Basic Income, Explained: Does It Only Work in Certain Kinds of Countries? | Interviews

Economist Guy Standing talked with us about the precariat, basic income policy and global economic politics — and about what makes a job "bullshit" and what makes work valuable.

The economist Guy Standing believes a new and troubling social class has appeared.

In a book published in 2011, he coined a word for it: precariat. It comes from precarious — a state of being at risk, on unstable footing. There is still no satisfying translation for precariat, and it is often misunderstood. In the Chinese-speaking world it is sometimes rendered, awkwardly, as "those who might not make it to tomorrow," and more often it misses the mark entirely and becomes "unstable proletariat."

Proletariat belongs to the 20th century, the age of large-scale industrialization: it means people who own no means of production and can sell only their labor. The precariat Standing keeps talking about is a different condition. The work is unstable. There is no career ladder to expect. Overtime is the norm and it isn't paid. There are no savings, only low and fluctuating wages, and the edge of debt is always close. Benefits and paid leave, of course, have nothing to do with them. The precariat emerged out of the way employment relationships changed under globalization.

The precariat is a mixed group. It might be migrant workers, or ride-hailing drivers, or public-school teachers who earn so little they need a second job, or photographers and journalists working something close to freelance who could lose the work at any moment. Standing wants to stress that some of them are well-educated young people looking for new politics, new ways of working and living, people who care about ecology and worry about their own creativity. Along the way, they became part of the precariat, and they have no security.

In the past, no organization claimed to speak for this group. But after Brexit, Donald Trump's election as US president and other shocks kept coming, people began to worry that social anger had reached the point of threatening existing institutions. Accounts of instability and vulnerable groups have never drawn as much attention as they do now — accurate or not.

In 2017 Standing was invited to the World Economic Forum in Davos. He was startled to find that entrepreneurs and politicians suddenly wanted to know what the precariat was, and whether the "unconditional basic income" he advocates could help pull the existing welfare system out of trouble. As recently as 2016, the basic income cause had suffered two big defeats: Switzerland held a referendum on basic income and it failed; Facebook livestreamed a White House roundtable on automation and basic income, and the US President's Council of Economic Advisers rejected the proposal anyway. Then, overnight, talking about the precariat and basic income became fashionable.

Standing calls himself a radical left-wing economist. He took his PhD in economics at Cambridge University, and from 1975 to 2006 he worked at the International Labour Organization, a UN agency. Since 2015 he has taught at SOAS, University of London, where he is now a professorial research associate. Over the past eight years Standing has published five books on the precariat and basic income, among them The Corruption of Capitalism, A Precariat Charter and Basic Income. A Chinese edition of Basic Income is due out shortly.

The "basic income" Standing argues for should, strictly speaking, be called "unconditional basic income." It treats everyone in a society or group the same, whatever their income and whether or not they work or are looking for work. It is paid regularly, like a wage, and the sum is small — at first perhaps a little less than rent and food. It is paid per person rather than per household, which protects the individual's control over the money, women's above all. As long as it isn't spent on something illegal, people can spend it as they like. It cannot be clawed back and it will not stop without warning. Standing holds that this is a citizen's right, a way of securing freedom and providing safety, and that it should become part of the welfare system.

It sounds somewhat utopian. Its supporters include no shortage of idealists. The Wall Street Journal interviewed Facebook co-founder Chris Hughes, an advocate of basic income and the author of Fair Shot. Hughes said that not long after Facebook went public he realized the money he had received didn't match the work he had done — he had far too much, while other people were still struggling to meet basic needs. It troubled him.

Other supporters — policymakers at the national and regional level, for instance — have different motives. In large part it is awkward reality and hard-headed pragmatism that have brought some of them together. Standing and people like him know this, which is why their arguments always sound eclectic, a mix and match. Facing committed libertarians, they stress that the existing welfare system is too complicated and its administrative costs too high, and that a flat basic income would be more efficient. At other times they want to bring out the moral side of welfare — how to let people live with more dignity, a point to which every utilitarian calculation and consequentialist argument should give way.

Criticism of basic income comes down to two points. First, getting something for nothing makes people lazy; it may fail to help people realize their own worth and instead draw out the worse side of human nature, and employment would suffer accordingly. Second, handing out money unconditionally requires either raising taxes or putting more money into circulation — the first is a thorny question of fairness, the second risks inflation.

Basic income's supporters keep trying to answer these objections, not always successfully. At the same time they push to run pilots in more countries and regions and let the evidence speak. Pilots have so far been run in India, Kenya, Canada, North Carolina, Oakland in California, Scotland and Finland. Standing told QDaily this August that had the UK Labour Party won the 2017 general election, he would have helped Labour run a basic income pilot in Britain. (The Conservatives won.)

Unlike the concept in its ideal form, every basic income pilot so far has been a compromise of some kind. Finland is one of the most closely watched. Finland's national insurance agency, KELA, tried a "partial" basic income scheme in 2016, paying about 560 euros a month over a two-year trial. The pilot drew criticism from several directions before it even finished. Only 2,000 people took part, and all of them were long-term unemployed rather than "anyone," which made it look more like an improved version of the existing benefits system — and Finland's was already good to begin with. Like most pilots, the Finnish one also left out the effects of adjusting taxes, so it cannot serve as a guide to a full rollout. This April the Finnish government decided to stop funding the pilot after the year was out.

Standing does not mention the controversy in his book. He simply writes, with evident pleasure, that 70% of Finns support the idea of basic income. He enjoys describing pilots from around the world, especially when they bring a community change for the better, large or small, and show traces of working better than the current system. That makes Basic Income read more like a book of policy advocacy, or something closer to The Whole Earth Catalog: full of fascinating, fresh ideas, with no intention of arguing them all the way through. It is, of course, a good deal more professional than that.

In Britain, Basic Income is published by Penguin in the Pelican series, a line founded in 1937 whose books are mostly written by well-known contemporary scholars and offer readers an expert way into fields they are deeply curious about but don't know how to enter. The book's full title is Basic Income: How We Can Make It Happen. In the US the rights belong to Yale University Press. The publisher proposed changing the title, and after thinking it over Standing decided that "a guide for the open-minded" better matched what he had in mind when he wrote it.

We interviewed Standing this August. Over more than an hour we covered the precariat as a new class, basic income policy and global economic politics, and also what makes work "bullshit" and what makes it valuable.

Q = QDaily

G = Guy Standing

Q: Last year you were invited to Davos. Talking with Zanny Minton Beddoes, editor-in-chief of The Economist, you said the invitation itself was very strange. Why?

G: Because the people who go to Davos are all executives of multinational corporations and important political figures. For a very radical economist like me — you could call me a left-wing economist — to be suddenly invited to speak at Davos is very strange. Davos is a right-wing forum. Not the extreme right, but certainly center-right. They believe in capitalism and in global markets. And last January the topics I was invited to Davos to talk about were the precariat and basic income. That's the strange part. Stranger still, they invited me again this year, and I had to give five talks in one week.

That said, I also sense that the rich people at Davos — Mark Zuckerberg, Bill Gates — are starting to support basic income. I think they have realized that a big reason Donald Trump was elected president is that more and more people have joined the precariat, more and more people are insecure, living with inequality, growing angry, and convinced that today's mainstream politicians don't care. Entrepreneurs need sustainable economic development. If people are angry they will break things, start social movements, vote for someone like Trump, and the whole system becomes unsustainable. So entrepreneurs are now quite willing to hear what people like us have to say.

My first book was about the precariat, published in 2011. On the first page I wrote: unless the precariat's insecurity is treated as the most urgent priority, we will see political monsters emerge. I used the word "monsters" back then.

Q: In hindsight, was that a prophecy?

G: Yes, it was a prophecy. After Trump was elected in November 2016 I got emails from all over the world saying "your monster has arrived." Once he was elected he started declaring war. He uses the language of war constantly, every day, and not only against China — Britain, Germany, Mexico, Canada too — and he isn't joking. Aggressive. We can treat him as a clown and have a laugh, but he is dangerous.

So I think a lot of people are starting to see that basic income might be worth considering, because they are afraid the political system will break down. Back in the 1930s the same inequality and the same insecurity produced fascism. Now we are seeing a new fascism.

Q: In your book you say the new fascism arrived along with neoliberalism. Isn't that too harsh a charge?

G: Last year I published a book called The Corruption of Capitalism. One of its arguments is that we are no longer in the age of neoliberalism. In the neoliberal era we created free markets, open markets, competition. But once bankers and the finance industry grew powerful, what did they do? They built institutions and systems that entrench property — we economists call them rent-seekers. As a result, more and more money has ended up in the hands of a small number of companies, banks and financial institutions, not because they work harder or more efficiently, but because they own the property rights.

I am not a neoliberal, but I have to admit that neoliberalism has given birth to an ugly child. In my book I call it "rentier capitalism": in any society or group, an ever-larger share of total income goes to a very small number of rentiers. Under those conditions the growing number of people without security — the precariat, as I call them — can only get a smaller and smaller share. They find their wages falling and growing less stable, and all they can do is bear the insecurity.

How do we change this? I was once invited to speak in San Francisco, in a room like this one, full of millionaires and billionaires. When I finished, one of them stood up — he counts among the richest people in the world, though I can't say who, because it has to stay confidential. He said, Guy, are you saying this is a rigged, illegitimate system? I stood up and said yes. He said, you know what, I agree with you, I think it's wrong, we're making too much money.

It's the same everywhere. In Southeast Asia a new billionaire appears every two days. But today, once someone becomes a billionaire, he has enormous power and the ability to damage the system legally. Sooner or later that can't hold.

Q: Let's get more concrete. You don't accept the neoliberals' "hands-off" free market, but you also oppose a paternalistic government. In your book you put forward a concept, "non-domination." How should we understand it, and how would it shape the design of a welfare system?

G: Libertarianism is popular in America today, but I don't believe in it. Libertarians like to say there should be no state at all, that government should be abolished entirely. Apart from the police, we don't need "big government." But if you actually did that, many people would be left with nothing. So they say, all right, we'll take the second-best option and give everyone a little basic income.

How could that work? To me it would be a dystopia, a disastrous system. Because we need social services, we need public accountability. We need all the things that government, at its best, provides and the market cannot.

And if you swing all the way to the other side, that is old-style socialism and old-style communism, the danwei (work-unit) system, the era of everyone eating from the same big pot. It is rule of an extremely paternalistic kind — commands so powerful and yet so inefficient that it finally collapses under its own contradictions. We have seen all of that. We don't want to become that.

I believe in equality, liberty, fraternity — I call these Enlightenment values. Pure egalitarianism has nothing to do with basic income. Basic income means everyone has a minimum of security. In a market economy the people who are cleverer, more driven, more ambitious will still earn more. The irony, of course, is that in China, in the US, anywhere in the world, some of the richest people barely work at all. Either they inherited property from their parents, or they were lucky enough that other people work and they take the benefit.

So I think we have to allow some inequality, allow some people to earn more than others. But in our society wealth is created collectively. So we have to make sure everyone gets a share of it. Anyone who thinks basic income leads to Soviet-style egalitarianism or China's danwei system is wrong.

In the book I talk about non-domination, which others call "republican freedom." It means I answer for my own decisions. I do something not because you want me to, or because some government official wants me to, but because I want to. For example, a woman should not have to ask her husband's permission to do this or that. She may have a good husband who agrees with her 99% of the time, but that is not freedom. You should be able to make your own decisions and answer for them.

We are moral beings precisely because we can make our own decisions. To take away a person's ability to decide is itself immoral — it turns adults into children who have to be told what to do. I think a wise politician understands that fundamentally you have to give people the chance to be moral agents.

That is what I mean by non-domination. And I think basic income helps.

Q: Is non-domination even possible? Especially now, when technology has made domination harder to notice. French President Emmanuel Macron even quoted Bismarck this June: "If you told people how sausages are made, they might not want to eat them anymore."

G: True, panopticons are everywhere now. In China, in the US, in Europe. Stripped down, a panopticon means getting people to make a particular choice while they believe they chose it freely. We call this libertarian paternalism. It is hidden power, invasive power — it comes into our homes, and there are cameras on the street. We can't stop governments from doing it.

But if we are able to decide for ourselves and believe we are responsible for those decisions, then as citizens we respond to the government's ever more powerful capacity to watch us, and I think that is good for all of us and for the government too. If politicians are foolish enough to believe these systems can control people, it may work for a few years, but the resentment will keep building.

Q: In your view, is basic income first of all a moral question rather than a workable policy?

G: No, I think it's both. Basic income is a workable policy right now. Even if China decided to start rolling out a basic income policy tomorrow, I think that would be fine — you start with pilots, see how they do, then scale up. This is a policy that works in 2018. Don't think of it as something far off.

And politicians need to understand that it is best to move in this direction before a crisis arrives. That matters. One point I have made before is that every stretch of economic development gets interrupted by a crisis, and once the crisis comes, that is not the best moment to introduce a remedy.

Q: One view holds that basic income implies people no longer need to support themselves, which damages the values of modern society and makes work optional. In your book I read that you don't think basic income reduces people's motivation to work.

But you also distinguish between what David Graeber calls "bullshit jobs" and "valuable forms of work." So how should we understand basic income's effect on work — and do you think work itself is optional?

G: There are several points here. First, it is the current system, not basic income, that reduces people's motivation to work. Under the current system, when income goes up, benefits go down. That makes people, especially women in a household, give up on taking a low-paid job. To keep their benefits they either don't work at all or they work on the black market, and neither helps the economy or employment. Basic income has none of these problems: however much tax you pay, your basic income is unaffected.

Second, our pilots in India, Africa and Canada all show that once people have a little basic security they become more energetic, maybe more confident. They use the money to buy clothes, to pay for the bus, whatever — the point is that they can go out, and feel like part of society. They look for work, they look for ways to earn, and they become more productive.

Saying basic income makes people lazy is stupid. There is no evidence for it. And thinking in black and white is pretty stupid too — give people money and they'll stop working, so don't give them money?

As for laziness: in a modern capitalist society we need a bit of laziness. A little of it might make people healthier, might give them better social contact and let them join social life in more structured ways. What is wrong with time that isn't spent shopping in a mall or grinding away at work? Don't we always assume that as society develops and people grow richer, they can do less labor?

Back to your question. I have said in my book and elsewhere that I think basic income will encourage us to do more work — and work is not the same as labor. More work includes more voluntary community work, more protection of ecology and resources, more taking part in political life, even in small ways. That has to be healthy, has to be what we want. We have come to see that this quite different way of looking at things arrives together with the 21st-century idea that development has to account for ecology. I genuinely believe basic income will help reshape, in every respect, how we think about work and where work sits in our lives.

In fact I have no way of knowing whether someone is being lazy or gathering strength. No government official knows either. Leonardo da Vinci and Michelangelo looked idle most of the time, but they thought they were learning. Creativity takes time. And it isn't only artists: to me everyone should be regarded as an artist. I think people and politicians with overly simple ideas really should step back and look at the nature of people's lives, at how complicated life is, and lecture a great deal less.

Maybe someone will sit on the beach because he has a basic income, but I don't think he will sit there forever. He will get bored, and suddenly notice that his friends are improving their lives and he isn't. I think demonstration effects will work. But in the end social policy should be built on trust in people. Because 99% of people are worth trusting.

Idleness is temporary. Over the long run, people should support themselves. I think we all want to support ourselves, and basic income makes that easier. You have more security, and you are more willing to take risks. Plenty of people have no security and can't take new training, because they have no money and no time.

Q: Interesting — the Chinese entrepreneur Kai-Fu Lee has also talked about retraining. But he thinks that while giving unemployed people money might help them find work, they would probably be laid off again soon, because basic income doesn't push most people to remake their professional skills. With AI especially, Silicon Valley's elite might manage it, but most people won't.

G: My answer to him would be: unless you have time you cannot improve yourself, and unless you have basic income security you cannot have time. Also, I don't agree with giving money to the unemployed only on conditions. I think basic income should apply to anyone — it could be the unemployed, or it could be labor the formal economy doesn't count, such as caring for children. Basic income would encourage them to build new skills.

And I disagree with Lee's claim that it would reduce their motivation.

Q: You proposed the concept of the precariat. Do you think basic income can solve this group's problems?

G: I think it can solve part of them. When I talk with precariat groups around the world, almost everyone says, "We need basic income." The precariat supports basic income because it is about their lives — both how they have to live and how they want to live. I would like to live a more flexible life, spend more time caring for my elderly mother, look after my community, try a mix of different skills, do a bit of consulting and a bit of creative work. But you can only do any of that if you have enough security. So I think the precariat understands basic income best.

Q: What is a reasonable amount for a basic income? Is there a formula that has been shown to work?

G: I explain that in the appendix. I think it has to be based on local conditions — how much money would really improve people's lives, and how much the program can afford. So it depends on where the program runs.

For my part, I would start with a lower amount.

Q: In Switzerland, for instance, would 2,500 euros a month for everyone be too high?

G: Yes, you mean Switzerland's 2016 referendum. That was a mistake. Think about it: German-speaking farmers there earn maybe a few thousand euros a month. That figure was never possible. It was a real mess at the time and I was very angry, because before that I had been all over Switzerland going to events and giving talks, and then this happened. Once that fool set that number, we lost everything.

Q: In 1986 you helped found BIEN, the organization that spreads the idea of basic income. I'm curious why it started in Europe.

G: At the beginning a small group of us got together — that was 1986. I proposed the name BIEN. In French bien means a good thing, and BIEN could also stand for the Basic Income European Network, because the original group all came from Europe. Later more and more people joined, many from Latin America, some from Southeast Asia and North America. So we changed "Basic Income European Network" to "Basic Income Earth Network" and kept the acronym, BIEN.

We were all quite young then. There were economists, philosophers and political activists among us, and we all felt strongly about the collapse of the welfare system. I think that was the more important reason for founding BIEN. We all felt Europe's welfare system was becoming more unfair and less efficient through the 1980s, and that more and more people were losing their security.

I have always thought this matters just as much for emerging market economies. In the former Soviet region, when they chose shock therapy, it was a disaster. If they had not cut basic income at the time, society could have been spared serious hardship. People were angry and in pain, and there was a wave of suicides. (Note: the same shock therapy was judged a success in Poland and the Czech Republic.) At first I too believed basic income was more likely to be adopted in rich countries than in poor ones. Now I think it can work in any country.

Q: How does BIEN persuade local or central governments? Quite a few governments have shifted their position on basic income in the past two years, but given fiscal pressure and complicated questions of social fairness, it still can't be easy, can it?

G: We apply pressure, and we also offer easy wins — what I call low-hanging fruit. If people worry that basic income will make people lazy, then let's run a pilot and see.

If I say I support basic income for reasons of philosophical justice and freedom, that argument obviously can't be tested by a pilot. But pilots can beat prejudice. Every pilot shows that basic income makes people do more work, not less. So I can show people that, and let the evidence speak.

The pilots have also shown things we didn't expect. In some Indian villages I realized that the liberating value of basic income was greater than its monetary value. People got only a tiny amount of money, and the effect was huge. I couldn't help asking why. Later I understood: it gives people extra energy and confidence, it prompts them to invest, and it makes them steadier when something goes wrong — they no longer have to borrow from loan sharks, they can turn to their neighbors. It increases their capacity to absorb shocks.

The day before yesterday, on my way to Shanghai, I got an email from Australia. I don't know the sender, but he wrote to say thank you, because after reading my book he now knows how to persuade the officials where he lives. That is the main purpose of the book: to let people who have no time to research this issue, or who can't spend 30 years on it as I have, get hold of the arguments quickly.

Q: More and more people have been talking about basic income these past two years. But honestly, some people in Silicon Valley seem to treat it as a game — they just want to see whether people who get an unconditional income turn lazier or use it to improve themselves. As if they were watching a game with new rules.

G: Well, some people in Silicon Valley go entirely on instinct, very California. He hasn't really spent time thinking it through, but he believes it. He'll say to me, Guy, I really feel we have to do this, I think it's right, come on, let's do it. Can you help me?

But not everyone is like that. I met a few people from the AI company DeepMind. They came to me and said, we believe basic income will definitely happen. These people are very rich and very smart. They are better at thinking things through, and every so often during a conversation they would ask me to explain something further. I prefer that kind.

Cover image by Artem Bali, Felix Koutchinski on Unsplash