Against Precarity, Towards Real Democracy. Kaleckian Perspective on Basic Income

  • Abstract:

    The neoliberal phase of capitalism, effectively commencing in the seventies, not only resulted in the current economic crisis, but also destabilised the labour market, making large numbers of people unemployed, relegating them to precarious forms of employment, and divesting them of basic economic security. The welfare state has transformed into workfare with increasing forms of conditionality, depriving many people of decent living conditions. The remainder of the welfare state is defended from immigrants, while some members of the precariat are played off against others. The frustration of the precariat, experiencing chronic insecurity, is exploited by resurgent neofascism. In these circumstances the idea of a universal basic income conceived as a solution to the aforementioned problems has gained some popularity.
    The paper investigates the potential influence of universal basic income on national Gross Domestic Product and the level of income inequalities. It uses Michał Kalecki’s equations that show relations between fundamental macroeconomic factors in the national economy (like GDP, wage/profit share, budget deficit, private investment, etc.) to verify and refute some of the common objections to basic income, including: problems with financing; potential increase in social inequalities; and lowering of wages. Basic income is analysed as a strategy to renew the full employment policy that would have a crucial impact on the balance of power between workers and capital. It could also contribute to a more equal distribution of key assets in society like wealth and time, therefore equalizing the opportunity to engage in political action, which is indispensable to a real democracy. In this sense, by empowering workers, basic income, according to the thesis of Erik Olin-Wright, can also contribute to a transformation of capitalism itself. The last part involves an analysis of the economic and institutional conditions under which implementing basic income can be beneficial in a specific state.

 

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