THE NEED FOR INCOME SECURITY

swiped from The CCPA Monitor of November 2006

- written by Guy Standing

There is a tide in the affairs of men Which, taken at the flood, leads on to fortune. --William Shakespeare, Julius Caesar.

Anxiety, insecurity and uncertaintyãthese are the feelings expressed by a vast number of workers all over the world. There is a growing consensus on the reasons: globalization, consumer capitalism, inequalities of various types, employment insecurity and unemployment, flexible wages, erosion and restructuring of the welfare state, social violence, and a lack of networks of social support.

Amidst all this, trade unions have found it difficult to maintain their appeal. Many of us lament the outcome, and feel sure that society needs strong organizations to protect and advance the rights of all its members, and that without them insecurities will multiply. Yet unions need to rethink how to appeal to people as they go through their working lives. As they do, I believe unions should champion a basic income as part of a strategy for economic security and redistribution.

Unions have always been at their most effective when they have appealed to a vision of the future, rather than clinging to achievements of the past. They should set out to be the vanguard for such a strategy, which should focus on the distributional issues of the time.

We are undergoing a great transformation in the way the economic system functions and in the relationship between economic forces and society. In the past, as superbly shown by Karl Polanyi, each transformation has created a period of instability, as old systems of regulation, social protection and redistribution broke down. In stable periods, those measures help moderate the insecurities and inequalities, at least enough to make most people tolerate their lot, by "embedding the economy in society." Put briefly, when unions were last in a position of strength, between 1945 and about 1975, tripartism and the welfare state performed these three functions reasonably well. Since then, however, inequalities and insecurities have multiplied.

Whether the old system was good or bad, there is no going back. The challenge now is to identify the new systems of regulation, social protection and redistribution that will moderate the insecurities while not undermining the economic dynamism that is driving the global economy.

The global context

In reflecting on feasible and desirable reform of social policy, it is essential to consider two big questions that set the context.

To be stable and prosperous, every society needs a system of regulation, a system of social protection, and a system of redistribution, to embed the economic forces in society and to moderate the insecurities and inequalities faced by most ordinary people.

The first question is: What are the appropriate systems for a globalizing open economy world?

This is not the place to try to provide a detailed answer. But it is important to realize what is not the answer and to see what options are feasible. First, in an open economy the most effective means of regulation against bad labour and social policies and practices is strong bargaining power for workers and others at every level of decisionmaking, which means collective bodies, not just individualistic quasi-legalistic mechanisms, although these are needed as well. It is obvious to most observers that such collective bodies cannot rely on the old models; unions need to broaden their appeal to citizenship rights and be champions of egalitarianism.

Second, for social protection, old-style social insurance schemes are limited, costly, and possibly dysfunctional in societies characterized by labour market flexibility, economic informalization, and fluidity of labour force participation. Means-tested social assistance and behaviour-conditional schemes such as "workfare" are even less viable if one wishes to promote universal social protection. The shortcomings of those schemes should lead to a willingness to think about more universalistic schemes, even though there are other grounds for doing so as well.

As for the most appropriate system of redistribution, in a globalizing economy progressive direct taxation can do little, and even progressive governments have abandoned it as a means of extensive redistribution. Indeed, fiscal policy has become more regressive, worsening inequality. Tax on capital has fallen, tax on labour has risen, while subsidies for capital have risen and subsidies for labour have fallen.

This leads to the second big question. Every great transformation hinges on resolving the social conflict over the distribution of the key assets in that particular era. In an era of crumbling feudalism, the struggle was over land; under industrial capitalism, the struggle was over the means of production, leading to a focus on nationalization of the "commanding heights" of the economy. What are the key assets in the era of globalization? What are the assets over which young progressives of the worldãto whom collective organizations must appeal if they are to thriveãwill wish to struggle to obtain? Put bluntly, they are surely financial capital, the environment (quality space in which to live healthily), and time (quality time in which to develop through work and leisure, in control over one's development), which together could promise economic security. If one accepts that these are the key assets of the era over which we wish to have more control, then we should assess policies and institutions by whether or not they offer us the prospect of obtaining such control.

The modern world is characterized by the frenzied pursuit of profits and possessions. Income and wealth are increasingly concentrated in finance capital. If inequality is to be reduced, all citizens must share in the benefits, which means renewed interest in economic democracy. Economic rights and democracy will surely be at the centre of progressive thinking in the years ahead. Among the advantages of collective and widespread individual ownership of financial capital would be that social controlãincluding control of ecologically irresponsible corporate behaviourãwould be exercised over the blatant rapaciousness so memorably demonstrated by Enron and other big business firms in recent years.

Here is not the place to develop that line of thinking. It is the other key asset that is relevant here, namely quality time. There is a uniquely modern crisis, which is the commodification of human existence. Globalization is not just the financialization of capitalism, but also the spread of insatiable consumption manipulated by constant advertising. In this, the instrumentality of labour is triumphing over the ethics of work, which conjures up "craftsmanship," creativity, and reproductive properties. The jobholder society so feared by Hannah Arendt is gaining ground. Jobs are mainly instrumental. For more and more people, there is something close to that old Soviet joke: "They pretend to pay us, we pretend to work." The emerging version might be: "They pretend my job is important, I pretend to believe them."

To consume is the goal. Alongside the well-known aphorism, "I shop, therefore I am," one should add, "I labour, so that I may shop." There is an underlying frenzy: to make more money, to work longer and more intensively, to take work home and home to one's job. The intensification of labour is threatening our capacity to reproduce physical and mental health. It is not just the Japanese who are suffering from karoshi (death from overwork). There is also a modern disease of presenteeism, staying in a job "at work" even when it would be advisable for one's health to take time off. Meanwhile, the losers are left "licking at the windows" and "bowling alone" in the malls, where teenagers and the elderly "hang out." Ironically, alongside labour intensification is a deepening passivity, epitomized by the watching of "reality" TV and a sequence of entertainments.

This is an exaggeration, of course. But there is what might be called existential stress, an anxiety, an insecurity. More people feel that they are never satisfied, having insatiable needs for money and commodities. We are urged to be "competitive" in almost everything. Education is valued only for the jobs that schooling and human capital may bring. I labour to have more, not to develop myself or my relationships, let alone to preserve and recreate the beauty of nature and society that our forebears have handed down to us. Purchase! Possess! Display! Discard! These are the laws of global consumer capitalism.

It all leads to a time squeeze. And when youth look forward to what their parents or peers are doing, they are surely correct if they think this is no great deal. What sociologists might call existential anomie arises, since more and more people do not belong to a functioning community of people who are working as a unified "class," or as an occupational group, as a union, as a guild, as a cooperative. Since they do not belong to such a collective community in which there is a spirit of social solidarity, there is no regulation of opportunism and social irresponsibility, and there is weaker reciprocity between the old and the young, the married and the single, and between religious and ethnic groups.

This too is an exaggeration, is it not? All right, but the dominant trend is definitely towards a combination of insecurity and anomie, a frenzy of labour (money-making) in a context of social and political passivityãa modern form of "bread and circuses," of MacDonald's, malls, and TV-watching.

How have the mainstream political Èlites responded to this era of social and economic insecurity and rising inequalities? The main responses have been "Third Wayism" on the social democratic side, and "Compassionate Conservatism" on the right-of-centre side. The former emerged in the 1990s when new social democrats yearned for power but were traumatized by a succession of electoral defeats. It was a timid response, accepting the market state. Third-Wayists no longer presented a vision of redistribution, but one of accommodation, offering "globalization with a human face," reflecting an eagerness to grasp at a "consensus," "social dialogue," and similarly vague non-threatening slogans. There was an emphasis on "social integration," in which the lukewarm left did not oppose the individualistic consumerism unleashed by the neoliberals, but tried to appeal to the conscience of the winners of global competitiveness to allow a moderation of market forces in the guise of poverty relief.

In effect, the new social democrats adopted the liberal position of John Rawls, the most influential political thinker of the last quarter of the 20th century, in saying that the primary social goal was the reduction of poverty, focusing on the groups perceived as the least well-off. They did so through a moralistic model in which they have made "socially responsible" behaviour by "claimants" the condition for "entitlement" to public benefits. Some preached "rights," but practised "entitlements." There was the language of pluralism and diversity, but the politics of conformity and norms. In the 1990s, social policy became more judgmental, a peculiar development indeed for those supposedly on the political left.

Third-Wayists expected the state to achieve social integration and market clearing (even full employment, which can still be heard from time to time), whereas their "compassionate conservative" competitors for the political "median voters" say this should be done by "civil society"ãthose religious, anti-poverty, and other NGOs that are playing an increasingly prominent role in social policy.

This is where we are in the first decade of the 21st century, mired in insecurity and inequality, with no prospect that these are being remedied, in which the mainstream political programs are offering a moralistic, paternalistic set of policies, with lower taxes, more subsidies for capital, and other inducements to invest.

Anybody who feels uncomfortable with the two variants of the mainstream political response to globalization should surely want to offer an alternative that could achieve basic security for everybody and a sustainable reduction in inequality. It is within that context that a basic income as a citizenship right should be considered.

What is a basic income?

Trade unionists, as well as all those who count themselves as egalitarians and advocates of social solidarity, should support a basic income as a right of a good society in which dignified work could flourish. Traditionally, there has been reluctance to go in that direction. But times have changed.

In 1984, a group of young social scientists, all supporters of trade unions, set up an organization called the Basic Income European Network (BIEN). Since then, it has attracted a wide cross-section of members from all over the world. Membership does not oblige anybody to adhere to a particular view. But in practice most members believe in the desirability of moving towards a society in which everybody has a right to basic income security. Although some members might disagree on details, the following defines roughly what we mean.

Most importantly, we are talking about basic security as an economic and social right. This is essentially a republican or claim right, developed by Rousseau, Thomas Paine, and others. A claim right implies that policies and institutions should move towards a realization of that right. A rightãand this is important given the way social policy debates have evolved in recent yearsãis unconditional in behavioural terms. You do not have a right if you have to do x, y and z in order to have an entitlement. That is not a right. A right is a right, period.

Second, we are talking about basic security. Basic means it must be meaningful, not a gesture, but not so much that it leads to indolence and loss of motive to function. Above all, it must be enough in order to be able to make rational choices. It must be basic and it must be meaningful.

Third, for basic income security, the income must come in a form that is non-paternalistic. It should not be given to you as a discretionary gesture, in the goodness of someone's heart; it is not charity. It must be in a form that you can decide how best to use it. It must be individual and must be equal, with supplements for those with special needs, for disabilities or frailties. It must be in a form to enable people to make rational choices.

Fourth, the basic income should be regarded as the base of a system of social protection, on top of which should be supplements for special needs, social insurance, and social security, as well as collectively bargained occupational benefits.

Fifth, the move to a basic income should be seen as evolutionary, a form of continuity, not nearly as radical as some enthusiasts convey and many critics seem to believe. In many countries, many of the elements exist already and others are emerging. A key factor is the integration of the tax and benefit systems, which is fast being achieved. Most of those who believe that a basic income should underpin a redistributive strategy advocate a stepby- step approach, weaving the patchwork of existing schemes into a universal base. Several transition routes have been proposed, and some see it coming "through the back door."

Some advocates believe the amount paid should be low initially, building up to a decent level as it became accepted. Others believe that the basic income should be paid initially to selected social groups deemed particularly vulnerable to poverty and insecurity, then gradually extended to others. That is the route that has been taken in Brazil, with its renda minima and bolsa escola schemes that have evolved into the bolsa familia under President Lula. Others, such as Sir Tony Atkinson, have advocated a participation income as an intermediate step towards a full basic income, in which some community work would be a condition for entitlement to the basic income, thereby helping to legitimize the concept with the middle class. The key point is that policy-makers can take a gradualist approach, befitting the cautionary nature of modern politicians and their advisors.

Finally, the name should not distract from the essentials of the idea. The point is that we are talking about a fundamental economic right. Other names sometimes used include "citizenship income grant" and "social dividend." In South Africa, where the trade union confederation COATSU is actively campaigning for it, the term Basic Income Grant has been adopted.

With these definitional elements in mind, there are also two policy principles that should guide us in thinking about redistributive and protection policies. The first, drawing on John Rawls, is what might be called the "security difference principle": A policy or an institutional change is socially just only if it improves the security of the least secure groups in society.

The second principle is what I call the "paternalism test principle." This has been neglected by social policy advisors and politicians in the last 10 years in Europe and elsewhere. The paternalism test principle goes like this: A policy or institutional change is just only if it does not impose controls on some groups that are not imposed on the most free groups in society. That, of course, relates to workfare and a number of other policies that have been evolving.

(Guy Standing is Director of the Socio-Economic Security Program for the Geneva-based International Labour Organization [ILO], a branch of the United Nations. In Part II of this essay, [to be found at 5c1] he will look at the arguments advanced against the adoption of a Basic Income policy and offer his rebuttals as well as the strong arguments for union support of a basic income.)

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