Towards an Historical Account of Universal Basic Income

On the 9th December, 2016, the Green Institute published the paper Can Less Work be More Fair: a discussion paper on Universal Basic Income and Shorter Working Week. As part of this release Green Agenda will be republishing a number of essay from the paper.

We start today with Elise Klein’s paper, “Towards an Historical Account of Universal Basic Income.

Universal Basic Income (UBI) is a simple idea which has been supported over the centuries by scholars and intellectuals including Thomas More, Thomas Paine, Abraham Lincoln, Henry George, Bertrand Russell, Franklin Roosevelt and Tony Atkinson. Universal Basic Income unconditionally provides every resident (children and adults) of a particular geographic location, a regular and unconditional subsistence wage.

Scholars, activists, and politicians have argued that UBI has radical potential for societies around the world. Reviewing the contemporary literature, there are three main ways UBI has been talked about:

As freedom: UBI is a way to free people from the threat of starvation, undignified labour and excessive state surveillance under conditional social welfare models. UBI is also a way for people to have freedom to live the lives they value and to have the capability to engage fully in their citizenship.

As justice: UBI is an idea to transfer democratic power back to the citizenry, where UBI is paid as a social dividend for their citizenship rather than as welfare. Related to this, UBI is also a way to give negotiating power back to labour—to have the choice not to work in undignified employment. Moreover, UBI can remunerate productive labour which is currently unpaid: for example, care work and household domestic work—a burden mostly held by women.

As economic transformation: UBI is not just about tying people over in times of crises, increased casualisation and precariousness. UBI has also been seen as a way to transition into the slow growth economy through providing people the freedom to undertake forms of labour outside the growth and consumption economy.

Whilst gaining traction today, UBI and the diverse arguments for the idea are not new. In this paper, I wish to suggest historical moments, writings and practise which have contributed to the framing of UBI we see today. This outline is of course not complete, however, a mere beginning to be extended.

Western history of UBI1

Thomas More's Utopia.
Thomas More’s Utopia.

Thomas More’s Utopia, published in 1516, is the usual place to begin. More narrates a conversation he has with the Archbishop of Canterbury, discussing how to fight petty theft. More floats the idea of a basic income as an alternative to sentencing petty thieves to death:

“This method of dealing with thieves is both unjust and undesirable. As a punishment, it’s too severe, and as a deterrent, it’s quite ineffective. Petty larceny isn’t bad enough to deserve the death penalty. And no penalty on earth will stop people from stealing, if it’s their only way of getting food. In this respect, you English, like most other nations, remind me of these incompetent schoolmasters, who prefer caning their pupils to teaching them. Instead of inflicting these horrible punishments, it would be far more to the point to provide everyone with some means of livelihood, so that nobody’s under the frightful necessity of becoming, first a thief, and then a corpse.”2

Two centuries later, Marquis de Condorcet, whilst in hiding for his role in the French Revolution, wrote Esquisse d’un tableau historique des progrès de l’esprit humain (1795). Within this text, Condorcet sketched out the beginnings of a Basic Income scheme to reduce inequality. Like many Enlightenment ideas, Condorcet’s ideas travelled to the US and Condorcet’s friend Thomas Paine. Paine develops the ideas further two years after Condorcet died in prison. Paine argues that the earth that gets cultivated, and a key part of capital accumulation, belongs to everyone. Individual property is only the value of the improvement through cultivation, and not the earth itself. To Paine,

“Every proprietor, therefore, of cultivated lands, owes to the community a ground-rent (for I know of no better term to express the idea) for the land which holds; and it is from this ground-rent that the fund proposed in this plan is to issue.”3

Paine then sets out his social insurance program where upon turning 20, every citizen will be paid 15 pounds sterling as compensation in part for the loss of their natural inheritance. This payment was to be given to both rich and poor men as a natural right to their ground-rent endowment.

Forty years later in 1836, the French scholar Charles Fourier also advocates for economic security as a natural, inalienable right. He argues this against what he sees as an inherent failure of capitalism to allow man to be self-sufficient because he loses his right to the means of production and subsistence (to hunt, to forage, to have cattle graze on the commons). To Fourier, loosing such rights meant that society owed subsistence to everyone to meet their basic needs. Basic needs, to Fourier, randomly, was a sixth class hotel room and three modest meals a day. This payment was not universal, being granted to only the poor.

Almost a century later, in 1849, a follower of Fourier, John Stuart Mill proposed a non-means tested Basic Income. Mill wrote in Book II of his Principles of Political Economy:

“In the distribution, a certain minimum is first assigned for the subsistence of every member of the community, whether capable or not of labour. The remainder of the produce is shared in certain proportions, to be determined beforehand, among the three elements, Labour, Capital, and Talent.”4

When accounting for the history of UBI, most tell it as an idea coming from Western intellectuals, and particularly thinking about how to deal with crises within capitalism. Yet we can see ideas of economic security far broader than in the West.

Economic security beyond the West

The Enlightenment thinkers developed their ideas at the time of the industrial revolution and the burgeoning of capitalism as the dominant economic system. It is useful to read their propositions as a way to tender the exploitative and oppressive nature of capital and primitive accumulation. It is also important to note however, that economic security has also been widely documented by moral economy scholars in non-Western societies. This is a body of research that shows how solidarity bonds have been a core part of pre-industrial and indigenous societies. Solidarity bonds are a way not only to tie members of the same kinship group, or community together, but also to provide economic security. Such bonds manifested in sharing of wealth (defined not just through cash)5 to ensure security for group members. For example, in his seminal text on demand sharing, Nicolas Peterson showed how hunter gathers in Australian First Nations communities share game, cash and commodities altruistically.6

Moreover, in his formative book Moral Economy of Peasants, James C. Scott showed how economic security was upheld in South-East Asian peasant societies, through the core foundations of the right to subsistence and the principle of reciprocity.7 Indeed Richard Posner argued that such economic security through reciprocity was sustained through non-centralised authorities (unlike the nation state model). Yet colonial governments and the enforcement of the centralised postcolonial state model wore down this authority of the moral economy.

Beyond the patriarchy

Poverty-has-a-womans-faceNot only has the mainstream story of UBI been written as a Western story against capitalism, it has also been a story of men. It is also important to note that through the regulation of relations of power and normative ideas of gender, in many societies women have held the burden of providing economic security for families through unpaid care and domestic work.8

Whilst care and household productive labour is typically not valued in monetary terms, it is extremely productive and underpins economic security in domestic and public spheres. The norm of ‘production’ is not merely about the production of commodities and services for sale, but also as the production of life (reproduction, child rearing, domestic duties and care work). This distinction challenges the gendered social norm that production of life and reproduction is ‘natural’ and belongs to the private sphere—a norm that severely undervalues the labour and productivity of women and the economic security they have provided over the centuries.

It is hard to quantify such a significant contribution of economic security, however a contemporary study carried out by Woetzel et al (2015) estimated that women’s unpaid work contributes globally US$10 trillion per year, or 13% of the global GDP.

Basic income developments since the 20th century

In the 20th century, most Western societies had or were in the process of establishing formal welfare systems. Yet welfare systems, whether insurance based or means-tested, are conditional on an individual’s requirement to work or to demonstrate a willingness to work. This condition has been contested by contributors to Basic Income, outlining the need for economic security to be not linked to work. At the end of the First World War literary Nobel laureate Bertrand Russell set out his vision for a Universal Basic Income in his Roads to Freedom: Socialism, Anarchism and Syndicalism:

“… the plan we are advocating amounts essentially to this; that a certain small income, sufficient for necessaries, should be secured to all, whether they work or not… no-one should be compelled to work, and those who choose not to work should receive a bare livelihood and be left completely free.”9

Moreover, UK Labour party member Dennis Milner pitched that 20% of GDP per capita should be paid weekly to each citizen of the UK unconditionally. Milner argued this was because everyone had the right to a means of subsistence, unconditional if that citizen worked or not. This proposal was debated by the British Labour Party at the 1920 conference, and later thrown out. Despite this rejection, another prominent British Labour Party member, George Cole took up the idea of what he called a social dividend. This idea was then supported by Nobel Laureate James Meade. Cole was troubled by the individualisation of success, and challenged that success was something born of a society:

“Current productive power is, in effect, a joint result of current effort and of the social heritage of inventiveness and skill incorporated in the stage of advancement and education reached in the arts of production, and it has always appeared to me only right that all the citizens should share in the yield of this common heritage, and that only the balance of the product after this allocation should be distributed in the form of rewards for, and incentive to, current service in production.”

Across the Atlantic, scholars were also debating forms of economic security. American economist Milton Friedman proposed an over-simplification of the social security system, replacing all services and welfare with what he called a negative income tax. Friedman advocated for the negative income tax on the grounds of productivity rather than distribution. Differently, James Tobin proposed a demogrant, which was an unconditional payment to the poor, not replacing other parts of the social security system. Tobin’s grant was to be given to each household, and if families were able to get other work, they could undertake this work in addition to the demogrant.

In 1968, leading economists from across America (but not Friedman), signed a petition and presented it to the US Congress. These scholars were calling for a system of income guarantees and supplements. This letter forced Nixon’s administration to implement an impressive social welfare program, including a guaranteed income with financial supplements for workers. This program was later amended to incorporate Tobin’s demogrant scheme. Yet the whole plan was defeated by the Senate in November 1974 with Watergate and Nixon’s subsequent resignation.

Also in 1974, 1,000 residents in the working class town of Dauphin, Canada, began receiving unconditional monthly payments. The trial was supported by both the federal government and the provincial government of Manitoba, and the payment was set at approximately 60% of Canada’s poverty threshold (roughly C$16,000/person/year). These payments were given for four years but the project’s budget of $17 million ran out half way through the project. The funding shortfall also meant that research around the trial was prematurely abandoned.

Basic Income in Australia

Trade Union Procession, 1918. Photo: State Library of South Australia:
Trade Union Procession, 1918. Photo: State Library of South Australia: Flickr

The idea of a universal and unconditional basic income in Australia has also contended with the enduring normative position of what we now know today as ‘mutual obligation’. Ronald Mendelson notes that within the first 50 years of federation, the debate in Australia around receiving benefits where in a big part, over the issue of individuals contributing to benefits (through taxes on waged labour).10 This obsession of waged labour as contribution has consequently led Castles and others to categorise the Australian welfare system as the workers welfare state.11

The connection between contribution and income security has deeper roots—linked to the idea of waged labour as a requirement of being a member, and indeed a productive member, of society. Such an idea overlooks the freedom for people to choose whether to work, persecuting anyone choosing not to work because of the exploitative conditions in which capital operates. This condition of mutual obligation linked to waged labour clearly excludes other forms of productive labour such as reproductive work carried out by women through child birth and through productive labour within the household and child raising—historically and currently free labour extracted overwhelmingly from women. It also includes the productive labour undertaken by many First Australians in caring for country.

Despite mutual obligation being a normative assumption of economic security in Australia, there have been proposals of Basic Income in Australia. In 1975, Ronald Henderson chaired a series of seminal volumes as part of the Poverty in Australia inquiry. Within the First Main Report, Henderson proposed a Guaranteed Minimum Income for all workers. The review was received well by the then Labor government, however was soon forgotten with the election of the Liberal government later that year.

Further, in 1977 HC ‘Nugget’ Coombs proposed a program whereby Indigenous notions of work were paid under what is known as the Community Development Employment Program (CDEP). In policy, CDEP was conditional on people working, however work was defined in its broadest sense. CDEP was also community controlled so that Indigenous groups could work out culturally appropriate modes of work. In practice though, because the program was given to Indigenous organisations to administer, in many cases, it was given unconditionally as a Basic Income and to make sure people had some cash to survive.12 In 1989, Jon Altman and Taylor produced a report The Economic Viability of Outstations and Homelands, commissioned by the Australian government. The Report recommended that a Guaranteed Minimum Income for Outstations (GMIO) scheme be established as a new program without income or work testing, providing basic income to those who demonstrate a commitment to outstation living in recognition of both their work in the informal sector and the absence of formal employment.13 This idea was overridden with the government’s focus on up-scaling CDEP. However, since 2000, CDEP was targeted by both neoliberal Labor and Liberal federal governments, resulting in CDEP being morphed into a complete work for the dole program. All the Basic Income aspects were reduced to workfare.

Basic Income today

Basic income schemes as a means to provide economic security, autonomy and dignity for marginalised communities have been garnering support globally. Basic Income programs internationally have largely been a successful form of economic safety net for extremely marginalised populations, such as found in the Basic Income Trial in India, and in unconditional cash transfers in Southern Africa. In the Global North, trials for a Basic Income are positioned as a basic wage for every citizen, not only the marginalised and vulnerable in communities.14

For example, Basic Income in the Global North has included the agreement of a trial in Utrecht, Netherlands, and the Finnish Parliament has locked in a trial to give its citizens a 800 euro stipend per month. The Canadian Province of Ontario has also recently committed to trialling a UBI in 2018. The details of this trial are still being worked out at the time of writing. Moreover, Republican Governor of Alaska, Jay Hammond, was able to institute the Alaskan Permanent Fund. The Fund acts as a Basic Income, paying unconditional annual dividends to all residents of Alaska, generated from oil wealth.

What would you do if your income were taken care of?
Street art as part of Switzerland campaign. Image: Twitter

Debates around economic security and Universal Basic Income continue to gain more traction in growing global economic precariousness and the increase of automation in the labour market. For example, Switzerland held a referendum in 2015 so that each Swiss citizen would receive 2,500 Swiss francs per month. Whilst this referendum did not get over the line, the campaign brought UBI front and centre of the public debate on the future of welfare in Switzerland.

Looking beyond the West, cash transfers have been a feature of economic security for populations of southern Africa. In South Africa, for example, 3.5% of GDP and 10% of national expenditure goes to 30% of the population in old age pensions and child support. In Namibia, 12% of the population receives grants such as the child maintenance main grant. A specific Universal Basic Income scheme is currently being debated in South Africa. Here, a UBI is seen as a way to support people who are permanently excluded from the limited South African formal labour market. Scholar Jonny Steinberg argued the need for rethinking approaches given the limited promise of full employment in an article in South Africa’s Business Daily (2013):

“… It hasn’t mattered who is in power or whether our political system has been a racial dictatorship or a democracy, or whether our labour law has been rigid or flexible—we cannot employ everybody. We cannot even come close. To think that we can is to indulge in millenarian thinking, as if Jesus will come and remake the world, as if there is a thing called magic. Deep deep down we know this. For a while we talk about creating jobs, we have been doing something else—we have been handing out grants. Some say this is a stop gap measure, just to tide us over until jobs are found. Others say that it is creating a cultural of idleness from which there will be no return. But if we are honest, it is what we do now and what we will keep doing forever. It is a substitute for work and it holds the country together; it has saved many millions from starvation and misery.”15

Anthropologist James Ferguson has echoed similar arguments regarding a basic income in South Africa. Ferguson has observed the failure of the promise of employment through mass unemployment or underemployment of populations in South Africa, and argues this is not going to disappear anytime soon. Consequently Ferguson contends that wage labour can no longer serve as the main basis of social membership, and a UBI could be an alternative.16

Moreover, a Universal Basic Income trial has been carried out in rural India by UNICEF and the Self Employed Women’s Association (SEWA). In eight villages in Madhya Pradesh, India, men and women were given 200 rupees per calendar month and children 100 rupees per calendar month from June 2011 to May 2012. Compared to non-UBI villages, the payments not only supported people to develop capabilities and obtain more resources, but it also encouraged them to partake more effectively in economic, social and political life. The women were able to invest this capital into other economic and social activities that increased their own income (and that of their household) by up to 16%. In the control villages, 36% of girls of secondary school age were enrolled in schools, compared to 66% of girls in the UBI villages. Further, while the nutritional status of boys improved in trial villages, the proportion of girls with normal weight for-age in basic income villages experienced a 25% improvement (compared to a 12% improvement in the control villages).17

Feminist political economist Kathi Weeks, in her seminal text The Problem with Work, states, “Utopian demands, including demands for basic income and shorter hours, are more than simple policy proposals; they include as well the perspectives and modes of being that inform, emerge from, and inevitably exceed the texts and practices by which they are promoted”.18 This historical account of UBI suggests that the idea is just beginning.

  1. The following snippets are taken from the historical account outlined by the Basic Income Earth Network (BIEN) 

  2. More, Thomas, Utopia, Penguin Classics, London, 1516/1963, pp 43–44 

  3. Paine, Thomas, Agrarian Justice, 1796, pp 612–613 

  4. Mill, John Stuart, Principles of Political Economy, Augustus Kelley, New York, 1849/1987, pp 212–214 

  5. Graeber, David, Towards an Anthropological Theory of Value: A false coin of our own dreams, Palgrave, New York, 2001 

  6. Peterson, N., Demand sharing: reciprocity and the pressure for generosity among foragers. American Anthropologist 95 (4) (1993), pp860–74 

  7. Scott, James C.,The Moral Economy of Peasants: Rebellion and Subsistence in South East Asia, Yale University Press, London 

  8. Waring, Marilyn. 1999. Counting for Nothing: What men value and what women are worth. Toronto: Toronto University Press 

  9. Russel, Bertrand, Roads to Freedom, Socialism, Anarchism and Syndicalism, Unwin Books, London, 1918, 80–81 

  10. Mendelson, Ronald, The condition of the people: social welfare in Australia 1900–1975, George Allen & Unwin, Sydney 

  11. Castles, Francis, A farewell to Australia’s Welfare State, Eureka Street, Vol 11 (1), 2001 

  12. Altman, Jon, “Basic Income for Remote Indigenous Australians: Prospects for a Livelihoods Approach in Neoliberal Times” In Basic Income in Australia and New Zealand: Perspectives from the Neoliberal Frontier, edited by Jennifer Mays, Greg Marston and John Tomlinson, 179–205. New York: Palgrave MacMillan, 2016 

  13. Altman, Jon, and Luke Taylor, The Economic Viability of Aboriginal Outstations and Homelands, Canberra: Australian Council for Employment and Training, 1989 

  14. Standing, Guy, A Precariat Charter: From Denizens to Citizens, London: Bloomsbury Academic, 2014 

  15. Steinberg, Jonny, Idea of jobs for all is a dangerous habit, Business Daily, 26th July 2013 

  16. Ferguson, James, Give a man a fish: reflections on the new politics of distribution, Durham and London: Duke University Press, 2015 

  17. Davala, S., R. Jhabvala, G. Standing, and S. Mehta, Basic income: A transformative policy for India, Bloomsbury Publishing: London, 2015. 

  18. Weeks, Kathi, The problem with work: Feminism, Marxism, Antiwork politics, and post work imaginaries, Durham and London: Duke UniversityPress, 2011, pp 32