This article includes comments I made on the proposed universal basic income.
As poverty levels increase, people around the world are beginning to question the current economic model as a whole. RAPHAEL VASSALLO looks at the basic mechanics behind a proposal that would, if successful, make every citizen eligible for a ‘universal basic income’ as a right.
Malta Today 25 July 2013
With unemployment levels now reaching 60% in EU countries like Greece and Spain - and with the incidence of poverty registering an alarming increase even here in Malta, despite our claims of relative economic success - people the world over are beginning to look beyond current socio-economic models in search of workable alternatives.
And while no broad consensus exists to this effect, a growing number of sociologists and economists are beginning to argue that the free market economy model at the heart of the European Union's basic structures - in particular, the deeply-ingrained view that wealth 'trickles down' to lower strata - has failed. And it is this realisation, among others, that now propels a Europe-wide petition to force the Commission to consider alternatives to the status quo... an objective for which the ambitious target of one million signatories is required, according to the Lisbon Treaty.
Paradoxically, no consensus exists on the preferred alternative either: or at least, not when it comes to specific structures to replace existing ones. If there is any agreement at all behind this initiative, it is that all citizens should receive a basic income to enable them to have a decent standard of living... not as a privilege, but as a right.
Other considerations such as the precise mechanics of the new system (e.g., how much this income should be; whether it should be standardised across the 28 Member States; and above all, how such a generous system could possibly be funded in practice) have yet to be debated, let alone decided. But there are indications that the proposal may not be as far-fetched as it sounds.
Michael Briguglio,a sociologist from the University of Malta, is one of a number of activists currently pushing the same petition in Malta: a stand that is entirely consistent with his previous political campaign (as Green Party leader) to raise the minimum wage.
What both these ideas have in common, he tells MaltaToday, is that they depart from the very opposite premise of the 'trickle-down effect': arguing that by improving economic conditions of the lowest rung of the social ladder would not only raise living standards across the board... but would also elevate the same people from recipients of social benefits to consumers in their own right, thus ensuring a rate of economic growth that has so far eluded the current model.
Separately, he argues that unlike the present welfare system, the UBI proposal marries two dimensions - the social and the economic - to create a more complete whole.
"The idea works on three basic levels. A guaranteed basic income would move a lot of people out of poverty... something that the present system has clearly failed to do. It will also stimulate the 'creative economy', allowing people to enjoy a basic standard of living that would in turn provide them with the time to do things that, at present, they cannot do. Thirdly, by empowering these people financially it would also boost economic growth."
Ultimately it is a case of changing our perspectives on social welfare: moving from a 'compensatory' system, to one of 'emancipation' instead.
However Briguglio acknowledges that it would be a mistake to view this model as an alternative to productive employment. "One thing the proposal does not aim to do is to make people rich for doing nothing," he observes.
The operative word here is 'basic' - whatever amount is decided as a basic income, it should not be enough to obviate the need to work altogether. On the contrary, it should only provide for the most fundamental needs.
Still, the basic question remains unanswered: who pays for all this in the end? Michael Briguglio answers by pointing towards 'progressive taxation'... coupled with the savings one could also expect from the resulting reform of a Welfare State that is by all accounts unaffordable in its present form. People who earn more should be taxed more, he suggests - echoing the same basic reasoning that had propped up AD's minimum wage proposal; but that is only half the story.
"In practice, the system would simplify existing models and cut down on bureaucracy. It would replace a labyrinth of welfare programmes with one, straightforward principle - that all citizens are entitled to a basic income." No eligibility criteria, no means testing, no different departments to handle different aspects of the present welfare state.
Radical though this may sound, the actual idea is not new. Globally, it has been debated for decades; locally, the late Rev. Prof. Peter Serracino Inglott once suggested a very similar idea, if only for artists.
Briguglio views the present initiative as a natural extension of this same debate. "This is not something I expect to be introduced in the near future. It might take years, if not decades. The important thing is that there is growing acknowledgement that something needs to be done... that the present system is simply not working."
A similar concern is separately expressed by social worker Charles Miceli, whose Alliance Against Poverty likewise supports the initiative.
"In Malta at present there are 88,000 people who are on or below the poverty line. Of that figure, 20% are children," he says, adding that what makes these statistics alarming is that they also illustrate how failed systems are retained and defended in spite of their failure.
Miceli argues that improved education was supposed to ameliorate social conditions.... yet the opposite has inexplicably occurred.
"How many millions have we spent on education, education, education?" he muses, mimicking the 'New Labour' battle-cry made famous by the UK's Tony Blair. "Where are the results? Why are there more poor people today, if we've spent so much on combating poverty through education?"
Like Briguglio, Miceli is confident that the economic advantages the new model would pose - the streamlining of myriad welfare programmes into a single, universal programme applicable to everyone - far outweigh the actual expense to the State. Admittedly, this expense has never been fully quantified - though studies are under way to this end. But Charles Miceli dismisses the knee-jerk tendency to believe that an already cash-strapped country can ill-afford such a generous welfare system.
"We always find money for so many things. Why is it only a problem when it comes to finding money to address serious social issues such as poverty?
More information about the European Citizen's Initiative (including a EU-wide petition) for an Unlimited Basic Income can be found at http://basicincome2013.eu/