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A case for giving something for nothing

by on October 22, 2010

Instead of cutting benefits, should everyone be receiving them? A radical policy originally by Philippe Van Parijs, here championed by Lawrence and Henry Gruijters, suggests we should do exactly that. First published on The Graduate Times.

A case for giving something for nothing

As part of cutting the budget, George Osborne is trying to solve dependency on government, specifically the ‘poverty trap’. People are stuck in the ‘poverty trap’ for two reasons: employers are unwilling to employ them because their productivity does not exceed the minimum wage plus non-wage costs; and the rewards of employment do not significantly exceed the benefits they receive for being unemployed.

Orthodox thinking (which has translated into policy) since Thatcher has been to get people out of benefits and back to work.  The means of doing so has been via disincentives in the benefits system and training to increase the potential productivity.  The initiative of being even tougher on people on benefits will most probably be this government’s proposal. The idea is that everybody should work and contribute to society and nobody should be receiving something for nothing. In actual fact, however, another convincing route out of the poverty trap is doing the opposite, giving all people exactly something for nothing through a Basic Income (BI).

Philippe Van Parijs argued most comprehensively for a BI in Real Freedom for All – What, if anything, can justify capitalism? A BI would be given to everybody, no matter where they are from, where they live, how much income they have, or the type of household. Giving people something for nothing comes at a cost. Instead of government doing (and funding) almost everything people need to do (and fund), people will have to do almost everything through their own income, which is subsidised by government through the BI.

Van Parijs argues that this would pull anybody out of the poverty trap, as no matter how much somebody is paid they will earn enough to take on a job that matches their productivity. He also argues that a BI would have the economic advantage of giving entrepreneurs the opportunity to take risks as they will have a BI to fall back on.

On the liberal front, he argues that everybody is capable of productivity and just because their productivity is under the minimum wage, this should not mean they cannot get a job.  At the same time it gives people the opportunity to do with their lives what they want to do. If I want to follow a particular career, I should not be pressured by lack of resources into following a different career. A BI would give each individual real power in the economic market through having basic demand. It would, through this, give everybody the freedom to live the life they want to live.

As with communism, a BI guarantees everybody an income and a job (if they want one) as they would only need to be paid as much as their productivity. According to Van Parijs this is the only way in which capitalism can be justified. People need an income in capitalism for ‘real’ liberty. Only through BI can this coalition’s aim be realised. As Nick Clegg put it, the coalition’s aim is to give “everybody no matter where they are from or who they want to be the opportunity to live their life the way they want to live it”.

Many objections have been raised to the idea of BI and for most of them Van Parijs has a convincing answer in his 600-page long book. More important, however, is what you think of this idea? What objections would you raise? Could a BI work? How much would a BI need to be? What would you do if you got a BI?

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