Andy Haldane’s version of a Participation Income

The Guardian reports on a mini-manifesto on the future of civil society by Andy Haldane, the Bank of England’s Chief Economist. Haldane says that the role of civil society will in the future

be the one it has always played at times of great social change: to provide a stabilising force, and support individuals and communities displaced by technology. By civil society he means not just charities, but also faith groups, trade unions, volunteers, carers and grassroots movements for social change, like #MeToo or Extinction Rebellion. The sector’s other task is to help prepare citizens for the seismic eruptions ahead, providing a sense of purpose and meaning – community glue, if you like – as an antidote to the conditions that have helped fuel Brexit and populism.

He is clear that civil society – neglected politically and financially – is not currently in a fit state to fulfil this role. “The reason we have the triple threats of disconnection of people from society, mistrust of institutions, and the rising tide of populism is because we have structurally underinvested in [civil society],” he says, citing former Indian central banker Raghuram Rajan’s book The Third Pillar. “We have let the local community pillar break down and wither.” …

Haldane suggests

a new framework for civic service, embedding volunteering in people’s psyche at an early age in school, and nurturing it throughout their working life by treating it as a core part of a career progression, indivisible from paid work, and rewarded accordingly. …

… The fourth industrial revolution will deliver billions of hours more free time to people who live longer, he says. But if we want the millions of people whose jobs are taken by robots to volunteer, how do we reward them? Does the social security system – obsessed with the seeking of paid work as a condition of receiving state benefit payments – accept that civic service might fulfil that condition? And what might be the implications for the paid labour market of a mass army of volunteers? Would there be a role for a universal basic income?

“I don’t know what I think about universal basic income to be honest … that’s the god’s honest truth,” says Haldane. He says he’d rather duck the issues of its feasibility and financing. But he is intrigued by its potential desirability. Work is valuable because it gives people a sense of purpose, and because it signifies to others that you are making a contribution to society. If a basic income was “earned” through linking it to volunteering (which would be recorded on a digital civic service “passport”) it would in theory meet both those requirements.  …

To read the article, click here.

Our comment:

While making an otherwise unconditional income conditional on voluntary activity at first sight appear to be a route to encouraging voluntary activity, and to making the otherwise unconditional income palatable to a British public keen on what we might call front-end reciprocity – that is, the idea that someone has to do something for society before society will do something for them – we might find that it wouldn’t be such a good idea after all.

First of all, it would turn voluntary work into paid work, would destroy voluntary activity as we know it, and would not build the kind of civil society that Haldane would like to see. The test for whether sufficient voluntary activity had been undertaken would require a significant bureaucracy, would impose intrusive questioning, would turn those supervising the now paid activity into gatekeepers to an income, and thus into street-level bureaucrats, and would turn all of us into claimants. It would be very different from an entirely unconditional  Citizen’s Basic Income, the recipients of which would see themselves as members of society receiving equal and unconditional social provision, in the same way that we see the National Health Service as a service provided for the whole of society.

Professor Tony Atkinson, who promoted the idea of a Participation Income, an income conditional on voluntary activity as well as on other ‘participation’ conditions, never factored in the difficulty of administering it. Research has shown that only about one per cent of the population would not fulfil at least one of Atkinson’s participation conditions (Malcolm Torry, The Feasibility of Citizen’s Income, Palgrave Macmillan, 2016, pp. 134–39). Participation Income amounts to a proposal for a vast bureaucracy that would enable street-level bureaucrats to impose intrusive detailed questioning on every member of the population in order to find out who was fulfilling the necessary conditions, and to exclude a tiny number from receiving the otherwise unconditional income: and an even smaller number if some of those initially excluded were then able to exercise creative compliance: that is, organisations would construct volunteering activities specifically tailored to fulfil the Participation Income conditions (Jurgen De Wispelaere and Lindsay Stirton, Why Participation Income might not be such a great idea after all’, Citizen’s Income Newsletter, issue 3 for 2008, pp. 3–8). In his final book before he died, Atkinson still thought the idea to be a realistic proposition (Anthony B. Atkinson, Inequality: What can be done? Harvard University Press, 2015, pp. 219–21, 297): but interestingly the microsimulation results published in the book are for a genuine Citizen’s Basic Income rather than for a Participation Income.

A further objection to a Participation Income is that the unpopularity of its administrative requirements would make it so unpopular that it would be quickly abolished, and that the experience would ensure that Citizen’s Basic Income would be off the agenda until the experience had faded from memory.

Haldane’s suggestion of a Universal or Citizen’s Basic Income is a far better idea than his version of Atkinson’s Participation Income. A genuine Citizen’s Basic Income would provide a secure financial floor that would provide every household with new options as to how to organise their time, and it would therefore encourage additional genuinely voluntary activity rather than imposing activity that was no longer truly voluntary as a condition for receiving an income.