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Guaranteed minimum income (GMI) also called Citizen's Income, is a system^[1] of social welfare provision that guarantees that all citizens or families have an income sufficient to live on, provided they meet certain conditions. Eligibility is typically determined by citizenship, a means test and either availability for the labour market or a willingness to perform community services. The primary goal of a guaranteed minimum income is to combat poverty. If citizenship is the only requirement, the system turns into a basic income guarantee.

Elements

A system of guaranteed minimum income can consist of several elements, most notably:

a minimum wage, either set by law or resulting from negotiations of employers or their organizations with trade unions;
a calculation of the social minimum, usually below the minimum wage;
a safety net, to help citizens or families without sufficient financial means survive at the social minimum. This may be a transfer or, in some cases, a loan, and is generally conditional to availability for work, performance of community services, some kind of social contract, or commitment to a reintegration trajectory;
child support by the state;
student grants and student loans;
state pension for the elderly.

Basic income

A basic income is granted independent of other income (including salaries) and wealth, with no other requirement than citizenship. This is a special case of GMI, based on additional ideologies and/or goals. While most modern countries have some form of guaranteed minimum income, a basic income is rare.

A basic income is a proposed system of social security, that periodically provides each citizen with a sum of money that is sufficient to live on. Except for citizenship, a basic income is entirely unconditional. There is no means test; the richest as well as the poorest citizens would receive it.

A basic income is often proposed in the form of a citizen's dividend (a transfer) or a negative income tax (a guarantee). A basic income less than the social minimum is referred to as a partial basic income. A worldwide basic income, typically including income redistribution between nations, is known as a global basic income.

Advocates

File:Felix Golden Egg 1936.jpg

The idea of guaranteed minimum income is not new, as witnessed in this vintage cartoon.

American revolutionary Thomas Paine advocated a basic income guarantee to all US citizens as compensation for "loss of his or her natural inheritance, by the introduction of the system of landed property" (Agrarian Justice, 1795).

French Emperor Napoleon Bonaparte echoed Paine's sentiments and commented that 'man is entitled by birthright to a share of the Earth's produce sufficient to fill the needs of his existence' (Herold, 1955).

In 1962, economist Milton Friedman proposed a Negative Income Tax coupled with a flat tax in support of a guaranteed minimum income.^[2]

In 1963, Robert Theobald published the book Free Men and Free Markets, in which he advocated a guaranteed minimum income (the origin of the modern version of the phrase).

In 1966 the Cloward–Piven strategy advocated "overloading" the US welfare system to force its collapse in the hopes that it would be replaced by "a guaranteed annual income and thus an end to poverty".

In his final book Where Do We Go from Here: Chaos or Community? (1967) Martin Luther King Jr. wrote^[3]

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.
— from the chapter titled "Where We Are Going"

In 1968, James Tobin, Paul Samuelson, John Kenneth Galbraith and another 1,200 economists signed a document calling for the US Congress to introduce in that year a system of income guarantees and supplements.^[4]

In 1973, Daniel Patrick Moynihan wrote The Politics of a Guaranteed Income in which he advocated for the Guaranteed Minimum Income and discussed Richard Nixon's GAI proposal.

In 1987, New Zealand's Labour Finance Minister Roger Douglas announced a Guaranteed Minimum Family Income Scheme to accompany a new flat tax. Both were quashed by then Prime Minister David Lange, who sacked Douglas.^[5]

In his 1994 "autobiographical dialog" Friedrich Hayek stated "I have always said that I am in favor of a minimum income for every person in the country."^[6]

Modern advocates include Hans-Werner Sinn (Germany) and Ayşe Buğra (Turkey), The Green Economics Institute (GEI) www.greeneconomics.org ^{[citation needed]}

Funding

Many different sources of funding have been suggested for a guaranteed minimum income:

Income taxes
Sales taxes
Capital gains taxes
Inheritance taxes
Wealth taxes, e.g. property tax
Luxury taxes
Elimination of current income support programs and tax deductions
Repayment of the grant at death or retirement
Land and natural resource taxes
Pollution taxes
Fees from government created monopolies (such as the broadcast spectrum and utilities)
Collective ownership
Universal stock ownership
A National Mutual Fund
Money creation or seignorage
Tariffs, the lottery, or sin taxes
Technology Taxes
Tobin tax

References

^ History of Basic Income, Basic Income Earth Network (BIEN), retrieved on 18 June 2009
^ Friedman, Milton (2002). Capitalism and Freedom: Fortieth Anniversary Edition. University of Chicago Press. pp. 192–194. ISBN 0226264211.
^ Martin Luther King jr., Where Do We Go from Here: Chaos or Community? (New York: Harper & Row, 1967)
^ Economists' Statement on Guaranteed Annual Income, 1/15/1968-4/18/1969 folder, General Correspondence Series, Papers of John Kenneth Galbraith, John F. Kennedy Presidential Library. Cited in: Jyotsna Sreenivasan, "Poverty and the Government in America: A Historical Encyclopedia." (Santa Barbara: ABC-CLIO, 2009), page 269
^ "New Zealand Is Jolted By a Speedy Decontrol", Seth Mydans, The New York Times (24 February 1988)
^ Hayek on Hayek: An Autobiographical Dialogue by F. A. Hayek, edited by Stephen Kresge and Leif Wenar (Chicago: University of Chicago Press, 1994)

External links

[1] History of Basic Income, Basic Income Earth Network (BIEN), retrieved on 18 June 2009

[2] Friedman, Milton (2002). Capitalism and Freedom: Fortieth Anniversary Edition. University of Chicago Press. pp. 192–194. ISBN 0226264211.

[3] Martin Luther King jr., Where Do We Go from Here: Chaos or Community? (New York: Harper & Row, 1967)

[4] Economists' Statement on Guaranteed Annual Income, 1/15/1968-4/18/1969 folder, General Correspondence Series, Papers of John Kenneth Galbraith, John F. Kennedy Presidential Library. Cited in: Jyotsna Sreenivasan, "Poverty and the Government in America: A Historical Encyclopedia." (Santa Barbara: ABC-CLIO, 2009), page 269

[5] "New Zealand Is Jolted By a Speedy Decontrol", Seth Mydans, The New York Times (24 February 1988)

[6] Hayek on Hayek: An Autobiographical Dialogue by F. A. Hayek, edited by Stephen Kresge and Leif Wenar (Chicago: University of Chicago Press, 1994)

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 French [[Emperor]] [[Napoleon Bonaparte]] echoed Paine's sentiments and commented that 'man is entitled by birthright to a share of the Earth's produce sufficient to fill the needs of his existence' (Herold, 1955).
+In 1962, economist [[Milton Friedman]] proposed a [[Negative Income Tax]] coupled with a [[flat tax]] in support of a guaranteed minimum income.<ref>Friedman, Milton (2002). Capitalism and Freedom: Fortieth Anniversary Edition. University of Chicago Press. pp. 192–194. ISBN 0226264211.</ref>
 In 1963, [[Robert Theobald]] published the book ''Free Men and Free Markets'', in which he advocated a ''guaranteed minimum income'' (the origin of the modern version of the phrase).