Basic Income: A Guide for the Open-Minded

Guy Standing

Why I looked at this book

It's a long story.

Some time ago I heard about The corruption of capitalism:Why rentiers thrive and work does not pay. Using the word 'rentiers' in a disparaging way rang alarm bells for me. My reading of Capital in the twenty-first century suggests rentiers can be thought of as good guys. And most people who live of income from investments are pensioners. But I did wonder what Standing had to say, and thought I might read his book if I could find it in the library. That proved to be difficult though, so I considered reading some of Standing's other works.

I've also read Utopia for Realists by 'Mr Basic Income' that is Rutger Bregman. I expected that book to put forward a path to a basic income society. But it didn't. So I decided I needed to find another book on this topic.

Then there was Human evolution: A Pelican Introduction by Robin Dunbar. I thought this was well worth reading. What I wasn't so sure about was whether it really qualified as an introduction to the topic. So I took a look at the other works in the Pelican Introduction series, and it did seem that they were more about someone putting forward their idea. That is how I came across Basic income : and how we can make it happen : a Pelican introduction. That seems to be the same book as this one (but this edition is easier to preview online)

First impressions

Standing starts off with a look at the history of the basic income concept. So far it looks good, so I hope that the book with go into details of how the economics a basic income might work in practice.

There's one thing I'd note though. In The corruption of capitalism I didn't like the use of the word 'rentiers'. In this book Standing seems a bit too keen to use the word 'paternalistic'. This seems to mean a system where an income which isn't totally unconditional, but if that is what the electorate has decided then I wouldn't call it paternalism. One thing that worries me about a basic income system is that if large amounts of money are raised for this purpose, politicians may well decide that they know best about what to spend it on. That's what I would call paternalism.

Note: I read Basic income : and how we can make it happen : a Pelican introduction which is the same as this book.

Main review

Standing argues that a basic income isn't just about enabling people to buy more stuff, that having a guaranteed regular income enhances greatly the security and freedom of many people in society. He is against the idea of 'larourism', that we all ought to do a certain amount of 'productive' work to deserve the income we get. This is especially relevant as automation becomes more and more prevalent. The book also looks at the arguments which have been put forward against the idea of basic income and gives counter-arguments for each of them.

It's a well thought out book, but I'm not entirely convinced - I felt that there were still some problems with the arguments put forward for a basic income, as follows. On one page of the book we see "a professor's teaser" Two alternatives are given: (A) is a means tested benefit which is gradually withdrawn with increased earnings and (B) is a basic income with a tax on further earnings. But (A) and (B) are in fact the same, just framed in different ways. So those who say (A) is obviously preferable to the crazy (B) don't know what they're talking about. That's all very well, but Standing then goes on to say how much better (B) is than (A). Oh dear. He seems to miss that the costs of means testing in (A) have equivalent costs of tax assessment in (B). My feeling is that if you are going to have a basic income then you need a substantial tax allowance on top of that, but that would greatly affect the affordability.

Another problem with the book is Standing's continual worry about 'paternalism' and his emphasis that a basic income isn't just about targeting the poor. For me this backfires, as much of the book seems to be written as if there were a big papa handing out money, rather than a complex web of winners and losers. I would have liked to read more of what we might expect from a society which rejects labourism, so that everyone has the choice of how they are going to spend their lives. I'd also like more discussion of the macroeconomic effects of a basic income - my worry is that many people would spend any extra money on accommodation, thus bidding up the price of houses and cancelling out much of the benefit. I'm not totally convinced that targeting is so bad, it would seem to me that providing, for example, free meals for schoolchildren has benefits which providing the money directly does not. Also, while there is a chapter on affordability, there is very little in the way of numbers, just references to other people who have done the calculations. I'd have liked to see at least an appendix with some definite numbers as to how a basic income might work in a developed country.

So I'm not entirely persuaded. I would only see a basic income as being a part of a larger scheme of new taxes, in particular taxes based on consumption and resource use. Then the basic income would compensate those in the middle for the extra tax they would likely have to pay.

Despite my misgivings I felt that the book made a good case for the basic income idea. It goes into some detail on the running of pilot schemes to test basic income plans, and brings the idea further into the realm of what might be possible. I'd say it's well worth reading to get involved in the discussion of whether a basic income is an idea whose time has come.