The Basic Income is currently widely discussed as a means to reduce poverty and inequalities in Britain and elsewhere. Malcolm Torry has for some time been one of its most active British advocates. This has impelled him to write its history, although, as he suggests, ‘perhaps there is no history to be written’ because no country has ever implemented it (p. 24). Perhaps the history can reveal why an idea that has been around since at least the eighteenth century, with many persuasive arguments in its favour, has never been implemented.
Another motive is to clarify what ‘Basic Income’ (BI) means and to make the case for it. As Torry shows, though the term has long been widely discussed, there is persistent confusion over its meaning. His clear definition is: ‘an individual, unconditional and nonwithdrawable regular income of the same amount for every individual of the same age, without work test or means test’, paid to all citizens with rights of residence in the country.
He describes how discussion of a comparable concept emerged in Britain in the later eighteenth century amid concern about poverty. It produced the ‘Speenhamland system’, which has been described as an experiment in BI – an example of confusion. It was, rather, an extension of poor relief, supplementing low earnings, based on assessment of those earnings, effectively subsidizing low-paying employers. A particular advantage of BI, Torry argues, is that it is not means-tested – which he especially, strongly and rightly, abhors; because, wherever it is implemented, means-tested benefit is, as is all too rarely recognized, stigmatizing and, hence, avoided by many in need, expensive and complex to administer. He is particularly aware of this because his own first job was administering means-tested benefits.
Thomas Paine came closer in the 1790s when he proposed that everyone should receive a capital sum at age 21 to help them start off well in life, then an annual sum from age 50. But this was not a full BI. Thomas Spence came closer still around the same time by proposing an unconditional payment for every individual, paid quarterly, to abolish poverty and stimulate the economy. Proposals for various kinds of unconditional payments appeared in the USA, France and Belgium as well as UK through the nineteenth century. Allen Davenport in the 1820s, inspired by Spence, came closest to BI by proposing a regular state income for every individual, as paid to the Royal Family. Like later proposals this was opposed for encouraging idleness. Davenport asked whether recipients of business dividends became idle. In the 1840s Belgian Joseph Charlier proposed quarterly universal, unconditional payments which he believed would encourage productive work and eliminate poverty.
Torry describes a variety of related proposals in the UK in the early twentieth century, when mainly means-tested state welfare was emerging and there was serious concern about poverty and unemployment. A proposal by Bertrand Russell did not meet Torry’s definition of BI, but in 1918 Quakers Mabel and Dennis Milner proposed that ‘every individual should receive from a central fund some small allowance in money which would be just sufficient to maintain life and liberty if all else failed’. They believed that this ‘State Bonus’ would enable people to refuse underpaid, unhealthy work, which was all too prevalent, and complement other welfare measures. It would enable parents to keep children at school and women to be less dependent on men, generally increasing security. It should be large enough ‘to maintain a national minimum standard of physical efficiency’, funded by raising income tax plus a flat-rate payment from anyone with an income from any source – a form of insurance. It was opposed by the Labour Party which believed it would disrupt the employment system and that they had better plans to abolish poverty through high wages, improved welfare measures and nationalization. It aroused little other interest.
Little interest was aroused either by CM Hattersley’s recommendation in 1922 of a universal ‘National Dividend’. Meant to support people through the shrinking labour market believed to be looming due to growing automation, leaving them free time to develop their creativity and skills, giving women secure incomes, it used arguments now common for BI. Not all Labour supporters objected. In 1929 a prominent member, GDH Cole, saw advantages in the idea but believed it would be unacceptable to the ‘ordinary worker in industry’ if there were no requirement to work. He proposed instead family allowances for all families with children and free education. Family allowances were invented and promoted by feminist Eleanor Rathbone, not as payments just for children but as a state-funded wage for the unpaid labour of women in the home, sustaining society and the economy by raising children and supporting working men – a form of BI for mothers that Torry does not fully explain. By 1935, amid continuing unemployment, Cole switched to supporting ‘a dividend large enough to cover the whole of the minimum needs of every citizen …of equal amount for all.…’ Most elements of the current BI debate were raised in this period, without impact on public policy.
In 1943 Juliet Rhys Williams, secretary of the Women’s Liberal Federation, objected to Beveridge’s proposal in his influential 1942 Report for a time-limited unemployment benefit, arguing that it would force too many families onto means-tested benefits when the time expired. She proposed a ‘social dividend’, providing flat-rate payments for all, though lower for women than men, replacing all benefits, conditional on working-age men and women being in or seeking employment and accepting any work offered – conditions Beveridge strongly opposed since his life-long ambition was to end underpaid, precarious work. Torry shows little understanding of Beveridge, including accusing him of promoting women’s dependence upon men, which his Report explicitly did not.
Rhys Williams’ proposal was received sympathetically by Liberals and Conservatives, though they objected to the cost. From 1948 the Labour economist James Meade supported her proposal for its administrative simplicity compared with existing benefits and potential to increase personal freedom and equalize incomes. As a Keynesian he thought it could help to control the economy. He feared the possible disincentive to work and the cost but long supported what he later called a Citizens’ Income, in 1991 proposing a ‘modest’ EU-wide BI funded by the EU from a general tax or levy, topped up by national governments, which he believed would assist the development of the European free market. He contributed to a growing debate in Europe.
It grew also in North America. There was confusion in Canada and USA, and elsewhere, between BI and Negative Income Tax (NIT), first proposed in the 1940s by American neoliberal economist Milton Friedman. This became increasingly popular from the 1970s, as economies and welfare systems everywhere fell into crisis, as a supposedly simple means of providing welfare payments by paying the equivalent of personal tax allowances to those who did not pay tax due to low incomes. It especially appealed to those who thought unconditional BI too socialist. They failed to recognize that NIT would be more complex and costly to administer and more intrusive, requiring officials to track claimants’ incomes. There was also much interest in North America in a Minimum Income Guarantee (MIG), proposed by presidential candidate George McGovern in the 1972 election campaign. This would top up household incomes to specified levels based on household structure, but had similar problems to NIT.
Discussion in USA was diffuse because income maintenance was a responsibility of states and practice varied. Some states and localities in USA and Canada conducted experiments with MIG from the 1970s. These led to no permanent schemes but contributed to the longer-term BI debate. MIG payments were found to be less stigmatizing than existing means-tested benefits, recipients’ health improved and workers felt freed to reject exploitative work and seek better jobs. These arguments were also presented for BI which its supporters judged less intrusive and administratively simpler, but its opponents thought too costly and too radical.
In 1976 the state government of Alaska set up the Alaska Permanent Fund Dividend, payments from a fund owned by the state made up of royalties from oil companies and state oil revenues. From 1982 it made annual payments to everyone who had lived in Alaska for more than a year and intended to stay. Payments varied from year to year but were very popular. In 1980 Alaska was the most unequal state in the US, by 2018 the least, but again the positive effects of the scheme were generally ignored and not emulated elsewhere. Torry points out that many other countries have sovereign wealth funds but none has followed Alaska’s example, which still continues.
By the late 1980s the focus of the BI debate returned to Europe, especially the UK as the welfare system crumbled under Margaret Thatcher’s neoliberal governments. Already by the 1960s the post-war benefits system failed to keep up with inflation and claimants were increasingly dependent upon means-tested benefits, as Beveridge (always critical of means-testing for the same reasons as Torry) had not intended. As Torry puts it ‘instead of fostering cohesion, the benefit system had become a source of division, stigma and poverty’ (p.123). This worsened, along with deindustrialization and welfare cuts, in the 1980s and 90s. From 1997-2010 New Labour reduced poverty and unemployment and introduced a (low) minimum wage, without solving the underlying problems. They replaced benefits with means-tested tax credits – long advocated in the US – which subsidized low wages and were available only to workers and their families. Under Conservative governments since 2010 employment became increasing precarious (the ‘gig economy’), benefits shrank further under ‘austerity’ policies, while the numbers in poverty rocketed, most in employment. Their problems were not eased by the development of a government scheme claimed to simplify the benefit structure by rolling several means-tested benefits together into a single ‘Universal Credit’ which, as Torry states ‘is neither universal nor a credit’ (p.124). Its rollout is still incomplete in 2021 and it has proved extremely complicated, stigmatizing, unreliable and more costly than the schemes it replaces.
In these increasingly dismal circumstances many people looked to BI as the solution. From 1988-1994 it was the policy of the newly merged Liberal Democratic Party, but fear of the costs caused it to be dropped and created general caution. The UK came closest to implementing a BI in 1977, when the Labour government introduced a universal Child Benefit to replace the increasingly inadequate family allowance and the child tax allowance which only benefited the better-off. This had been proposed since the 1960s by the Child Poverty Action Group, founded in 1965 in response to the ‘rediscovery of poverty’ by the revelation by Brian Abel-Smith and Peter Townsend of unexpectedly high levels of child poverty in working families. Meanwhile proposals for a full BI were supported by Claimants’ Unions, the Women’s Liberation Movement and the Green Party who argued that it could sustain incomes during the transition to a more sustainable economy. Conservative MP Brandon Rhys Williams, son of Juliet, promoted versions of her proposal, arousing no enthusiasm, then in 1982 proposed a ‘Basic Income Guarantee’, an unconditional income for every individual to replace most existing benefits, arguing that the administration would be much simpler and cheaper. The House of Commons Treasury Committee recommended the government adopt it as a serious option. It was unimaginable that a Thatcher government would do so, and it did not, but it stimulated discussion of BI beyond the radical left.
This led to the foundation in 1984 of the Basic Income Research Group (BIRG), supported from across the political spectrum, to research realistic proposals for implementation. Torry was its secretary, then voluntary Director. It promoted public discussion. Then in 1986 the Basic Income European Network (BIEN) was founded in Belgium, to which BIRG affiliated. It later became the Basic Income Earth Network as it became global. In 1992 BIRG became the Citizens’ Income Trust (CIT), from 2017 the Citizens Basic Income Trust and it remains active, still researching BI and informing people of its advantages. Torry was its Director until recently. It met the usual objections to the cost and the assumed encouragement to idleness, despite persistently providing opposing evidence. As unemployment and poverty declined in UK from the late 1990s so, temporarily, did interest in BI.
Torry describes similarly active debates elsewhere in Europe in the 1980s and 90s and into the early 21st century for similar reasons with similar arguments, including in Ireland, Belgium, France, Spain, Italy, the Netherlands, Germany, Austria. In Denmark from the 1970s there were various proposals for BI but it was rejected by political parties, Ministers and civil servants who believed it would create a passive, dependent citizenry and was too expensive. There was little interest in Norway or Sweden whose welfare states were eroded but still protected living standards better than elsewhere in Europe and there was a general preference for means-testing and the obligation to work.
Interest was stronger in Finland, which suffered greater unemployment, especially in the 1980s, and had a less collectivistic culture. There were debates and proposals for BI from the 1970s, especially from the mid-1990s. This led to the first nationwide trial of something like BI proposed in 2015 by the newly elected Centre-Right coalition government. From Jan 2017–Dec 2018 the main unemployment benefit was paid unconditionally to 2000 randomly selected individuals from the entire population. But it was paid only to individuals aged 25–58 who were receiving unemployment benefit on 1 December 2016, to save costs. There was a comparable control group. It led to a small increase in employment, especially in families with children. Compared with the control group, individuals experienced more well-being, less stress and depression or financial stress, better cognition, more trust in politicians, an increased sense of autonomy and less bureaucracy. The project did not lead to the introduction of a BI in Finland, but it aroused international interest and stimulated further debate and perhaps greater understanding of its potential effects. In Switzerland supporters of BI succeeded in gaining a national referendum (a regular feature of the Swiss constitution) in 2016 for an unconditional BI for the whole population. The government opposed it and it was firmly defeated.
Interest in BI was rising across the world as Torry goes on to describe. There were lively debates in South America and Africa and some promises from politicians. The government of Namibia initiated a pilot scheme in 2008. Namibia is a resource-rich country with a small population but substantial poverty, unemployment and inequality. In 2002 a government commission recommended reducing inequality by making the tax system more progressive and spending the proceeds on a BI. This was supported by churches, trade unions and NGOs, though the IMF objected to universality and to the cost, preferring a ‘targetted cash grant’, though it later realized that it had miscalculated and withdrew its objections. The Namibian government went no further but a Church initiated a pilot project in a deprived community mainly of displaced farm workers. From Jan 2008–Dec 2009 each of the 1,000 inhabitants received a monthly BI. Donors bore the costs and the project was monitored by the World Bank. There was no control group because the researchers thought it unfair to subject a deprived community to onerous surveys from which they would not benefit. They found that household poverty declined, economic activity grew, often self- employment including setting up vegetable plots or building latrines, which improved health. People felt more secure and able to take risks. Child malnutrition fell and school attendance rose. People could afford to attend health clinics. Debt was reduced and savings and ownership of livestock grew. Crime fell. Women felt more economically independent and economic activity rose faster than among men, while sex work declined. Alcoholism did not increase. Villagers opened a Post Office and shops. Fewer were short of food. Low-wage employment was replaced by better pay. There was no inflation. Administration of the project cost just 3–4% of the outlay. Interviews 10 years later found that the benefits to the villagers continued.
The findings challenged the commonplace objections to BI, but the Namibian government took it no further. It continued to object to giving money to people who were not working – possibly, Torry suggests, fearing to encourage too much independence in the population and reducing the opportunities for government to control their lives. In 2015 a new President included BI in his anti-poverty strategy but has not so far gone further. Analysis by the World Bank and UNICEF of this and other schemes in Africa concluded that unconditional schemes can be highly effective.
Torry then discusses another pilot scheme, in India. In 2008 a Self-Employed Women’s Association planned a BI pilot to discover whether it would help women more than existing welfare schemes. Then the Indian government worked with them to organize a project in a Delhi slum area in 2010 and another in eight villages in 2011, funded by the government, the UN Development Programme and UNICEF India. Each adult received individual, unconditional monthly payments and mothers received children’s allowances. There was a control group for each community. Careful research found that the payments were spent mainly on food, healthcare, education. School attendance improved, especially for girls. Less was spent on alcohol. More people had enough food and consumed more fresh vegetables and milk. Children gained weight. One-fifth of households increased their earned income, debt fell, more had bank accounts, illness declined and use of health services grew. Communities pooled some of their new incomes to create roads, water supplies, drainage, toilets. New businesses started and households co-operated to improve their accommodation. Many women started their own businesses and were no longer dependent on their husbands. A survey in 2017 found that many of the effects continued including reduced alcohol consumption.
In 2014 the new BJP government in India was sympathetic to BI. An intense public and political debate followed. The usual fears were expressed: that would lead to the abolition of the existing welfare system, was too expensive and would encourage idleness. It was argued that it would be easier to administer than existing systems and India had an acute need for social justice. Some local action followed. In 2018 in Telegana every farmer was given an unconditional 8000 rupees per acre, which was presented as investment in increased production. In 2019 the government extended payments to farmers in the whole of India. The outcomes are not yet clear. Proposals and debates continue in India.
Both the Indian and Namibian schemes had significant results on which supporters of BI could build, though Torry is understandably uncertain whether they would have the same effects in developed economies with more complex tax and benefit systems, or whether permanent schemes would yield the same results as temporary pilots. He briefly surveys limited projects in Iran and S.Korea which had beneficial results and successful trials in Ugandan villages and in Kenya, where a longer-term project was under way as he wrote. In 2009 13 homeless men in London were given £3,000 and most turned their lives around. Cherokee Indians received an annual distribution of casino profits which were found to deliver health and educational benefits and increase the quality of parenting. Torry confesses to finding it increasingly difficult to keep up with BI initiatives around the world.
He reports that serious interest in BI rose in the UK from 2014, following publicity for the trials in Namibia and India and, more, for the Swiss referendum and the Finnish experiment. The first article about BI in the mainstream press came in the Guardian, in August 2014, following the Finance Editor reading Torry’s Money for Everyone published in 2013. Thinktanks showed interest and a campaigning organization, Basic Income UK, was established with close links with CIT and international BI campaigners. Polls showed that 50% of the public supported BI, though support fell when it was pointed out that taxes would have to rise to pay for it, not helped by media reports misrepresenting the likely costs. In 2016 the House of Commons Work and Pensions Committee held a hearing on BI. In the Labour Party the Shadow Chancellor, John McDonnell showed increasing interest in BI as a means to reduce poverty and Labour promised BI pilot projects if it won the 2017 election, which it did not. The debate then became increasingly lively in the UK and worldwide due to growing concerns about welfare systems, the effects of automation and the changing labour market, then the income insecurity revealed by the pandemic.
In 2013 a Scottish government working group on welfare gave serious consideration to BI being implemented in an independent Scotland, preparing for the independence referendum in 2014. While it remained in the UK the Scottish government had insufficient control over tax and benefits to introduce BI. The Green Parties of Scotland and of England and Wales included commitment to it in their 2015 election manifestoes. In 2017, having failed to gain independence, the Scottish government committed £250,000 to planning BI pilot projects. Detailed plans were published in 2020 but there is no sign of further action in Scotland or England. Then in May 2021 the First Minister of Wales announced a BI pilot. Plans are not yet finalized and may require sanction from the Westminster government which is reported to believe that BI would disincentize work.
An international BI week is now held every September which provides information. Internationally Torry finds trade unions and labour movements remain dubious, fearing that no country can afford both BI and good universal services including health and education, though support may be growing in view of the capacity of BI to improve the bargaining power of individual workers. There is most support where there are high levels of poverty, unemployment, precarity and weak welfare regimes. Torry argues that the left should promote BI because it would enable workers to reject exploitative work, would be more efficient and not necessarily more costly than existing benefit schemes, whilst they should also support a realistic minimum wage and well-funded public services. He recognizes the need for continuous research into which schemes are feasible in each country, drawing on the findings of pilot schemes.
Torry clearly describes the long, increasingly widespread debate on BI over more than 200 years and makes a strong case in its favour. He also shows how governments persistently shy away from implementing it. A possibly hopeful recent move was President Biden’s decision to respond to the crisis arising from the pandemic by making, from March 2021, payments of $1400 to all individuals earning under $75,000 plus allowances for each child, and smaller amounts to those earning up to $80,000, plus rental, mortgage and health insurance assistance, financial aid for university students and other grants unusual on a national level in the USA and ambitious infrastructure investments. It’s a long way from a permanent BI but it suggests how politicians may be moved by severe economic crisis despite their fears of the costs.
The international debate continues but it is quite uncertain whether a full BI will ever be implemented.
