Post-capitalism is in part a hypothetical state in which the economic systems of the world can no longer be described as forms of capitalism. Various individuals and political ideologies have speculated on what would define such a world. According to classical Marxist and social evolutionary theories, post-capitalist societies may come about as a result of spontaneous evolution as capitalism becomes obsolete. Others propose models to intentionally replace capitalism, most notably socialism, communism, anarchism, nationalism and degrowth.
In 1993, Peter Drucker outlined a possible evolution of capitalistic society in his book Post-Capitalist Society. This states that knowledge, rather than capital,
land, or labor, is the new basis of wealth. The classes of a fully
post-capitalist society are expected to be divided into knowledge
workers or service workers, in contrast to the capitalists and proletarians
of a capitalist society. Drucker estimated the transformation to
post-capitalism would be completed in 2010–2020. Drucker also argued for
rethinking the concept of intellectual property by creating a universal
licensing system.
In 2015, according to Paul Mason,
several factors — the rise of income inequality, repeating cycles of
boom and bust, and capitalism's contributions to climate change — led
economists, political thinkers and philosophers to start seriously
considering how a post-capitalistic society would look and function.
Post-capitalism is expected to be made possible with further advances in
automation and information technology – both of which are effectively causing production costs to trend toward zero.
Nick Srnicek
and Alex Williams identify a crisis in capitalism's ability and
willingness to employ all members of society, arguing that: "there is a
growing population of people that are situated outside formal, waged
work, with minimal welfare benefits, informal subsistence work, or by
illegal means".
Heritage check system is a socioeconomic plan that retains a market economy but removes fractional reserve lending power
from banks and limits government printing of money to offset deflation.
Money printed is used to buy materials to back the currency and pay for
government programs in lieu of taxes, with the remainder to be split
evenly among all citizens to stimulate the economy (termed a "heritage
check", for which the system is named). The original author of the idea,
Robert Heinlein, stated in his book For Us, The Living: A Comedy of Customs,
that the system would be self-reinforcing and would eventually result
in regular heritage checks able to provide a modest living for most
citizens.
Economic democracy
Economic democracy is a socioeconomicphilosophy that establishes democratic control of firms by their workers and social control of investment by a network of public banks.
In his book Of the People, By the People: The Case for a Participatory Economy, Robin Hahnel describes a post-capitalist economy called the participatory economy.
Hahnel argues that a participatory economy will return empathy to
our purchasing choices. Capitalism removes the knowledge of how and by
whom a product was made: "When we eat a salad the market systematically
deletes information about the migrant workers who picked it".
Socialism often implies common ownership of companies and a planned
economy, though as an inherently pluralistic ideology, it is argued
whether either are essential features. In his book PostCapitalism: A Guide to our Future, Paul Mason argues that centralized planning, even with the advanced technology of today, is unachievable.
In UK politics, strands of Corbynism and the Labour party have adopted this 'post-capitalist' tendency.
Permaculture is defined by its co-originator Bill Mollison
as: "The conscious design and maintenance of agriculturally productive
systems which have the diversity, stability, and resilience of natural
ecosystems".
Progressive utilization theory (PROUT) is a socioeconomic and political philosophy created by the Indian philosopher and spiritual leader Prabhat Ranjan Sarkar
in 1959. PROUT includes the decentralization of the economy; economic
democracy; development of cooperatives; provision of all working members
of society with five basic needs: food, clothing, shelter, education,
medical care; and systematic solution of environmental problems through
technological development and limitation of consumption.
Modern monetary theory (MMT) could enhance the degrowth movement in transitioning to a "post-growth, post-capitalist economy", according to economic anthropologistJason Hickel.
Towards this end, he suggests that the power of "the government’s role
as the issuer of currency" could be utilized to bring the economy back
into balance with the natural world while at the same time reducing economic inequality by providing high quality universal basic services,
implementing the rapid development of renewable energy infrastructure
to completely phase out fossil fuels in a shorter period of time, and
establishing a public job guarantee
for 30 hours a week at a living wage doing decommodified, socially
useful work in the public services sector, and also useful work in renewable energy development and ecosystem restoration.
Hickel notes that providing a living wage at 30 hours a week also has
the added benefit of shifting income from capital to labor. Furthermore,
he adds that taxation can be used to "reduce demand in order to bring resource and energy use down to target levels," and specifically to reduce the purchasing power of the wealthy.
Technology as a driver of post-capitalism
Automation
Technological
change that has driven unemployment has historically been due to
'mechanical-muscle' machines, which have reduced the need for human
labor. Just as the use of horses for transport and other work was
gradually made obsolete by the invention of the automobile, humans' jobs
have also been affected throughout history. A modern example of this technological unemployment
is the replacement of retail cashiers by self-service checkouts. The
invention and development of 'mechanical-mind' processes or 'brain
labor' is thought to threaten jobs at an unprecedented scale, with
Oxford Professors Carl Benedikt Frey and Michael Osborne estimating that 47% of US jobs are at risk of automation.
Information technology
Post-capitalism
is said to be possible due to major changes brought about by
information technology in recent years. These changes have blurred the
boundaries between work and free time
and loosened the relationship between work and wages. Significantly,
information is corroding the market's ability to form prices correctly.
Information is abundant and information goods are freely replicable.
Goods such as music, software or databases do have a production cost,
but once made can be copied infinitely. If the normal price mechanism of
capitalism prevails, then the price of any good which has essentially
no cost of reproduction will fall towards zero.
This lack of scarcity of those things is a problem in those models,
which try to counter by developing monopolies in the form of giant tech
companies to keep information scarce and commercial. But many
significant commodities in the digital economy are now free and
open-source, such as Linux, Firefox, and Wikipedia.
In the social sciences, unintended consequences (sometimes unanticipated consequences or unforeseen consequences, more colloquially called knock-on effects)
are outcomes of a purposeful action that are not intended or foreseen.
The term was popularised in the twentieth century by American sociologistRobert K. Merton.
Unintended consequences can be grouped into three types:
Unexpected benefit: A positive unexpected benefit (also referred to as luck, serendipity, or a windfall).
Unexpected drawback: An unexpected detriment occurring in addition to the desired effect of the policy (e.g., while irrigation schemes provide people with water for agriculture, they can increase waterborne diseases that have devastating health effects, such as schistosomiasis).
Perverse result: A perverse effect contrary to what was originally intended (when an intended solution makes a problem worse).
History
John Locke
The idea of unintended consequences dates back at least to John Locke who discussed the unintended consequences of interest rateregulation in his letter to Sir John Somers, Member of Parliament.
"The individual undertaker (entrepreneur), seeking the most efficient allocation of resources, contributes to overall economic efficiency;
the merchant’s reaction to price signals helps to ensure that the
allocation of resources accurately reflects the structure of consumer
preferences; and the drive to better our condition contributes to economic growth."
Marx and Engels
Influenced by 19th century positivism and Charles Darwin's evolution,
for both Friedrich Engels and Karl Marx, the idea of uncertainty and
chance in social dynamics (and thus unintended consequences beyond
results of perfectly defined laws) was only apparent, (if not rejected)
since social actions were directed and produced by deliberate human
intention.
While discerning between the forces that generate changes in
nature and those that generate changes in history in his discussion of Ludwig Feuerbach, Friedrich Engels touched on the idea of (apparent) unintended consequences:
In nature [...] there are
only blind, unconscious agencies acting upon one another, [...] In the
history of society, on the contrary, the actors are all endowed with
consciousness, are men acting with deliberation or passion, working
towards definite goals; nothing happens without a conscious purpose,
without an intended aim. [...] For here, also, on the whole, in spite of
the consciously desired aims of all individuals, accident apparently
reigns on the surface. That which is willed happens but rarely; in the
majority of instances the numerous desired ends cross and conflict with
one another, or these ends themselves are from the outset incapable of
realization, or the means of attaining them are insufficient. Thus the
conflicts of innumerable individual wills and individual actions in the
domain of history produce a state of affairs entirely analogous to [...]
the realm of unconscious nature. The ends of the actions are intended,
but the results which actually follow from these actions are not
intended; or when they do seem to correspond to the end intended, they
ultimately have consequences quite other than those intended. Historical
events thus appear on the whole to be likewise governed by chance. But
where on the surface accident holds sway, there actually it is always
governed by inner, hidden laws, and it is only a matter of discovering
these laws.
For his part, for Karl Marx
what can be understood as unintended consequences are actually
consequences that should be expected but are obtained unconsciously.
These consequences (that no one consciously sought) would be (in the
same way as it is for Engels)
product of conflicts that confront actions from countless individuals.
The deviation between the original intended goal and the product derived
from conflicts would be a marxist equivalent to «unintended
consequences.
This social conflicts would happen as a result of a competitive
society, and also lead society to sabotage itself and prevent historical
progress. Thus, historical progress (in Marxist terms) should eliminate these conflicts and make unintended consequences predictable.
Austrian School
Unintended consequences are a common topic of study and commentary for the Austrian school of economics given its emphasis on methodological individualism. This is to such an extent that unexpected consequences can be considered as a distinctive part of Austrian tenets.
Carl Menger
In "Principles of Economics," Austrian school founder Carl Menger
(1840 - 1921) noted that the relationships that occur in the economy
are so intricate that a change in the condition of a single good can have ramifications beyond that good. Menger wrote:
If it is established that
the existence of human needs capable of satisfaction is a prerequisite
of goods-character [...] This principle is valid whether the goods can
be placed in direct causal connection with the satisfaction of
human needs, or derive their goods-character from a more or less
indirect causal connection with the satisfaction of human needs. [...] Thus quinine would cease to be a good if the diseases it serves to cure
should disappear, since the only need with the satisfaction of which it
is causally connected would no longer exist. But the disappearance of
the usefulness of quinine would have the further consequence that a
large part of the corresponding goods of higher order would also be
deprived of their goods-character. The inhabitants of quinine-producing
countries, who currently earn their livings by cutting and peeling cinchona
trees, would suddenly find that not only their stocks of cinchona bark,
but also, in consequence, their cinchona trees, the tools and
appliances applicable only to the production of quinine, and above all
the specialized labor services, by means of which they previously earned
their livings, would at once lose their goods-character, since all
these things would, under the changed circumstances, no longer have any
causal relationship with the satisfaction of human needs.
— Principles of Economics (Grundsätze der Volkswirtschaftslehre), 1871.
Friedrich Hayek and Catallactics
Economist and philosopher Friedrich Hayek
(1899 – 1992) is another key figure in the Austrian School of Economics
who is notable for his comments on unintended consequences.
In "The Use of Knowledge in Society" (1945) Hayek argues that a centrally planned economy cannot reach the level of efficiency of the free market
economy because the necessary (and pertinent) information for
decision-making is not concentrated but dispersed among a vast number of
agents.
Then, for Hayek, the price system in the free market allows the members
of a society to anonymously coordinate for the most efficient use of
resources, for example, in a situation of scarcity of a raw material,
the price increase would coordinate the actions of an uncountable amount
of individuals "in the right direction."
The development of this system of interactions would allow the progress of society,
and individuals would carry it out without knowing all its
implications, given the dispersion (or lack of concentration) of
information.
The implication of this is that the social order (which derives from social progress, which in turn derives from the economy), would be result of a spontaneous cooperation and also an unintended consequence,
being born from a process of which no individual or group had all the
information available or could know all possible outcomes.
In the Austrian school, this process of social adjustment that generates a social order in an unintendedly way is known as catallactics.
For Hayek and the Austrian School, the number of individuals
involved in the process of creating a social order defines the type of
unintended consequence:
If the process involves interactions and decision making of as
many individuals (members of a society) as possible (thus gathering the
greatest amount of knowledge dispersed among them), this process of
"catallaxy" will lead to unexpected benefits (a social order and
progress)
On the other hand, attempts by individuals or limited groups (who
lack all the necessary information) to achieve a new or better order,
will end in unexpected drawbacks.
Robert K. Merton
Sociologist Robert K. Merton popularised this concept in the twentieth century.
In "The Unanticipated Consequences of Purposive Social Action"
(1936), Merton tried to apply a systematic analysis to the problem of
unintended consequences of deliberate acts intended to cause social change. He emphasized that his term purposive action,
"[was exclusively] concerned with 'conduct' as distinct from
'behavior.' That is, with action that involves motives and consequently a
choice between various alternatives". Merton's usage included deviations from what Max Weber defined as rational social action: instrumentally rational and value rational. Merton also stated that "no blanket statement categorically affirming or denying the practical feasibility of all social planning is warranted."
Everyday usage
More recently, the law of unintended consequences has come to be used as an adage or idiomatic warning that an intervention in a complex system tends to create unanticipated and often undesirable outcomes.
Akin to Murphy's law, it is commonly used as a wry or humorous warning against the hubristic
belief that humans can fully control the world around them, not to
presuppose a belief in predestination or a lack or a disbelief in that
of free will.
Causes
Possible causes of unintended consequences include the world's inherent complexity (parts of a system responding to changes in the environment), perverse incentives, human stupidity, self-deception, failure to account for human nature, or other cognitive or emotional
biases. As a sub-component of complexity (in the scientific sense), the
chaotic nature of the universe—and especially its quality of having
small, apparently insignificant changes with far-reaching effects (e.g.,
the butterfly effect)—applies.
In 1936, Robert K. Merton listed five possible causes of unanticipated consequences:
Ignorance, making it impossible to anticipate everything, thereby leading to incomplete analysis.
Errors in analysis of the problem or following habits that worked in the past but may not apply to the current situation.
Basic values which may require or prohibit certain actions even if
the long-term result might be unfavourable (these long-term consequences
may eventually cause changes in basic values).
Self-defeating prophecy,
or, the fear of some consequence which drives people to find solutions
before the problem occurs, thus the non-occurrence of the problem is not
anticipated.
In addition to Merton's causes, psychologist Stuart Vyse has noted that groupthink, described by Irving Janis, has been blamed for some decisions that result in unintended consequences.
Types
Unexpected benefits
The creation of "no-man's lands" during the Cold War, in places such as the border between Eastern and Western Europe, and the Korean Demilitarized Zone, has led to large natural habitats.
The sinking of ships in shallow waters during wartime has created many artificial coral reefs, which can be scientifically valuable and have become an attraction for recreational divers. This led to the deliberate sinking of retired ships for the purpose of replacing coral reefs lost to global warming and other factors.
In medicine, most drugs have unintended consequences ('side effects') associated with their use. However, some are beneficial. For instance, aspirin, a pain reliever, is also an anticoagulant that can help prevent heart attacks and reduce the severity and damage from thrombotic strokes. The existence of beneficial side effects also leads to off-label use—prescription or use of a drug for an unlicensed purpose. Famously, the drug Viagra was developed to lower blood pressure, with its use for treating erectile dysfunction being discovered as a side effect in clinical trials.
Unexpected drawbacks
The implementation of a profanity filter by AOL in 1996 had the unintended consequence of blocking residents of Scunthorpe, North Lincolnshire, England, from creating accounts because of a false positive. The accidental censorship of innocent language, known as the Scunthorpe problem, has been repeated and widely documented.
In 1990, the Australian state of Victoria made safety helmets
mandatory for all bicycle riders. While there was a reduction in the
number of head injuries, there was also an unintended reduction in the
number of juvenile cyclists—fewer cyclists obviously leads to fewer
injuries, all else being equal. The risk of death and serious injury per cyclist seems to have increased, possibly because of risk compensation,
or due to invisibilisation of cyclists. (the more a transportation
method is uncommonly sighted, the likelier it could be deemed to be
accident prone)
Research by Vulcan, et al. found that the reduction in juvenile cyclists was because the youths considered wearing a bicycle helmet unfashionable. A health-benefit model developed at Macquarie University
in Sydney suggests that, while helmet use reduces "the risk of head or
brain injury by approximately two-thirds or more", the decrease in
exercise caused by reduced cycling as a result of helmet laws is
counterproductive in terms of net health.
Prohibition in the 1920s United States,
originally enacted to suppress the alcohol trade, drove many small-time
alcohol suppliers out of business and consolidated the hold of
large-scale organized crime
over the illegal alcohol industry. Since alcohol was still popular,
criminal organisations producing alcohol were well-funded and hence also
increased their other activities. Similarly, the War on Drugs, intended to suppress the illegal drug trade, instead increased the power and profitability of drug cartels who became the primary source of the products.
In CIAjargon, "blowback" describes the unintended, undesirable consequences of covert operations, such as the funding of the Afghan Mujahideen and the destabilization of Afghanistan contributing to the rise of the Taliban and Al-Qaeda.
The introduction of exotic
animals and plants for food, for decorative purposes, or to control
unwanted species often leads to more harm than good done by the
introduced species.
The introduction of rabbits in Australia and New Zealand for food was followed by an explosive growth in the rabbit population; rabbits have become a major feralpest in these countries.
Cane toads, introduced into Australia to control canefield pests, were unsuccessful and have become a major pest in their own right.
Kudzu, introduced to the US as an ornamental plant in 1876
and later used to prevent erosion in earthworks, has become a major
problem in the Southeastern United States. Kudzu has displaced native
plants and has effectively taken over significant portions of land.
The protection of the steel industry in the United States reduced
production of steel in the United States, increased costs to users, and
increased unemployment in associated industries.
In 2003, Barbra Streisand unsuccessfully sued Kenneth Adelman and Pictopia.com for posting a photograph of her home online. Before the lawsuit had been filed, only 6 people had downloaded the file, two of them Streisand's attorneys. The lawsuit drew attention to the image, resulting in 420,000 people visiting the site. The Streisand Effect
was named after this incident, describing when an attempt to censor or
remove a certain piece of information instead draws attention to the
material being suppressed, resulting in the material instead becoming
widely known, reported on, and distributed.
Passenger-side airbags
in motorcars were intended as a safety feature, but led to an increase
in child fatalities in the mid-1990s because small children were being
hit by airbags that deployed automatically during collisions. The
supposed solution to this problem, moving the child seat to the back of
the vehicle, led to an increase in the number of children forgotten in
unattended vehicles, some of whom died under extreme temperature
conditions.
Risk compensation, or the Peltzman effect,
occurs after implementation of safety measures intended to reduce
injury or death (e.g. bike helmets, seatbelts, etc.). People may feel
safer than they really are and take additional risks which they would
not have taken without the safety measures in place. This may result in
no change, or even an increase, in morbidity or mortality, rather than a
decrease as intended.
According to an anecdote, the British government, concerned about the number of venomous cobra snakes in Delhi,
offered a bounty for every dead cobra. This was a successful strategy
as large numbers of snakes were killed for the reward. Eventually,
enterprising people began breeding cobras for the income. When the
government became aware of this, they scrapped the reward program,
causing the cobra breeders to set the now-worthless snakes free. As a
result, the wild cobra population further increased. The apparent
solution for the problem made the situation even worse, becoming known
as the Cobra effect.
Theobald Mathew's temperance campaign in 19th-century Ireland resulted in thousands of people vowing never to drink alcohol again. This led to the consumption of diethyl ether,
a much more dangerous intoxicant—owing to its high flammability—by
those seeking to become intoxicated without breaking the letter of their
pledge.
It was thought that adding south-facing conservatories
to British houses would reduce energy consumption by providing extra
insulation and warmth from the sun. However, people tended to use the
conservatories as living areas, installing heating and ultimately
increasing overall energy consumption.
A reward for lost nets
found along the Normandy coast was offered by the French government
between 1980 and 1981. This resulted in people vandalizing nets to
collect the reward.
Beginning in the 1940s and continuing into the 1960s, the
Canadian federal government gave Quebec $2.25 per day per psychiatric
patient for their cost of care, but only $0.75 a day per orphan. The
perverse result is that the orphan children were diagnosed as mentally
ill so Quebec could receive the larger amount of money. This psychiatric
misdiagnosis affected up to 20,000 people, and the children are known
as the Duplessis Orphans in reference to the Premier of Quebec who oversaw the scheme, Maurice Duplessis.
There have been attempts to curb the consumption of sugary
beverages by imposing a tax on them. However, a study found that the
reduced consumption was only temporary. Also, there was an increase in
the consumption of beer among households.
The New Jersey Childproof Handgun Law, which was intended to protect children from accidental discharge of firearms by forcing all future firearms sold in New Jersey to contain "smart" safety features,
has delayed, if not stopped entirely, the introduction of such firearms
to New Jersey markets. The wording of the law caused significant public
backlash, fuelled by gun rights lobbyists, and several shop owners offering such guns received death threats and stopped stocking them.
In 2014, 12 years after the law was passed, it was suggested the law be
repealed if gun rights lobbyists agree not to resist the introduction
of "smart" firearms.
Drug prohibition can lead drug traffickers to prefer stronger, more dangerous substances, that can be more easily smuggled and distributed than other, less concentrated substances.
Televised drug prevention advertisements may lead to increased drug use.
Increasing usage of search engines, also including recent image search features, has contributed in the ease of which media is consumed. Some abnormalities in usage may have shifted preferences for pornographic film actors, as the producers began using common search queries or tags to label the actors in new roles.
The passage of the Stop Enabling Sex Traffickers Act
has led to a reported increase in risky behaviors by sex workers as a
result of quashing their ability to seek and screen clients online,
forcing them back onto the streets or into the dark web. The ads posted were previously an avenue for advocates to reach out to those wanting to escape the trade.
The use of precision guided munitions meant to reduce the rate of civilian casualties
encouraged armies to narrow their safety margins, and increase the use
of deadly force in densely populated areas. This in turn increased the
danger to uninvolved civilians, who in the past would have been out of
the line of fire because of armies' aversion of using higher-risk
weaponry in densely populated areas.
The perceived ability to operate precision weaponry from afar (where in
the past heavy munitions or troop deployment would have been needed)
also led to the expansion of the list of potential targets. As put by Michael Walzer:
"Drones not only make it possible for us to get at our enemies, they
may also lead us to broaden the list of enemies, to include
presumptively hostile individuals and militant organizations simply
because we can get at them–even if they aren’t actually involved in
attacks against us." This idea is also echoed by Grégoire Chamayou:
"In a situation of moral hazard, military action is very likely to be
deemed 'necessary' simply because it is possible, and possible at a
lower cost."
Other
According to Lynn White, the invention of the horse stirrup enabled new patterns of warfare that eventually led to the development of feudalism (see Stirrup Thesis).
Perverse consequences of environmental intervention
Because of the complexity of ecosystems,
deliberate changes to an ecosystem or other environmental interventions
will often have (usually negative) unintended consequences. Sometimes,
these effects cause permanent irreversible changes. Examples include:
During the Four Pests Campaign
a killing of sparrows was declared. Chinese leaders later realized that
sparrows ate a large amount of insects, as well as grains. Rather than
being increased, rice yields after the campaign were substantially
decreased.
(The decision to cull sparrows may itself have been an unintended
consequence of silencing intellectuals: "For 3 years after the
establishment of the Communist Government, in 1949, Chinese scientists
and intellectuals found themselves in the midst of turmoil. Many
scientists were humiliated and intimidated during the nationwide program
of "thought reform" and political indoctrination".)
During the Great Plague of London
a killing of dogs and cats was ordered. If left untouched, they would
have made a significant reduction in the rat population that carried the
fleas which transmitted the disease.
The installation of smokestacks to decrease pollution in local areas, resulting in spread of pollution at a higher altitude, and acid rain on an international scale.
After about 1900, public demand led the US government to fight forest fires
in the American West, and set aside land as national forests and parks
to protect them from fires. This policy led to fewer fires, but also led
to growth conditions such that, when fires did occur, they were much
larger and more damaging. Modern research suggests that this policy was
misguided, and that a certain level of wildfires is a natural and
important part of forest ecology.
Universal basic income (UBI) is a social welfare proposal in which all citizens of a given population regularly receive a minimum income in the form of an unconditional transfer payment, i.e., without a means test or need to work. In contrast a guaranteed minimum income
is paid only to those who do not already receive an income that is
enough to live on. A UBI would be received independently of any other
income. If the level is sufficient to meet a person's basic needs (i.e.,
at or above the poverty line), it is sometimes called a full basic income; if it is less than that amount, it may be called a partial basic income. No country has yet introduced either, although there have been numerous pilot projects and the idea is discussed in many countries. Some have labelled UBI as utopian due to its historical origin.
There are several welfare arrangements that can be considered
similar to basic income, although they are not unconditional. Many
countries have a system of child benefit,
which is essentially a basic income for guardians of children. A
pension may be a basic income for retired persons. There are also
quasi-basic income programs that are limited to certain population
groups or time periods, like Bolsa Familia
in Brazil, which is concentrated on the poor, or the Thamarat Program
in Sudan, which was introduced by the transitional government to ease
the effects of the economic crisis inherited from the Bashir regime. Likewise, the economic impact of the COVID-19 pandemic prompted some countries to send direct payments to its citizens. The Alaska Permanent Fund
is a fund for all residents of the U.S. state of Alaska which averages
$1,600 annually (in 2019 currency), and is sometimes described as the
only example of a real basic income in practice. A negative income tax
(NIT) can be viewed as a basic income for certain income groups in
which citizens receive less and less money until this effect is reversed
the more a person earns.
Critics claim that a basic income at an appropriate level for all
citizens is not financially feasible, fear that the introduction of a
basic income would lead to fewer people working, and/or consider it
socially unjust that everyone should receive the same amount of money
regardless of their individual need. Proponents say it is indeed
financeable, arguing that such a system, instead of many individual
means-tested social benefits, would eliminate much expensive social
administration and bureaucratic efforts, and expect that unattractive
jobs would have to be better paid and their working conditions improved
because there would have to be an incentive to do them when already
receiving an income, which would increase the willingness to work.
Advocates also argue that a basic income is fair because it ensures that
everyone has a sufficient financial basis to build on and less
financial pressure, thus allowing people to find work that suits their
interests and strengths.
Early historical examples of unconditional payments date back to
antiquity, and the first proposals to introduce a regular
unconditionally paid income for all citizens were developed and
disseminated between the 16th and 18th centuries. After the Industrial Revolution,
public awareness and support for the concept increased. At least since
the mid-20th century, basic income has repeatedly been the subject of
political debates. In the 21st century, several discussions are related
to the debate about basic income, including those regarding automation, artificial intelligence (AI), and the future of the necessity of work. A key issue in these debates is whether automation and AI will significantly reduce the number of available jobs
and whether a basic income could help prevent or alleviate such
problems by allowing everyone to benefit from a society's wealth, as
well as whether a UBI could be a stepping stone to a resource-based or post-scarcity economy.
Trajan, emperor of Rome from 98 to 117 AD, personally gave 650 denarii (equivalent to perhaps US$430 in 2023) to all common Roman citizens who applied.
16th century
In his Utopia (1516), English statesman and philosopher Thomas More depicts a society in which every person receives a guaranteed income.
In this book, basic income is proposed as an answer to the statement
"No penalty on earth will stop people from stealing, if it's their only
way of getting food", stating:
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.
Spanish scholar Johannes Ludovicus Vives
(1492–1540) proposed that the municipal government should be
responsible for securing a subsistence minimum to all its residents "not
on the grounds of justice but for the sake of a more effective exercise
of morally required charity." Vives also argued that to qualify for
poor relief, the recipient must "deserve the help he or she gets by
proving his or her willingness to work."
18th century
In 1797, English RadicalThomas Spence published The Rights of Infants in 1797 as a response to Thomas Paine's Agrarian Justice. In this essay Spence proposes the introduction of an unconditional basic income to all members of the community. Such allowance would be financed through the socialization
of land and the benefits of the rents received by each municipality. A
part of everyone's earnings would be seized by the State, and given to
others.
English-born American philosopher Thomas Paine authored Common Sense (1776) and The American Crisis (1776–1783), the two most influential pamphlets at the start of the American Revolution. His essay, Agrarian Justice,
was published in 1797, In it, he proposed concrete reforms to abolish
poverty. In particular, he proposed a universal social insurance system
comprising old-age pensions and disability support, and universal
stakeholder grants for young adults, funded by a 10% inheritance tax
focused on land, it is also considered one of the earliest proposals for
a social security
system. Thomas Paine summarized his view by stating that "Men did not
make the earth. It is the value of the improvements only, and not the
earth itself, that is individual property. Every proprietor owes to the
community a ground rent for the land which he holds." Paine saw
inheritance as being partly a common fund and wanted to supplement the
citizen's dividend in a tax on inheritance transfers.
19th century
Henry George
proposed to create a pension and disability system, and a broad social
support system from a single tax on land and natural resource value.
Social support would be distributed to residents "as a right" instead of
as charity. George mentioned, but did not stress, the possibility of
direct cash distribution of land rent. His ideas gave rise to the
economic philosophy now known as Georgism or the "single tax movement", which is an economic ideology holding that, although people should own the value they produce themselves, the economic rent derived from land—including from all natural resources, the commons, and urban locations—should belong equally to all members of society. Some Georgists refer to unconditional basic income funded by the single tax as a citizen's dividend in reference to Thomas Paine's proposal from the 19th Century.
Early 20th century
Around 1920, support for basic income started growing, primarily in England.
Bertrand Russell
(1872–1970) argued for a new social model that combined the advantages
of socialism and anarchism, and that basic income should be a vital
component in that new society.
In the United Kingdom at the end of World War I, Dennis and Mabel
Milner, a Quaker married couple of the Labour Party, published a short
pamphlet entitled "Scheme for a State Bonus" (1918) that argued for the
"introduction of an income paid unconditionally on a weekly basis to all
citizens of the United Kingdom." They considered it a moral right for
everyone to have the means to subsistence, and thus it should not be
conditional on work or willingness to work.
C. H. Douglas
was an engineer who became concerned that most British citizens could
not afford to buy the goods that were produced, despite the rising
productivity in British industry. His solution to this paradox was a new
social system he called social credit, a combination of monetary reform and basic income.
In 1944 and 1945, the Beveridge Committee, led by the British economist William Beveridge,
developed a proposal for a comprehensive new welfare system of social
insurance, means-tested benefits, and unconditional allowances for
children. Committee member Lady Rhys-Williams
argued that the incomes for adults should be more like a basic income.
She was also the first to develop the negative income tax model. Her son Sir Brandon Rhys-Williams
proposed a basic income to a parliamentary committee in 1982, and soon
after that in 1984, the Basic Income Research Group, now the Citizen's
Basic Income Trust, began to conduct and disseminate research on basic
income.
Late 20th century
Milton Friedman proposed the idea of a negative income tax (NIT), which effectively sanctioned a basic income for all, in his book Capitalism and Freedom published in 1962. In his 1964 State of the Union address, U.S. President Lyndon B. Johnson introduced legislation to fight the "war on poverty".
Johnson believed in expanding the federal government's roles in
education and health care as poverty reduction strategies. In this
political climate, the idea of a guaranteed income for every American
also took root. Notably, a document, signed by 1200 economists, called
for a guaranteed income for every American. Six ambitious basic income
experiments started up on the related concept of negative income tax.
Succeeding President Richard Nixon explained its purpose as "to provide both a safety net for the poor and a financial incentive for welfare recipients to work." Congress eventually approved a guaranteed minimum income for the elderly and the disabled.
In the mid-1970s the main competitor to basic income and negative income tax, the Earned income tax credit
(EITC), or its advocates, won over enough legislators for the US
Congress to pass laws on that policy. In 1986, the Basic Income European
Network, later renamed to Basic Income Earth Network (BIEN), was founded, with academic conferences every second year. Other advocates included the green political movement, as well as activists and some groups of unemployed people.
In the latter part of the 20th century, discussions were held
around automatization and jobless growth, the possibility of combining
economic growth with ecologically sustainable development, and how to
reform the welfare state bureaucracy. Basic income was interwoven in
these and many other debates. During the BIEN academic conferences,
there were papers about basic income from a wide variety of
perspectives, including economics, sociology, and human rights
approaches.
In 2019, in California, then-Stockton Mayor Michael Tubbs
initiated an 18-month pilot program of guaranteed income for 125
residents as part of the privately funded S.E.E.D. project there.
In the 2020 Democratic Party primaries, political newcomer Andrew
Yang touted basic income as his core policy. His policy, referred to as
a "Freedom Dividend", would have provided adult American citizens US$1,000 a month independent of employment status.
On 21 January 2021, in California, the two-year donor-funded Compton Pledge began distributing monthly guaranteed income payments to a "pre-verified" pool of low-income residents,
in a program gauged for a maximum of 800 recipients, at which point it
will be one of the larger among 25 U.S. cities exploring this approach
to community economics.
Beginning in December 2021, Tacoma, Washington,
piloted "Growing Resilience in Tacoma" (GRIT), a guaranteed income
initiative that provides $500 a month to 110 families. GRIT is part of
the University of Pennsylvania's Center for Guaranteed Income Research larger study. A report on the results of the GRIT experiment will be published in 2024.
Response to COVID-19
As a response to the COVID-19 pandemic and related economic impact, universal basic income and similar proposals such as helicopter money and cash transfers were increasingly discussed across the world.
Most countries implemented forms of partial unemployment schemes, which
effectively subsidized workers' incomes without a work requirement.
Around ninety countries and regions including the United States, Spain,
Hong Kong, and Japan introduced temporary direct cash transfer programs
to their citizens.
In Europe, a petition calling for an "emergency basic income" gathered more than 200,000 signatures, and polls suggested widespread support in public opinion for it.
Unlike the various stimulus packages of the US administration, the EU's
stimulus plans did not include any form of income-support policies.
Two
ways of looking at basic income when combined with a flat income tax,
both of which result in the same net income (orange line): 1. (red)
stipend with conventional tax for income above the stipend. 2. (blue)
negative tax for low-income people and conventional tax for high-income
people.
The diagram shows a basic income/negative tax system combined with flat income tax (the same percentage in tax for every income level).
Y is here the pre-tax salary given by the employer and y' is the net income.
Negative income tax
For low earnings, there is no income tax in the negative income
tax system. They receive money, in the form of a negative income tax,
but they do not pay any tax. Then, as their labour income increases,
this benefit, this money from the state, gradually decreases. That
decrease is to be seen as a mechanism for the poor, instead of the poor
paying tax.
Basic income
That is, however, not the case in the corresponding basic income
system in the diagram. There everyone typically pays income taxes. But
on the other hand, everyone also gets the same amount of basic income.
But the net income is the same
But, as the orange line in the diagram shows, the net income is
anyway the same. No matter how much or how little one earns, the amount
of money one gets in one's pocket is the same, regardless of which of
these two systems are used.
Basic income and negative income tax are generally seen to be similar in economic net effects, but there are some differences:
Psychological. Philip Harvey accepts that "both systems
would have the same redistributive effect and tax earned income at the
same marginal rate" but does not agree that "the two systems would be
perceived by taxpayers as costing the same".
Tax profile. Tony Atkinson made a distinction based on whether the tax profile was flat (for basic income) or variable (for NIT).
Timing. Philippe Van Parijs
states that "the economic equivalence between the two programs should
not hide the fact that they have different effects on recipients because
of the different timing of payments: ex-ante in Basic Income, ex-post in Negative Income Tax".
Perspectives and arguments
Automation
There is a prevailing opinion that we are in an era of technological
unemployment – that technology is increasingly making skilled workers
obsolete.
Prof. Mark MacCarthy (2014)
One central rationale for basic income is the belief that automation and robotisation could result in technological unemployment,
leading to a world with fewer paid jobs. A key question in this context
is whether a basic income could help prevent or alleviate such problems
by allowing everyone to benefit from a society's wealth, as well as
whether a UBI could be a stepping stone to a resource-based or post-scarcity economy.
U.S. presidential candidate and nonprofit founder Andrew Yang has stated that automation caused the loss of 4 million manufacturing jobs and advocated for a UBI (which he calls a Freedom Dividend) of $1,000/month rather than worker retraining programs. Yang has stated that he is heavily influenced by Martin Ford.
Ford, in his turn, believes that the emerging technologies will fail to
deliver a lot of employment; on the contrary, because the new
industries will "rarely, if ever, be highly labor-intensive".
Similar ideas have been debated many times before in history—that "the
machines will take the jobs"—so the argument is not new. But what is
quite new is the existence of several academic studies that do indeed
forecast a future with substantially less employment, in the decades to
come.Additionally, President Barack Obama
has stated that he believes that the growth of artificial intelligence
will lead to an increased discussion around the idea of "unconditional
free money for everyone".[56]
Some proponents of UBI have argued that basic income could increase
economic growth because it would sustain people while they invest in
education to get higher-skilled and well-paid jobs.However, there is also a discussion of basic income within the degrowth movement, which argues against economic growth.
Advocates contend that the guaranteed financial security of a UBI will increase the population's willingness to take risks, which would create a culture of inventiveness and strengthen the entrepreneurial spirit.
The cost of a basic income is one of the biggest questions in the
public debate as well as in the research and depends on many things. It
first and foremost depends on the level of the basic income as such,
and it also depends on many technical points regarding exactly how it is
constructed.
While opponents claim that a basic income at an adequate level
for all citizens cannot be financed, their supporters propose that it
could indeed be financed, with some advocating a strong redistribution and restructuring of bureaucracy and administration for this purpose.
According to the George Gibbs Chair in Political Economy and Senior Research Fellow at the Mercatus Center at George Mason University and nationally syndicated columnist
Veronique de Rugy's statements made in 2016, as of 2014, the annual
cost of a UBI in the US would have been about $200 billion cheaper than
the US system put in place at that date. By 2020, it would have been
nearly a trillion dollars cheaper.
American economist Karl Widerquist
argues that simply multiplying the amount of the grant by the
population would be a naive calculation, as this is the gross costs of
UBI and does not take into account that UBI is a system where people pay
taxes on a regular basis and receive the grant at the same time.
According to Swiss economist Thomas Straubhaar,
the concept of UBI is basically financeable without any problems. He
describes it as "at its core, nothing more than a fundamental tax
reform" that "bundles all social policy measures into a single
instrument, the basic income paid out unconditionally."
He also considers a universal basic income to be socially just,
arguing, although all citizens would receive the same amount in the form
of the basic income at the beginning of the month, the rich would have
lost significantly more money through taxes at the end of the month than
they would have received through the basic income, while the opposite
is the case for poorer people, similar to the concept of a negative
income tax.
Inflation of labor and rental costs
One
of the most common arguments against UBI stems from the upward pressure
on prices, in particular for labor and housing rents, which would
likely cause inflation.
Public policy choices such as rent controls or land value taxation
would likely affect the inflationary potential of universal basic
income.
Work
Many critics
of basic income argue that people, in general, will work less, which in
turn means less tax revenue and less money for the state and local
governments.
Although it is difficult to know for sure what will happen if a whole
country introduces basic income, there are nevertheless some studies who
have attempted to look at this question:
In negative income tax experiments in the United States in 1970
there was a five percent decline in the hours worked. The work reduction
was largest for second earners in two-earner households and weakest for
primary earners. The reduction in hours was higher when the benefit was
higher.
In the Mincome
experiment in rural Dauphin, Manitoba, also in the 1970s, there were
slight reductions in hours worked during the experiment. However, the
only two groups who worked significantly less were new mothers, and
teenagers working to support their families. New mothers spent this time
with their infant children, and working teenagers put significant
additional time into their schooling.
A study from 2017 showed no evidence that people worked less because of the Iranian subsidy reform (a basic income reform).
Regarding the question of basic income vs jobs, there is also the
aspect of so-called welfare traps. Proponents of basic income often
argue that with a basic income, unattractive jobs would necessarily have
to be better paid and their working conditions improved, so that people
still do them without need, reducing these traps.
By definition, universal basic income does not make a distinction
between "deserving" and "undeserving" individuals when making payments.
Opponents argue that this lack of discrimination is unfair: "Those who
genuinely choose idleness or unproductive activities cannot expect those
who have committed to doing productive work to subsidize their
livelihood. Responsibility is central to fairness."
Proponents usually view UBI as a fundamental human right that enables an adequate standard of living which every citizen should have access to in modern society. It would be a kind of foundation guaranteed for everyone, on which one could build and never fall below that subsistence level.
It is also argued that this lack of discrimination between those
who supposedly deserve it and those who do not is a way to reduce social stigma.
In addition, proponents of UBI may argue that the "deserving" and
"undeserving" categories are a superficial classification, as people
who are not in regular gainful employment also contribute to society,
e.g. by raising children, caring for people, or doing other
value-creating activities which are not institutionalized. UBI would
provide a balance here and thus overcomes a concept of work that is
reduced to pure gainful employment and disregards sideline activities
too much.
The
first comprehensive systematic review of the health impact of basic
income (or rather unconditional cash transfers in general) in low- and
middle-income countries, a study that included 21 studies of which 16
were randomized controlled trials, found a clinically meaningful
reduction in the likelihood of being sick by an estimated 27%.
Unconditional cash transfers, according to the study, may also improve
food security and dietary diversity. Children in recipient families are
also more likely to attend school and the cash transfers may increase
money spent on health care.
A 2022 update of this landmark review confirmed these findings based on
a grown body of evidence (35 studies, the majority being large randomized controlled trials) and additionally found sufficient evidence that unconditional cash transfers also reduce the likelihood of living in extreme poverty.
The Canadian Medical Association passed a motion in 2015 in clear support of basic income and for basic income trials in Canada.
Omitara, one of the two poor villages in Namibia where a local basic income was tested in 2008–2009
Since the 1960s, but in particular, since the late 2000s, several
pilot programs and experiments on basic income have been conducted. Some
examples include:
1960s−1970s
Experiments with negative income tax in the United States and Canada in the 1960s and 1970s.
The province of Manitoba, Canada experimented with Mincome, a basic guaranteed income, in the 1970s. In the town of Dauphin,
Manitoba, labor only decreased by 13%, much less than expected. This
program was ended after issues with the cost becoming unsustainable
started to arise.
2000−2009
The basic income grant in Namibia launched in 2008 and ended in 2009.
An independent pilot implemented in São Paulo, Brazil launched in 2009.
2010−2019
Basic income trials run in 2011–2012 in several villages in India, whose government has proposed a guaranteed basic income for all citizens. It was found that basic income in the region raised the education rate of young people by 25%.
Iran
introduced a national basic income program in the autumn of 2010. It is
paid to all citizens and replaces the gasoline subsidies, electricity,
and some food products,
that the country applied for years to reduce inequalities and poverty.
The sum corresponded in 2012 to approximately US$40 per person per
month, US$480 per year for a single person, and US$2,300 for a family of
five people.
In Spain, the ingreso mínimo vital, the income guarantee system, is an economic benefit guaranteed by the social security in Spain, but in 2016 was considered in need of reform.
In South Korea the Youth Allowance Program was started in 2016 in the City of Seongnam, which would give every 24-year-old citizen 250,000 won
(~US$215) every quarter in the form of a "local currency" that could
only be used in local businesses. This program was later expanded to the
entire province of Gyeonggi in 2018.
The GiveDirectly experiment in a disadvantaged village of Nairobi, Kenya,
benefitting over 20,000 people living in rural Kenya, is the
longest-running basic income pilot as of November 2017, which is set to
run for 12 years.
A project called Eight in a village in Fort Portal, Uganda,
that a nonprofit organization launched in January 2017, which provides
income for 56 adults and 88 children through mobile money.
A two-year pilot the Finnish government began in January 2017 which involved 2,000 subjects In April 2018, the Finnish government rejected a request for funds to extend and expand the program from Kela (Finland's social security agency).
An experiment in the city of Utrecht, Netherlands launched in early 2017, that is testing different rates of aid.
A three-year basic income pilot that the Ontario provincial government, Canada, launched in the cities of Hamilton, Thunder Bay and Lindsay in July 2017.
Although called basic income, it was only made available to those with a
low income and funding would be removed if they obtained employment,
making it more related to the current welfare system than true basic
income. The pilot project was canceled on 31 July 2018 by the newly
elected Progressive Conservative government under Ontario PremierDoug Ford.
In Israel, in 2018 a non-profit initiative GoodDollar started with
an objective to build a global economic framework for providing
universal, sustainable, and scalable basic income through the new
digital asset technology of blockchain. The non-profit aims to launch a
peer-to-peer money transfer network in which money can be distributed to
those most in need, regardless of their location, based on the
principles of UBI. The project raised US$1 million from a financial
company.
The Rythu Bandhu scheme is a welfare scheme started in the state of Telangana, India, in May 2018, aimed at helping farmers. Each farm owner receives 4,000 INR per acre twice a year for rabi and kharif
harvests. To finance the program a budget allocation of 120 billion INR
(US$1.55 Billion as of May 2022) was made in the 2018–2019 state
budget.
2020−present
Swiss non-profit Social Income started paying out basic incomes in the form of mobile money in 2020 to people in need in Sierra Leone. Contributions finance the international initiative from people worldwide, who donate 1% of their monthly paychecks.
In May 2020, Spain introduced a minimum basic income, reaching about
2% of the population, in response to COVID-19 in order to "fight a
spike in poverty due to the coronavirus pandemic". It is expected to
cost state coffers three billion euros ($3.5 billion) a year."
In August 2020, a project in Germany started that gives a 1,200 Euros monthly basic income in a lottery system to citizens who applied online. The crowdsourced project will last three years and be compared against 1,380 people who do not receive basic income.
In October 2020, HudsonUP was launched in Hudson, New York, by The Spark of Hudson and Humanity Forward Foundation
to give $500 monthly basic income to 25 residents. It will last five
years and be compared against 50 people who are not receiving basic
income.
In May 2021, the government of Wales,
which has devolved powers in matters of Social Welfare within the UK,
announced the trialling of a universal basic income scheme to "see
whether the promises that basic income holds out are genuinely
delivered".
From July 2022 over 500 people leaving care in Wales were offered £1600
per month in a 3-year £20 million pilot scheme, to evaluate the effect
on the lives of those involved in the hope of providing independence and
security to people.
In July 2022, Chicago
began a year-long guaranteed income program by sending $500 a month to
5,000 households for one year in a lottery system to citizens who
applied online. A similar program was launched in late 2022 by Cook County, Illinois
(which encompasses the entirety of Chicago as well as several suburbs)
which sent monthly $500 payments to 3,250 residents with a household
income at or below 250% of the federal poverty level for two years.
In June 2023, The Guardian reported that a universal basic income of £1,600 a month is to be trialled in two places in England – Jarrow and East Finchley.
The Permanent Fund of Alaska in the United States provides a kind of
yearly basic income based on the oil and gas revenues of the state to
nearly all state residents. More precisely the fund resembles a sovereign wealth fund, investing resource revenues into bonds, stocks,
and other conservative investment options with the intent to generate
renewable revenue for future generations. The fund has had a noticeable
yet diminishing effect on reducing poverty among rural Alaska Indigenous
people, notably in the elderly population. However, the payment is not high enough to cover basic expenses, averaging $1,600 annually per resident in 2019 currency
(it has never exceeded $2,100), and is not a fixed, guaranteed amount.
For these reasons, it is not always considered a basic income. However,
some consider it to be the only example of a real basic income.
Macau's
Wealth Partaking Scheme provides some annual basic income to permanent
residents, funded by revenues from the city's casinos. However, the
amount disbursed is not sufficient to cover basic living expenses, so it
is not considered a basic income.
Bolsa Família is a large social welfare program in Brazil that
provides money to many low-income families in the country. The system is
related to basic income, but has more conditions, like asking the
recipients to keep their children in school until graduation. As of
March 2020, the program covers 13.8 million families, and pays an
average of $34 per month, in a country where the minimum wage is $190 per month.
Other welfare programs
Pension:
A payment that in some countries is guaranteed to all citizens above a
certain age. The difference from true basic income is that it is
restricted to people over a certain age.
Child benefit: A program similar to pensions but restricted to parents of children, usually allocated based on the number of children.
Conditional cash transfer:
A regular payment given to families, but only to the poor. It is
usually dependent on basic conditions such as sending their children to
school or having them vaccinated. Programs include Bolsa Família in Brazil and Programa Prospera in Mexico.
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