Volume 1, Issue 2 - Retrospective: A Capitalist Road to Communism - Twenty Years After

A common objection to unconditional basic income is that it is unfair because it allows people to live off the labour of their fellow citizens without making a reciprocal productive contribution to society (the 'exploitation objection'). The paper outlines four responses to the objection: the perfectionism, balance of fairness, balance of reciprocity, and inherited asset responses. While it finds little merit in the first, it argues that, taken together, the latter three add up to a powerful reply to the exploitation objection. In concluding, the paper also explains that even if the exploitation objection can be satisfactorily met, there might still be other justice-based reasons for making basic income conditional on behaviour.

This paper defends a regularly paid basic income as being better equipped to tackle unfair inequalities of outcome. It is argued that the timing of "option-luck" failures – in particular, whether they occur early in a lifetime of calculated gambles, and whether they are clustered together – may lead to a form of "brute bad luck," referred to as "cumulative misfortune." A basic income that is paid on a regular basis provides a way to prevent the emergence of cumulative misfortune, because the basic income at least partially replenishes the individual's ability to take the next calculated gamble. The upshot of this is a nonpaternalistic justification for an unconditional basic income that is paid regularly and is nonmortgageable. This has an important bearing on the debate between those who advocate a one-off endowment at the start of adult life and those who advocate a basic income paid regularly throughout one's life. The paper contends that a regular basic income represents a superior social policy because it prevents the emergence of cumulative misfortune, rather than belatedly attempting to compensate for its effects during our senior years.

The cost of a negative income tax (NIT) designed to mimic the redistributive effects of a universal basic income (UBI) and set at a level sufficient to eliminate official poverty in the US is estimated using income distribution data for 2002. It is estimated that an NIT satisfying these conditions would have required an $826 billion increase in government spending in 2002, compared to a $1.69 trillion increase for an equivalent UBI. Despite this cost difference, the income and substitution effects of a UBI and an equivalent NIT are shown to be the same; and these effects are analyzed. Finally, the cost of providing a basic income guarantee (BIG) by either of these means is compared to the cost of securing the right to work and income security recognized in the Universal Declaration of Human Rights using a program of direct job creation and conventional income transfers.

This note introduces a virtually unknown social constitution drafted in Brussels in 1848, in which an unconditional basic income figured prominently. We provide details on the historical and intellectual context in which the proposal originated, and briefly compare it with similar proposals of the same period. In the appendix, we present an English translation of the constitution.