current affairs economics

The basic income and the ideas lying around

In the last few weeks I’ve been pondering what Milton Friedman famously said about how crises are moments of change. “When that crisis occurs, the actions that are taken depend on the ideas that are lying around” he said. His role, along with his fellow neoliberal theorists, was to “develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”

This quote is often used as a warning of how elites can use crises to their own advantage, and I noticed that Naomi Klein opens with it in her recent video about ‘coronavirus capitalism‘. But it applies just as much to progressive ideas, and the one that comes to mind first is the basic income.

The citizen’s income is, without a doubt, one of the ideas that has been ‘lying around’ as the crisis hits. It was a laughable suggestion not so very long ago. A series of reports, feasibility studies, books, campaigns, and pilot projects has pushed it gradually towards mainstream acceptance. As soon as it became clear that ordinary people needed emergency incomes during the crisis, it was ready as a solution. It’s been discussed in Parliament already, with media attention ranging from the Financial Times to the Daily Mail.

Across the Atlantic, the US has already agreed to the related measure of direct cash transfers as part of a stimulus plan. The plan is most similar to the idea of ‘helicopter money‘, which was first suggested by the aforementioned Mr Friedman, as it happens. Hong Kong has taken a similar approach, and so have Australia and Japan. India will give cash transfers to 90 million farmers, and there is an active conversation around basic income.

Others, including Britain, France and New Zealand, have chosen to underwrite wages instead. But as the British government has found, support packages can easily leave people out. An initial plan to shore up wages overlooked the self-employed. A second announcement to support the self-employed left out those who had only recently started working for themselves. There are always gaps, and a basic income approach helps to overcome that problem.

This is a live debate, and things are moving fast. With active campaigns in Britain, France, Italy, Spain and elsewhere, it’s quite possible that we’ll see an emergency citizen’s income somewhere in the world as a response to the coronavirus. In fact, there’s a chance that somebody has done it already and I haven’t heard about it yet.

To use the terms that Joseph Overton set out, basic income has gone from being a radical idea to a sensible one, and perhaps now a popular one. Policy is the last step.

4 comments

  1. I’d bet money Joesph Stiglitz support Guaranteed Annual Income, and I’m not evening a betting person. I’d add to such program a basic annual Carbon disbursement. Use more you are penalized finacially, use less you are rewarded… sort of building on the Carbon fee and dividend system. Happy Easter tide to you and your family Jeremy. Stay safe.

  2. Rather disappoint in the lack of grand vision by the trade union movement in their rather negative attitude to universal basic income

    Click to access en_ubi_full_report_2019.pdf


    A modest universal basic income (say $4000 per year) could be IN ADDITION to universal basic services in developed countries and the same level of UBI ($4000 per year) would be a massive boost to poor people in the Global South as long as the funding only comes from progressive wealth taxes on the top 20%.

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