Financialization turns the case. Ruins regulatory and taxation capacity of the state which makes it impossible for basic income to actually be effective.

A fourth strand of IPE linked with interpreting the expansion of financial economies in the context of global marketisation is helpful in further illuminating the consequences for Basic Income narrative of changing global conditions. In formal vernacular, Financialised Capitalism (FC) refers to a global-level transformation in the logic of capitalism beginning in the 1970s with the breakdown of the Bretton Woods managed financial system, and evolving over time through successive stages. For example, Lapavitsas (2009: 1) refers to financialisation as ‘a structural transformation of core capitalist economies that has gathered momentum since the crisis of 1973–4’. Formally, financialisation can be measured by the level of commercialisation of assets. For example, Krippner (2005: 174–175) describes fnancialisation as ‘a pattern of accumulation in which profits accrue primarily through financial channels rather than through trade and commodity production’. However, many scholars argue that the process of financialisation cannot be separated from structural inequalities (Stockhammer 2013: 944). This is important to bear in mind when considering how far Basic Income can offer a response. Financialised uprooting creates not only a personalisation of responsibility, but also inability to support this responsibility, individually or publicly.

As many development economists have argued (Minsky 1993: 18–24; see Sen 2015; Stockhammer 2013: 945), the central problem in development is not levels of debt in terms of GDP, but rather whether productive systems are in place to stabilise and sustain debt, and insulate individuals and firms. For example, average household debt in terms of GDP is higher in some of the wealthier and more equal countries in Europe compared with some of the most fnancially unstable and unequal economies in Latin America. Denmark’s ratio was 131.7 in 2017, and in the same year the ratio was 127.8 in Switzerland, and 93.7 in the UK, compared with 7.1 in Argentina, 37.0 in Chile, and 50.1 in the EU as a whole (CEIC 2018). At the same time, there is significant, and on some measures growing, inequality between mature economies in terms of the ability of average and low-income households’ to service debt (Grant and Padula 2018), which similarly relates to differences in structural inequalities and regulatory capacities. In Nordic countries such as Sweden, Denmark and the Netherlands, the percentage of arrears was 3.5, 2.2 and 1.0% respectively, whereas in Mediterranean Europe it ranged from 14.2% in Greece, to 2.9% in Italy. Ability to repay is greater among higher earners, the better educated, older people, and among couples. Households in arrears are more likely to have seen earnings fall. Unsecured debt has risen faster in countries with weaker regulation, even after the crisis. For example, the level and rise of unsecured debt were much higher in the UK compared with other OECD states in the 2010s (Stockhammer 2013: 29–31). In contrast, the rate of unsecured and debt arrears are much lower in Denmark, despite higher indebtedness compared with both the UK and South and Eastern Europe, regions which face greater risk as a result of inability to service debt (Civic Consulting 2013: 3–5), linked with relatively lower take-home income, rooted in higher inequality.

In this context, to better understand the ‘problem’ of fnancialisation in relation to Basic Income narrative, it is necessary to understand how financialisation and governance are linked. Financialisation extracts profits from risk, and hence feeds on the destruction of hybrid property, which in the end includes states’ regulatory and fiscal powers—the very capacities on which Basic Income depends—and the common services which sustain its effects. The 2008 crisis merely extended a growing contradiction between the background for Basic Income and the case for this reform as an instrument of development and freedom. Inability to reassert regulation and taxation, as documented by the International Monetary Fund (2017), has allowed asset concentration, income inequalities, and social exclusion, to continue to rise as states’ redistributive efforts are reduced and/or have become less effective.

On the other hand, the 2010s were also a period in which the narrative about Basic Income regained prominence. Europe’s renewed focus on a moral concern for the plight of the unemployed emerged in response to some of the same processes already affecting middle-income countries: growing precarity in employment, and relative poverty. This case was underwritten by the emergence of punitive sanctions policies, and in a context of austerity, a range of other public policies devised to reduce the scale of dependence on state transfers in OECD countries (Haagh 2019b). In countries already committed to developed social assistance, these policies had dubious justifiability, given the exclusionary consequences, and the increasingly precarious form of work that individuals were required to accept. The upshot was to expose a deep tension in Basic Income narrative between the moral case for income security, and the claim that Basic Income might generate economic security, or economic freedom, given rising stratifcation of both income and opportunity among states in both the OECD and the Global South. The moral case and the scale of challenges to Basic Income generate the Opportunity and Equality Paradoxes that I discussed at the outset.