Basic Income: The Term Itself Is Wrong

The language we use contains ideology—the lens through which we view the world. Ideology refers to systems of thought and belief, such as one’s values or religious outlook. Because language carries ideology in this way, even the same issue can be interpreted from a completely different angle depending on the words and sentences used to express it.

“Income” is a word we encounter often in everyday life. It is widely used not only in private conversation—such as personal income, national income, low income, and high income—but also in the news. Income means earnings received in return for supplying factors of production such as labor or capital. The concept of income generally rests on the belief that it is “compensation received in proportion to one’s work,” and ideologically it is not a biased term at all.

People often regard high-income earners and the rich as the same thing. But a high-income earner is someone with a large income, whereas a rich person is someone with substantial assets. If income is the flow of cash coming into a person’s hands, wealth is assets accumulated over a long period of time. In accounting terms, if income is the income statement, wealth is the balance sheet. The reason many wealthy people are elderly is that they have accumulated assets over many years. Therefore, it is problematic to hate the rich indiscriminately. Very few rich people amassed their assets easily. If one hates the rich, one is denying the legitimate result of their sweat and effort, and that is not “fair.”

One of the words that became a global hot issue and also a subject of heated debate for us is “basic income.” This term combines “basic” and “income.” Basic income refers to giving the same amount of money to all members of society regardless of the size of their income or assets, and regardless of whether they work or are willing to work. The word “income” carries the meaning of labor, but the term “basic income” contains no meaning of labor at all. Therefore, the term “basic income” contains a powerful ideology.

From the individual’s standpoint, basic income is certainly “income” because money comes in. But from the standpoint of the state that provides it, it becomes “welfare” because it is given even without work. Since antiquity, welfare has been selective, targeting people in need, whereas basic income is universal. Just as free education and free school meals are funded through the public budget and could therefore just as well be called budget-funded education or budget-funded meals, basic income too should be understood in the same context as universal “basic welfare.”

Given this situation, the progressive camp welcomes basic income, while the conservative camp, which values freedom and responsibility, criticizes it as a representative form of populism. The term “basic income” itself is “not income but welfare,” and because it is a sensitive issue that could shake the foundations of the existing welfare system, it lies at the center of ideological conflict. In general, once welfare begins, it is difficult to reduce or reverse it. The same is true of basic income: once it is set in motion, its destructive force is enormous.

Basic income is an issue that has risen rapidly in recent years, but its history is very old. Thomas More, the author of Utopia, argued in his novel that the way to eradicate crime was not execution but guaranteed income. He saw guaranteeing a minimum income as the duty of rulers or the state. Milton Friedman also argued in Capitalism and Freedom for the so-called “negative income tax,” under which those below a certain level would not pay taxes but instead receive subsidies from the government.

The event that turned basic income into a heated global controversy was the Swiss referendum in June 2016. The result was rejection, with only 23.1% in favor. Finland, arguing that basic income was not an addition to welfare but a concept that would replace welfare—thereby reorganizing the existing welfare system, which had become complicated and difficult to control, and boosting work incentives—conducted a two-year pilot program involving 2,000 people beginning in 2017, but it ended in failure.

Supporters of basic income explain that it is not a welfare policy but a basic right. They argue that the ultimate purpose of the economy is to liberate human beings from painful labor, and that unlike subsistence assistance, which has the effect of branding people as failures, basic income is based on citizenship. From the standpoint of basic rights, they say, no compensation should be demanded and no screening should be necessary. They also argue that while the current welfare system is very complex and requires significant administrative costs, basic income is transparent and simple. More recently, there have also been calls to introduce basic income in order to provide relief for the unemployed who will emerge as many jobs disappear due to technological shocks such as the Fourth Industrial Revolution, including the introduction of AI and robots.

Opponents of basic income argue that it is far removed from freedom and justice. In countries such as the United States, where poverty is often viewed not as a social responsibility but as a natural phenomenon, this perspective is especially strong: basic income can become oppression and suffering for those who must bear its cost. They believe society can be sustained only if all members contribute to it in some way, and that providing for one’s own livelihood is both the practice of responsibility and the basis for enjoying freedom. In their view, if the government takes responsibility for income itself, it denies the value of income earned through work and obstructs free economic activity.

They also explain that freedom is paired with responsibility, and that those who do not know how to take responsibility must give up freedom as well. In that sense, they define “basic income as a denial of freedom and a socialist method.” They argue: “If we are to share bread, we must first bake it. No matter how large the loaf, if we keep dividing and eating it, eventually not even a single piece will remain, and it will disappear; the social system, too, will collapse in the same way.”

There are various views on basic income, but the most important issues are the problem of securing massive financial resources and the problem of violating the value of fairness. With next year’s general election approaching, it is possible that discussion of basic income will once again be reignited here as well. To state the conclusion first, basic income has strong characteristics of a pseudo-solution. A pseudo-solution refers to a supposed remedy that only makes the problem more tangled. In other words, if basic income is introduced as a solution for “resolving poverty amid abundance” and “reducing inequality,” it could instead become “the worst choice.”

Basic income also runs counter to the value of equity. There is a famous picture related to equity: a short child, a medium-height teenager, and a tall adult are trying to watch a baseball game over a fence. Without chairs, the child and the teenager cannot see the game, and only the tall adult can. In that case, if chairs are to be given, what height should they be?

Those who advocate basic income propose a method in which everyone receives a chair of the same height regardless of stature. The short child still cannot see the baseball game over the fence, and the tall adult ends up with a chair that is unnecessary. Only the medium-height teenager truly feels the need for the chair. Those who oppose basic income propose a method in which the short child receives a tall chair, the medium-height teenager receives a normal chair, and the tall adult receives nothing. In that case, all three reach the same height and can watch the baseball game. Since each person receives a chair tailored to his or her needs, the satisfaction of all three is increased.

Equity means “fair equality,” and in welfare this corresponds to selective welfare. The fact that progressive tax rates are firmly established—applying higher tax rates to high-income earners and lower rates or tax exemption to low-income earners—is itself an example of the principle of equity at work. Selective welfare and progressive taxation are already established institutions in modern society, and basic income runs directly counter to them.

Younghwan Lee, Professor at Keimyung University

---

Original title: 기본소득, 단어부터 잘못됐다

Author: Young-hwan Lee

Date: 2023-03-27

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&idx=25491