This is a CTP of initiative: BIEN/Vereniging Basisinkomen (Netherlands)
In March 2006 the Dutch Central Planning Bureau (CPB) published a study on the future of the welfare state. It had the promising title “Reinventing the Welfare State”. The report did indeed feature the basic income as one of the options for welfare state reform, and started from a social-economic diagnosis that arguably opened up the debate for radical options like the basic income: The Dutch welfare state is under pressure. Future trends of ageing and globalisation render public finances unsustainable and worsen the position of low-skilled workers on the labour market. At the same time, welfare state institutions seem insufficiently adapted to changed socio-cultural circumstances. Moreover, they cause inactivity among elderly workers, women and social benefit recipients. To prepare for the future, the Dutch government aims to raise labour supply and improve human capital. This study explores how welfare state reform can contribute to these goals. Thereby, we take into account the key social and economic functions that the welfare state fulfils in our society. We analyse a number of reforms in Dutch institutions from a broad welfare perspective and quantify their effects on the labour market and the income distribution. (CPB 2006: 5)
Published by the particularly authoritative agency of the Central Planning Bureau, the study had the potential to bring back the basic income into political debate. This debate had come to a nearly complete standstill since the economic boom of the late 1990s (see previous CTP and [related events]). The publication could thus be the crucial outside help that the VBI activists were desperately needing at this time – in the middle of (more than) a decade of silence on the basic income.
The publication did not at all turn out as a breakthrough in the basic income discussion however, and is rather an example of barriers and setback. First of all, the publication featured a negative judgment of the finance aspects of the basic income that continued to haunt the basic income ever since. Moreover, and this underlines the isolating process that the VBI had landed into, the study passed in silence. Even apart from the unfavourable light that the CPB cast upon the basic income, it did not even achieve the exposure and stimulation of public attention that could be expected from such a publication. The interviewee is still surprised and somewhat disappointed by this passing in silence: So in contrary to what we saw with the CPB study in 1992 and the WRR report in 1985 - that something similar to a basic income, or something worthy of the name of the basic income, that it immediately is carried into the public discussion-, that did not happen at all any more with that story of the CPB in 2006. Even though it is a very important chapter about the basic income, in which they give the basic income a chance, in the scientific sense, as they said, using micro-economic arguments on its impacts on the labour market on the shorter and the longer term. But subsequently they rejected it, with the consideration, ‘good idea, yet, in the end it is an inefficient concept. And that has later, as articulated by professor Bas Jacobs, become the most important argument against the basic income.
The interviewee critically remarks (see further under [learning]) that the 2006 publication was a bit of a fake critical turning point. The publication could have sparked something decisive to happen – yet it didn’t. In that sense the critical turning point is instructive as an event inviting resignation. As the interviewee looks back on the incapacity of the VBI in this period to break the silence on basic income and to somehow amplify the signals on the basic income such as the CPB publication: But, well…you asked about the role of the VBI, that was the role of the VBI, as I feel it. Later on Michiel van Hulten and the other board members have continued doing what they have always done… namely, trying to intervene into the discussion every year, but, it never succeeds…nobody listens! Well, maybe these are harsh words, and maybe it’s not entirely justified what I just said, that is possible, I can’t rule that out, but, in any case that is my impression. In any case, as regards this event, this ‘critical point’, under the surface (laughs) of the discussion.
As the CPB study passed in silence, it only underlined the difficulty for VBI to amplify the sparse signals on the basic income. Their resources to do so had become greater by then. In addition to the earlier newsletters, a website had become an important new tool through which to resonate basic income discussion. The importance of ICT as co-productive factor became even more evident in the next CTP (link).
The CTP can be said to constitute a small step in network development, and in gaining legitimacy and reputation. Soon after its publication, he and fellow basic income proponents were invited to come over and discuss the report. The VBI was acknowledged as a worthy party for the CPB to have an intellectual exchange with. This is significant, considering the otherwise quite marginal position of the VBI at the time. Even if the interviewee is a (former) university professor himself, it was impressive for him to enter this highly respected institute with its beautiful building and renowned history: Well, I was with [the chairman at the time], it was he who had invited me, Paul de Beer, Loek Groot [VBI members and basic income researchers],some other board members of the VBI, to have a talk with the CPB. He had just called the people, and then we’ve spent a whole morning there, in that beautiful building they have, great to enter there, it’s Tinbergen’s home you’re entering there (smiles). It was just a historical moment really, and well, it was really a nice talk we had there…
The pleasant and fruitful discussion did not contradict the fact stressed by the interviewee, namely that the CPB were quite dismissive about the basic income (see further under [contestation]). Overall, this CTP event mainly marks a lack of (favourable) co-production, however, and a process of isolating that was difficult to break through for the VBI. In the end they just fell short both in size as well as in high-profile political contacts: Activities in that time were limited to meetings, a few meetings a year. There were workshops about certain themes, in which myself, Saar Boerlage and a few others tried to involve people and get them interested for a basic income, and then to have these people engaged in the dissemination of flyers. And we had the development of a brochure in which the basic income was exposed in understandable language…All very useful things, but if that is to become effective, you’ll need either contacts in the higher ranks of politics, or you’ll need to be able to organize and mobilize a ‘groundswell’ of activists. But neither was the case - that is what it comes down to.
The isolation of the VBI was particularly strong in the first decade of the 20th century. It had to do with the resignation of some of the initial trailblazers, who abandoned the project in favour of other battles. The union and political party affiliated members had seen how the basic income had gradually disappeared from the progressive-political agendas. More broadly, the political tide had become very unfavourable for the basic income (see previous CTP), which had become a contaminated concept. The Dutch economy was still going well, providing the opposite situation of the 1980s economic crisis and the associated support for radical reforms. Moreover, apart from the absolute unemployment figures and the factual social security challenges from them, there was a broader ideological trend that went entirely against the basic income. From about 2000 onwards, social security policy in the Netherlands has steadily moved towards ‘workfare’. Opposite to a basic income arrangement, this involves more stringent conditions upon unemployment benefits entitlements, more efforts towards employability, and more responsibilities and duties conferred upon the unemployed. To the interviewee, this political and societal shift in norms speaks volumes about the difficulty for VBI to set foot on the ground. So if we consider its development over time, and look at the city of Rotterdam, then we see that the Social Service at first was close to the basic income in its policy of unemployment benefits. And now (laughs), well, it has landed almost in the very opposite category [of a social security systems graph]. Currently it is in the group of the very stringent, enforced, extraordinary conditional allowances, to which a considerable obligation to work is attached.
The 2006 CPB publication is a negative, ‘false’ CTP in the sense that it marks not a breakthrough but rather a setback and standstill in the Dutch basic income discussion. The interviewee eagerly theorizes about the significance of the event for the overall timeline of the VBI. As a longstanding member but especially as a basic income researcher he is inclined to consider it as a phase in a development process that looks like a peat fire. Yes, it could have been a critical turning point [the CPB publication] – however, that is just not what it turned out like. And then you see, suddenly, that two-three years ago, the discussion about basic income suddenly flared up again. I used to have this expression, when describing BIEN in my publications, that, ‘in the Netherlands, it’s always a peat fire that we’re having…for a long time there is nothing, then you a little plume of smoke, and suddenly, wham, it flares up again…’ And that is what we’re [recently] seeing, really…
Interpreted through this ‘peatfire’ metaphor, he positions the 2006 event amidst five related events. First, the influential WRR 1985 report (link to CTP).
Second, a 1992 report in which the same Central Planning Bureau had included the basic income as well. Both are examples of authoritative and high-quality accounts that did manage to evoke broad societal and political debate. They were little fires or at least plumes of smoke that the 2006 study could have become as well, but as it turned out it remained almost entirely below the surface.
Third, the interviewee addresses at several points how the political tide for the basic income had changed, and how the 2006 event fitted in with a longer period of silence. He associates the event with the developments described in the previous CTP, the deceptive political breakthrough of the basic income. A particularly significant related event is in that respect the ‘introduction by stealth’ in 2001. This tax reform measure implicitly introduced a basic income in the form of a small tax deduction – yet the fact that nobody except a few basic income supporters wished to call it a basic income, marked how the concept had become contaminated by then.
Fourth, the interviewee points out that the CPB publication had a certain critical turning point character as it cast the basic income in a new (and not particularly favourable) light. As will be elaborated under [contestation], the CPB study generated economic and taxation-technical arguments against the basic income that reframed the basic income as an inefficient, unaffordable and needlessly crude arrangement. From 2006 onwards, basic income proponents have therefore been repeatedly encountering the CPB objections. The debate with the CPB and like-minded organisations and actors has involved a certain repetition-of-moves: there are a fundamental disagreements about the ways in which the economic effects of a basic income arrangement should be calculated/assessed.
Fifth, the interviewee sees his peatfire metaphor supported by the 2013 and 2014 CTPs (link). He considers that the long silence on the basic income has never amounted to a completely extinct ‘peatfire’.
Even if passing in relative silence, the publication of the CPB study yielded a significant degree of contestation. The contestation was typically a confrontation of disagreeing experts. Looking back on the discussion they had at the CPB, the interviewee recalls the friendly and open exchange of arguments they had had there: It was really a nice talk…We had our criticisms towards the CPB, and they, they could all absorb that and parry that benevolently...
Notwithstanding the friendly exchange of arguments, the VBI had encountered an actor that came with a new framing of the basic income that was quite critical of the concept. The CPB did articulate a few arguments in favour of the basic income that confirmed its way of challenging dominant institutions. (...), the basic income would remove the need for other income transfers, such as welfare benefits, child allowances, basic pensions, etc..Thus, it avoids the complexities and administrative difficulties of the current system. For instance, public agencies would no longer have to make substantial administrative costs in collecting information about who is eligible for welfare benefits and subsidy schemes. Moreover, non-compliance and moral hazard with these schemes would disappear as do the inconsistencies between different agencies responsible for supplying different benefits. A basic income also better respects privacy of individuals. In short, it is the simplest system of income redistribution, with the lowest possible administrative and compliance cost and the best performance regarding privacy. (CPB 2016: 70)
The administrative simplicity and privacy arguments can be considered supportive arguments, added to the predominant arguments of fairness and social justice brought forward by basic income proponents. On the other hand, the CPB study contained first and foremost an economic assessment of the basic income, and the report stated very clearly that the basic income did not hold against scrutiny of the finance side of it. So they gave the basic income a chance, ‘in the scientific sense’, as they said, using micro-economic arguments on its impacts on the labour market on the shorter and the longer term…But subsequently they rejected it, with the consideration of ‘good idea, yet, in the end it is an inefficient concept…The indicated inefficiency of the basic income resided in its generic, crude character – not responding to the different situations of individuals and households and indifferently according income entitlements. In welfare economical, taxation-technical terms the basic income was found to seriously violate the ‘targeting principle’ (CPB 2006:70). ...and that has later, in the terms used by professor Bas Jacobs, become the most important argument against the basic income.
A related counter-argument that the CPB study brought forward was that any of the supposed positive effects of basic income could be realized more efficiently or strongly by alternative measures. In comparison to other instruments with which one has more switches to pull, it is an inefficient way of combating poverty. Whilst also creating more possibilities on the lower end of the labour market, but again, not as much as can be achieved through other measures – measures that, in the eyes of voters and political parties, are more acceptable. Himself an expert in these matter, the interviewee appeared to consider these points as serious arguments against the basic income.
Whilst accepting several of the CPB arguments to be identifying more or less serious flaws of the basic income, the VBI members were not accepting the way in which the arguments were quantified. The CPB is an important institute in the Netherlands, responsible for macro-economic forecasts and policy analyses regarding policy proposals. Their assessments of costs and benefits carry heavy weight in Dutch politics. For the VBI, the CPB study amounted to an important event in the sense that the utopian-critical basic income concept was further formalized. As this formalization was done along the prevailing economic understandings and assumptions, they felt it was bound to misrepresent the basic income. As a transition into a basic income situation would fundamentally transform social-economic relations, CPB should be much more cautious regarding a number of assumptions in its models: Well, it came down to, basically, that we said ‘your models, a number of things that we find important they are not taking into account, and, ‘your models are most probably not very reliable, because you’re investigating something that is dependent on very large institutional changes – whilst micro-economic models can deal with small changes and their direction, but not with the big ones.’ And that is something they admitted.
Considering the great silence on the basic income in the 5-6 preceding years in the Netherlands, the publication came a bit out of the blue. It was a pleasant surprise for VBI members and basic income proponents.
On the other hand, the publication of the CPB study was entirely planned from the perspective of the agency itself. As a planning bureau, the CPB had the capacity to publish reports out of their own, and they had the independence from political developments to choose issues as they deemed relevant. The CPB could afford to come with a study including the somewhat out of fashion basic income. First you had nothing, then suddenly in 2006 – the mills of bureaucracy turn slowly, and Welfare state reform is never out of the picture with the CPB, so at a certain moment there is such a report.
The point about the ‘mills of bureaucracy turn slowly’ is relevant. This reminds that the silence in the basic income was only relative, and that earlier discussions had established the basic income as an at least interesting policy concept. Even if the political developments had been such that it was not much en vogue anymore, it remained available on the menu of welfare state reforms – as an option that by then had already been explored to a considerable degree. It was not that surprising that the basic income appeared in the CPB future scan: (...) they did take away from earlier discussions that that basic income was something to be included. Partially because in the U.S. similar experiments and the negative income tax played a part, it has always been a common reference for economists, which has helped to stimulate the discussion.
Finally, the interviewee expresses that it is only in hindsight that he describes the publication as an ‘inverse’ critical turning point. The fact that it did not incite the debate in Dutch politics and society as it was evoked by earlier publications, he cannot easily explain it. Considering the report as being of high quality and relevance – the reinvention of the welfare state had by no means left the political agenda -, he considers it quite mysterious why the report passed in such relative silence.
As the interviewee is an academic with a track record in basic income research and author of several historical analyses on it, his CTP account is particularly full of lessons. Three of them can be lifted out that have particular significance for the overall development of VBI and the basic income discussion in the Netherlands.
First of all, his description of the basic income discussion as a ‘peatfire’ is instructive (see under [related events]). It also helps to understand the recent ‘flaring up’ of the basic income discussion, i.e. the two most recent CTPs (links). Regarding the 2006 publication and the decade of silence that surrounded it, the metaphor clarifies how it can be recognized as subterranean smothering -rather than as a complete extinction of societal debate on the basic income. On a further consideration, the interviewee wonders critically whether the peat-fire metaphor may introduce a bit too optimistic a view on matters, though. On the other hand, this suggests that it is a process that goes on and on, and that is maybe wishful thinking...If you’re very critical, then you actually have to say, that whole peat fire metaphor is suggestive, maybe it pays just too much honours for the basic income…You also have to consider, why it never really became a raging fire - which would then be a really critical turning point, wouldn’t it?” So the CTP holds lessons regarding the near-extinction of the socially innovative concept, and the isolating of the social innovation initiative.
Second, the study provided valuable lessons for the critical contribution it delivered for the basic income debate. It generated a few powerful counterarguments that from then on had to be confronted by basic income proponents. It set an agenda for VBI in the sense that the issues of affordability/efficiency and the performance related to certain other welfare state reforms would have to be established more convincingly. The altogether very businesslike and finance-focused new framing also conveyed the lesson that the administrative simplicity and un-intrusive/privacy friendly character of basic income were potentially persuasive arguments in the political arena.
Third, a painful lesson was learnt related to the way in which the transformative concept was formalized and assessed through prevailing economic models. It was poor consolation that CPB economists – and earlier the authors of the 1985 WRR report - acknowledged the limitations of economic science and prevalent models to articulate the effects of a basic income arrangement. In the end, the dominant models and economic knowings were decisive in the basic income discussion, and they were clearly indicating the basic income to be economically unfeasible. The mismatch with prevailing economic models and assessment procedures made clear how the basic income concept faced a certain institutional void. Even if incumbent actors were at times quite appreciative of the transformative concept, somehow it did not resonate with prevailing institutional logics and procedures.
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