The German parliament “Bundestag” in Berlin. Photo: Axel Schmidt / dapd.
What would you do if you had € 1,000, every month, for the rest of your life, regardless of whether you worked or not? Would you worry about the future? Would you be scared about losing your current job? Would you feel under pressure to work anywhere, just to be sure you can support yourself? Some leading economists, politicians and businessmen think it’s a genius idea to reform our economy and society to adapt to today’s modern world – whilst others think it insane and unworkable. This week’s article focuses on the idea of a basic income guarantee.
I have to admit first of all, I am to economics as Guido Westerwelle is to the English-speaking press – I try to avoid it at all costs. The heavy lifting work of the economic arguments should be left to economists. I would like to focus on the social impact; this being, after all, a mini-series of articles on social changes in the way society is run in answer to the question posed last week: ‚If there were a revolution in Germany, what would you change?‘ Let’s start by defining the world we live in.
What does our current society look like?
That’s quite a big question but one I will nevertheless attempt to answer within our ’socio-economic framework‘ (I wrote that to sound intelligent).
Thanks to capitalism, everyday life since the industrial revolution of the mid-eighteenth century has changed beyond recognition. We are still the same human beings as before, with our wants and needs, our feelings and emotions, but now more than ever our wants are being catered to, and we are consuming at a fast rate. Capitalism is like no other economic system. Characterised by constant expansion and wealth accumulation, capitalism and its friend industrialisation have spread around the world. Since the Cold War, we can no longer divide the Earth’s population into ‚First World‘, ‚Second World‘ and ‚Third World‘. Capitalism is reaching almost all corners of the globe and in many areas, though admittedly some more slowly than others, it is making opportunity for those where before there was little, and for others there was none.
Not only that but we are living in a period of rapid social change. A mere twenty years ago, most people didn’t have or need a computer but nowadays many couldn’t live without it in some way or other. More and more tasks are becoming automated, humans are no longer necessary in production processes and the tertiary sector of the economy (i.e. the service industry) is growing and growing. Although most of the world in general is on the brink of suffering from overpopulation (a scary thought considering that perhaps there aren’t enough jobs to go round), Germany has the opposite problem: the German population is retiring more and reproducing less, bringing the country ever closer to being like that film Children of Men.
According to Max Weber, change in our society can be described as a process of ‚rationalisation‘ – the organisation of our social and economic lives are driven by the need for efficiency, driven by science and bureaucracy. Furthermore, he argued that as bureaucracy increasingly imposed itself on the people, it would unnaturally work against our human nature. It becomes easier and easier to get caught up, to find it hard to keep pace with society, and this manifests itself in many negative ways for members of the public. As another pillar of sociological thought Emile Durkheim argued, with change being so intense, our lifestyles and patterns of living can end up being disrupted, and where there is a lack of immediate replacement, there can be feelings of aimlessness and despair he described as ‚anomie‘, which is kind of like the feeling I get after watching RTL.
So where does the idea of society’s position relate to the need for a monthly guaranteed payment for each person? The key result of such basic income guarantee proposals is that it provides the recipient with more control over their own lives, that is to say freedom. Money creates power over others and the way they live their lives, as the sociologist Pierre Bourdieu put it: „Economic power is first and foremost a power to keep economic necessity at arm’s length.“
Basic Income Guarantee and Freedom
Imagine a world where you would be entitled to an amount of money regardless of whether you worked or not. This amount doesn’t necessarily have to be € 1,000 but it is universally agreed among Basic Income’s advocates that the amount should be enough for you to support yourself with all basic needs – food, water, heating, electricity and a roof over your head. Whether rich or poor, employed or out of work, old or young, male or female – everyone would get the same.
The implications of this are huge. If you so wished, you could give up your job to work on a voluntary basis for a project close to your heart. Perhaps the extremely low birth rate could see a turn around, with mothers and fathers alike having more time to take care of children. You could set up a business venture, knowing it won’t leave you struggling for survival if it doesn’t go your way. And even in your current job, it would shift the balance of power; as Daniel Ravantos, chairman of the Spanish Basic Income Network and author of the book ‚Basic Income: The Material Conditions of Freedom‘, puts it: „[The boss] still defines the content, form and conditions of the workers‘ labour, while maintaining management powers almost intact… [but] capitalists would have to offer pay rises and improved working conditions to make the least appealing and most monotonous jobs more attractive, because nobody would be obliged to accept them in order to survive.“
Currently being out of work in Germany is about as fun as a holiday in Bahrain, thanks to the conditions the Arbeitsamt slaps onto the benefits system. For the many people without unemployment insurance, you have to accept a ‚reasonable offer of work‘ or face having your money cut, meaning your average person has to take any old demoralising slave labour just to get by. With Basic Income, this would be a situation relegated to the past.
Financing a Basic Income Society
It all sounds like a Disneyland dream of beautiful rainbows and magical unicorns but it is possible to finance such a system. And simultaneously reduce the kind of crippling bureaucracy that gives Schäuble a wet dream, the very same bureaucracy that our friend from earlier Max Weber was so staunchly against.
One system of economic reform aimed at supporting Basic Income can be found in Götz Werner’s book ‚Einkommen für Alle‘, where he describes one form of funding: get rid of all other tax systems and simply increase VAT (Sales Tax) to 50 per cent (though, he mentions, this should of course be done gradually) – simultaneously making our lives simpler for having deposed the complex self-assesment forms known for their ‚Beamtendeutsch‘, getting rid of the cost of Germany’s many tax offices and supporting an unconditional Basic Income.
Tax would no longer be based on the old system of taxing your income, but taxing consumption. And so the theory goes: the rich have more money and will consume more, and therefore pay more tax, whilst the poor consume less and pay less tax. Makes sense right?
Whilst the Great German Revolution doesn’t seem to be just round the corner, implementing such a system would just require good old-fashioned public awareness and political will. Unfortunately, this is more complex than it sounds. A solid real-world test of a Basic Income Guarantee has yet to manifest itself, so there is little solid fact to shove in the faces of political decision-makers. On paper it looks amazing, but then so did communism (at least it is if you believe Marx’s writings), and look what happened to that. The next step is a big one: somewhere needs to try this system out to see if it really works.
If Basic Income can work to the extent its supporters claim, the it will change our lives forever. We will be done with the struggle for survival that has been a spectre over mankind since time immemorial; it will do away with some of the inherent inequalities that come with capitalism and the inhuman cage of bureaucracy. Dramatic though it sounds, it’s a message which is repeated time and time again in discussion of an ‚income for all‘:
If you had € 1,000 every month, for the rest of your life,
you would have freedom.
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