Tuesday, 29 October 2013

"Money has lost its connection with social reality." Interview with Generation Basic Income, part two

In the second part of the interview with members of the Swiss Generation Basic Income, we discuss the effects of introducing an unconditional income, how it will be financed, criticisms of the concept, inequality, and the ugly nature of current policies on welfare.

You can read the first part here

Enno Schmidt, the co-founder of Generation Basic Income, has said a basic income could be “one of the landmark historical moments, like the abolition of slavery or the civil rights movement”. What do you think will be the social effects of introducing an unconditional income?

Che Wagner: To have a right for an income that will make possible a life in dignity without condition is a landmark historical moment for sure! Primarily it represents a question to each and every one of us: do you trust others? Introducing a basic income will pose the question of trust in a fundamental way: what will you do if your income is assured?

Socially this means nothing less than that I am fully accountable for my deeds in the sphere of what I contribute to others through my work, but not in a juridical sense, because the basic income is unconditional. There won’t be a penalty for those who are not ready to contribute anything. But in the social sphere I will have to stand by the things I do for others and there are no excuses anymore, such as I have to do this because I need an income.. etc.

In the aftermath of financial crisis, we are constantly told that public spending cuts are unavoidable and that we must “live with our means”. A basic income is going in the opposite direction. To mouth a hoary old objection, where would the money come from to fund a basic income?

Enno Schmidt: This is a matter of education. Money is created where goods and services are produced that are for sale. Otherwise they could not be bought. What can be produced, can also be financed. We have no shortage of goods. There is not only enough money, there is too much money. But a lot of money has lost its connection with social reality. We do not know what the economy is, what money is, what taxes are. We think the economy is there to make money-profits, that money is a possession of which one can never have enough, and taxes should be avoided. That's just silly. The economy is there to satisfy the needs of others, to do something that benefits others. Money is a legal means to regulate the exchange between performance and need. Taxes are what we pay for the work to which we assign to the state - work, which is not paid by the individual consumer, but work we want to fund as a community. The tax is a division of the process to be generated socially, in part by the private and non-profit sectors. When you buy a computer, you don’t pay for the one you get, but the next, which is already produced. The one you took already was paid for, otherwise it could not be there. And what accounts for its price, is not the stuff that will be available at your desk, but the income of all involved in the production process, so that a computer can be made ​​and given to you. These is also the source of the income of the people who run the government and non-profit work.

All money goes into income. That's one thing. And a second is that there is so much work, as there are people. The income enables you to work. It makes you free, it allows you not to just take care of yourself but also to do something for others, and to live by what others do. This is the situation today. But we still think like it was 150 years ago. Work cannot be paid, otherwise you can buy people. Actually, slavery has already been abolished. But not in our habits.

 Where will the money come from for the unconditional basic income? It is already there. We share sufficient goods. We all have more or less an income sufficient to live on. This level of income will be made unconditional. How does it work? This is a consideration for economists. When all have an unconditional basic income, prices rise or wages fall. Most likely, wages and benefits will decrease on average to about the level of basic income. Because everyone now already comes with an income to work. Income from labour is relieved of the task of ensuring the existence of people. Wage negotiations will take place as free negotiations between free people.

There are objections to basic income from the Right and Left. Conservatives says that an unconditional income would lead most people to sleep late, drink, take drugs and not do anything useful. Some left-wingers say it is unfair to allow able-bodied people not to work while leaving the burden of producing necessary goods on others. How do you respond to these criticisms?

CW: Regarding the arguments from the Right: basic income is an arduous idea and initiative as well and is not about being lazy. The primary question for everyone is: what are you going to do when your existential income is secured? To keep up at this question will be hard and everyone has to deal with it individually. Some may go to sleep late as well but that’s within their own freedom – I don’t see a problem or even an economic issue there.

Regarding the arguments of the Left: with the basic income, people are free to contribute to society what they individually find necessary. For the first time in history that will convert to something we could call a free market situation, where everyone has the ability to say “No”, because their basic needs are unconditionally covered. To produce necessary goods is a question of the need of these very goods or services. Why wouldn’t these goods be produced anymore? It will definitely have an impact on the prices of these goods and services in the sense that quality producing will get cheaper in comparison to quantity and profit-oriented producing.

Large parts of the Left fear the shift of power to the individual who is enabled to say “No” by the existence of the basic income and thereby forget this very shift used to be the one political agenda in their initial formation a century ago. The big difference now is: it’s not a class war anymore but a simple step to empower everyone economically, whatever social class he/she may belong to.

ES: The Left and the Right are used to talking about others and to judge without touching their own heads. Perhaps the conservatives would only sleep late and take drugs, and the leftists live by the actions of others. Today, many have switched off at their workplaces, today more and more people are mentally ill and take legal drugs that are already prescribed to children. There is no way forward, without thinking again.

Does Generation Basic Income have any other objections to capitalism or conventional Parliamentary democracy? I note that you are working directly through a referendum, rather than through the Parliamentary system. Is a basic income sufficient or does society need other changes as well?

CW: I do not want to generalise here because every nation and cultural sphere has its own history. But the idea of the discussion or even implementation of an unconditional basic income is not limited to any borders; it’s a global idea in a globalised world.

I don’t object to capitalism in general because I don’t see a problem in concentrating forces by raising capital to be able to make things and ideas possible – that’s a great thing! But we’re in a situation now, where capital has too much weight and people are controlled by it and can’t live in dignity anymore. The unconditional basic income is able to change this situation not by destroying capitalism but by humanising it.

As you can easily observe, in many countries within the EU plus the USA, Parliamentary democracy is stuck in a deep crisis. In my opinion, the idea of a basic income doesn’t work in a top-down setting and it is only natural that the movement is diverse and carried by people like you and me. Strongly Parliamentary systems and political spheres controlled by parties won’t be able to keep up with such a movement. If people are able to take into consideration individual economic power and self-determination, the question of political rights and power is never far away.

There is another forthcoming referendum in Switzerland, on whether to limit pay differentials in companies to a 12:1 ratio. Does Generation Basic Income overlap with the people behind the “1:12 initiative”?

CW: The “1:12 initiative” is an interesting but rather conventional leftist proposal. We are in contact with some of the initiators and talking about similarities and differences but from the basic mindset, the two initiatives are still very far from each other. The basic income does not want to take anything away from anyone by law. On the one hand, “1:12”, like our initiative is the attempt to socialise our society. But the basic income asks: can you trust your neighbour enough to give him an unconditional income without forcing him to work for it? It can be seen as a very liberal initiative because it does not dictate by law as to what you're going to do with that income in any way. It is not predictable what will happen with this new freedom and that’s the root of all the fear of opponents, including the leftists behind “1:12”. Still, I would definitely count the “1:12” group as part of the Basic Income Generation because they are doing something they really want to do out of an inner decision – in that case being politically active!

Marilola Wili: Those two ideas are not standing in concurrence but do not overlap either. They are two totally different approaches. The “1:12 intiative” wants an income upper limit and to set a ratio by law. The idea of an unconditional basic income wants to empower everyone and ask herself/himself what she/he wants and what she/he is able to do.

ES: Also, the difference is that 1:12  just throws a stick into the gearbox. The thought is good. It is very easy to say this is justice. But nothing moves, because income is only reduced and comes from the side of an isolated regulation. It is one measure. The basic income doesn’t come from the side of a regulation, a measure, a smug sense of justice. As Che said, the basic income is not directed against capitalism, it is just better than that. It allows people to do better and to develop it further.

I wanted to ask about the 1:12 initiative because there is growing recognition, in the UK (as well as in other countries) of the damage caused by inequality. There was book published in the UK a few years ago, called The Spirit Level, that showed that social problems such as mental illness, poor educational attainment, violence, obesity, teenage conceptions etc were invariably worse in countries of high inequality. Also, I think you can trace a lot of causes of financial crisis to too much money at the top of society – money that goes into restructuring companies, mergers and acquisitions, and speculation in shares or commodities like food. Is not inequality – as opposed to solely providing an unconditional income for people – a problem that needs to be addressed?

ES: Yes, inequality has all the effects you mention. But why does nothing change? We know everything. While I am writing these words 20 children will die of hunger. Why do all the good intentions change nearly nothing? We have organisations for everything but something is missing. The old forms of justice do not apply, they have brought us to this point.

It will take a lot more than proposals such as the 1:12 Initiative. It is a distraction and not just because those in power will prevent it. But because the thought has no substance. You might think you could reach 1:12, it is so simple and direct, but it has no reality. The unconditional basic income looks like it is just imagination, but it is very real. Basic income is not against anybody or anything. It eliminates poverty, it does not stick to hatred of the rich. It’s a trap, to always look on the rich. With a basic income, a lot more people can work to ensure that inequality decreases. Then you can look at why some people are so rich, then you can go to the source. Then you can look at the causes and see what to do differently. But that only works if people are strengthened.

In the UK and elsewhere, the political debate on “welfare” is fixated on imposing ever more punitive penalties on benefit claimants, and that includes disabled people, for not seeking work with enough ardour. Hunger and destitution are resulting and more and more people rely on food banks. Does a basic income have the potential to bring about a paradigm shift into this ugly debate?

CW: You’re speaking of one of the core shifts that has to take place, whether a basic income is introduced or not. The problem here is a lack of income and not a lack of work or employment. People need an income in order to be productive and to contribute for others by work. It’s a simple rule you can test on yourself: when is it you’re more productive? In a state of pressure and stress or rather in a state of ease and security?

MW: If the basic needs of everyone are met unconditionally, the stigma of being poor, unemployed or providing care-work would swiftly disappear. That’s only one reason why the unconditional basic income would change a lot in these problems.

ES: We are now in a time of old, outdated thinking and old ideas are becoming more violent because they feel they are no longer correct. But this thinking wants to stay with all its might. It tortures people, it can only assert itself at the expense of others in its falsehood. The backlash can be bloody. We hope not. The unconditional basic income is a way to channel the pent-up energy in a positive and creative track. That way,  the contempt for the people, the misanthropy loses its power.

What does the future hold for Generation Basic Income? If you don’t win the forthcoming referendum, will you continue to campaign?

MW: Generation Basic Income is the main source of this initiative in Switzerland but we’re not bound to the results of the initiative or to borders. We are living the idea of an unconditional basic income. It’s a lifestyle. We are going to continue to engage with the idea and to make it sensible for as many individuals as possible.


The 1:12 referendum was defeated, sadly, by a margin of 66-34 - http://www.independent.co.uk/news/world/europe/swiss-voters-reject-112-proposal-to-cap-top-executives-pay-in-latest-referendum-8960669.html 


  1. This a truy transformational idea, and so logical: in the US there will be support from progressives, liberals/modernists/libertarians and conservatives if the idea makes it past the intelligensia...Occupy and the Green Party have adopted it as a platform, but they have very little political power. However, the minimum wage movemnt is gaining strength, which goes in the right direction...there is growing recognition in public opinion of the plight of the working poor and the cost to the taxpayer of their (meagre) benefits

    1. Thanks for the comment. I agree that it's transformational and logical but I don't share the belief that conservatives will support the idea of a basic income. In the UK and I imagine the US, the whole political programme of conservatives is founded on making exploitation easier, of making it nigh on impossible for people say no to a bad deal as Enno Schmidt puts it.
      Wage negotiations as "free negotiations between free people" strike me as one of the last things conservatives would want to happen

  2. White House petition to introduce a guaranteed income for all Americans. http://wh.gov/lBIAx