In 1797 Thomas Paine, the philosopher and revolutionary, set out in his Agrarian Justice a scheme "to create a national fund, out of which there shall be paid to every person, when arrived at the age of twenty-one years, the sum of fifteen pounds sterlin, as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property."

In my view, we should be focusing on the overall net worth of the state, not just the national debt. The proper objective of fiscal policy should be a return to a situation where the state has a significant positive net worth. Of course the reduction of the national debt would contribute to this end, but it is only one side of the equation. The other side is the accumulation of state assets. By holding capital and by sharing in the fruits of technological developments, the state can use the resulting revenue to promote a less unequal society. This is all the more important, given the earlier analysis of the economic forces driving the distribution of income. To the question, who owns the robots? the answer should be that, in part, they belong to us all.

[...] people are taxed on the amount received rather than the amount left, as happens under the current system. [...] With a progressive rate structure, this switch would provide a direct incentive to spread wealth more widely. People could pass on their wealth tax free if it were transferred to people who have received little so far in lifetime receipts. In this way, it could contribute to reducing both gender inequality and inequality across generations. More important, the new tax would be patently directed at seeking to secure a more level playing field and thus contributing to reducing inequality of opportunity [...]

[...] in the case of valuable properties there should be provision for payment in the form of equity participation in the value of the house. Such a provision would help, for example, pensioners living in a valuable house who have a relatively small cash income. [...]

In the past, the impact of high marginal tax rates lower down the scale was dismissed on the grounds that many people had little discretion about their working hours or intensity of work. However, even if that were true in the past, it has become less so in a labour market where there is greater fluidity. [...]

There is, moreover, a second crucial difference between the two types of scheme: the Child Benefit strategy would continue to make transfers to families with children at all income levels. This means that we have to consider issues of equity, not just between rich and poor, but also between those with and without children. We have to examine the way in which families with and without children are valued in our society--an issue not discussed in the standard economic analysis. Should we, other things equal, attach a higher value to £1 received by the person with a child than to a person with no children? Some people would say "no," arguing that having children today is a "lifestyle choice" and that the parent should be treated no differently than if he or she made a different choice. For those making such a judgment, the withdrawal of Child Benefit from those with higher incomes would indeed be the distributionally preferred policy, since income woul dbe taken from those who on average were better off. Such a "lifestyle choice" view, however, attaches no weight to the welfare of the child. Many people would regard this as unacceptable. A single person with a child should be counted as two people. The lifestyle choice view runs counter to the widely adopted practice in distributional analyses of adjusting household income for differences in family composition, as discussed in Chapter 1. Children are here today and should count today--as well as being an important part of the future. This is further reinforced by the demands of intergenerational equity. Taken together, these considerations mean that there should be transfers to families with children at all income levels.

Second, the proposal is for a benefit to be paid on the basis not of citizenship but of "participation", and for this reason it is referred to as a "participation income" (PI). "Participation" would be defined broadly as making a social contribution, which for those of working age could be fulfilled by full- or part-time waged employment or self-employment, by education, training, or an active job search, by home care for infant children or frail elderly people, or by regular voluntary work in a recognised association. There would be provisions for those unable to participate on the grounds of illness or disability. The notion of contribution would be broadened, taking account of the range of activities in which a person is engaged. Reflecting the features of the twenty-first-centry labour market described in Chapter 5, the definition of participation would allow for people holding a portfolio of activities over, say, a thirty-five hour week, and people may qualify for fractions of this period.

[...] Any actual scheme would involve a condition of eligibility and hence the risk of exclusion. Who would then be excluded from the PI? The criteria would exclude those who devoted their lives to pure leisure. The Belgian philosopher Philippe Van Parijs has written a famous article titled "Why Surfers Should Be Fed: The Liberal Case for an Unconditional Basic Income." In advocating the participation income, I am adopting the opposite position. I agree with John Rawls, who said that "those who surf all day off Malibu must find a way to support themselves and would not be entitled to public funds." In reality, relatively few people would be excluded (and the costings in Chapter 11 do not seek to identify surfers). The participation condition should, in my view, be interpreted positively. It is an answer to the question, who is eligible for the basic income? The answer conveys a positive message about "reciprocity," a message that is both intrinsically justified and more likely to garner political support.

The standard objection to proposals such as those described in Part Two is that reduced inequality can be achieved only at the expense of lowering economic output or slowing economic growth. We have to sacrifice efficiency in order to secure greater economic justice.

To this objection, I have two responses. First, the possibility that the cake will be shrunk by the proposals is not a knock-down argument against pursuing them, since a smaller cake more fairly distributed may be preferable to a larger one with present levels of inequality; the two aspects--size and distribution--have to be considered in conjunction. [...]

[...] the corrosive view that there is nothing that can be done: that there is no alternative to the present high levels of inequality. I reject this view. There have been periods in the past, not just in wartime, when significant reductions in inequality and poverty were achieved. The twenty-first century is different, notably in the nature of the labour market and in the globalisation of the economy, but we can learn from history when looking to the future.