Научная статья на тему 'BASIC INCOME: THEORY AND PRACTICE'

BASIC INCOME: THEORY AND PRACTICE Текст научной статьи по специальности «Экономика и бизнес»

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Ключевые слова
BASIC INCOME / ECONOMIC PROGRAMS / WELFARE STATE / ECONOMIC INEQUALITY / GUARANTEED INCOME / SOCIAL AND ECONOMIC POLICY

Аннотация научной статьи по экономике и бизнесу, автор научной работы — Balakin I.A.

The article discusses the essence and importance of the basic income in the economic policy of states, examples of application of basic income in many countries of the world, the advantages and disadvantages of the possible use of a basic income in the future.

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БАЗОВЫЙ ДОХОД: ТЕОРИЯ И ПРАКТИКА

В статье рассматриваются сущность и значение базового дохода в экономической политике государств, примеры применения базового дохода во многих государствах мира, преимущества и недостатки возможного использования базового дохода в будущем.

Текст научной работы на тему «BASIC INCOME: THEORY AND PRACTICE»

3. Официальный сайт Министерства сельского хозяйства и продовольствия Ростовской области [Электронный ресурс]. - Режим доступа: http://www.don-agro .ru/index.php?id=1442

УДК 33

Balakin I.A.

Student of 2 course, Faculty of Economics Scientific director: Sergina S.A. Omsk State University of F. M. Dostoevsky

Russia, Omsk

BASIC INCOME: THEORY AND PRACTICE

Abstract: The article discusses the essence and importance of the basic income in the economic policy of states, examples of application of basic income in many countries of the world, the advantages and disadvantages of the possible use of a basic income in the future.

Keywords: basic income, economic programs, welfare state, economic inequality, guaranteed income, social and economic policy.

Балакин И.А. студент 2 курса факультет «Экономический» Сергина С.А. научный руководитель Университет: ОмГУ им. Достоевского

Россия, г. Омск БАЗОВЫЙ ДОХОД: ТЕОРИЯ И ПРАКТИКА

Аннотация: В статье рассматриваются сущность и значение базового дохода в экономической политике государств, примеры применения базового дохода во многих государствах мира, преимущества и недостатки возможного использования базового дохода в будущем.

Ключевые слова: базовый доход, экономические программы, социальное государство, экономическое неравенство, гарантированный доход, социально-экономическая политика.

Introduction

Nowadays many developed countries are trying to achieve poverty reduction, reduction of the gap between rich and poor, as well as the increase in the average standard of living in the country. Many of them go through the payment of social security benefits, social security for vulnerable populations and unemployment benefits. This path turns out to be effective in many European countries, particularly in Scandinavia, the countries of which can be called welfare states. But some social countries decided not to limit social benefits only for certain segments of the population, and try to pay the required amount of money for the life for every

citizen, regardless of whether he works or not. These payments are called absolute income. The issue of its effectiveness will determine the direction of economic policy in many developed social countries. Thus, the theme of my work is urgent.

The purpose of this work is to determine whether the concept of unconditional income is viable and feasible. I want to decide whether it makes sense to introduce such a system across the whole country, and if it is introduced, how effective it will be.

The tasks of this work are as following:

- To give a precise definition of the concept of unconditional income

- To consider the advantages and disadvantages of entering this concept.

- To consider the practice of unconditional income worldwide.

In solving these problems, this educational and research work will examine various points of view on basic income, considered related to basic income in different countries and societies. I will try to present in this paper a sufficient amount of information, because in order to achieve the goal of the work is necessary to consider all aspects of the investigated phenomenon

1. General information about the concept of "basic income"

The idea of basic income is at least 150 years old. Its two earliest known formulations were inspired by Charles Fourier, the prolific French utopian socialist. In 1848, while Karl Marx was finishing off the Communist Manifesto around the corner, the Brussels-based Fourierist author Joseph Charlier published Solution the Social Problem, in which he argued for a 'territorial dividend' owed to each citizen by virtue of our equal ownership of the nation's territory.

This exceedingly simple idea has a surprisingly diverse pedigree. In the course of the last two centuries, it has been independently thought up under a variety of names — "territorial dividend" and "state bonus", for example, "demogrant" and "citizen's wage", "universal benefit" and "basic income" —, in most cases without much success. In the last two decades, however, it has gradually become the subject of an unprecedented and fast expanding public discussion. Some see it as a crucial remedy for many social ills, including unemployment and poverty. Others denounce it as crazy, economically flawed, ethically objectionable proposal, to be forgotten as soon as possible, to be dumped once and for all into the dustbin of the history of ideas.

The ambiguity of this phenomenon has served as one of the reasons for writing this work. First, we need to find out what definition different authors give the concept of a basic income. One of the first person who proposed the idea of a basic income was Thomas Paine, which proposed the following22: "In advocating the case of the persons thus dispossessed, it is a right, and not a charity ... [Government must] create a national fund, out of which there shall be paid to every person, when arrived at the age of twenty-one years, the sum of fifteen pounds sterling, as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property and also, the sum of ten pounds

22 Paine, T. - Agrarian Justice. (1797)

per annum, during life, to every person now living, of the age of fifty years, and to all others as they shall arrive at that age". As we can see, initially basic income was considered only like one-time payments and pension. Such author like Philippe Van Parijs23 gives next definition to the concept of basic income: "A basic income is an income paid by a political community to all its members on an individual basis, without means test or work requirement". In the book of Loek Groot24, Philippe Van Parijs gives some different definition of the basic income: "By universal basic income I mean an income paid by a government, at a uniform level and at regular intervals, to each adult member of society. The grant is paid, and its level is fixed, irrespective of whether the person is rich or poor, lives alone or with others, is willing to work or not". In last definition of the basic income, which has given by Philippe Van Parijs, we can see that basic income is an income paid not to all members of society, but an income paid only to adult members of society. Philippe Van Parijs also adds: "In most versions - certainly in mine - it is granted not only to citizens but to all permanent residents". Daniel Raventos defines a basic income at the following25: "Basic income (BI) is a guaranteed regular income (ideally above the poverty line) paid by the State to each full member or accredited resident of a society, regardless of whether he or she wishes to engage in paid employment, or is rich or poor, whatever his or her sources of income might be, and irrespective of cohabitation arrangements in the domestic sphere".

So, a basic income is an income paid by a political community or other organizations to all adult its members on an individual basis, without means test or work requirement.

2. The advantages and disadvantages of entering this concept

To assess the potential effectiveness and feasibility of basic income, it is necessary to consider its advantages and disadvantages. John McDonnell, journalist of the NewStatesman, highlights 3 major advantages26. The first advantage of basic income, according to the journalist, due to the fact that: "education and retraining to take part in new economic opportunities is the only solution. But as technology and the growth of the MINT countries brings ever more economic disruption, as well as opportunity, we must have a mechanism to provide people with both security and a platform from which to be able to access these new opportunities. Basic Income would do just that". The second advantage of basic income is related to the fact that a lot of people have very low motivation to work because of the variability of jobs or because of dissatisfaction with the workflow. These problems are solved by a basic income, which gives a chance to all people to realize themselves in the areas in which they want to work. The last advantage of basic income the journalist describes the following: "My third, and final, reason for backing Basic Income is

23 Van Parijs, P. - BASIC INCOME : A SIMPLE AND POWERFUL IDEA FOR THE 21 ST CENTURY. de Louvain: Faculty of Economics. (2000).

24 Groot, L., Van Parijs, P. - Basic Income, Unemployment and Compensatory Justice. Amsterdam: Faculty of Economics. (2004).

25 Raventós, Daniel; Lo Vuolo, Rubén - "Basic Income: good in the boom, essential in the crisis". On Line Opinion (Australia's e-journal of social and political debate). (2009).

26 McDonnell, J. - How I learnt to stop worrying and love Basic Income. NewStatesman. (2016).

far simpler. I object to the levels of poverty in this country and believe them to be an indefensible waste of talent and resources. I wonder how many successful businesses, or technological inventions, or medical breakthroughs, we miss out upon because we do not give enough people the platform from which they might fulfill their potential". John McDonnell, how we can see, adjusted in relation to the basic income is rather optimistic, but he recognizes that the implementation of this concept, there are problems: "There are many issues still to resolve about Basic Income, such as how to give additional support to those with disabilities, and how to tackle the chronic British problem with housing benefit when we simply do not have sufficient houses. We would also need to consider how long economic immigrants would have to be in the UK before they became eligible". But McDonnell considered a basic income only from a social point of view and he is not considered it from an economic point of view.

Philippe Van Parijs, considered basic income from an economic point of view, answers the question about affordability of basic income in the following way: "A meaningful answer can only start being given to the question of affordability if one specifies the level at which the basic income is to be pitched and stipulates which benefits, if any, it is to replace. Under some specifications — for example "abolish all existing benefits and redistribute the corresponding revenues in the form of an equal low benefit for all" —, the answer is trivially yes. Under other specifications — for example "keep all existing benefits and supplement them with an equal benefit for all citizens at a level sufficient for a single person to live comfortably" —, the answer is obviously no". Philippe Van Parijs also suggests that if we would compare the basic income from conventional guaranteed income, the basic income will be more expensive because: "One obvious reason might simply be that a basic income is given to all, whether or not they are willing to work, whereas a conventional guaranteed minimum income is subordinated to a willingness-to-work test. As a result, it is claimed, more poor people will be receiving a basic income than a conventional guaranteed income, or, if the number of beneficiaries is not much greater, they will be doing less work than would be the case under a workconditional benefit system. In net terms, therefore, a basic income scheme is certain to cost more". But the most dangerous disadvantages of basic income for society it is big taxes. Logical question - Better for the poor that the poor be taxed more? But Philippe Van Parijs gives answer on this question in the following way: "This is not as terrible as it sounds. The modestly paid workers whose marginal tax rate would need to go up are also among the main beneficiaries of the introduction of a basic income, as the increased taxation of their wage falls short of the level of the basic income which they henceforth receive. The concern, therefore, need not be distributive. Even if one ends up, as in some proposals, with a linear income tax, i.e. if the lowest earnings are taxed at the same rate as the highest ones currently are, the reform would still redistribute downwards from the 15 higher earners (whose tax increase on all income layers would exceed their basic income). However, there is some ground for a legitimate concern about the impact such a reform would have on incentives. As stressed by some opponents of basic income

and negative income tax (e.g. the marginal rates would be lowered in a range in which there is a possibly growing, but still comparatively small proportion of the economy's marginal earnings, while being raised in a range in which far more workers would be affected. The incentive to work and train, to be conscientious and innovative would be increased in the very lowest range of incomes (say, between 0 and 500 Euro per month), but it would be decreased upward of this threshold, where the bulk of society's work force, and particularly of its most productive work force, is concentrated. We would therefore be well advised not to rush too quickly to a system in which the effective marginal tax rate on the lowest incomes would not be higher than those higher up".

Thus, the basic income has a lot of advantages but also many disadvantages, mainly related to the economic validity of this social program. But most of these problems can be solved by the well-planned program of introduction of basic income.

3. Research of the practice of basic income worldwide

Generally the discussion on basic income developed in Europe in the 1970s and 1980s, partly inspired by the debate in United States and Canada somewhat earlier, and has since then broadened to most of the developed world, to Latin America, Middle East, and to at least some countries in Africa and Asia. The Alaska Permanent Fund is regarded as one of the best examples of an existing basic income, even though it's only a partial basic income. Other examples of existing basic income, or similar welfare programs, include the partial basic income in Macao and the basic income in Iran. Basic income pilots, such as Mincome, have been conducted in United States and Canada in the 1960s and 1970s, Namibia (from 2008) and in India (from 2011). In Europe there are political decisions in France, Netherlands and Finland to start up some basic income pilots. Voters in Switzerland strongly defeated a referendum on the topic in 2016 with 77 percent voting against the proposal.

In 2016, a poll showed that 58 percent of the European people are aware about basic income and 65 percent would vote in favor of the idea.

From January 2008 to December 2009, a pilot project with basic income grant was implemented in the Namibian villages of Otjievero and Omitara27. The amount paid out per head was N$100 (around US$12). Six months after the launch, the project was found to have significantly reduced child malnutrition and increased school attendance. It was also found to have increased the community's income significantly above the actual amount from the grants as it allowed citizens to partake in more productive economic activities. The project team stated that this increase in economic activity contradicts critics' claims that a basic income would lead to laziness and dependency. After the conclusion of the pilot project phase, a monthly bridging-allowance of N$80 (around US$10) was paid regularly to all who participated in the pilot until March 2012. One of the conclusions of the project was that, even with the restriction that only residents of the village for over a year since

27 BIG Coalition Namibia. - "Basic Income Grant Coalition: Pilot Project". (2013)

the pilot's start could benefit from the grant, there was a significant migration towards Otjivero-Omitara, despite the fact that the migrants wouldn't receive the grant. The project concluded that this phenomenon reveals the need to introduce such basic income systems as a universal national grant, in order to avoid migration to particular regions, towns or households.

Another finding of the project was that after the introduction of the pilot, overall crime rates fell by 42%, specifically stock theft, which fell by 43% and other theft by nearly 20%. These conclusions are derived from two empirical studies conducted by the Basic Income Grant Coalition.

Two basic income pilot projects have been underway in India since January 2011. According to the first communication of the pilot projects, positive results have been found. Villages spent more on food and healthcare, children's school performance improved in 68 percent of families, time spent in school nearly tripled, personal savings tripled, and new business startups doubled28.

The issue of the basic income gained prominence on the political agenda in Netherlands between the mid-1970s and mid-1990s. In 2015 it was announced that the city of Utrecht and its local university will be conducting an experiment on basic income. Local authorities are planning to encourage other municipalities to engage in similar experiences.

But in many developed countries of Western Europe, like Switzerland, Norway and Spain, the concept of basic income was rejected, despite the fact that this concept is developed and evolves main in Western Europe.

As we can see, the basic income has shown a good performance in all spheres of social life, both in developed countries and in developing countries

Conclusion

In conclusion, I'd like to say that the basic income in the world economy is one of the most interesting and the most important social concepts. This concept can have a huge impact on the future of the world, if supported by most people in the world.

A basic income is an income paid by a political community or other organizations to all adult its members on an individual basis, without means test or work requirement.

A basic income can solve many problems of modern society, such as income inequality, poverty, crime, growth during the crisis, etc. Major social problems, which basic income can solve are:

- First, with an indefinite basic income a job loss would not have such distressing effects on the well-being of the casualties of the system.

- Second, BI offers a measure of risk reduction for people embarking on certain projects of self-employment.

Third, BI would represent, in the case of strikes, a kind of unconditional resistance fund, offering an improved bargaining position to workers who would better equipped to confront the labor conflict: nowadays, depending on how long a

28 Fernandez, Benjamin. - "Rupees in your pocket". (2013)

strike lasts, salaries can be cut to levels that are barely sustainable if - as tends to be the case with the great majority of workers - no alternative resources are available.

But basic income has yet some problems, such as lack of funding for the payments themselves. This is due to the fact that in developed countries, politicians can't decide how best to proceed - to increase taxes at the expense of new acquisitions to provide a basic income or provide it at the expense of the existing social benefits.

The discussion on basic income developed in many countries of the world, especially in countries of Western Europe. Basic income has many political initiatives in developing countries, like India, Namibia and Brazil.

Despite all the advantages of basic income, he still held only as an experiment, because it doesn't solve still too many questions relating to this concept. However, it is possible that the first state, which runs basic income throughout its territory, will be in the next decade.

Использованные источники:

1. Van Parijs, P. (2000). BASIC INCOME : A SIMPLE AND POWERFUL IDEA FOR THE 21ST CENTURY. de Louvain: Faculty of Economics.

2. Groot, L., Van Parijs, P. (2004). Basic Income, Unemployment and Compensatory Justice. Amsterdam: Faculty of Economics.

3. Paine, T. (1797) Agrarian Justice.

4. Raventós, Daniel; Lo Vuolo, Rubén (16 July 2009). "Basic Income: good in the boom, essential in the crisis". On Line Opinion (Australia's e-journal of social and political debate). Retrieved 13 November 2016, from http: //www.onlineopinion. com.au/view.asp?article=9172

5. McDonnell, J. (17 February 2016). How I learnt to stop worrying and love Basic Income. NewStatesman (journal of social and political debate). Retrieved 13 November 2016, from http://www.newstatesman. com/politics/welfare/2016/02/how-i-learnt-stop-worrying-and-love-basic-income

6. "Basic Income Grant Coalition: Pilot Project". BIG Coalition Namibia. (24 July2013) Retrieved 13 November 2016, from http: //www.bignam.org/BIG_pilot.html

7. Fernandez, Benjamin (4 May 2013). "Rupees in your pocket". Le Monde diplomatique. Retrieved 13 November 2016, from http: //mondediplo .com/2013/05/04income

Банкурова Р.У. ст. преподаватель кафедра экологии и природопользования Чеченский государственный университет Российская Федерация, г. Грозный ПРОБЛЕМЫ РАЗВИТИЯ ЭКОАУДИТА В РОССИИ И ПУТИ ИХ

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