North American debates and social experiments on a ‘guaranteed income’ in the 1960s and 1970s

In recent years, interest in the idea of a UBI and its empirical testing has been growing rapidly in a number of countries around the world, and it seems to be increasingly spreading into politics.

Some Examples (click to expand):

In 2016, Canadian Prime Minister Justin Trudeau announced the Ontario Basic Income Pilot, which was then launched in 2017 by the province’s Liberal government. (However, it was canceled after a short time. URL1, URL2) In the United States, during the 2020 presidential primaries, Democratic candidate Andrew Yang campaigned for a “freedom dividend” as a response to digitization. Michael D. Tubbs, the former mayor of Stockton in California, started the nationwide initiative “Mayors for a Guaranteed Income” in 2020, after conducting a local trial the years before (Stockton Economic Empowerment Demonstration “SEED”). This group of mayors has been growing strongly since then and is now implementing various pilots in cities across the country in cooperation with scientific institutions.

There is a similar development in Great Britain, where more and more city-councils are favoring basic income trials. In Scotland, the head of government, First Minister Nicola Sturgeon, announced in 2017 that her government would provide financial support to local authorities to trial a UBI system. In 2021, the Welsh government followed and announced a plan for a pilot in Wales.

In continental Europe, the Finnish government has commissioned the National Social Insurance Agency KELA to conduct a large UBI study from 2017-2019. Different local pilots are underway in Holland, France, Italy, Spain, and Switzerland. Germany joined the group of countries preparing for UBI trials in 2020, pushed by two citizens’ initiatives. That same year, several political parties started to include the idea in their programs.

In Asia, South Korea has become a hotspot of UBI politics. In 2015, mayor Lee Jae-myung introduced a „Youth Basic Income“ in the city of Seongnam, the tenth-largest city in South Korea nearby Seoul. He then became governor of Gyeonggi-Province in 2018, which is the Korean Silicon Valley region around Seoul. Since 2019, 175,000 young adults of this province aged 24 receive the Youth Basic Income for one year, with scientific monitoring by Gyeonggi-Research-Institute (GRI) (URL). The Corona-pandemia prompted the governor to add a temporary, unconditional Disaster Subsidy for all ages in Gyeonggi-Province, and he is running for president in 2021, with the pledge of extending his UBI politics to a nationwide, fully-fledged UBI.

Interest in UBI is also growing in India, South America, and Africa, where, in 2016, the non-governmental organization “GiveDirectly” started in rural Kenya the largest UBI trial so far, with the participation of economist Abhijit Banerjee (MIT), who was awarded the Nobel Memorial Prize in Economic Sciences in 2019 together with Esther Duflo and Michael Kremer. In many countries around the world, COVID-19 has fueled debates about UBI, leading some to argue that direct cash transfers could allow economies to maintain momentum during a pandemic.

>>See a list of past, present, and planned UBI-pilots in the world

Looking back into history, one discovers that there was already a time of intense debate and social experimentation about a universal basic or “guaranteed” income. Not everywhere in the world, but in North America. Its story is worth knowing for contemporaries interested in the topic.

With World War II, North American economies eventually left the depression era and moved toward the postwar period, which became the epoch of prosperity for a large part of the population, of “Middle-Class”-America with significantly less income inequality than today, while the countries remained racially segregated.

GDP per capita, 1870 to 2018

The economic context prompted some U.S. intellectuals, with great progress optimism, to engage in a conversation about the goals the country should pursue. Harvard sociologist David Riesman, for example, famously asked “Abundance for what?” , after Harvard economist, presidential advisor and diplomat John Kenneth Galbraith drew attention to a lack of cultural adaptation of society to prosperity . Economist and intellectual Robert Theobald diagnosed “the prospect of freeing whole populations from the pressure of want” . Discussions culminated in the 1960s with the first societal debate on the idea of a “guaranteed income” or “negative income tax”2 .

You can see this in the following graph from Google’s Ngram Viewer, which shows the occurrence of selected keywords in Google’s digitized corpus of books:

Google Ngram-Viewer for “American English” texts, 1945-2019
(Do you use a tablet or smartphone? In this case, the chart will probably be distorted. Then click on the link above to see the chart directly on Google’s pages.)

Public debate about a “guaranteed income” and “negative income tax” in the 1960s inspired a series of “Minimum Income Maintenance Experiments” funded by the U.S. federal and the Canadian government. The first one in New Jersey and Pennsylvania was started by the U.S. “Office of Economic Opportunity” in 1968. Others followed throughout the 1970s. The largest study took place in Seattle and Denver (SIME/DIME), where over 5,000 recipients were involved over six years (1970-76). In Canada, the MINCOME-Pilot in Manitoba (1974-79) added a sophisticated variant to this series of trials, which for the first time in history applied a scientific experimental approach to a policy idea on such a scale .

After U.S. President Richard Nixon took office in 1969, his administration even intensified a cross-party process of implementing a negative income tax variant of the guaranteed income idea (the “Family Assistance Plan”), a process that already started before . However, in the end, the implementation died in the U.S. Senate in 1972, i.e., already at the beginning of the great series of scientific social experiments, without waiting for their empirical results.

But this was not the end of the story. With this failure, especially the U.S. moved on toward a very distinct direction, which had formed in important respects in direct opposition to the basic income idea: with workfare policies, economic deregulation, increasing inequality, growing overall indebtedness (of the state, private sector, and people), a growing financial sector, the reintroduction of the death penalty, the expansion of the prison system up to a world record incarceration rate and more. In some ways, the optimistic spirit of the post-war period increasingly became a pale memory in a sobering world.

Watch the short video below in which California Governor Ronald Reagan, who later became a defining politician of this historic shift in policy, publicly criticized the idea of a ‘guaranteed income’. He distinguished himself from the policy course of his party colleague Nixon in Washington and promoted his own economic and labor market policy ideas that later became known as “Reaganomics” and shaped global history for the next several decades.

Governor Ronald Reagan speaking publicly to students at Luther Burbank High School, May 22, 1973.

Ronald Reagan’s subsequent election in 1980 brought to the forefront of domestic politics new welfare reform ideas that had arisen in direct opposition to GAI [=”Guaranteed Annual Income”] policies and that signaled the eclipse of GAI plans from national policymaking. (p. 182)

The ‘new consensus’ on welfare reform that emerged during this period culminated in President Bill Clinton’s 1996 welfare reform legislation, which terminated government-sponsored welfare entitlements. (p. 219)

Brian Steensland (2008). The Failed Welfare Revolution: America’s Struggle over Guaranteed Income Policy. Princeton University Press

However, this did not prevent the basic Income idea from returning in recent years.

Our international, interdisciplinary research group about the period 1950-1980, is looking for answers to the question, why an idea is experiencing a renaissance today that was discussed and rejected decades ago. What were the reasons for the negative outcome of the debate in the 1960s and 1970s, and why did the idea attract attention in the first place? Why did the USA in particular take an entirely different path in the mid-1970s? Was there a connection between the reasons for rejecting the implementation of a basic income and the direction of development chosen instead? What role did cultural patterns of interpretation (about work, leisure, autonomy, the legitimacy of unconditional payments, technological progress, justice, lifelong learning, job training, biographical transformations) play, what role the distribution of power in society or tangible obstacles of a more technical nature? These are general questions that we have in mind. However, we will first conduct specific studies to fill significant research gaps. We will then combine these new results with research findings that are already available and discuss with others what can be said about the broader questions.

Historical UBI-debate in North America – a short collection of videos and books

Cite this article as: Manuel Franzmann, "North American debates and social experiments on a ‘guaranteed income’ in the 1960s and 1970s," in: Dr. Manuel Franzmann's Website-Blog, August 4, 2021, https://int.manuelfranzmann.de/2021/08/04/north-american-debates-and-social-experiments-on-a-guaranteed-income-in-the-1960s-and-1970s/.

Footnotes:

1. A “Universal” or “Unconditional” or “Citizens” Basic Income “is a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.” (Basic Income Earth Network 2021) The term “Guaranteed Income” was used primarily in the 1960s and 1970s. It has a broader meaning and also includes direct cash payments only to groups in need of income. Milton Friedman’s idea of a “Negative Income Tax” (NIT) is the best known concept. In technical terms, the differences between UBI and NIT do not appear to be large. At the level of the discourse of justification, however, the differences are considerable: A UBI treats all citizens equally. A NIT addresses only the needy and therefore still implies stigmatization, even if it is granted generously without behavioral control. In the 1960s and 1970s, both UBI and NIT were discussed under the umbrella term of a “Guaranteed Income.”

2. The idea of a “negative income tax”, which should guarantee a minimum income via a “negative tax”, i.e. a payment from the tax office to a citizen with low income, was put forth by economist Milton Friedman in his book “capitalism and freedom”. Further Reading.


References:

Ferber, Robert and Hirsch, Werner Z. (1978). Social Experimentation and Economic Policy. A Survey. In: Journal of Economic Literature, 16(4), 1379–1414.
Retrieved from https://www.jstor.org/stable/2723555
Friedman, Milton (1962). Capitalism and Freedom. Chicago, London: The University of Chicago Press.
Galbraith, John Kenneth (1958). The Affluent Society. Boston: Penguin Books.
Levine, Robert A. / Watts, Harold / Hollister, Robinson / Williams, Walter / O’Connor, Alice and Widerquist, Karl (2005). A Retrospective on the Negative Income Tax Experiments. Looking Back at the Most Innovate Field Studies in Social Policy. In: K. Widerquist and M. A. Lewis (Eds.), The ethics and economics of the basic income guarantee (pp. 95–106). Abingdon: Routledge.
Luther King Jr., Martin (1967). Where Do We Go From Here. Chaos or Community? New York: Harper & Row.
Oakley, Ann (1998). Experimentation and social interventions. A forgotten but important history. In: BMJ, 317(7167), 1239–1242.
https://doi.org/10.1136/bmj.317.7167.1239
Riesman, David (1965). Abundance for what?: and other essays. Albany, N.Y.: Doubleday.
Steensland, Brian (2008). The Failed Welfare Revolution. America’s Struggle over Guaranteed Income Policy. Princeton: Princeton University Press.
Theobald, Robert (1963). Free Men and Free Markets. New York: C.N. Potter.
Retrieved from http://archive.org/details/freemenfreemarke0000unse
Theobald, Robert (1961). The Rich and the Poor: A Study of the Economics of Rising Expectations. New York: New American Library.

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