Four strands of thought come together in CI. They are: the amelioration of the poverty trap; the pursuit of economic efficiency; the uncoupling of income and work; and the concern for an individual's freedom.
A Citizen's Income is an automatic, unconditional and nonwithdrawable income for every citizen, paid for by reducing tax allowances and means-tested and contributory benefits.
A Citizen's Income scheme (sometimes called Basic Income or Universal Benefit) is intended to overcome the failings of the present welfare state. It would be simple in application, increase economic efficiency, help prevent poverty and unite our society.
Thomas Paine recommended that every citizen should receive an income from the state, in compensation for the inequitable division of land, which he regarded as belonging to every citizen.
In 1920, Major C.H. Douglas proposed Social Credit or National Dividend as a remedy for unemployment. Variations of this idea entered the economic and social policy debates of the inter-war period and were advocated by several leading economists associated with John Maynard Keynes.
And then Beveridge's report and the subsequent legislation for the welfare state as we know it included a provision for Family Allowances: an allowance for every child except the first in each family ( - Child Benefit later extended the benefit to all children). Beveridge's system of contributory benefits backed up by a means-tested safety-net soon became a means-tested safety net to which contributory benefits contributed, because the means-tested benefit-levels were set too close to those for contributory benefits, and means-tested benefits included housing costs and contributory benefits didn't. The stage was therefore set for ideas aimed at reform, and the example of Child Benefit offered a possible way forwards.
All through his career the late Professor James Meade of Cambridge University (winner of the Nobel prize for Economics in 1977) advocated the introduction of what we now call a Citizen's Income.
In Britain, during the 1930s, he advocated what he called a Social or National Dividend which would be payable to all citizens. But the idea of an income paid to individuals and replacing existing cash benefits and income tax reliefs is believed to have originated from the "New Social Contract" advocated in 1943 by Lady Juliet Rhys Williams as an alternative to the Beveridge Report. Her "contract" was close to a Citizen's Income but differed in that it depended on a work test. Professor Meade later developed Lady Rhys Williams' ideas, abandoning her work test, and financing the scheme through income tax. He was particularly concerned about Citizen's Income as a method of helping a return to full employment. He argued that a Citizen's Income served three purposes: "(1) It relieves poverty by guaranteeing for every citizen a sufficient Minimum Acceptable Level of income. (2) It does so without destroying incentives to work if it is not withdrawn as the citizen earns other income. (3) It provides a universal supplement to earnings which is aimed at justifying any restriction of rates of pay which is needed to ensure full employment." A few months before his death in December 1995, Meade had once again returned to this theme in his book Full Employment Regained? ISBN 052155697X. Citizen's Income is also the logical conclusion to Richard Titmuss' famous 1955 lecture in which he drew attention to similarities and inequities between social security benefits, tax reliefs and occupational benefits. In 1962 in their book "Capitalism and Freedom", Milton and Rose Friedman proposed negative income tax as a way of escaping work-status benefits. But negative income tax is not the same as a CI because the assessment unit is the family or household and not the individual and the amounts payable depend on the income of family members.
In 1972 the Government of Edward Heath put forward detailed proposals for a tax-credit scheme. It would have replaced most income tax allowances and some social security benefits with tax credits payable in cash where they exceeded tax liability. These tax credits resembled a Citizen's Income in some ways but did not cover the whole of the population. In 1979 child benefit which is a Citizen's Income for children in all but name was introduced.
Politicians from all the major parties have shown interest in the conceptof CI. For a period the Liberal Democrats accepted it as official policy but have since modified their support. CI remains official policy of The Green Party. The independent Commission on Social Justice set up by the late Labour Party leader, John Smith, said that it would be "unwise" to rule out a CI for the future. .
Yes. A CI has a great deal of support in the academic world where much work is being done to assess the exact impact of a CI on our social and industrial life, its costs and benefits.
In Holland the Dutch were discussing "Basisinkommen" in the late l970s. In Belgium, France and Germany the debate is mainly restricted to academic institutions. In Canada in 1985 the MacDonald Commission recommended a Universal Income Security Program with a low guarantee income level, a low tax-back rate, and special "top-up's" for those who are unable to work. The membership of the Basic Income European Network (BIEN) has become increasingly world-wide.
Right across Europe the debate about the future of welfare and social security benefits is opening up. Rising unemployment and prolonged recession have put serious strains on national economies. Unfortunately many Governments are seeking to solve their economic and financial problems at the cost of civilised standards of social welfare. A Citizen's Income is the sort of long-term solution which should be advocated in these circumstances. It combines the possibility of increasing economic efficiency whilst providing a basic level of support which allows the individual maximum freedom.