Basic income in the European Union: a conundrum rather than a solution

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The Amsterdam Centre for Contemporary European StudieS SSRN Research Paper 2017/02 Basic income in the Union: a conundrum rather than solution Frank Vandenbroucke ACCESS EUROPE This work is licensed under Creative Commons Attribution 4 0 International License © 2017 University Professor of www frankvandenbroucke uva nl accessseurope org Abstract In Income A Radical Proposal Free Society and Sane Economy Philippe Van Parijs Yannick Vanderborght table two arguments that focus explicitly on Union Their first argument concerns strategies to introduce basic at national level: VP&V argue there tension between principle free movement; cope with threat selective immigration sustainability imposes ‘firm limits hospitality’ second introduction pan-European income: contend best answer social challenges created by integration this paper I develop three claims My claim are unclear about consequences movement: renders their case ambiguous regard core feature EU National seems incompatible consistent legitimate logic movement non-discrimination; support sketch normative framework non-discrimination VP&V’s If it true EU’s principal justice-related problem has diminished capabilities welfare states such as redistribution stabilization without adequately ensuring functioning higher level remedies essentially different from third both starting point compelling: we all benefit common inheritance which none us did anything However more needed why should be priority amidst competing ‘gift’ constituted past technological economic progress fact need add dimension project militates against favour or Keywords Social Justice Freedom Movement Reciprocity Wage Subsidies Investment Acknowledgements thank Robert van der Veen Erik De Bom Toon Vandevelde exchanges subject; usual disclaimers apply 1. Introduction overview new wide-ranging book (Basic Economy) (EU) (VP&V remainder paper) separate individual member (or Eurozone) our agenda Throughout will use ‘national income’ short-cut strategies; ‘pan-European short pursued simultaneously How does dual strategy relate well-known debates integration? developed (‘benefit tourism’) “firm hospitality” (VP&V: 222) Selective emigration citizens high earnings potential also discouraged solve problems pressure weighing systems consequence single market viability Eurozone large would contribute “saving extinction so-called model” 231) whilst bolstering future Admittedly lack clarity an not indictment per se Moreover constitutive make sacrosanct: needs justification if take seriously crux equality access employment opportunities just happy few Such egalitarian cannot mitigated nuanced: apart transitory arrangements long run either applies everybody meaningful sense These features them depart defining anything; was given freely nature capital accumulation organization civility rules so on; hence question arises how distribute gift fairly alternative ways via think cheap) excellent education health care; wage subsidies people whose productivity rated low market… More these when compare policy options funded Section 2 briefly presents proposal Sections 3 discuss workers 5 assesses idea important 6 returns rationale views could used 7 concludes 2. nutshell propose universal (it paid every irrespective any other sources) unconditional depend present behavior would-be recipient; i e counterpart) Recipients must members particular territorially defined community interpretation means fiscal residence permanent citizenship excludes tourists travelers undocumented migrants diplomats employees supranational organizations subjected local personal tax 9) do posted workers:1 remains home country (rather they posted) entitled one where philosophical can summarized follows real freedom “very stuff justice consists distributing fairly” 104) Real only sheer right but genuine capacity whatever might wish Being imply aim equalize cost For inequalities regarded everyone: go greatest those least provides material basis exercise obligation-free because distributes gift: “What ensure everyone receives fair share what today (…) And pitched highest sustainable ensures who receive much durably feasible ” 105) offered particularly labour market: facilitates saying yes job offer generates modest finds rewarding; no lousy degrading “the joint operation features” turns into “a paramount instrument freedom” 16) Thus condition underscore following caveat: “Contrary way sometimes characterized chagrin among its advocates want sell radical simplification understood being definition full substitute existing transfers less public funding quality care services 12) What relevant income? To fix ideas suggest picking amount order one- fourth current GDP capita lower poverty threshold 1 ‘posted worker’ employee sent his employer carry out service another state temporary Posted mobile remain host temporarily integrate maintain contract (‘sending’) have latter equal treatment nationals working conditions suffices get household falls adequate system unemployment insurance provide full-time worker average salary loses With qualifications flavour realism weaken key “getting rid trap” 25): far assistance levels above inactivity traps continue exist albeit lower-level consequential budgetary feasibility relief objectives resources benefits totally ‘recycled’ income; pursue discussion here 200 euro month countries living 236); represents 5% Depending create transfer purchasing power richer poorer 3. cross-border mobility start premise international migration constitutes redistributive functions “[t]he open borders generous schemes conditional stem likely net beneficiaries 219) creates “cruel dilemma” committed affluent parts world torn generosity towards ‘own poor folks’ hospitality ‘strangers’ knocking door They recognize disturbing basic-income supporters “as appeal endears firm OECD (2017) simulates impact scheme non-elderly population UK France Italy Finland neutral (with itself taxed) effect shifts composition income-poor some moving line while others fall below Overall rates increase significantly extent little Obviously mechanical calculations account behavioral changes But conflict components handled [T]here absolute 221) mainly governed threatened From empirical view ‘welfare magnet’ hypothesis centrally disputable defense Boso Vancea (2012) validity tourism Howard (2006) nuanced assessment underscores political salience context (see footnote 3) As matter intra-European motivated differences non-active individuals Martinsen Rotger show vastly overstated Denmark archetypal universalistic relatively state: positive observations limited reality today’s Europe settle legal understanding non-discriminatory non-nationals accommodate pure ‘benefit tourism’: Member States refuse subsistence upon arrival Danish illustrates implement exclusionary principles very effective restrictive sense: restricting Germany traditionally seen ‘insurance state’ (Martinsen Werner 2018 forthcoming) Yet like supports refused non-nationals: reason reject ‘soft’ waiting periods restriction rejection premised recognition may dilemma liberal egalitarians migrate example already 1992 (1992: 162) wrote: “There survive old sick lazy came running advantage been discussed addressed Jordan (2007) actual pull-effect expect makes expected saliency migrants’ welfare; he therefore mix fight entitlements restrictions find ‘middle way’ applied within same encountered advocated (who moreover income) survey factors affecting intra-EU adds lot nuance see Commission (2016) period requirement always unacceptable discrimination kind benefit; contradiction fundamental “it involve major distortion end able turn down jobs thanks entitlement forced accept bargaining confers” 223) categorically “two categories residents” conclude logically: “Once place hand 223-224) Hence ‘harder’ necessary avoids dissociating Having said silent comprise silence happenstance: limiting markets indicated section ‘fiscal residence’ constitute generic set ‘selective migration’ feared VP&V: normally residents regular profile (posting exception based country) Would bury return old-style policies regulated governments ‘economic needs’? hardly plausible goes grain citizenship; huge ‘real freedom’ Europeans having ample cross purpose finding interesting hard come up concrete ‘exclusionary strategy’ pass test understand establish balance creating (due attractiveness beneficiaries) unattractiveness contributors capacity) Apart promotion patriotic ethic practical suggestions operational proposals tackle emigration; suggestion individual’s emigrate conditioned paying back investment human made : highly-educated pay economically unsuccessful highly-skilled improve situation So left conundrum: signaled clear say Whilst active generate In-work development low-wage sector earn decent net-income top-up purse An State pursues attract disproportionate less-developed offers net-incomes low-skilled supply-effect: boosts low- skilled infamous now defunct Brexit-deal negotiated former British Prime Minister David Cameron one: theoretically conceivable boosting in-work attracts puts pursuing Whether empirically moot nuances whether government – perceived allow discriminate confronted type challenge difference: redistribute incomes call notion reciprocity: effort productively even value contribution low: ‘earn’ Although backlash immigrants benefiting domestic opinion ready ‘earned’ migrant participation Public acceptance become stronger strictly proportional hourly subsidy; elaborate non- ‘earned citizenship’ perspective EU: (2018 significant number Germany; terms numbers percentage indeed simply assume stand chance publicly accepted 4. Can ‘nuanced’? defender root nexus nationality foundational independent justify clarify issues distinguish questions: 1) movement? 2) move? difference application (1) (2) citizenship? 4.1. Why citizens? previous debate It obviously enlargement regime (but workers) agreed limitations transitional corollary goods refers associated posting (which delivery) regimes each well-balanced whole Posting7 controversial issue widespread feelings difficult control disruptive phenomena dumping sectors drawbacks taken notoriously thought transition See heart reform 8 Notwithstanding dispense regime: integrated requires short-term projects employed affiliated security receiving Simultaneously seeking contracts explained highly stylized theoretical counterfactual B socially Imagine construct (say specific certain g possible mean activity (in implies guarantees safeguard practices dumping; contrast sending allows deviations prevailing B; Limiting implies) allowing unfair since impossible imbalance enhance dynamic dumping: ‘non-dumping’ option prefer (compared ‘posting’ option) unavailable yet words well-delineated refer sees (This distinct traditional enhances efficiency allocation ) specification: recognized Commission; put forward Commissioner Thyssen step respect Commission’s Press Release March 2016 (http://europa eu/rapid/press-release_IP-16-466_en htm) led resistance leading ‘yellow card’ procedure At moment writing settled my most robust opportunity larger sets 9 One note position worst-off 10 status conception comparable Rawls’ ‘fair opportunity’ ‘difference principle’: Rawls positions offices) respected limit scope 11 conceived trade-off envisaged (between formal European-wide ‘maximization continuum possibilities; possibilities ‘equal opportunities’ across There congeniality formulate de Witte’s ‘transnational solidarity’: good life beyond nation (de Witte 2015) people’s notably reference ‘the life’ tries interpret backdrop communitarian philosophers fail term (for instance liberalism) sufficient plurality conceptions admit available realize (quantitatively) moves Romania Netherlands excluded Romania; Rawlsian enlarging choice migrating increases primary (unchanged) framing constraints thus deficit liberalism ‘exit options’ obtain societies heterogeneous availability similarly body text enlarged formally (i necessarily sense) private communication points liberal-communitarian wants emphasize importance self-realization motives (a ‘qualitative’ ‘quantitative’ satisfaction lives): exit ‘breaks hold cultural societal patterns over individual’s herself her ’ further elaboration et al don’t reformulation affects critical comment space forbids priori exclude ceteris paribus negative outflows reduces worst- off matter: crucial factor comparison inspired Boer (2013) endorses postponing during period): high-skilled kinds misunderstood: I’m arguing focusing occupations following: imagine ‘in between’ contradict 4.2. Non-discrimination denying often grounds efficient production) defended discriminatory tabled addition promoted incorporated solidarity circle she works Without broadly cosmopolitan theories justice) union Polish enjoys rights Belgian Belgium justifies contributions revenue sustains tolerate competition taxation territory: recipe establishes reciprocity guarantee States; including protects circles own territory 12 Milanovic (2016:154) argues global currently exists legally mild foreign labour” better “keep flow fiction facto differential ‘illegals’” purchase mature grant cash services; exerted services? Access successful Differential severe tensions aspire counterproductive longer segmented underclass housing kids 4.3. Earned coexistence (Kramer me expression) That evolved: dominated progressively expanding followed law became increasingly restrictive; degree continuity Historically inherent bounded reconciled granting move (and dependents) exclusion inactive establishing coordination 13 simple dichotomy tenable were granted Elaborating Sangiovanni convincingly wrongfully demeans stigmatizing general moral non-EU (2016: 15) mentions “demands cooperating maintaining reproducing EU” His reciprocity-argument scenario Britons denied simplify exposition sentence abstraction reasons study throughout unreasonable burden State” 14 2014 Dano- judgment Court stresses possibility refusing solely State’s assistance” 15 Kramer sketches combination change evolution situates broader “neoliberal communitarianism” “combines neo-liberal emphasis responsibility achieve membership community” 2016: 277): labels ‘neo-liberal’ becomes expressed form ‘earning’ convert values” dangers traits language risks pushed confines similar vein Verschueren (2015) warns viz-à-viz vulnerable leeway Dano interpreted Thym uncertainty taking board cautionary notes reading oblige comprehensive minimum protection avoided carefully delineated domains compassion dominate (such assistance) duty protect vulnerability ‘European Union’ complementary logics legitimately conjointly: Economically Art Directive 2004/38/EC C-333/13 C: 2014:2358 para 78 added involuntary (unemployment illness) regulations fairness fully serves cohesion citizen rely her) choice: determines foremost responsible Under bond allowed citizen’s ‘unreasonable burden’ (these substantiate absence link exercised state’s ‘unreasonable’ causes dependence setting boundaries complex task raises many questions as: grants range non-nationals? exact role played criteria ‘integration country’ link’ country? Which facilitating job-search restricted nationals)? demand judiciously Also next act constraint importantly lead ‘enter your risk’ (whereby tolerated protection) precariousness marginalization concern articulated illustrated subject Heindlmaier Blauberger avoid misunderstanding am implying complimentary consistently: mobility’ non-mobile complexities illegitimate regulating expedient popular defensible sits uneasily purposes (basic) active: identical ‘no asked’ Reconciling giving ‘reciprocity’ firmly emigrating explains fit conclusion famous concept ‘embedded liberalism’ signals openness’: openness regional communities politically 5. Pan-European appropriate predicament? “can tread several paths simultaneously” 244): steps complementarity (the project: earlier (Van expanded Viehoff (Viehoff) considers answer: maintenance wages then Viehoff’s wages; 5.1. built-in automatic stabilizers smooth cyclical shocks: progressive character play currency areas United Monetary lacks central (though unanimous) agreement experts Different formulated Unemployment Benefit Scheme re-insurance 16 Viehoff) First stabilizer replacement kicks lose hit stabilization: steady stream loss one’s compensated Therefore compared sub-optimal main precisely VP&V) sobering argument: upward adjustment parities) qua too economies shock Even (adjusted downward standards) although marginal macro-economic features: kick it’s relation operate re-insurance; Beblavy literature assess stabilize diverse exactly opposite additional remark proposed Viehoff): opt VAT scale criticism useful observation institutions versus linear related consumption expenditure reduce crisis (Keynesian) declines (basic directly mitigates hitting react non-linear shocks complexity sensitivity linked observation: “Personal taxes means-tested prerogative” 2015: 239) flip side interwoven prerogative equipped device (i) (ii) provided intergovernmental ‘re- insurance’ agreement: interstate direct links fund operates purely designed beneficiary 2015); objection “richer beneficiaries” “plant seed conflict” 234) surprising plea minor stabilizing impact; cooperative mutual 17 5.2. subsection draw congenial answered respective merits 18 contends “does indirectly introducing regimes: after reserve price cheap (Viehoff 19) VP&P disputable: suggests relationship ‘reservation wage’ complicated standard analysis reservation lowest rate willing determinant combined earning simplified representation discarding variables influencing search weekly decision reduction clear-cut presentation sure called ‘income effect’ supply function worker: worker’s result forces exploration Rogers forum topic reaction (2014) explores references Juliana Bidadanure drawing attention Rogers’ ‘floor’ universally accessible X unemployed (sticking problem); ask extra offer) fraction work’ bottom ‘No society review refuses attached he/she like) extreme examples Let suppose sake corresponds ‘subsistence level’: pays hour accepting hours (let’s unemployment’ calculated 40 minus worked basis) choose behavioural scenario? monthly prefers job’ option’ still losing floor hour: depending hypotheses here: essence qualified ‘work conditionality’ takes jobs; generated variant consist implementing employers presented floor; however practice well-organized floors wages) earned before lost (hence skill level); surpass disadvantage trap: gain trap hand: work-conditionality defenders fundamentally strengthens affirm favourable incentives matter) Next emphasizing ‘superiority’ incentive effects 19 disincentives one-sided this: historically explicit aims Returning discussion: believes ‘social ‘ readiness badly uniform According activation “get traps” “Being help ‘de- commodify’ labour; helps ‘commodify’ otherwise 27) stressed 6) prevent happening considered Job supported conditionality force Decent country-specific: foregoing holds fortiori 20 Worse someone Given probability actions are: improving generalizing reforming 21 5.3. “[c]ross-border generally plausibly excessive organizing 22 low-income high-income countries? shows (low systems) overall according Eurostat Bulgaria (235 euro) (318 Latvia Lithuania (both 380 (data 2017S2 accessed July 2017) pull push explaining predict relative reorientation disincentive se? Since supplement packages contributing pan- motivate somewhat reduced Differences affected orientation migration) established research: 23 upshot (selective) prospects transferring money 6. distribution all’; ‘maximin’ ‘gifts’ (by freedom) sophisticated various publications 1995 All: (If Anything) Justify Capitalism? promises non-partisan synthesis unsatisfactory counts weakness NAFTA (2007: 17) decreasing regions: give poorest Both weaknesses reflect alternatives 6.1. kind? confined healthcare child elderly care… flourishing distributed unconditionally (without allocated substratum delivered cash’ kind’? adamant “quality services” decide hand? mentioned cursory hint gets “[I]t allocate part heavily subsidized provision healthy enjoyable environment total shared components? neat experiment rough guidelines: Suppose had nothing knew expectancy spread lifetimes earmarked expenditures?” passage reveals hypothetical behind veil ignorance inequality handicaps remedying Education intellectual physical autonomy bound increase: persistent medical science technology necessitates foreseeable objective 24 keep affordable perfectly increasing GDP) spent health; rationally attach early childhood large) message Esping- Andersen’s state? (2002) meanwhile investment’ Hemerijck recent survey) income25 implicit expansion states: unwarranted reversed: inherit capacitating future? Arguably quantity (think housing) socialization children) success valorization par excellence 6.2. subsidies? 44-45) remarks Edmund Phelps Phelps’ dismiss contradicts neutrality life; Taking slightly (2004) thorough instruments advantaged maximized metric income-leisure years (Hall Jones 2007; Murphy Topel 2006) Increasing spending well source facing 25 knowledge mostly forms ‘basic kind’ White (2010) discusses ‘Basic Capital’ young adult idea) light White’s address priorities proponents investment; subsidization (any trade-off: sacrifice leisure) taxing enlarge adding information happens 26 model match measure ‘effort’; subsidy received held worked) compensates array besides maximizing unique unambiguously ‘optimal’ guided supplementary compatible actually select zero endorsing ‘egalitarian reciprocity’: “entitlements cooperation confers maximin willingness productive ”(van 2004 p 162-163) 27 thesis dispensing uniquely justified ideal incorporates considerations Contra emerges strongly brief asserts breach elaborates optimal (2001) 1997 1999; discussions (2003) finally indicates reciprocity-objective decisive subsequently conclusions invoking propensity invest skills safety nets He preferred typically asked whereby mitigated) normatively subsidies) typical baseline fulfilled conjunction assumptions lifetime participants contemporary unnecessarily curtailed instead mind (van 2004: 180) 28 OECD’s simulations revenues (OECD 2017: refinement argument) ‘effort’ differentiates Before caveats noted evolutions rise types atypical harder ‘working time’ derives plausibility tie social-protection impossible: applicability fine-grained activities Veen’s company issue: sources secure captures unequal Parijs’ point) sharing yield include work- component rule largest 2011) 29 coupling caveat wages: compensate freed respecting amounts and/or deliberation EU-wide playing field obliging bear costs (if extent; due exceptions engaged protected employment) pressures caused automation outsourcing combinations benefits) toolkit’30 ‘Earned Tax Credit’: Credit tied 31 legitimacy calls toolkit 32 ‘service vouchers’ sectoral implementation hours’ unproblematic metric: cleaning Yurovich Marx 30 borrow expression Anderson (2008) (40-43) EITC; EITC minimum- suboptimal condemn stand-alone “doing jobless” “only boon employers” (quoting approvingly Andy Stern “If jobs”) 42) cf Kenworthy democratic America’ emphasises sufficiently low-productive therein 7. Conclusion: Is EU? sketched distinguishes assigns broad notions inner risks; nor consistently reconciling require seemingly ‘liberal’ (real all) ends unlimited sustainable; embedded unconvincing Nonetheless demographic ageing scientific impacts domain aspiration ‘Union Welfare States’ reconciles Finally improved research (e doubtful easily outperform Reference List E Expanding toolbox: Equality bureaucracy Aristotelian Supplementary Volume 82 1: 139-160 M Marconi G Maselli ahead CEPS Special Report 119 Immigrants? 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Applied doi: 1111/japp 12129 Biographical Notes studied economics Leuven Phil Security Health Insurance Pensions Federal Government (1999-2004) Flemish Regional (2004-2009) professor (KU Leuven) until October (UvA) teaches Antwerp (UA) chair “Herman Deleeck” focuses nl/publicaties Corresponding Author Contact Details Universiteit Spui 1012 WX Email: Vandenbroucke@uva