Welfare Status 25.2. – Basic Income and Constitution
Articles,  Blog

Welfare Status 25.2. – Basic Income and Constitution

My name is Tatu Ahponen, and I’m here to
give you the Welfare Status. This is an ongoing series where I discuss the developments connected to the Finnish welfare state. I’m going to discuss some of the debates
of the last two weeks, this time one that got some publicity outside
of Finland and one that is very central to politics inside of
Finland at the moment. If you have been following news about Finland
for the past decade, you have heard of the experiment regarding
Universal Basic Income. A very bare-bones account of what this concept
means: the state pays everyone a lump sum of money each month. For instance, the Finnish Left Alliance wants
this sum to be 800 euros, while the Greens advocate for 600 euros or
something like that. This would be funded by replacing the current
benefits and by adjusting the tax system. UBI has been a hot topic of debate in Finland
for decades so it’s not surprising this government has concluded an actual experiment on it. Now, let’s get this right from the start: the experiment
was flawed. The experiment chose a bunch of research subjects
receiving a benefit currently mostly received by
long-term unemployed persons – already a hard-to-employ category. The short duration meant we don’t know if
people would make large changes in life based on knowing the
UBI would continue. These are just ust some of the flaws that left the experiment hobbled, and a source of criticism right from the beginning. The experiment was wrapped up, two weeks ago,
to news that it had not contributed to more employment even though people it had covered were more content in their lives. This has been used as an excuse to dismiss UBI as a whole – both in Finland and outside of it. I would not be so hasty. First, a few notes on why Universal Basic
Income is a good thing. Currently our welfare benefits are means-tested. This means that if you are,
for instance, unemployed or recuperating from a mental illness,
you receive a basic benefit, but if you also have extra sources of income,
your benefits receive a hefty cut. There is also the so-called earnings-related
benefit – if you have been gainfully employed for a
certain period of time, you receive, for bit under
a year of unemployment, a benefit equivalent to a fraction of
your old pay. In the old days the state aimed for full employment
where periods of unemployment would be temporary,
and unemployment benefits were at most transitory. Since then, the labor market has changed and un- employment has become a permanent fixture of society. For many poor people working odd jobs,
means testing may mean that the derive only a little benefit for putting in extra hours, or that they even lose more in benefits than gain in wages. This is called a benefits trap. An Universal Basic Income could introduce
a bit of certainty in people’s lives. There would be some costs when it adds all up, coming from covering the people currently in a benefits trap. However, in a welfare state, reforms like this
always involve costs. You need to invest money to get things done,
that’s just a fact of life. And many believe that in the end, at least
a part of those costs would be recouped in the lower expenditures instress-related mental health and other such things. Many people take a moral stand against UBI,
saying “We cannot just give free money to people
who don’t want to work!” We already do that. Everyone is entitled to some minimum benefits,
even if they put in just the barest token effort or do nothing at all. UBI is precisely intended to give everyone
an opportunity to work without it affecting their benefits due to
a benefit trap. A more interesting criticism comes from the left. It posits the UBI as a neoliberal plot by the likes Milton Friedman. UBI is said to bolster the capacity of firms
to move from stable employment contracts to a model based on temporary labor. There are, indeed, neoliberal UBI proponents
who want just that. However, it’s not a reason to be against
UBI as a whole. After all, the alternative is a means-tested
welfare system, and this can also be used to advance neoliberal
goals. It is still a reminder that UBI is not a magic
bullet to all the problems in a society. We will still need a robust capacity of state
intervention to fix and replace the failures of the markets and
an active labor movement to ensure that cheap labor paradigm does not
take over. One final thing. Remember when I said that the experiment was dismissed? It didn’t lead to improved employment figures, it ONLY improved the general welfare of the people. How far have we fallen from the original ideal of
a welfare state when that’s not enough? Now, the other issue
I’m going to discuss is the currently undergoing constitutional review
of the social and health care reform. And when I say ongoing, I mean that between the time this video is shot, indeed at the time this video is shot, and published,
we will probably have more information on what the Constitutional Committee says, which I will then discuss in two weeks’ time. Either way, a few notes are needed
on the constitutional process. Unlike in, say, the United States, the most important institution regarding the constitutionality of Finnish laws is not the Supreme Court but instead the Constitutional Committee of the parliament. “Doesn’t that politicize
the constitution?”, many would ask. But the United States shows us that Supreme Courts can and do also become political organs. Another difference between the United States
and Finland; The American constitution, due to its history involving gentlemen and slaveowners, has traditionally been quite restrictive when it
comes to attempts to establish a welfare state. The Finnish constitution, by comparison, is built as a sustaining pillar of a welfare state,
guaranteeing people not only rights like the freedom of speech and freedom of religion, but also rights to proper health care, education and so on. It is, thus, unsurprising, that it is often the right wing arguing that we should not pay that much attention to a strict interpretation of the constitution. Indeed, the Finnish conservatives have been
on an overdrive regarding how restrictive they find the Constitution
not only regarding health care but also the new acts on how the state intelligence services
can snoop on Finnish citizens. Regarding the latter, the Defence Minister called critical constitutional experts “the constitutional Taliban”, and the right-wing rhetoric regarding the constitution on health care is often hardly different. As I mentioned the last time, the political basis of
this reform is quite simple. The main parties of government,
Centre and National Coalition, made a deal, both getting an important goal of their party
through and in exchange, they would swallow something they don’t like. The Centre was assured that the future
administration of health care would happen in the context
of self-governing regions, while National Coalition got through its
‘freedom of choice, which favors private health care providers. Now, both of these have some issues
regarding constitutionality. The self-governing regions themselves aren’t a problem, but the Centre has insisted there would be 18 of them, even though health care experts recommend
a smaller number, so that all of them would be big enough to
comfortably handle the necessary duties. This would lead to troubles regarding the equality in service provisions for all citizens across Finland mandated by the constitution. The so-called freedom of choice model causes more serious issues. One of the major ones is related to the original intent of creating regional public corporations for public health care for so-called “fair competition”
with private entities. This was seen as unconstitutional and was subsequently scrapped. However, there continues to be a bevy of other,
smaller issues, such as the degree to which the EU has to
be notified of various aspects of the reform, considering
the Union’s competition directives. This is all quite technical and confusing,
but the central point remains: the Finnish constitution offers people basic
rights on various welfare services,
and when these collide with a model based on private profit-seeking,
there are issues. The best solution would be scrapping the so-called
“freedom of choice”. However, doing this or even delaying its implementation and implementing regions first is politically completely untenable for National Coalition, which does not really like the region-based
model it had to swallow as a compromise. The party is afraid that if it does not get
its model implemented now, it will never be implemented, since no other party likes that model, and for a good reason. Thus, if the government’s social and health
care reform falls now, perhaps we can get on with the
process of building an actually beneficial health care model,
preferably one not influenced by the ideology of private profit-seeking. Well, that’s all for these two weeks. Once again, good night, or a good day, or a good morning, or whatever it is in your time zone.

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