Why is a Basic Income paid in cash?

Why is a Basic Income paid in cash?

The last few months have seen significant momentum grow behind the Basic Income movement. Distinguished voices have demanded people are given the right to a minimum income, with politicians from across the globe and  religious figures such as Pope Francis joining in a call for Basic Income. Scotland has emerged as a leading figure in the Basic Income movement, with Nicola Sturgeon repeatedly backing its implementation as well as the groundbreaking feasibility report published recently, which advised pilots be rolled out.

With growing energy and excitement surrounding the idea, more and more people are becoming aware of Basic Income for the first time. To ensure the Basic Income community is one of critical discussion, education and imagination, we want to provide some information on the foundational pillars of a Basic Income. 

Over the next few weeks, we will be publishing a series of blogs which will answer some of the most frequently asked questions about Basic Income, and explore its key characteristics. Through this we aim to provide a useful toolkit and a space to find core knowledge about the Basic Income and in doing so empowering people far and wide to talk about what exactly a Basic Income is and to imagine how it could transform people’s lives. 

The first in this series answers a common question about one of the core principles of Basic Income:

Why is a Basic Income paid as a cash payment? 

A fundamental characteristic of a Basic Income is that it is given to all people as cash, as opposed to being provided as benefits in kind or a form of voucher. This is critical to the character of Basic Income in ensuring people have control, autonomy and freedom. 

Nobody knows your needs better than yourself. Being given cash without any conditions or specifications on where it is spent will provide people with security, enabling them to make decisions over their lives. This contrasts to the current social security which aims to control the behaviour and actions of individuals, rather than empowering and trusting them. 

An often proposed alternative to a Basic Income is to give people vouchers for various necessities such as food, utilities, rent and so on. Indeed, in recent times the UK government’s “Eat Out to Help Out” discount provides a in-kind benefit to encourage people to eat out. 

The main issue with such ideas is that they are based upon an intrinsic distrust in people to control their own lives. There are ingrained ideas of the ‘undeserving poor’ and benefit scammers who just want to sit around and watch TV all day, drink and take drugs. This is a consequence of a systematic ‘scrounger narrative’ driven by media outlets who have generated huge misconceptions over benefits claimants. In reality however, various Basic Income pilots have shown an unconditional cash payment sees spending on alcohol decrease

Furthermore vouchers for food or utilities will inevitably lead to various means tests, bureaucracy and add further complexity to people’s lives. Rather than officials trying to shape people’s lives from a distance, let’s put money in people’s hands and give them back control over their own lives. 

Attempts to influence and shape people’s behaviour are evident in schemes such as the “Eat Out to Help Out” discount. Rather than prioritising people’s wellbeing and security during uncertain economic times, the focus of these interventions is on boosting business profits by incentivising people to go out and consume. 

A Basic Income given as a cash payment has no such underlying motivations. If people wish to spend the money they should be free to. If people wish to save money they should be free to. A cash payment enables all people to choose; it places people’s interests and freedom at the centre, rather than using people as a way to get money into business owners’ hands. It comes down to the question of whether we serve the economy or the economy serves us. A Basic Income is all about putting people first. 

Another argument in favour of vouchers rather than a Basic Income is that with vouchers you can target those in need whereas a Basic Income is given to all people, regardless of their financial circumstance. This, however, is quickly overcome by funding a Basic Income through a redistributive tax system, ensuring lower earners are the largest beneficiaries. 

With means-tested social security or vouchers, not only do many people in need inevitably fall through the gaps, but a stigma and ’them and us’ dichotomy is created which is antithetical to a cohesive and compassionate society. A Basic Income given to all in cash embodies trust in people and empowers all to freely make decisions about their life – something they know more about than any business owner or government official.

Luke Brotherdale Smith, Basic Income Network Scotland volunteer

Image credit: “Scottish Banknotes” by cowrin is licensed under CC BY-NC 2.0.

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