Grundeinkommen (Basic, or Guaranteed Income)

I am now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.
Martin Luther King

Almost two years ago Susanne Wiest, a native of Bavaria now working in a Kindergarten somewhere in Mecklenburg-Vorpommern, started a citizen's initiative to introduce in Germany a guaranteed income. It is, to her great surprise, rapidly gathering momentum, to the extent that it is today the most successful such initiative, having collected around 50,000 signatures in the first few weeks of its life, and subsequently 90,000 fans on Facebook. It now has political support from the Green Party (Bündnis 90/Die Grünen), with Susanne Wiest having presented the idea to the Bundestag earlier this week (on 8th November 2010).

In brief, the idea is to give every citizen in Germany an income, regardless of age and gender. Wiest suggests €1,500 for every adult, and €1,000 for every child. The idea, for those smelling the overly controlling hand of socialism, is not to equalize income, but to equalize opportunity. For example, for those earning more than €1,500 monthly, the employer would pay €1,500 less than before. I.e. for someone earning €3,000, the employer would pay €1,500. In this way income differentials would remain while eradicating poverty, but society could still 'objectively value,' via the established price mechanism – while such remains necessary – the various job skills.

Furthermore, the scheme would put no pressure on the employer to compete with the guaranteed income on money terms, rather it would demand more creative and flexible employment contracts and work conditions. It would also almost certainly generate growing equality in the work place. A guaranteed income would be an instrumental element in creating a fairer labour market. Implemented carefully, and conjoined with a revolution in the money creation system, employment itself would be revolutionized for the better, with employer and employee equally dependent upon one another. Only in this way can the best that market processes have to offer operate to the benefit of society generally.

The idea that we today have a 'labour market' is of course a one sided joke where, currently and for centuries, the employer tends to be the one laughing. For example, most people in former East Germany cannot find decent work, and when they do it is for less than €1,500, for which they do 40+ hours a week. These are not market conditions, where people seeking work can pick and choose from the many jobs on offer; the unemployed are powerless, totally at the mercy of employers. A guaranteed income would quickly create a genuine labour market in which a job seeker would actually have some choice in the matter, have real bargaining power. Again, the idea is not to equalize income, it is to equalize the opportunity to live a life of dignity. Current welfare payments stave off starvation, but not much else, and certainly bestow no dignity on those receiving them.

Opponents raise the expected objections, which have been engagingly addressed by Professor Goetz Werner et al in a recent study. The principal objection is that too few would want to work. Werner's detailed survey of over 2,000 people, from the unemployed as well as different income levels, shows in fact a desire among the unemployed to work, among the employed to work less, such that the amount of work offered to employers would be more or less as today. And, because the nature of work, as well as the direction of the economy, would be profoundly changed were the guaranteed income to be introduced, the 'people are lazy' objection has no teeth.

In my case, I would want to work less at my job, say three days a week, or around 25 hours. I would also no longer aggressively save my money as I now do (I was unemployed for over a decade and have a very small pension pot), which means what I earn would not be hoarded. I would also have more time for my family and to fight for those environmental issues which mean so much to me, as well as do more for the elderly perhaps, and other socially worthy causes. I would also, with my increased spending power, buy only environmentally friendly products, many of which I currently cannot afford. This rough decision-set probably applies to many others in my approximate position.

'Freedom' is just a propaganda buzz word until the power and material security to be independent is available to all. The current system has failed miserably to deliver the very freedom it touts as its defining quality and crowning achievement. A guaranteed income, in conjunction with others, can deliver genuine independence, alongside recognition of interdependence, which would be so healing to all.

What concerns me about this idea is possible rampant economic growth and the unreadiness of society for the changes it would affect, if other needed changes are not simultaneously affected. I don't think a guaranteed income can be coldly introduced into the current system and be healthy for society, nor, perhaps, should it be introduced in one country alone. What would happen to immigration policy, for example? I don't fear inflation initially, since we have enormous overcapacity on the production side, but as society adjusted to the scheme, other changes, perhaps deeper and more upsetting to the status quo, would be needed to deal with that possibility. I seek such changes, but feel they would need to be transparently anticipated from the outset, baked into the guaranteed income cake in the form of a road map perhaps, as part of a broad and multi-pronged programme to change radically society's direction worldwide.

My interest remains the pursual of a post-scarcity, resource-based economy, but my focus is on how to get there, since it is a long way from here. I believe the way is growing clearer. Right now it looks likes this: MMT with 100% reserve banking + guaranteed income + revolution in education + the total embracing of technology/automation in the interest of humanity and the environment + revolution in economics. If a resource-based economy is a viable system, these steps, taken pretty much simultaneously or as linked steps in a bold programme for change, would lead us to that discovery.