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Welfare and Social Issues

Basic Income: Insights from Finland

By Heikki Hiilamo

Finland’s well-publicised, government-backed basic income trials began in January 2017. As they approach their scheduled end, we caught up with social policy expert Heikki Hiilamo at the BIEN basic income congress to get a flavour of the current debate in Finland beyond and around basic income, and to see what might be next on the political agenda.

Green European Journal: Why do you think that the basic income debate has received so much attention in the last few years?

Heikki Hiilamo: The standard explanation is that it is a consequence of artificial intelligence, automation, and all that. But I don’t think that is particularly convincing since we’re not actually seeing that much disruption in the labour market. In fact, most Western countries are recovering quite well from the economic collapse of 2008. Inequality is probably much more important as a factor for the rise in the basic income debate. The upper middle classes are getting wealthier and wealthier and yet there are still a lot of poor people. This is difficult to accept.

How can basic income encourage the inclusion and participation of people, both in the labour market and society more generally?

Participation is really the key question in Western countries where most poverty is not absolute, but relative. In my discipline, when we measure poverty, we talk about relative poverty. People are considered poor when they cannot participate in the normal way of life of the society around them. The problem with basic income is conditionality. In Anglo-American countries, many people are not covered by the minimum income programme but elsewhere, especially in the Nordic countries, the social security network is extensive and people are covered. People might be put into different categories but they are covered, so I don’t think universality is a problem.

So the main issue remains conditionality. Should there be conditions or we can trust people and just give them money? Certainly in the Nordic countries and perhaps also in some continental countries, conditionality refers to social services too. In exchange for access to benefits, there are conditions as well as social services such as training programs, job-seeking assistance, or other care services. Now there is a fear that if there are no conditions, people will just run away and turn their backs on society. Social workers will be left with no way of giving the support they provide in their professional capacities. That’s the real concern around conditionality when it comes to inclusion and participation.

Does the introduction of basic income imply a form of trust then?

Some advocates of basic income seem to have a deep-rooted distrust in government. But welfare state researchers like myself recognise that generalised trust is crucial in implementing any extensive social programme. If we give government grants with no strings attached, that should be a sign of and be based on trust, not distrust. In return, the individual trusts in society because he or she recognises that society thinks they are going to use the money for a good purpose. So it’s reciprocal trust.

Do you think that trust and reciprocity would be more effective in terms of encouraging participation in society than just a direct participation income, which would link payments to formal work, care or education?

If you look at opinion polls, which we have conducted in Finland, support for basic income, depending on how it’s defined, is somewhere between 20 and 50 per cent. The participation income has a lot of problems, that’s true, but support for it is around 80 per cent. Yet though participation income has more public support, the real question is what the participation requirement looks like, whether participation is monitored, and if so, how. If it’s really loosely monitored then it can be taken as almost non-conditionality, almost basic income. But if it’s strictly monitored and conditioned, then it’s more like workfare.

there is a fear that if there are no conditions, people will just run away and turn their backs on society.

We’ve been talking about basic income as a targeted policy to fight poverty, but some proponents of basic income present it as a very radical or utopian proposal. What do you think of these ideas and how do they contribute to the debate?

The problem with the basic income movement is that it’s not quite clear if basic income is an end or a means. Sometimes it seems like, for some, having a basic income is an end in itself. For me, as a social policy scholar, it’s very important to assess its outcomes, what is it used for, and whether it actually achieves the goals that it sets out. Even among people who agree on basic income as an end, there are divergent opinions on its objectives. Some people have very radical and utopian ideas, imagining that basic income will create some of kind of a paradise on earth. For others, it is just an incremental change, which could perhaps help alleviate poverty.

Do you think the prospect of achieving more modest incremental measures is put at risk by radical versions of basic income?

Militant basic income supporters can, in some cases, be counterproductive. I posed the same question to Rutger Bregman, the author of Utopia for Realists from the Netherlands, and he said that it’s okay to have a split personality, that we need both radical and pragmatic thinking, and that there should be a dialogue. I think that’s a solid position, we need people with radical ideas.

But at the same time, I compare the basic income debate to the old debates of the early 20th century when there were two competing state ideologies: capitalism and socialism. The most fervent supporters of socialism argued that there was no need to develop any social programmes in Western countries because it was just going to delay the revolution. If basic income militant supporters say that you shouldn’t take any kind of incremental steps or that you shouldn’t run any experiments because it’ll delay the big revolution when we’ll seize power and introduce a UBI, then that’s counterproductive.

if people were to receive money from the European Union, it would create a personal connection to the European Union as well

Societal disruptions do create windows of opportunity. After the economic collapse of 2008, new radical ideas were emerging and were considered as more realistic because the context had changed suddenly and completely. In that kind of a regime shift, introducing new ideas is possible. But I think it is dystopian thinking to say, “Well let’s just wait until the old world collapses so we can show up and introduce UBI.” That’s thinking about the future in very grim terms, waiting for catastrophe instead of taking the actions needed to prevent it.

From what I have seen from the congress, basic income has been discussed as part of a larger picture of services and there is widespread recognition of the need for incremental measures to get to a basic income.

The title of this conference is universalism. Universalism is a very important idea and not just in terms of a guaranteed income, also in terms of basic services, education, healthcare, and social care.

There is a critique of basic income that argues that it is not universal enough. It’s based on the nation state while increasingly we live in a globalised world of migration and interconnection. Can we imagine basic income beyond the borders of the nation state?

Well, the global level is quite tricky because there is no authority which could introduce the redistribution needed. Any social programme needs an authority with the mandate to redistribute. I think it would be possible on a European level and very good ideas have been put forward on introducing a European basic income for children. To come back to reciprocity, if people were to receive money from the European Union, it would create a personal connection to the European Union as well. Even if that money was a very small amount, say 10 euros a month, it would create an important personal connection.

Do you see that as feasible, even on the modest level you suggest?

If it’s at a moderate level and if it’s first introduced to children, then it is a feasible idea. Children are seen as the most deserving, there are no fears of free-riding when it comes to children. That’s why I like the basic income movement because it’s based on the idea that basic income should be an individual right, like the right to healthcare or education.

There is an opposition between the moral question of whether someone deserves something or not and the question of rights. How can the basic income movement move beyond moral debates to frame the demand for basic income as the assertion of a right?

Even rights are always based on reciprocal relationships, so it’s not possible to disconnect those two. If there is a right, there has to be a political community who guarantees it. That community has to accept that right and, on that basis, someone will be obliged to pay for it. There is no ‘manna from heaven’, basic income would be paid for by redistributing resources that are currently mostly in private hands. That’s why it is so complicated.

I’m a big believer in incremental change so if we could introduce new groups and loosen the conditionality little by little, then we could slowly work towards basic income.

From abroad, Finland seems to offer plenty of government support already in terms of healthcare, training, quality education, and other social services. Why is Finland looking into basic income?

In Finland, we’re focusing on the very core issue of conditionality. In our experiment, some of those who are on the flat-rate government unemployment grant will continue to receive this payment if they take up work. We are testing whether that will lead to good outcomes or not.

So the current trial is only giving money to people that are currently out of work. Do you think it’s possible to capture the more universal aspects of UBI in a pilot?

Yes, I think it would be. There were plans to extend the experiment, but the government wasn’t willing to invest. I’m a big believer in incremental change so if we could introduce new groups and loosen the conditionality little by little, then we could slowly work towards basic income.

Could you clarify what is happening with the basic income trial in Finland? Because it’s coming to an end this year and, while it was always meant to finish in 2018, some press reports indicate that it has been rejected.

No, that’s not quite true. I did a report for the government on youth participation income and had the rare opportunity to participate in government meetings where they discussed extending the basic income experiment. Straight from the horse’s mouth, I can tell you that there was not enough interest. If the pilot were to be extended, current government wouldn’t benefit from the results because their term in office is going to cease by the time they would be ready. Plus the budget was quite tight too. Employment is increasing and Finland’s GDP is growing, but we’re still in deficit – as a result of tax cuts – and so they weren’t keen on putting more money into this.

The ministry and its officials have not been enthusiastic about basic income either, partly for ideological reasons and partly for practical reasons. On the practical side, they have a lot going on in this field and are a bit tired of preparing experiments. Then ideologically, these are the people who write the laws and their mindsets are fixed to the present system. It’s difficult to introduce something completely new, a system based on a totally different ideology. A complete rethink of the basic security system would require changing a large amount of laws and ultimately their authority is based on the existing system.

When a government introduces an experiment, it’s just an experiment. The officials may well think that this is an idea that will come and go. Preparing legislation is different matter entirely. You have to set up a working group, which produces a report, then you organise a public consultation on the report and invite comments on the report, and only then you start writing legislation. It’s a really cumbersome process.

So you do see some reluctance to pursuing basic income further, at least from the current government?

They didn’t promise anything more than a pilot. Currently there are different reform plans for our basic security system that are being debated. It’s a very large project involving all parties in the Parliament and a large number of other stakeholders to prepare for a larger reform. It’s still a bit unclear what kind of role the results from the basic income experiment will play in that reform.

There will be more international interest in the results than domestic

Is there an indication of what direction that reform would go in?

What we know is that there’s going to be less bureaucracy. Starting next year, we’ll have a new system where social security institutions will get on-time information on wages and earnings so it’ll be easier to adjust the level of benefits to earned income and will allow much greater flexibility. Internationally, it’s quite unique.

What is the political debate around basic income? Are there prospects for further trials?

The problem is that politics is a battle of ideas. It’s really important that those with the political initiative get to write some initiative on his or her own name, or in the name of their party. Currently the Greens and the Left Alliance have been the most eager to speak about basic income and at the moment they are in opposition. They are promising more trials and social programmes based on this idea, but their combined support at the moment is around 20 per cent. We tend to have coalition governments in Finland and the Social Democrats are leading in the polls and so the next prime minister will probably be from the Social Democrats. Their favoured system is sort of like a basic income but more like a participation income. But since they didn’t coin the term basic income and have always said they were against it, they don’t use the term and wouldn’t sign up to any scheme with that name.

The results of the pilot are expected next year. What can we expect and how will they be used?

There will be more international interest in the results than domestic. The thing is that we didn’t have any questionnaires for those in the experiment group at the baseline. The only information we have is that from income registers so we’ll quickly have information on labour market participation and social security. For use of health services, medicine reimbursements, and so on, it’ll take a bit longer. There are plans to have qualitative interviews and retrospective questionnaires, but those will take more time too.

What will happen to the people that are currently on the pilot?

They will just switch back to the old system.

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