A different take on economic reality
Author of the documentary Free Lunch Society Christian Tod talks about unconditional basic income and the possibilities of portraying economic ideas through the medium of film.
Ronald Reagan once said: "There’s no such thing as a free lunch". The same statement was used by Austrian economist and film maker Christian Tod for the title of his documentary in which he explores the socioeconomic idea of unconditional basic income. Free Lunch Society provides background information about this concept and searches for explanations, possibilities and experiences regarding its implementation.
The film was shown on ZagrebDox film festival in february, when we got the chance to talk to director about his film, the unconditional basic income and possibilities of portraying economic ideas via medium of film.
This is Tods third documentary after critically acclaimed Fatsy – The Last Cowboy of Austria (2007), and his first feature-length Es muss was geben (2010). Tod is currently working on his doctoral dissertation on unconditional basic income.
K.P.: Free lunch society is a documentary that explores the idea of unconditional basic income and its hold on world economy and the redistribution of power. To what extent is cinema an effective medium for addressing economic ideas? What are you hoping the film can achieve?
Cinema is the most effective medium to raise awareness for social issues. It engages the audience both intellectually and emotionally, which is key for changing people’s traditional views on reality. This is also what I want to achieve with this film: to turn on a different reality for 90 minutes and release the audience with a fresh look at the world they live in.
K.P.: In your opinion as an economist, considering rapid work automatization, is unconditional basic income a real possibility in the near future?
It’s going to happen sooner as we might expect. When I started to engage in the notion of unconditional basic income about 12 years ago, the conversation was almost exclusively limited to academia. Since then the discussion accelerated rapidly and has hit international mainstream media only 3 years ago. Basic income experiments pop up all around the globe and almost each media article about automation and digitalization mentions basic income as a possible solution if only in one sentence. My bet is that we are going to see a basic income program implemented on a national level within 5 to 10 years. Possibly in California and in some developing countries.
K.P.: What are your stances on criticism that the implementation of basic income is the only way of preserving mass consumption and consumerism, considering that fully automated production in the future will not produce worker’s wages and therefore a high demand for material goods? Also, considering that the implementation of basic income does not include the control over prices, is there a threat that, through pricing policies, people with the same income could be deliberately held in poverty, as a way of discipline?
Well, first of all, a reasonable and just basic income has to be strictly tied to economic output. For starters, I propose to use one third of GDP for basic income. In this sense, everybody will be an economic shareholder of her or his political community. Hence, basic income can be regarded as a dividend on the performance of the whole economy. If the economy grows (in terms of money), the basic income increases automatically and vice versa. Of course, many business leaders fear that increased technological unemployment could indeed lead to a significant decrease in consumer demand. It’s like in the now legendary conversation between Henry Ford II and union leader Walter Reuther in the early 1950s, where Ford showed Reuther a fully automated car production line. "Walter, how will you get robots to pay union dues?", Ford asked. Reuther replied: "Henry, how will you get robots to buy your cars?"
But basic income is much more than a means for the middle class to retain their purchasing power (the alternative is to let the masses starve to death). Basic income is also a catalyst for new forms of production. With the financial security of a basic income, it is much easier to become an entrepreneur, a producer, instead of compensating a lack of meaning with mere consumerism. In combination with the latest technologies like ever more sophisticated 3D printers (metal, plastics, organic materials), basic income enables small groups of people to tackle huge corporations and monopolies, which leads to more competition and a more efficient and more innovative market economy.
Consider the European truck cartel as a negative example: for 14 years Europe’s largest truck manufacturers colluded to fix prices and stall innovation regarding to more efficient, more ecological engines. You can also look at rising real estate prices since the financial crisis in 2008: although central banks are creating more money than ever before, all western economies fight desperately against deflation. For a couple of years now there has been a conversation among economists, who seriously consider inflation a thing of the past. The only exceptions are real estate prices and rents. This is because the additional money doesn’t find its way to the middle class. It is being hoarded by financial institutions and the rich, who regard an investment in real estate as a safe harbor.
If we paid everyone in our societies the money created by our central banks in form of a basic income, we could actually see a deflationary effect on real estate prices and rents. People could move back to rural areas if they wanted, build a business there, become organic farmers, or simply live off their basic income once the economy is almost fully automated. No need to stay in overcrowded cities only because of job opportunities. This, by the way, also refutes the old argument against redistribution from the top. It is often argued, that we shouldn’t care about the rich getting richer, because they don’t take the money away from us. This is simply not true, when we consider the examples above. In short, basic income will lead to a more efficient, much more innovative and more productive economy.
K.P.: Since demands for a basic income stem from developed western societies, can we expect that these communities will want to share their economic benefits with a growing immigrant population? Is there a real danger that basic income will remain an exclusive right of white citizens from western societies, while, instead of improving working conditions, so called “shit jobs” will still be done by cheap immigrant labor?
This is not entirely the case. We will probably see developing countries as the first ones with a basic income scheme. Both World Bank and International Monetary fund economists have given up the notion that austerity programs should be put into place in donor countries. There is more and more talk of cash transfer programs that should be implemented as a condition for World Bank and IMF loans. And cash transfer is just another term for unconditional basic income. And it would be very cheap. In most developing countries a basic income of only up to 20 dollars a month would make a huge difference to living conditions, economic efficiency and productivity. Of course immigrants in highly industrialized economies should also be eligible for a basic income. Otherwise we would have something like in the United Arab Emirates, where only about 10 percent of the population lives in abundance and the rest works for this rich minority in slave like conditions. That said, we can of course discuss appropriate transition periods for the eligibility of a basic income. And with basic income schemes in the poorest countries in place, there would be much less pressure to migrate to developed countries only for economic reasons.
K.P.: This is your third film after the critically acclaimed Fatsy and Es muss was geben, and it’s obvious you are progressing towards more complex, and somewhat serious topics. Where do you draw your inspiration from and which topic are you planning to tackle next?
Although Es muss was geben can be regarded a music documentary it is much more. It’s about reclaiming the commons, building grass roots initiatives and DIY and maker culture. In my next project I’m going to dive into the most fundamental existential questions and want to ask "what makes us human?"