The society our politicians are shaping is defined by the idea of "something for something". What would happen if, instead, we were given something for nothing? A new campaign for a "citizen's income" asks exactly that.

Replacing the costly, complex benefits system, a citizen's income is an unconditional payment granted to every individual as a right of citizenship. It's not a high figure – barely enough to survive on alone, and below the minimum wage – but it is designed to prevent all of us from falling into poverty traps. Compellingly, it removes the stigma from state support. There is no difference between a student, a person managing life with a disability, a pensioner and someone struggling to find stable employment if we all share the same basic starting point.

The concept, first mooted in the interwar years, was then known as "social credit" and had support from thinkers including Bertrand Russell, but it lost traction after the creation of the welfare state. But, as today's welfare system stretches to breaking point, the citizen's income is gaining support, with key figures including Green party leader Natalie Bennett and Labour MP John McDonnell bringing the issue back into political consciousness.

The campaign for a basic income for all, led by Citizen's Income Trust and Basic Income UK argues that the scheme would actually cost less than our means-tested benefits system. It would be paid for by the withdrawal of income-contingent benefits and lowering the threshold at which people people in work start to pay income tax. Some supporters also call for a land value tax. This would mean every citizen could benefit from a basic income of £7,000 (more for pensioners, and those with severe disabilities).

Campaigners believe a citizen's income would bind us as a society, and put workers in a stronger position to negotiate better employment terms and conditions. But couldn't it simply encourage laziness, make productivity plummet and stall the economy? If we all had enough money to survive, why would we work at all? In fact, evidence suggests the opposite.

A Unicef-funded pilot project introduced a basic income to adults in eight villages in Madhya Pradesh, India, paid directly into bank and co-operative accounts. No food substitutes were allowed. During the scheme income-earning work increased, even among this impoverished community, and women gained more than men. The cash in pockets led to small-scale investments, such as the creation of new businesses.

Guy Standing, professor of development studies at the School of Oriental and African Studies ,who studied the scheme, wrote: "Unlike food subsidy schemes that lock economic and power structures in place … basic income grants gave villagers more control of their lives, and had beneficial equity and growth effects."

In the UK, welfare benefits are withdrawn when employment is found, but personal income can decrease as bills once covered by benefits have to be paid, removing any incentive to work (hence the introduction of crude punishments instead). If we are all entitled to a basic income, and can keep extra money we earn for ourselves, what could be fairer and more conducive to productivity?

In the debate over welfare reform, it may feel as if every facet and idiosyncrasy of the welfare state has been dissected and analysed. Yet the principle of means testing – that we should only get something from the state if we can prove we definitely need it – stands intact and unscrutinised with politicians simply tinkering with the goalposts.

It's hard to imagine a political climate in which the case for a full citizen's income will ever be palatable. But let's hope that the reigniting of this timely debate prompts us to question our assumptions over welfare. We might not want to roll back the past, but we could certainly think harder about the future of the welfare state.