Commentary
What’s causing this secular stagnation? Poverty
The present economic and living conditions in advanced countries require a universal ‘base level’ monetary transfer to all citizens. This is an inheritance that every citizen should receive for the mere fact of having come into the world.
By Friday, the recipients of the citizenship income were to have renewed their ISEE certificates (the “indicator of the economic situation of households”), otherwise they will lose their benefits. Thus begins the second year of implementation of this measure, introduced at the initiative of the Five Stars.
It continues to be the target of attacks from both the right and the left. Could it be because it hasn’t managed to “abolish poverty” or significantly reduce it? That would be encouraging, as it would mean that Italian politics across the spectrum would have finally embraced the notion that in our country, the real emergencies are inequality and poverty.
Unfortunately, that’s not the reason it’s under attack: rather, it’s because it hasn’t created enough jobs and because there are too many cheaters among its beneficiaries. That’s why many are saying it would be better to abolish it and give the money to companies in the form of tax incentives, because “only companies create real work.”
For those who still have doubts about the ideological subjugation of the Italian political class to the dominant economic theories, this approach to the problem of work and income distribution should definitely open their eyes.
On one hand, we hear proposals to reinstate the classical neoliberal scheme focused on the centrality of private enterprise, where labor is merely a commodity among other goods, excluding any active and direct role of the state in determining both employment and income levels. On the other hand, the condition of those being “subsidized” is blamed as a source of social parasitism and distortion of the labor market.
These notions also feature prominently in the latest report of the International Monetary Fund (IMF) on Italy, in which the Fund says outright that the citizenship income benefits “are too high” and “disincentivize work,” leading to “a condition of welfare dependence.” We are talking here about benefits that in 70% of cases are below €400 per month.
After the “short century,” it almost seems like we’ve gone back in time, straight into the 19th century—or even worse. According to this view, the only role for the state is to support and encourage business initiatives, supply creates demand all by itself, the most talented are the ones who succeed, the poor are in that condition mostly due to their own behavior, and a certain level of poverty and unemployment are simply “natural,” as the “marginal productivity” curve seems to say (and who are we to go against math?).
Marx and Keynes have been shelved as outdated, but other hoary figures seem to have risen from the grave, alongside those who are singing paeans to the immutability of how things are: authors like Herbert Spencer, with his social Darwinism, and Vilfredo Pareto, according to whom only few people deserved wealth, “in comparison to the multitude who deserved poverty,” and only a tiny few deserved great riches.
That picture is precisely what NGOs like Oxfam are lamenting nowadays.
What nobody is managing to figure out is that the problem of the citizenship income lies precisely in its connection to active labor policies, in the inadequacy of the resources allocated to it, and, above all, in the calculation of the thresholds for access on a family basis. If this was really a “citizenship” income, it would be awarded without any conditions, and it is in any case unacceptable that the members of poor and large families are paradoxically the ones being excluded or penalized, because of the sum total of the meagre income of each individual.
The present economic and living conditions in advanced countries require a universal “base level” monetary transfer to all citizens, with or without income—even to the wealthiest ones, who will ultimately make up for it by paying higher taxes to the state.
This is an inheritance that every citizen should receive for the mere fact of having come into the world. Only in this case could one really talk about a “citizenship income,” instead of a measure aimed at the class-based division—and consequent branding—of the marginalized in the pre-established social order.
Furthermore, fighting poverty and inequality would also be good for the economy as a whole, because the propensity towards consumption of those who have little is always higher compared to those who have a lot, decreasing as income rises.
“Normal” families tend to spend almost all of their income on the goods necessary for the subsistence of their members, while the minority of the rich, once they have satisfied their basic needs as well as those that produce “pleasure and happiness,” to quote Jeremy Bentham, tend to allocate the rest of their income—indeed, the greatest part—to savings or alternative activities, including speculation. On closer examination, we come to realize that even the “secular stagnation” phenomenon is the result of poverty.
Originally published at https://ilmanifesto.it/reddito-di-cittadinanza-poverta-come-colpa/ on 2020-01-31