Pertti Koistinen: Income Distribution and Basic Income. Basic income – basic rights symposium 24.11.2014 Kela, Helsinki.

1. Income Distribution and Basic Income
The Agenda of 21st Century
Pertti Koistinen

2. Income distribution
Who owns the agenda?
Economist (theory, methods, perspectives, say?)
Social scientist (theory, expertise, advocacy?) or
Policy makers (advocacy, responsibility, policy design?)
Long silence
Did the neo-liberal ideology lead to a loss of target? 0r
Did the social policy experts loose their reputation and worthiness?
The pragmatic policies adopted after 2008 avoided the worst but didn’t tackle the essential and provide a durable response to the structural crisis of capitalism like
Transparence of financial markets
The rise of inequality
Sustainability of the welfare state?

3. Income distribution policy – a taboo?
No adequate discussion and no reforms despite income distribution is a crucial question
There are some policy oriented economist like Stiglitz (2012, 2014), Sachs (2011, 2012), Piketty (2014) and Riihelä, Sullström & Tuomala (2012)who opened the issue but, those economist who have been advocates for European policies and national solutions, fall silent. Why?
Where are those who could open the Pandora's box?
What could we learn from historical experiences? Income policies before the first world war and there after? In times of great depression?
Distribution of incomes over the life course and between generations and social groups?
Who starts talking about solidarity tax and capital tax and progressive taxation?
New agenda is needed: sharing risks, new policies of income distributions, sustainability of the welfare state?

4. The evidence of the welfare state
The financial power of the welfare state increased and stabilized since the 1980 everywhere in the developed economies and enabled
Provision and development of a universal education, healthcare, and social serviced and maintaining the social security (including the pensions)
State intervened also in setting rules  not only collecting taxation
This led to birth of financial market
The growing tax and social insurance contributions enabled governments to take on ever broader social function which contributes now 25-30 % national income and takes even more important role in redistributing this.
State redistribute them in forms of replacement income (pension and unemployment allowance) and transfer payment (family allowances, guaranteed income etc.)
Wfs become powerful agency in regulation of the financial markets and but, it lost its political agency and power.

5. Question of redistribution
Modern redistribution does not succeed in transferring income from the rich to the poor?
Modern distribution consist of public services and replacement incomes that are more or less equal for everyone and the middle class benefits from the more than others – at least more than low income groups.Mathews effect
Modern redistribution is base on a logic of rights and principle of equal access to certain number of goods and services but,
More and more of working aged population are out of these options
More and more are excluded by various reasons.
Is the foundations of wfs in safe without a larger and updated concept of income distributions?
Question of capital incomes and
Global response to global risks of economy

6. Rethinking income distribution as a whole
Four forms of taxation and public incomes:
Income tax
Capital tax
Consumption tax and
Contributions to social insurance programs
Three forms of redistribution
proportional
Progressive
Regressive
But does these systems work adequately?
Does the government use them?
Do we need something new?

7. Reasons to rethink 1
Increase of wealth and extension of global production chains  hos to deal issues of distribution of wealth and redistributions of risks?
The markets is allowed to determine that some human being are worth vastly less than other  but, how long this can be tolerated without negative consequences?
Extended and flexible forms of participation on paid work and market relations work over the life course  how to create new concepts and sustainable models for division of incomes and revenue's over the life course

8. Reasons to rethink 2
The cost and share of public investments on human skills development increased in a knowledge based society enormously  there is a need to find a better balance for public and private investments in long run.
Structural changes in the contractual systems and pay like increase of self-employed, short-term contracted, new forms of capital incomes and free lancer outside the standart employment and social income protection need for new concept of income distribution
Sheep labour created a problem of productivity and social sustainability of the wfs model.

9. Why basic income?
Basic income is needed as social security and insurance reform but, does it be enough?
Income courante for low income group and for those with low and inconsistent incomes
Extension of social right for all in working age
Do we need more?
Economic funds and buffers
New regulations for contributions to public vs private sponsored social insurance programs
More transparence and control?
Extension of a progressive taxation?