π Economics
Has the pandemic revived debate over universal basic income?

“Universal income is more than a new form of welfare state”

Richard Robert, Journalist and Author
On October 13th, 2021 |
4 mins reading time
“Universal income is more than a new form of welfare state”
Juilen Damon
Julien Damon
Lecturer at Sciences-Po, HEC and En3s, columnist and director at Éclairs
Key takeaways
  • Advocates of universal income fit into various intellectual and political categories; some with the aim of reinforcing the welfare state as a universal base, whilst others push for universal income as way to even overpower said state.
  • Historically, even though social welfare is public, it remains a charitable or philanthropical service.
  • For Julien Damon, universal income is not a magic wand; if its objective is to fight poverty, it would not work because pre-existing social welfare schemes have never achieved that.
  • Rather, he says that as it is envisaged by its advocates, universal income has another objective: to allow freedom in a society where everyone will be able to choose between, for example, a boring but well-paid job or a meaningful but almost unpaid job.

Uni­ver­sal income pro­pos­als that are emerg­ing today in devel­oped coun­tries are sup­port­ed by dif­fer­ent intel­lec­tu­al groups. They all share ques­tions regard­ing the legit­i­ma­cy of social pro­tec­tion and the way it has devel­oped since the end of the 19th cen­tu­ry; to per­fect it, to replace it, or to begin a new chap­ter in history. 

Is the uni­ver­sal basic income (UBI) con­cept, that occu­pies a sub­stan­tial place in pub­lic debate today, left-wing or right-wing?

Julien Damon. Advo­cates for UBI belong to sev­er­al intel­lec­tu­al and polit­i­cal groups. The best-known form of UBI, at the core of much debate today, con­sists of com­ple­ment­ing the wel­fare sys­tem to pre­vent peo­ple from slip­ping through the cracks. On the con­trary, anoth­er school of thought con­sid­ers UBI as a way of com­plete­ly smash­ing the wel­fare state itself. For instance, Mil­ton Fried­man put for­ward the idea of a neg­a­tive tax. In his opin­ion, fur­ther devel­op­ing the wel­fare state is a mis­take; yet, since it would be dif­fi­cult to get rid of, a solu­tion could be to estab­lish a neg­a­tive tax which would be less dam­ag­ing over­all. In addi­tion to tra­di­tion­al lib­er­als, there are also lib­er­tar­i­an-con­ser­v­a­tives like Charles Mur­ray. He pro­pos­es to put an end to all social poli­cies by allo­cat­ing $10,000 every year to each adult to let them plan and pre­pare for retire­ment. So, as we can see, there is not only a great diver­si­ty of mech­a­nisms for UBI, but also a lot of dif­fer­ent ide­olo­gies about why it should exist.

All these ide­olo­gies high­light the sim­plic­i­ty of this con­cept. Is it just because the man­age­ment costs of our com­plex sys­tems today would be sig­nif­i­cant­ly reduced?

This goes much fur­ther. We’re talk­ing about a rad­i­cal sim­pli­fi­ca­tion which ques­tions the very legit­i­ma­cy of the whole edi­fice of social pro­tec­tion. Here again, both sides of the ide­o­log­i­cal spec­trum con­verge, though they do not include the same things in the pro­pos­al. The “social­ist” side is sen­si­tive to a greater trans­paren­cy of the wel­fare sys­tem; it is cur­rent­ly so com­plex that the peo­ple most in need are often unaware that they are eli­gi­ble to receive social ben­e­fits. This is trans­lat­ed by the high rate of “non-take up of social ben­e­fits”. On the “lib­er­al” side, the objec­tive of sim­pli­fi­ca­tion would main­ly be to lim­it the accu­mu­la­tion of finan­cial sup­port that can lead to state hand­outs. After all, the great­est form of sim­pli­fi­ca­tion con­sists of dis­solv­ing everything.

The com­plex­i­ty of social wel­fare schemes stems from a very rich his­to­ry, with vary­ing mod­els of social pro­tec­tion. Are we wit­ness­ing the vic­to­ry of a mod­el or enter­ing a new phase?

His­tor­i­cal­ly, col­lec­tive or uni­ver­sal social pro­tec­tion is an exten­sion of pub­lic sup­port, which would oth­er­wise be con­sid­ered char­i­ty or phil­an­thropy. Over time, two main mod­els emerged. First, the so-called Bis­mar­ck­ian mod­el was a con­trib­u­to­ry and pro­fes­sion­al sys­tem. Employ­ees became “insured per­sons”, a.k.a cov­ered by “social insur­ance”. The sec­ond, the Bev­erid­gian sys­tem, was fund­ed by tax­es and is more uni­ver­sal. In real­i­ty, these two sys­tems fused to pro­duce the hybrid form of social wel­fare that we have today. The French social secu­ri­ty sys­tem, for exam­ple, is Bis­mar­ck­ian in prin­ci­ple, but over time, peo­ples’ rights were expand­ed, and nation­al sol­i­dar­i­ty (i.e. tax­es) grad­u­al­ly became an impor­tant part of its fund­ing; as is the case in oth­er devel­oped coun­tries. One might con­sid­er that UBI, which is Bev­erid­gian in essence, is an addi­tion­al phase in this evo­lu­tion with the com­ple­tion of uni­ver­sal­i­sa­tion. But that would sug­gest it is a con­ti­nu­ity of cur­rent social wel­fare, while there is some­thing tru­ly new in this pro­pos­al. In any case, UBI is not a mag­ic wand you can wave to sud­den­ly repair his­tor­i­cal models.

The con­cept of uni­ver­sal basic income can also be in con­tra­dic­tion with a social com­po­nent: social pro­tec­tion schemes are also social poli­cies, and each one has a pre­cise aim. Could intro­duc­ing a uni­ver­sal basic income chal­lenge this idea of actions tar­get­ed at spe­cif­ic social issues?

Yes, if we are talk­ing about a replace­ment. No, if the goal is to com­ple­ment the exist­ing sys­tem. We must under­stand that in devel­oped coun­tries, even if we know that our social wel­fare sys­tems cause many prob­lems, they are so mas­sive and inter­twined in our lives that a com­plete sub­sti­tu­tion would be tru­ly rev­o­lu­tion­ary – although, very unlike­ly. More­over, the ques­tion is dif­fer­ent in dif­fer­ent coun­tries, such as India or Kenya, where social pro­tec­tion has yet to be devel­oped and in which UBI exper­i­ments are tak­ing place.

It is also anoth­er way of approach­ing the issue of amounts, often brought up with regard to this ques­tion. In a wealthy coun­try, it would be easy to intro­duce a uni­ver­sal income of €1 euro per year per cit­i­zen. But if we were to increase UBI to €500 per month, it would rep­re­sent a con­sid­er­able effort and require exten­sive arbi­tra­tion. Spe­cial­ists point out that it would have no impact for peo­ple who already ben­e­fit from exist­ing social aids (like the RSA, Revenu de Sol­i­dar­ité Active, in France). At most, it would lim­it the rate of non-take up of social ben­e­fits. To put it sim­ply, if the objec­tive is to fight pover­ty, UBI is point­less because many tools already exist for that.

Is the objec­tive real­ly to fight pover­ty, then?

That is an excel­lent ques­tion which falls in a dif­fer­ent cat­e­go­ry. The wel­fare state was his­tor­i­cal­ly cre­at­ed to pro­tect peo­ple against the main risks in life: ill­ness, pen­ni­less retire­ment, unem­ploy­ment and so on. It is the rea­son why social secu­ri­ty often takes the form of insur­ance. But with the UBI con­cept, as con­sid­ered by both its most rad­i­cal advo­cates like Philippe Van Par­i­js, the objec­tive is entire­ly dif­fer­ent: it allows free­dom. The idea is to cre­ate a soci­ety in which every­one is free to choose between, let’s say, a bor­ing but well-paid job or a mean­ing­ful job with low wages. It is the rea­son why the amounts pro­posed for UBI are clos­er to the aver­age salary than social aids. The objec­tive lies in the work itself. More­over, the idea is not to even things out, but rather to offer indi­vid­u­als the pos­si­bil­i­ty of a delib­er­ate choice. This pro­found­ly orig­i­nal vision of soci­ety rais­es many ques­tions. Clear­ly, it does not just con­sist of invent­ing the social secu­ri­ty sys­tem of the future, to cre­ate a ver­sion 2.0 of the wel­fare state. The aim is to pro­vide every­one with a means to access free­dom. This calls for reflec­tion, doesn’t it?