Income Distribution and
Basic Income The Agenda of 21st Century
Pertti Koistinen
Income distribution Who owns the agenda?
Economist (theory, methods, perspectives, say?)
Social scientist (theory, expertise, advocacy?) or
Policy makers (advocacy, responsibility, policy design?)
Long silence
Did the neo-liberal ideology lead to a loss of target? 0r
Did the social policy experts loose their reputation and worthiness?
The pragmatic policies adopted after 2008 avoided the worst but didn’t tackle
the essential and provide a durable response to the structural crisis of capitalism
like
Transparence of financial markets
The rise of inequality
Sustainability of the welfare state?
Income distribution policy – a taboo? No adequate discussion and no reforms despite income distribution is a crucial
question
There are some policy oriented economist like Stiglitz (2012, 2014), Sachs (2011,
2012), Piketty (2014) and Riihelä, Sullström & Tuomala (2012)who opened the issue
but, those economist who have been advocates for European policies and national solutions, fall silent. Why?
Where are those who could open the Pandora's box?
What could we learn from historical experiences? Income policies before the
first world war and there after? In times of great depression?
Distribution of incomes over the life course and between generations and
social groups?
Who starts talking about solidarity tax and capital tax and progressive taxation?
New agenda is needed: sharing risks, new policies of income distributions,
sustainability of the welfare state?
The evidence of the welfare state The financial power of the welfare state increased and stabilized since the 1980
everywhere in the developed economies and enabled
Provision and development of a universal education, healthcare, and social
serviced and maintaining the social security (including the pensions)
State intervened also in setting rules not only collecting taxation
This led to birth of financial market
The growing tax and social insurance contributions enabled governments to take on ever broader social function which contributes now 25-30 % national income
and takes even more important role in redistributing this.
State redistribute them in forms of replacement income (pension and
unemployment allowance) and transfer payment (family allowances, guaranteed income etc.)
Wfs become powerful agency in regulation of the financial markets and but, it
lost its political agency and power.
Question of redistribution Modern redistribution does not succeed in transferring income from the rich to
the poor?
Modern distribution consist of public services and replacement incomes that are
more or less equal for everyone and the middle class benefits from the more than others – at least more than low income groups.Mathews effect
Modern redistribution is base on a logic of rights and principle of equal access to
certain number of goods and services but,
More and more of working aged population are out of these options
More and more are excluded by various reasons.
Is the foundations of wfs in safe without a larger and updated concept of
income distributions?
Question of capital incomes and
Global response to global risks of economy
Rethinking income distribution as a whole Four forms of taxation and public incomes:
Income tax
Capital tax
Consumption tax and
Contributions to social insurance programs
Three forms of redistribution
proportional
Progressive
Regressive
But does these systems work adequately?
Does the government use them?
Do we need something new?
Reasons to rethink 1 Increase of wealth and extension of global production chains
hos to deal issues of distribution of wealth and redistributions of
risks?
The markets is allowed to determine that some human being are worth vastly less than other but, how long this can be tolerated
without negative consequences?
Extended and flexible forms of participation on paid work and market relations work over the life course how to create new
concepts and sustainable models for division of incomes and
revenue's over the life course
Reasons to rethink 2
The cost and share of public investments on human skills
development increased in a knowledge based society enormously there is a need to find a better balance for public and private
investments in long run.
Structural changes in the contractual systems and pay like increase
of self-employed, short-term contracted, new forms of capital
incomes and free lancer outside the standart employment and social income protection need for new concept of income
distribution
Sheep labour created a problem of productivity and social
sustainability of the wfs model.
Why basic income? Basic income is needed as social security and insurance reform but,
does it be enough?
Income courante for low income group and for those with low and
inconsistent incomes
Extension of social right for all in working age
Do we need more?
Economic funds and buffers
New regulations for contributions to public vs private sponsored
social insurance programs
More transparence and control?
Extension of a progressive taxation?