The year 1795 was when the magistrates of Speenhamland set up a means-tested cash benefit scheme that started looking like a genuine minimum-income scheme , but soon led to a backlash. It was also when the book in which Condorcet first formulated the general idea of social insurance, much later to become the main principle of our welfare states, was published. And it was the year when one of Condorcet’s closest friends started writing a short piece that, while it was barely noticed at the time and soon forgotten, would be rediscovered and recognized two centuries later as the first proposal of something quite close to a genuine unconditional basic income.
Thomas Paine (1737–1809)
In a pamphlet entitled Agrarian Justice (1796) and addressed “to the Legislature and the Executive Directory of the French Republic,” Thomas Paine (1737–1809), by then a prominent figure in the American and French revolutionary movements, put forward a scheme radically different from both public assistance and social insurance. In it, he proposed to “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 inheritance, by the introduction of the system of landed property. And also, the sum of ten pounds 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.
With their fifteen pounds per capita, a young couple “could buy a cow, and implements to cultivate a few acres of land.” The bulk of the fund would finance the payment of a strictly individual, universal, unconditional basic income to every man and woman aged fifty or more.
“It is the value of the improvement only, and not the earth itself, that is in individual property. Every proprietor, therefore, of cultivated lands, owes to the community a ground-rent for the land which he holds; and it is from this ground-rent that the fund proposed in this plan is to issue.
It is proposed that the payments, as already stated, be made to every person , rich or poor. It is best to make it so, to prevent invidious distinctions. It is also right it should be so, because it is in lieu of the natural inheritance, which, as a right, belongs to every man, over and above property he may have created , or inherited from those who did. Such persons as do not choose to receive it can throw it into the common fund.”
Thus, what Paine proposed was a universal, obligation-free, individual cash payment, but not throughout adult life.
Thomas Spence (1750– 1814)
It did not take long, however, before his proposal was radicalized into a genuine lifelong basic income.
In The Rights of Infants, a pamphlet published in London in 1797, the English schoolteacher and activist Thomas Spence (1750– 1814) formulated the proposal he claimed he had tirelessly defended since his youth.
All land and houses of each municipality should be entrusted to a committee of women, their use should be auctioned off, and part of the proceeds should be used to cover all public expenditures, including for the construction and maintenance of buildings, and the taxes owed to the government.
“And as to the overplus, after all public expences are defrayed, we shall divide it fairly and equally among all the living souls in the parish, whether male or female; married or single; legitimate or illegitimate; from a day old to the extremest age; making no distinction between the families of rich farmers and merchants and the families of poor labourers and mechanics.”
“Personal property is the effect of society; and it is as impossible for an individual to acquire personal property without the aid of society, as it is for him to make land originally. Separate an individual from society, and give him an island or a continent to possess, and he cannot acquire personal property. He cannot be rich. All accumulation, therefore, of personal property, beyond what a man’s own hands produce, is derived to him by living in society; and he owes on every principle of justice, of gratitude, and of civilization, a part of that accumulation back again to society from whence the whole came.”
Spence’s plan was debated by some radical English reformers in the 1820s, before sinking, along with Paine’s, into oblivion.
In London on February 21, 1848, the Communist League published a little book that the young German Karl Marx had finished writing in Brussels , in a great hurry, the previous month: the Manifesto of the Communist Party.
On March 28, a document was seized by the police at the house of Joseph Kats, brother of the Jacob Kats (1804–1886) who was a writer and prominent member of Brussels’s Association Démocratique, of which Marx was vice chairman.
Project of a New Social Constitution
Written in Flemish and titled Project of a New Social Constitution, this document stipulates that “the earth is the universal heritage of the people”and that “its fruits must be equally distributed among all of them”; and that “all personal property rights over real estate are abolished”; and that all land, whether built on or not, will be rented out by the state with their revenues “regarded as the fruits of nature in order to be distributed equally among all members of society in as many equal parts as there are people, no one excluded”.
This is clearly an unconditional basic income justified unwittingly in fundamentally the same way as the schemes proposed half a century earlier by Paine and Spence. But the short document is not more specific. Nor is its author known.
Joseph Charlier (1816– 1896 )
Nor is there any known connection with a book-length development of the same idea published in Brussels later that same year.
Compared to Marx’s Manifesto, its contemporary, Solution du Problème Social, is equally ambitious and no less original. But it is less engagingly written, and little is known about its author— a certain Joseph Charlier (1816– 1896 ). It had no noticeable impact at the time or indeed at any later point. Thomas Paine had advocated a basic endowment for the young and a basic pension for the elderly. Thomas Spence had advocated a genuine basic income at a municipal level.
Charlier’s book offers the first developed plea for a genuine basic income on a national scale: a uniform “territorial dividend” to be paid every quarter to each “indigenous” resident of the country, whether male or female, whether adult or child, and to be funded by rents on all properties, whether built or not.
Nature was created for the sake of meeting everyone’s needs. Therefore, he argued, private land ownership is incompatible with justice, and the state must ultimately become the sole owner of all land and all buildings on the land.
The revenues from this rent would provide all households with an income sufficient to cover their “absolute needs” and thereby provide “a sovereign remedy for the plague of pauperism.” Yes, the level of the dividend will be such that “the state will secure bread to all but truffles to no one,” he argued. “Too bad for the lazy; they will have to get by with the minimum allowance. The duty of society does not go beyond this: to assure to everyone his fair share in the enjoyment of the elements that nature has put at his disposal, without usurpation by some people to the detriment of others.”
“It is no longer the worker who will have to bow before capital, it is capital, reduced to its true role of collaborating agent, that will have to negotiate with labor on an equal footing.
Undoubtedly, by raising and improving the material condition of the masses, the implementation of a guaranteed minimum income will make them choosier in the choice of their occupations; but as this choice is usually determined by the price of manpower, the industries concerned will need to offer their workers a salary high enough to compensate for the inconveniences involved. Therefore, the proposed scheme will have as an immediate consequence a reparatory remuneration for this class of people presently condemned to misery by way of reward for their irksome and useful labor.
It is the only rational and just solution that should be given to the social question, no offense to my more or less self-interested contradictors. There are truths which one neither wants nor dares to face.”
His 1848 book seems to have been barely read at the time and his subsequent writings seem to have been just as quickly forgotten.
John Stuart Mill (1806– 1873)
This cannot be said of another, far more authoritative author who joined the tiny team of isolated early basic income supporters at about the same time.
The year 1848 not only saw the publication of Marx’s Manifesto and Charlier’s Solution. It was also the year that John Stuart Mill (1806– 1873) published the first edition of his Principles of Political Economy, one of the founding classics of modern economics.
Mill identifies and recognizes the structural problem inherent in public assistance to the poor: while the consequences of assistance itself are beneficial, he writes, the consequences of relying on it “are for the most part injurious.” But unlike Ricardo, Hegel, or Tocqueville, this did not make him advocate a return to private charity. Subject to some conditions, he wrote, “I conceive it to be highly desirable that the certainty of subsistence should be held out by law to the destitute able-bodied, rather than that their relief should depend on voluntary charity.”
What are these conditions? Essentially that there should remain an incentive to work— that is, that the condition of the person receiving help should not be made as desirable as that of “the labourer who supports himself by his own exertions.” If that is the case, there will be no need to set up a system of forced labor for the undeserving poor—that is, “an organized system of compulsion for governing and setting to work like cattle those who had been removed from the influence of the motives that act on human beings.” Moreover, “the state must act by general rules. It cannot undertake to discriminate between the deserving and undeserving indigent. The dispensers of public relief have no business to be. inquisitors.
”What is needed, therefore, is neither private charity nor workhouses, but a legal guarantee of subsistence for all the destitute, whether able-bodied or not, whether “deserving or not.”
“This System does not contemplate the abolition of private property, nor even of inheritance; on the contrary, it avowedly takes into consideration, as elements in the distribution of the produce, capital as well as labour. In the distribution, a certain minimum is first assigned for the subsistence of every member of the community, whether capable or not of labour. The remainder of the produce is shared in certain proportions, to be determined beforehand, among the three elements, Labour, Capital, and Talent.
The scheme guarantees “certainty of subsistence” to all, whether able-bodied or not. No inquisitorial distinction is made between the deserving and the undeserving. Yet incentives are preserved through the remuneration of labor, capital, and talent as a top-up over and above the minimum that has been “first assigned.
The social problem of the future? How to unite the greatest individual liberty of action, with a common ownership of the raw materials of the globe, and an equal participation of all in the benefits of combined labour.”
Bertrand Russell (1872–1970).
“The great majority of men and women, in ordinary times, pass through life without ever contemplating or criticising, as a whole, either their own conditions or those of the world at large. They find themselves born into a certain place in society, and they accept what each day brings forth, without any effort of thought beyond what the immediate present requires. Almost as instinctively as the beasts of the field, they seek the satisfaction of the needs of the moment, without much forethought, and without considering that by sufficient effort the whole conditions of their lives could be changed.” Bertrand Russell
Something more akin to a real public debate took shape in Britain shortly after the end of World War I.
The first to open fire was the mathematician, philosopher, nonconformist political thinker, militant pacifist, and Nobel laureate Bertrand Russell (1872–1970).
In Roads to Freedom, a short and incisive book first published in 1918, he argues for a social model that combines the advantages of socialism and anarchism:
Anarchism has the advantage as regards liberty, socialism as regards the inducement to work. Can we not find a method of combining these two advantages? It seems to me that we can. Stated in more familiar terms, the plan we are advocating amounts essentially to this: that a certain small income, sufficient for necessaries, should be secured to all, whether they work or not, and that a larger income, as much larger as might be warranted by the total amount of commodities produced, should be given to those who are willing to engage in some work which the community recognizes as useful.
“The necessaries of life should be free, as Anarchists desire, to all equally, regardless of whether they work or not. Under this plan, every man could live without work: there would be what might be called a ‘vagabond’s wage,’ sufficient for existence but not for luxury. The artist who preferred to have his whole time for art and enjoyment might live on the ‘vagabond’s wage’, traveling on foot when the humor seized him to see foreign countries, enjoying the air and the sun, as free as the birds, and perhaps scarcely less happy.
One great advantage of making idleness economically possible is that it would afford a powerful motive for making work not disagreeable; and no community where most work is disagreeable can be said to have found a solution of economic problems.
Modern technique has made it possible for leisure, within limits, to be not the prerogative of small privileged classes, but a right evenly distributed throughout the community. The morality of work is the morality of slaves, and the modern world has no need of slavery.
When education is finished no one should be compelled to work , and those who choose not to work should receive a bare livelihood, and be left completely free; but probably it would be desirable that there should be a strong public opinion in favor of work, so that only comparatively few should choose idleness.”
Dennis Milner (1892–1956)
In the same year as Russell’s Roads to Freedom, the young engineer, Quaker, and Labour Party member Dennis Milner (1892–1956), published jointly with his first wife, Mabel, a short pamphlet entitled Scheme for a State Bonus.
Using an eclectic series of arguments, they argued for the introduction of an income paid unconditionally on a weekly basis to all citizens of the United Kingdom. Pitched at 20 percent of GDP per capita, the “state bonus”would be funded by contributions from everyone “with any income at all,” and should make it possible to solve the problem of poverty, particularly acute in the aftermath of World War I.
As the state bonus scheme is based on the moral right to the means of subsistence, any obligation to work enforced through the threat of a withdrawal of these means is ruled out. “Persuading people to work,” the Milners wrote, “is an educational problem. Starvation must not be used as an educative force, for it only makes inefficient workers.” Having gained access to the “primal necessities of life,” workers will be “in a fairer position for bargaining” about wages. Better wages, in turn, “will mean a greater demand for necessities, and thus a steadier state in all the staple industries.”
Clifford H. “Major” Douglas (1879–1952)
Clifford struck by how productive British industry had become after World War I and began to wonder about the risks of overproduction. How could a population impoverished by four years of war consume the goods available in abundance, when banks were reticent to give them credit and their purchasing power rose only very slowly? To solve this problem, Douglas proposed, in a series of books and popular lectures and writings, the introduction of “social credit” mechanisms, one of which consisted in paying all households a monthly “national dividend.”44 The social credit movement enjoyed varying fortunes. It failed to establish itself in the United Kingdom but attracted many supporters in several parts of Canada.
George D. H. Cole (1889–1959)
The first holder of Oxford’s Chichele Chair of Social and Political Theory, Cole was fully aware of the earlier pleas by the State Bonus League and the social credit movement. In several books, he consistently defended what he seems to have been the first to call a “social dividend”and “basic income.” Incomes, he argued in 1935, should “be distributed partly as rewards for work, and partly as direct payments from the State to every citizen as ‘social dividends’, a recognition of each citizen’s claim as a consumer to share the common heritage of productive power. The aim should be, as speedily as possible, to make the dividend large enough to cover the whole of the minimum needs of every citizen.
“If the maximum a man could earn came to no more than the amount of his social dividend, the incentive to earn it, in a society living nearly at a common standard, would be fully as powerful as the incentive to earn many times as much in the class-ridden society of today. For the demand for little luxuries and larger supply of substitutable necessaries is the keenest of all human demands.… Earnings will become, under such a system, more and more of the nature of “pocket money,” without any loss of the incentives to effort such as absolute equality of incomes would involve. Work will have its sufficient reward; but the main part of national income will no longer be distributed as a by-product of industry.”
James Meade (1907–1995)
He defended the “social dividend” with even greater tenacity than Cole. The idea is present in his writings from the 1930s onwards as a central ingredient of a just and efficient economy. And it is still at the core of Meade’s Agathotopia project, which he advocated with great enthusiasm in the last years of his life: partnerships between capital and labor and a social dividend funded by public assets are there offered together as a solution to the problems of unemployment and poverty.
Robert Theobald (1929–1999)
From the early 1960s, Robert Theobald started advocating a “guaranteed income” on the grounds that automation was at the same time making goods abundant and workers redundant. The guaranteed income, he argued, “is essential for both short-run and long-run reasons. In the short run, it is required because an ever-growing number of people—blue-collar, white-collar, middle-management and professional—cannot compete with machines; in the absence of the guaranteed income the number of people in hopeless, extreme poverty will increase. In the long run, we will require a justification for the distribution of resources that is not based on job-holding.”
Ultimately, as also suggested by the title of one of Theobald’s books, Free Men and Free Markets (1963), what must guide this distribution is a concern for freedom for all: “A guaranteed income provides the individual with the ability to do what he personally feels to be important. The guaranteed-income proposal is based on the fundamental American belief in the right and the ability of the individual to decide what he wishes and ought to do.
The need is clear: the principle of an economic floor under each individual must be established. The principle would apply equally to every member of society and carry with it no connotation of personal inadequacy or implication that an undeserved income was being received from an overgenerous government.”
Along with other activists and academics, Theobald was one of the chief authors of a report sent to President Lyndon Johnson in May 1964 that urged the government to address the “cybernation revolution” by guaranteeing an adequate income to all:
“We urge, therefore, that society, through its appropriate legal and governmental institutions, undertake an unqualified commitment to provide every individual and every family with an adequate income as a matter of right. The unqualified right to an income would take the place of the patchwork of welfare measures— from unemployment insurance to relief— designed to ensure that no citizen or resident of the United States actually starves.”
Milton Friedman (1912–2006)
Friedman, the founding father of “Neoliberalism”, never advocated a basic income but he did popularize a proposal that, though different from a basic income, can be partly defended on the same grounds: the negative income tax.
If we want to alleviate poverty, he argues, “the arrangement that recommends itself on purely mechanical grounds is a negative income tax.”
A negative income tax amounts to a uniform refundable tax credit. Even in the versions closest to a genuine basic income, it lacks one crucial feature of it: its being paid upfront to all. But the two ideas have enough in common for the discussion of one of them to be relevant to the discussion of the other.
The negative income tax, in his view, should replace the bulk of America’s welfare programs:
“We have a maze of detailed governmental programs that have been justified on welfare grounds— though typically their product is “illfare”: public housing, urban renewal, old-age and unemployment insurance, job training, the host of assorted programs under the mislabeled “war on poverty,” farm price supports, and so on at incredible length. The Negative Income Tax would be vastly superior to this collection of welfare measures. It would concentrate public funds on supplementing the incomes of the poor—not distribute funds broadside in the hope that some will trickle down to the poor.”
“I see the negative income tax as the only device yet suggested by anybody that would bring us out of the current welfare mess and still meet our responsibilities to the people whom the program has got in trouble.”
Thus, what justifies a guaranteed income, in Friedman’s view, is only a damage-control argument.
Friedrich Hayek (1899–1992)
Hayek us the other founding father of “Neoliberalism” and Friedman’s colleague at the University of Chicago and fellow Nobel Memorial Prize winner.
From The Road to Serfdom (1944) to Law, Legislation and Liberty (1979), Hayek unambiguously supported a minimum-income scheme as a permanent feature of a free society. He does reject “the security of the particular income a person is thought to deserve” because “it can be provided only for some and only by controlling or abolishing the market. ”Instead, “the security of a minimum income,” which can be “provided for all outside of and supplementary to the market system,” is “an indispensable condition of real liberty”.
“There is no reason why in a society which has reached the general level of wealth which ours has attained, the security of a minimum income, should not be guaranteed to all without endangering general freedom. There are difficult questions about the precise standard which should thus be assured.… but there can be no doubt that some minimum of food, shelter and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody .” And even more firmly: “The assurance of a certain minimum income for everyone, or a sort of floor below which nobody need fall even when he is unable to provide for himself, appears not only to be a wholly legitimate protection against a risk common to all, but a necessary part of the Great Society in which the individual no longer has specific claims on the members of the particular small group into which he was born.”
Hayek never specified the institutional setup most appropriate to secure this “uniform minimum income”.
James Tobin (1918– 2002)
Starting in 1965, the Yale economist and Nobel Memorial Prize winner James Tobin published a series of articles in which he defended what he initially called a “credit income tax.” This scheme was not meant to replace the whole system of public assistance and insurance schemes, let alone to help extinguish the welfare state altogether, but rather to reconfigure its lower component so as to make it a more efficient and work-friendly instrument for improving “the economic status of the Negro ” or for “raising the incomes of the poor,” to quote the titles of two of Tobin’s articles.
With his colleagues Joseph Pechman and Peter Miezkowski, Tobin published in 1967 what can be regarded as the first technical paper on negative-income-tax schemes, in a broad sense that covers the upfront-basic-income variant. In the scheme they proposed and analyzed, each household was to be granted a basic credit at a level varying with family composition, which each family could supplement with earnings and other income taxed at a uniform rate. In their view, this “credit income tax” was as preferably to be administered through “automatic payments of full basic allowances to all families, except those who waive payment in order to avoid withholding of the offsetting tax on other earnings.” It could therefore be regarded as a household-level “demogrant”: universal and obligation-free, though not strictly individual.
John Kenneth Galbraith (1908–2006)
In the first edition of his best seller The Affluent Society (1958), the Harvard economist expressed great skepticism as to the possibility of a guaranteed minimum income: “An affluent society, that is also both compassionate and rational, would no doubt, secure to all who needed it the minimum income essential for decency and comfort. It can use the forthright remedy of providing for those in want. Nothing requires it to be compassionate. But it has no high philosophical justification for callousness. Nonetheless any such forthright remedy for poverty is beyond reasonable hope.”
The best hope he saw for the reduction of poverty “lies in less direct but, conceivably, almost equally effective means,” such as education and slum clearance.
In an article published in 1966, however, he expressed a very different view on what could be reasonably hoped, repudiated the “strongly traditional” approach to poverty he had held until then (“we should help them to help themselves”), and argued:
“We need to consider the one prompt and effective solution for poverty, which is to provide everyone with a minimum income. The arguments against this proposal are numerous, but most of them are excuses for not thinking about a solution, even one that is so exceedingly plausible. It would, it is said, destroy incentives. Yet we now have a welfare system that could not be better designed to destroy incentives if we wanted it that way. We give the needy income, and we take away that income if the recipient gets even the poorest job. Thus we tax the marginal income of the welfare recipient at rates of 100 percent or more. A minimum income, it is said, would keep people out of the labor market. But we do not want all the people with inadequate income to work. And there is no antidote for poverty that is quite so certain in its effects as the provision of income.”
The second edition of The Affluent Society (1969) reflects this radical change of mind. The passage quoted above remained unchanged up to the sentence “Nonetheless any such forthright remedy for poverty is beyond reasonable hope,” but at that point made room for the following paragraph: “Within the last ten years, the provision of a regular source of income to the poor, as a matter of broad social policy, has come to seem increasingly practical. The notion that income is a remedy for indigency has a certain forthright appeal. As elsewhere argued, it would also ease the problems of economic management by reducing the reliance on production as a source of income. The provision of such a basic source of income must henceforth be the first and the strategic step in the attack on poverty.”
The “elsewhere argued” refers to a chapter titled “The Divorce of Production from Security,” completely rewritten for the second edition so as to support the following position: “For those who are unemployable, employable only with difficulty or who should not be working, the immediate solution is a source of income unrelated to production. In recent years, this has come extensively into discussion under various proposals for guaranteed income or a negative income tax. The principle common to these proposals is provision of a basic income as a matter of general right and related in amount to family size but not otherwise to need. If the individual cannot find (or does not seek) employment, he has this income on which to survive.”
“Everybody should be guaranteed a decent basic income. A rich country such as the US can well afford to keep everybody out of poverty. Some, it will be said, will seize upon the income and won’t work. So it is now with more limited welfare, as it is called. Let us accept some resort to leisure by the poor as well as by the rich.”
In 1968, consistently with his revised conviction, Galbraith supported, along with James Tobin, Paul Samuelson, and Robert J. Lampman, a petition signed by over one thousand economists calling for the US Congress to adopt “a system of income guarantees and supplements.”
In the meantime, academics had been joined by other components of American civil society. Thus, at its inaugural convention in August 1967, the National Welfare Rights Organization (NWRO) adopted as its first goal: “Adequate income: a system that guarantees enough money for all Americans to live dignified lives above the level of poverty.”
Martin Luther King, Jr. (1929–1968)
In his last book, Where Do We Go From Here?, published the same year, King wrote:
“I am now convinced that the simplest approach will prove to be the most effective, the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income. The dignity of the individual will flourish when the decisions concerning his life are in his own hands, when he has the assurance that his income is stable and certain, and when he knows that he has the means to seek self-improvement.”
President Lyndon B. Johnson (1998 – 1973)
In January 1968, President Johnson had already set up a Commission on Income Maintenance Programs which included, along with several businessmen, economists Robert Solow and Otto Eckstein. Johnson insisted: “We must examine any and every plan, however unconventional.”
Published in November 1969, the final report recommended, as an alternative to the existing welfare system, a “basic income support program” that would take the form of a “direct federal cash transfer program offering payments to all, in proportion to their need.”
President Richard Nixon (1913 – 1994)
Before this report was published, however, Republican Richard Nixon had taken office as president in January 1969 after winning the election against Democrat Hubert Humphrey. He immediately launched the preparation of the Family Assistance Plan, an ambitious public assistance program that would provide for the abolition of the aid program targeting poor families (AFDC), and incorporate a guaranteed income with financial supplements for workers. The plan came close to a household-based negative income tax, but with one major difference: the legislation made provision for a reduction of benefits “if recipients refused to accept suitable employment or register for job training”.
“In the final analysis, we cannot talk our way out of poverty; we cannot legislate our way out of poverty; but this Nation can work its way out of poverty. What America needs now is not more welfare, but more ‘workfare.’”
Senator George McGovern (1922 – 2012)
In January 1972, however, as the controversy about the Family Assistance Plan reached its height, a considerably more ambitious guaranteed income plan managed to attract much attention.
One of the candidates for the Democratic presidential nomination, Senator George McGovern, with Tobin and Galbraith on his campaign team, decided to incorporate a basic-income proposal into his platform. Labeled “minimum income grant,” “national income grant,” or sometimes “demogrant,” it consisted of paying every American a yearly installment of $ 1,000. “I propose that every man , woman, and child receive from the federal government an annual payment . This payment would not vary in accordance with the wealth of the recipient. For those on public assistance, this income grant would replace the welfare system.”
The proposal he mentioned in greatest detail is one by James Tobin, which “calls for the same payment to be made to all Americans”: “the payments are made on an individual basis. Thus, there would be no incentive for a family to break up in order to receive higher total”.
The Presidential election took place in November 1972, and Nixon won a landslide victory, just a few weeks after the final demise of his own Family Assistance Plan. These events marked the end of the short but spectacular appearance of basic-income-type ideas in the US debate.
Four large-scale experiments took place in the United States between 1968 and 1980. Initiated by the federal administration in connection with the preparation of Nixon’s Family Assistance Plan, these unprecedented experiments were a major landmark in social scientific research. Never had there been a scientifically motivated social experiment on such a scale. Households were randomly assigned to groups enjoying the benefit of a negative-income-tax scheme for a number of years and to control groups that continued living under existing arrangements. The main goal was to establish the effects of the guaranteed-income scheme on various indicators such as weight at birth, school performance, divorce rate, and above all, labor supply.
Among the most discussed effects of these experiments were an uncontroversial yet relatively modest reduction in the labor supply of secondary earners and an alleged increase in the divorce rate in one of the experiments. Such results contributed to killing for many years the political attraction of basic-income-type proposals in the United States, even among some of their keenest supporters.
Under the influence of the US debate, several official reports discussing a “guaranteed annual income” were published in Canada in the early 1970s. These reports inspired the so-called Mincome negative income tax experiment, conducted in 1975– 78 in the city of Winnipeg and in the small town of Dauphin (Manitoba) at the request of Canada’s federal government.
Data collection was interrupted after two years, however, and the results were never officially published. It was only many years later that they were analyzed. The very fact that the Canadian government lost interest long before the experiment was completed confirmed that the North America of the 1970s was not ripe for a major new step towards something that would start resembling an unconditional basic income.
Jay Hammond (1922–2005)
And yet it was North America that hosted, just a few years later, the most decisive step towards a basic income in the strictest sense of the term. This happened with barely any connection to the big US debate of the late 1960s and early 1970s.
In the mid-1970s, Jay Hammond (1922–2005), the Republican governor of the state of Alaska from 1974 to 1982, secured ownership of the Prudhoe Bay oil field, the largest in North America, for the citizens of Alaska (rather than for all US citizens). However, he was concerned that the huge wealth generated by oil extraction would benefit only the current generation of Alaskans. He therefore proposed setting up a fund to ensure that this wealth would be preserved for future generations, thanks to the investment of part of the oil revenues.
In 1976, the Alaska Permanent Fund was created by an amendment to the State Constitution. In order to get the current Alaskan population interested in its continuity and growth, Governor Hammond conceived of a dividend paid annually to all residents. “The Dividend concept,” Hammond explains in his memoirs, was “based on Alaska’s Constitution, which holds that Alaska’s natural resources are owned, not by the State, but by the Alaskan people themselves.”
A genuinely universal basic income paid to all legal residents at the same level, including newcomers and foreign nationals.
The program was first implemented in 1982. Since then, every official resident of Alaska for at least one year is entitled to an equal annual dividend. Around 637,000 applicants qualified in 2015. This dividend corresponds to some proportion of the average financial return, over the previous five years, of the Alaska Permanent Fund.
Although Alaska’s oil dividend is by no means sufficient to cover an individual’s basic needs, at its maximum, it reached about 20 percent of the official US poverty line for a single person and it never exceeded 4 percent of Alaska’s GDP per capita, it is clearly a genuine basic income: it is an obligation-free cash payment made to all on an individual basis. Is it surprising that it should have been introduced by a Republican administration?
Is it surprising that the Alaska dividend scheme has not been emulated elsewhere? Perhaps. There are now over fifty countries with sovereign wealth funds similar to the Alaska Permanent Fund. Yet, despite various proposals, Alaska’s dividend scheme remains unique so far.
Since the mid-1980s, the history of basic income is no longer a set of isolated national developments, completely independent and mostly ignorant of each other. Thanks to the existence of an international network, to the power of the internet, and to the spreading of the idea, new initiatives around basic income are now happening every day and are being echoed worldwide.
Philippe van Parijs & Yannick Vanderborght