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Zero Growth and Basic Income
On June 12, the Italian Huffington Post published an op-ed by Carlo von Lynx titled: "Una Repubblica sfondata sul lavoro contro un reddito di esistenza universale"
The author, a member of the German Pirate Party, says growth is not a "desirable objective" because of the limits to growth imposed by finite resources and a vulnerable ecosystem. He considers growth the most lethal drug to which humanity is currently addicted. "...c'è da fare è fermare la tossicodipendenza dalla droga più infame per l'umanità: la crescita."
He criticizes politicians who are repeating the old mantra of growth as the only way of creating jobs for the current record numbers of unemployed in many European countries. Instead, he advocates a reform of income distribution which provides everybody with an unconditional basic income "reddito di esistenza" sufficient to permit a dignified subsistence "sussistenza dignitosa."
Both ideas are not particularly new. Since Rachel Carson's "Silent Spring" (1962) and D&D Meadows' "Limits to Growth" (1972), ecological concerns have conditioned mainstream thought, particularly in Europe. The recent economic expansion of the BRICS countries (Brazil, Russia, China, India) is seen by many observers as worrisome and is suspected of speeding up trends toward global auto-destruction.
A dignified subsistence policy had already been introduced in the 18th century by the eastern Arabian town of Al-Hofuf, also known as Al-Ahsa. With its good income from pearl fishing in the Persian Gulf, Hofuf created a model welfare system copied by other well-off places such as Kuwait. A minimum subsistence income was offered to Hofuf citizens by providing interest-free public credit to people who fell in debt and risked being caught in a poverty trap. In general, the religion of Islam favors the basic income approach by urging Muslims to pay an obligatory tax, zakat, to be distributed among poor, needy and indebted people.
In his op-ed, Lynx took growth for a synonym of ecological damage. Although it is true that growth in the past and mostly still today squanders finite resources and spoils the environment, there is a growing trend towards introducing ecologically neutral, resource protecting forms of growth. Historically speaking, the main agent of growth was never squandering of resources but human ingenuity. Today, more people armed with better education and skills are peopling the planet than ever in history. These human resources are driving progress and growth worldwide.
To vilify and try to stop this growth would not only be shortsighted but outrightly harmful to humanity which relies on growth to provide employment and raise incomes. Lack of growth can be very harmful to the environment as prehistoric peoples proved who cleared Australia and South America of most of its large mammals, now extinct. In fact, preferring stagnation over growth would follow romantic concepts of "back to the basics" and "let's be happy with what we have," but with humankind still expanding rapidly, lack of economic growth would force it to follow a sure fire path to ecological destruction.
As Ralf Fücks, (the president of the Heinrich-Böll Foundation, a subsidiary of the German Greens party) explained, our century is facing the challenge of transforming growth from a resource gobbling to a resource protecting activity. He appears optimistic that it can be achieved. The historic success of the Greens movement would be manifest in making itself redundant.
The concept of an "unconditional basic income" was probably generated in Berlin, a city where a full third of the population is living on government handouts. "Unconditional" means no strings attached. Germany's social security program forces the recipients of "Hartz IV" support to perform a variety of chores including applying for jobs, showing up at the welfare agency office, accepting lowly and unqualified work, revealing former savings and moving from large to smaller flats. To avoid being harrassed by inflexible and greedy bureaucrats, a third of Germans entitled to these handouts refrain from claiming their entitlements. In this way, the government keeps a lid on welfare expenditure.
While the concept of unconditionality offering the basic income in addition to one's own earnings, to beggar and billionaire alike, is quite charming; the idea of providing this benefit to the entire populace is not. The main concern is not to squander taxpayer money on fanulloni who are loath to working or learning. Lynx even urges to offer similar basic incomes to the entire humankind in order to wipe out global poverty and make the quest for employment unnecessary. A noble and brave thought which has certainly been enshrined in some long forgotten UN resolution.
More realistically, how is this basic income likely to work in an average European country, say, Italy? In past cases experimenting with this method of abating poverty, the beneficiaries were men, and populations entitled were limited by national borders. In Italy, the principal beneficiaries would be millions of unemployed women, particularly in the South. In traditional communities where single and working mothers are not well considered, the minimum income would help women to refrain from seeking work outside the home or to move to where the work is. In countries like Italy and Greece with still very low ratios of female participation in the workforce, the minimum income would thus delay integration of women in the economy, one of the main reasons for persisting poverty and lack of growth.
No country of the European Union is self-contained anymore. With free movement of people across borders and the governments' legal obligation of providing identical social benefits and services to all European citizens within the respective country, the basic income concept hits the rock. Poor people from poorer European countries would flock to Italy to claim the basic income. Already now, part of an estimated 6-8 million Roma and Sinti in eastern Europe are on the move westbound. The basic income can be trusted to accelerate this migration. Even if this kind of benefit was introduced in the entire European Union, migrants would congregate in the countries where the basic income is highest. One of them would be Italy.
Likely developments in the job market are difficult to predict, Europeans from Community members would enjoy an unfair advantage over already disadvantaged immigrants from outside. With their basic needs covered by the government Europeans would be able to accept lower paid menial work than poor applicants from non-member countries (extracomunitari in Italian). However, will the Community Europeans exploit this advantage or would they still leave hard and dirty labor in agriculture, construction and private homes to non-communitarians? Would they prefer to use the advantage of a basic income to apply for underpaid or unpaid white collar jobs?
Quite apart from these considerations there is still the supreme issue of who is going to provide funding for the basic income legislation. In Italy, the state is already now taking a whopping 59 percent of all income generated in the official economy, excluding the "black" or illegal sector, according to the latest Eurostat calculations. All experts in the Letta government, in Brussels as well as Berlin agree that levying still another tax on the economy would send it in tailspin and bury all hopes for a recovery.
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—— T. C. Sempronius