THE BLOG

The Green's Basic Income

03/02/2015 10:49 GMT | Updated 04/04/2015 10:59 BST

An article written in the Guardian by the Channel 4 News economics editor, Paul Mason, took on the Green party's proposal for a universal basic income, making some important but common errors along the way. It is important to correct these, so we can debate basic income proposals properly.

The very first sentence contains such a crucial error. Mason states that a universal basic income takes "a large chunk of a country's tax revenues" and pays "people a few thousand pounds a year to do nothing." This is simply false. The British government does not collect tax revenues before spending, nor do tax revenues in any way fund spending. Rather, it is spending that precedes taxation. This is because the British government is a currency issuer -- and so before it can collect it back (through taxation), it must first issue it (through spending). Consequently, a basic income would not take any such "large chunk" of tax revenue.

Mason proceeds to discuss the basic income on the assumption that it would be worth £6,000 per year (whilst the Green party's proposal is only around £3,500 per year). One consequence of this, he notes, would be that it would "eradicate low-paid menial work." After all, why would anyone work in drudgery for £12,000 per year "when you get £6,000 for free?"

Perhaps, because £6,000 per year is not much. Consequently, unemployed people would be forced back into those low-paid menial jobs. We can see this now from the fact that people work in these jobs today, despite the existence of unemployment benefits. Asking why people do not just abandon their jobs in favour of benefits would lead us to a whole host of further questions, concerning not just basic income but education, a desire to work, and so on. The assumption that a basic income would "eradicate low-paid menial work" is not warranted.

Finally, rearticulating his initial error, Mason notes that "the rest of the fiscal gap would be closed through raising tax" -- something "that is not a cheap or easy solution." However, to repeat the earlier point, there is no "fiscal gap," there are no financial constraints facing a sovereign government. Spending precedes taxation; taxation does not fund spending, spending allows taxation.

These errors are frequently made, found in economics textbooks that rely upon theories that have been "absolutely and systematically refuted," to quote the anthropologist David Graeber, and are religiously repeated by the media without criticism or scrutiny, indicating their neoliberal bias.

Given that a basic income proposal would face no financial constraints, and though commendable in itself, the Green party should ideally go further. Government spending could be used as a tool to provide meaningful well-paid work for all those who want it -- some kind of job guarantee, as proposed by many modern chartalist economists (such as Hyman Minsky and Randall Wray).

This would have the advantage of not only providing income, but would also provide (non-menial) employment. Further, it would force the private sector to raise standards and wages in low-paid jobs, or risk losing workers to the public sector, curbing some of the destructive forces of modern capitalism. Another advantage would be that the public would have greater say over how resources are managed, as the government would then be in more of a position to direct those taking up guaranteed jobs into productive and useful areas.

To be truly radical, the Greens should insist on work for all who want it and income for all who need it, expounding the humane maxim, from each according to ability, to each according to need.