A basic income and an inheritance for all – Thomas Piketty

The covid-19 crisis forces us to rethink the tools of redistribution and solidarity. Proposals flourish almost everywhere: basic income, guaranteed work, an inheritance for everyone. Let’s face it right away: these proposals are complementary and not alternative. In the long run they will all have to be applied, step by step and in this order. Let’s start with basic income. Today this measure is insufficient, especially in the global South, where in the absence of a minimum wage people cannot respect the lockdown. In India, during the 2019 elections, opposition parties had proposed introducing a basic income, but the nationalist-conservatives in power in Delhi continue to postpone.

There are many forms of minimum income in Europe, but with various types of inadequacies. In particular, it is urgent to make it accessible also to younger citizens and students (as has been happening for some time in Denmark) and above all to people without domicile or bank account, who often have to face an insurmountable obstacle course.

Furthermore, we must not underestimate the importance of discussions on central bank digital currencies, which ideally should lead to the creation of a public and free banking service, the polar opposite of the systems dreamed of by private individuals (Bitcoin, Facebook, banks). Among other things, it is essential to extend the basic income to all low-wage workers, with a system of automatic payments to paychecks and bank accounts, without the people involved having to request it, and connected to the progressive taxation system.

Basic income is an essential but insufficient tool. Its amount, in particular, is always limited: it is generally between half and three quarters of the minimum wage of full-time workers. This means that, from its conception, it can only be a partial tool for fighting inequalities. This is why it is preferable to speak of basic income and not universal income (a concept that promises more than it can guarantee).

A more ambitious instrument, which could be set up to complement the basic income, is the employment guarantee scheme proposed in the context of the discussions on new deal green. The idea is to offer all people full-time employment, with a decent minimum wage ($ 15 per hour in the United States). Funding would be guaranteed by the state and jobs in the public sector and in associations (municipalities, local administrations, non-profit entities) would be offered by public employment agencies. Such a system could contribute to the process of demercification and collective redefinition of needs, in particular with regard to services to the person and the energy transition. It would also allow the unemployed to get back to work during recessions at limited costs.

The last measure that could complement this set, alongside basic income, job security and rights deriving from an extended welfare state (free education and health, pensions and unemployment benefits, trade union rights), is to guarantee a inheritance to every citizen.

When studying inequalities, the most surprising element is the persistence of the concentration of property. The poorest 50 percent of the world population has practically never had anything: today in France they own 5 percent of the total assets, while 55 percent are in the hands of the richest 10 percent of the French. The idea that just waiting for wealth to spread makes no sense: if it were true, it would have happened for some time.

The simplest solution is a redistribution of inheritances that allows the population as a whole to receive a minimal amount. To give an idea, this inheritance could be 12 thousand euros (or 60 percent of the average wealth of each adult). Paid to all 25-year-olds, it would be financed by a mixture of progressive taxation on assets and inheritances. Those who today inherit nothing would have 120 thousand euros, while those who inherit one million euros would have 600 thousand. We are still a long way from a situation of equal opportunity, a principle often defended on a theoretical level, but which the privileged classes see as the plague.

The goal of universal inheritance is to increase the bargaining power of those who have nothing, allowing them to turn down some jobs, have a home and make plans. This freedom scares the wealthy and employers because it would make their employees less compliant, but it makes everyone else happy. We are returning to the world after having been in isolation for a long time. One more reason to think and hope again.

(Translation by Federico Ferrone)