Tag Archives: Universal Basic Income

Cutting the Gordian Knot of Technological Unemployment with Unconditional Basic Income – Scott Santens. 

Invisible Sheep, the Missing Right, and the Return of Common Wealth

In the opening of the film 2001: A Space Odyssey, viewers are shown a historic moment in time where primitive man used the first tool. It was a bone, and used like a club, it allowed a physically weaker group to overpower a physically stronger group. The story is of course fictional, but at some point in time we as humans did use our first tool, and ever since that day, directly because of our tool usage, we as a species have been able to accomplish increasingly more with increasingly less. Buckminster Fuller referred to this process as “ephemeralization.” The theoretical endpoint of this process exists as an asymptote that we can only approach but never reach, where we gain the ability to accomplish everything with nothing. This should sound great. It is. But there’s a catch. There’s always a catch.

What’s the catch?

The catch is of our own making. The catch, and it’s a big one, is two-fold. First, we require the exchange of money for the basic necessities of life like food and shelter. And second, we require the exchange of work in order to obtain money. The result of this pairing is that we systematically require the exchange of work to stay alive. So as long as everyone can exchange their labor for income, moral issues of involuntary servitude aside, everyone can then theoretically survive in a system where private property is established and enforced. However, tool use throws an unavoidable wrench into this system.

That wrench is technological unemployment.

The ability to find paid work is rooted within supply and demand. If there is a demand for your labor, and few can supply it in the same way you do, you will do well. If many can supply it just like you, you may not do so well, but you may also manage to get by if you’re lucky. However, we’ve been busy building tools far beyond those made out of bone, and these newer tools are increasingly able to meet our demand for labor without any need for us. So the question becomes, if machines can supply the demand for labor, and at a lower price point, what happens to the ability of living human beings to work, and therefore to live, and even to obtain what all the machines are producing?

There can only be three solutions to this self-created conundrum based on our two-fold catch. We can either stop requiring the exchange of money for basic needs, essentially making certain things like food, water, and shelter entirely free. Or we can guarantee that everyone can always find paid work for enough income to exchange for the fulfillment of basic needs. Or we can stop requiring the exchange of work for money by paying everyone an income whether they work or not, and the amount would just need to be sufficient enough to cover basic needs.

The first option would destroy the price system for basic goods and services. This would in turn destroy the ability to calculate just what to produce, how much of it produce, and where it’s needed. This option is a planned economy in for basic goods and services. The second would guarantee that in a world of machines able to do an increasing amount of work better than us humans, the work we could guarantee to ourselves would be increasingly pointless — the equivalent of digging holes and filling them. This is the job guarantee (JG). The third would fully preserve the price system and entirely avoid the pitfalls of unnecessary work. In fact, it would not only preserve the price system, but enhance it, and it would not only avoid the creation of unnecessary work, it would reduce it. That third option is the Unconditional Basic Income (UBI).

… continued at Medium.com

Guess Who Just Endorsed Universal Basic Income. Mark Zuckerberg – Scott Santens. 

“Every generation expands its definition of equality. Now it’s time for our generation to define a new social contract. We should have a society that measures progress not by economic metrics like GDP but by how many of us have a role we find meaningful.

We should explore ideas like universal basic income to give everyone a cushion to try new things.

If I had to support my family growing up instead of having time to code, I wouldn’t be standing here today.”

Mark Zuckerberg

***

This is big!

I would put this endorsement of basic income right up there in history alongside Martin Luther King Jr.’s on the left and Milton Friedman’s on the right as far as the potential to influence the conversation.

The fifth richest person in the world, and the richest millennial in the world, just endorsed the idea of unconditionally providing everyone enough money for basic needs, and he even discussed it in the context of enabling the pursuit of meaning.

He did not say because of automation, people will need basic income or die. He said people seek purpose, and that with the greater opportunity that basic income provides, along with other programs like childcare, healthcare, and education, people will be more enabled to find their purpose.

Take this understanding of how basic income isn’t charity but a means of equalizing opportunity as part of a new social contract, and combine it with the global loudness of his voice as chairman and CEO of Facebook, and we’ve got a potential recipe for greatly accelerating the timeline for basic income adoption.

We’ll see just how much he ends up actively advocating for basic income in the years ahead, and how much of his own money he puts behind the idea itself, like perhaps helping fund a pilot somewhere in the U.S. as Sam Altman has.

I think I just woke up today into a world with millions more people having heard or read the words ‘universal basic income’ for the first time, which on its own, is no small victory.

Scott Santens

AliveTampaBay

Basic Income in a Just Society – Brishen Rogers. 

“Amazon needs only a minute of human labor to ship your next package,” read a CNN headline last October. The company has revolutionized its warehouse operations using an army of 45,000 robots and other technologies. Previously workers known as “pickers” would walk among shelves to find goods. Now robots bring the shelves to them; pickers select goods, scan them, and put them into bins; after robots whisk the shelves away. A network of automated conveyer belts then sends the bins to “packers,” who spend just fifteen seconds on each, sealing boxes with tape that is automatically dispensed at the perfect length. “By the time you take an Amazon delivery off your stoop, walk into your home, find a pair of scissors and open the brown box,” the story intoned, “you’ve already spent nearly as much time handling the package as Amazon’s employees.”

The story is hardly exceptional. Each week, it seems, another magazine, book, or think tank sketches a dystopian near-future in which new technologies render most workers unnecessary, sparking widespread poverty and disorder. Delivery drivers, the thinking goes, will not be needed when there are drones or autonomous cars staffed by robots, and Starbucks baristas and fast food workers will be redundant when a tablet can take your order and a machine can prepare it. Some even envision more skilled jobs at stake: robots repairing our homes, caring for the elderly, or nursing patients back to health. As President Obama warned in his farewell address, “The next wave of economic dislocations . . . will come from the relentless pace of automation that makes a lot of good, middle-class jobs obsolete.”

An economic challenge of this magnitude requires ambitious solutions, and many in public debates have converged around a basic income. The idea is simple: the state would provide regular cash grants, ideally sufficient to meet basic needs, as a right of citizenship or lawful residency. Understood as a fundamental right, basic income would be unconditional, not means-tested and not contingent on previous or current employment. It would help sever the link between work and welfare, provide income security for all who are eligible, and perhaps mitigate growing inequality. It could also enable people to provide unpaid care work or community service, start new businesses, or get an education.

While this widespread attention to the problems of work and equality is welcome and overdue, and while a properly designed basic income would have many virtues, we need to be clear about the policy’s justifications, merits, and limits. As noted above, basic income proponents often pivot off the threat of widespread technological unemployment. But students of capitalism have been predicting labor’s demise ever since they identified and named “capitalism” itself. Is this time different? Consider what has happened at Amazon: warehouse robotics lowered prices and increased sales, and in early February the company announced plans to hire one hundred thousand more workers across the country.

Yet the news is still not good. Technology has transformed work in ways that have to do with political economy, not resource distribution. Amazon workers spend less than a minute per package because the company requires them to work at a furious pace, and it can afford to hire them by the thousands in part because it pays fairly low wages. Amazon also outsources many deliveries to third-party vendors whom it pays by the package, thus avoiding duties under wage per hour, workers’ compensation, and collective bargaining laws. Increasing the pace of work and outsourcing are not new, of course, but information technologies make such efforts easier and more profitable. With computer analysis of barcode scans, for example, Amazon can track the efficiency of pickers, packers, and drivers without necessarily setting eyes on them. Technology is not a substitute for menial labor in this story but rather one among many tools to keep labor costs down by exerting power over workers.

This account changes the case for a basic income. Many of today’s basic income proponents are libertarians and view the policy as a means of compensating losers, or as an excuse to repeal wage per hour or collective bargaining laws. Few are concerned about public goods, workers’ and capital owners’ entitlements within the firm, the power of various social groups, the ability of workers to organize collectively, and the question of what constitutes good work, not just jobs.

An alternative case for basic income draws from classic commitments to social democracy, or an economic system in which the state limits corporate power, ensures a decent standard of living for all, and encourages decent work. In the social democratic view, however, a basic income would be only part of the solution to economic and social inequalities—we also need a revamped public sector and a new and different collective bargaining system. Indeed, without such broader reforms, a basic income could do more harm than good.

This agenda will of course make zero progress during the Trump administration. But questions surrounding work and rising inequality are not going away. After all, Trump exploited fears of a jobless or insecure future in his campaign, signaling a return to our industrial heyday, with good-paying factory jobs implicitly promised to whites, men, and Christians. On the left, meanwhile, there is grassroots energy and momentum to think big and to address these issues head on, in all their complexity. But we still need a vision of good work and its place in our society, one that recognizes how our economy—and our working class—have changed dramatically in recent decades. I do not think for a moment that I have all the answers. But I do think an ambitious agenda around technology, work, and welfare can be a focal point and political resource for organizers, and perhaps even candidates, in the years to come.

Consider the life of a truck driver forty years ago versus today. In 1976 long-haul truck drivers had a powerful, if flawed, union in the Teamsters and enjoyed middle-class wages and excellent benefits. They also had a remarkable degree of autonomy, giving the job a cowboy or outlaw image. Drivers had to track their hours carefully, of course, and submit to weigh stations and other inspections of their trucks. But dispatchers could not reach them while they were on the road, since CB radios have limited range. Truckers would call in from pay phones, if they wanted.

No longer. Trucking companies today monitor drivers closely through “telematics” devices that gather and analyze data on their location, driving speed, and delivery efficiency. Some even note when a driver turns the truck on before fastening his seat belt, thereby wasting gas. As sociologist Karen Levy has shown, some long-haul trucking companies use telematics to push drivers to drive for all the hours permitted per day under federal law, at times waking them up or even overriding drivers’ own judgments about whether it is safe to drive. UPS has used the technologies to reduce its stock of drivers, and many have noted the stress that “metrics-based harassment” puts on workers.

While the specter of self-driving vehicles is out there, this is the current reality for many drivers and will be for the foreseeable future. We have seen stunning advances in autonomous vehicles in recent years, but there is a vast difference between driving on a highway or broad suburban streets in good weather conditions and navigating narrow and pothole-filled city streets, not to mention making the actual delivery to houses, apartments, and businesses. As labor economist David Autor and others have argued, we are nowhere close to fully automated production or distribution of goods, since so many jobs involve nonrepetitive tasks. In other words, the reports of the death of work have been greatly exaggerated.

Technological development is nevertheless altering the political economy of labor markets in profound ways. As we can see in the truck driver example, many firms are deploying information technologies to erode workers’ conditions and bargaining power without displacing them.

And of course truck drivers are not alone. Many other firms today use advanced information technologies to push for more efficiency, in the process reducing workers’ discretion, ultimately requiring them to work harder, faster, and for less. For example, where once taxi drivers’ folk knowledge of the optimal path from A to B in a crowded city was a valuable skill, now Uber and Lyft can calculate the best route through GPS technology and machine learning processes based on data gleaned from hundreds of thousands of trips.

Other technological innovations make it easier—which is to say more efficient—to purchase labor without entering formal employment relationships and accepting the attendant legal duties. In the past firms tended to employ workers rather than contractors, or to pay employees above-market wages, in scenarios where it was difficult to train or monitor them. Workers who felt valued in this way would work diligently and remain loyal toward firms, ultimately reducing overall labor costs.

Again Uber’s model helps illustrate. The company’s app reduces consumers’ and drivers’ search costs significantly. Rapid scalability reduces Uber’s costs of identifying and contracting with new drivers and riders; its GPS-based monitoring of its drivers enables it to know whether they are speeding or otherwise driving carelessly and whether they are accepting a sufficient number of fares; and its customer rating system enables it to manage an enormous workforce without managerial supervision. The net result is an economic organization of global scope based largely on contract where the firm disclaims any employment relationship toward its workers and therefore any employment duties toward them.

To be clear, there are powerful arguments that Uber drivers meet the legal test for employment, given the company’s pervasive control of their work and its economic power over them. But given the ambiguities of current law, Uber has few economic incentives to bring drivers inside the firm, making them employees, or to extend them generous wage and benefit packages. Similarly Amazon’s analytics help it to keep wages low: with barcode scanners tracking pickers’ and packers’ efficiency, the company does not have to pay workers as well to keep them motivated.

Finally, extensive data about market structures and consumer demand can enable firms to exert power over their suppliers or contractual partners, driving down costs—and therefore wages and conditions—through their supply chains. Walmart has long leveraged its unparalleled market data to estimate the lowest possible price suppliers will accept for goods, putting downward pressure on their profits and their workers’ wages. Amazon does the same today, and franchisors such as McDonald’s set prices and detailed product specifications for their franchisees.

Many firms today have substituted algorithmic scheduling for middle-managers’ local knowledge, using data on past sales, local events, and even weather forecasts to schedule work shifts. A Starbucks employee, for example, has little schedule predictability since she is at the mercy of the algorithm, and a McDonald’s worker can be sent home early if computers say sales are slow. This push to limit labor costs through finely tuned scheduling practices also alters workplace norms, since workers cannot appeal to a computer’s emotions in asking for more or less time, a raise, or a slower pace of work. The net effect of all of this is that power in our labor and product markets is increasingly concentrated in a few hands.

Crucially such management techniques and new production strategies are often more efficient than the status quo. Amazon has undeniably lowered prices for goods through its use of automation. Similarly a recent MIT study calculated that just three thousand multi-passenger cabs using a version of Uber’s algorithm could serve Manhattan’s need for taxis. The potential benefits here are staggering, especially if coupled with a modern mass transit system: shorter commutes, less car ownership, less pollution, and more urban space.

But the line between innovation and exploitation is far from clear. While some workers will thrive as their unique skills and talents are rewarded by new technologies, many others will have less autonomy, less generous wages, less time for social connection, and unpredictable schedules. And under current laws, we can expect such trends to accelerate. Our labor and employment laws still envision the economy of the 1930s, which was dominated by massive industrial firms with hundreds of thousands of direct employees. Those laws rarely touch modern “fissured” work relationships such as Uber’s relationship with its drivers, Walmart’s relationship with its suppliers’ workers, or McDonald’s relationship with its franchisees’ workers. Those laws also limit workers’ ability to unionize or bargain effectively since they encourage bargaining at the firm or even plant level whereas today’s modal workplace is growing ever smaller. Workers have fewer and fewer means to exert power on their own behalf.

How would a basic income impact workers and firms in this context? It would surely protect workers against the economic harms of unemployment and underemployment by giving them unconditional resources, and it would enable them to bargain for higher wages and to refuse terrible jobs. But a basic income would do little to reduce corporate power, which is a function not just of wealth but of the ability of firms to structure work relationships however they wish when countervailing institutions—such as a powerful regulatory state—are absent or ineffective. Yes, a basic income would make it easier for workers to organize and demand reforms—Andy Stern dubbed it “the ultimate permanent strike fund”—but the threat of termination or retaliation would still prevent many workers from protesting or striking in the first place.

And of course many have argued that a basic income would make minimum wage and collective bargaining laws less necessary, since workers’ material needs would be met by the state. But cash benefits and reasonable wages are not morally equivalent. In Robert Solow’s memorable phrase, the labor market is a “social institution” governed in part by norms of reciprocity and mutual respect. Workers often demand higher wages from larger and more profitable employers. And they work less diligently when they feel disrespected. So there is a major difference between a generous wage on the one hand and a meager wage supplemented with cash from the state on the other. Generous wages help make firms’ economic responsibility roughly commensurate with their economic power. Meager wages signal disrespect, and state transfers are impersonal.

In fact, without labor market regulations in place, the impact of a basic income on very low-wage work could be disastrous. If a basic income were not extended to green card holders, guest workers, or “irregular” immigrants (those who enter or stay without authorization), such workers would be far cheaper to employ in menial jobs, at which point they would be permanently enshrined as a laboring underclass. (Currently minimum wage laws apply regardless of work authorization, on the grounds that differential treatment would undermine standards for all.) A basic income could even be designed to serve white nationalist ends. In fact, far-right European parties have often embraced the welfare state as a means of defending citizens against a purported tide of immigrants.

A standalone basic income also will not ensure equal access to quality education, health care, mental health care, housing, and transportation. Liberal markets systematically fail to provide such goods to the poor and working class, for the simple reason that they often are not profitable when provided on equitable terms. Giving cash to individuals to purchase them will not suddenly change matters.

Popular debates have largely ignored these limits of a standalone basic income, an oversight that is not entirely accidental. As a tax-and-transfer program, basic income would be consistent with a wide variety of political-economic systems, including neoliberal capitalism, social democracy, and various forms of socialism, but much of the basic income literature has a libertarian streak. On the right, Milton Friedman proposed a negative income tax in large part because he hoped it would reduce government bureaucracy. On the left, Philippe van Parijs’s now-classic argument for the policy held it would maximize what he called “real freedom” better than standard welfare-state policies. And Silicon Valley’s take exemplifies an “everyday libertarianism,” which views market results, including pre-tax incomes, as presumptively fair.

Unlike many libertarians, basic income proponents accept the necessity and fairness of income and wealth taxation. But a basic income is still no cure for the moral ills of liberal markets. Since labor cannot be separated from workers, it will never be a classic commodity, and labor markets will never be stock exchanges for faceless buyers and sellers. Low wages carry a stigma that low bids for soybeans never will. In the long run, companies cannot treat workers or even consumers as line items on a balance sheet without risking a revolt. Uber is now paying a high price for ignoring this lesson. The company’s flagrant disregard for our moral economy and its open embrace of a cutthroat, winner-take-all libertarianism made it a pariah in many quarters well before it faced allegations of a workplace culture of sexual harassment.

In my view, the more compelling arguments for basic income are rooted in commitments to equality as well as freedom. Take Thomas Paine’s Agrarian Justice (1797), which prefigured the later case for social insurance. The earth, he argued, had been “the common property of the human race” in its natural state. Private property enabled the few to profit from the earth’s resources, but all are entitled to compensation through a “citizens dividend.” G. D. H. Cole updated Paine in the twentieth century, arguing for a “social dividend” on the grounds that all production is “a joint result of current effort and of the social heritage of inventiveness.” Auto manufacturers did not discover electricity, after all, and Silicon Valley did not invent the Internet. Rather than a means of maximizing freedom, a basic income would help meet our duties toward one another.

A still more compelling case for basic income builds on Elizabeth Anderson’s and Philip Pettit’s (quite distinct) arguments that a just society must ensure that no group of citizens is subordinate to another. Extreme poverty causes subordination since it forces us to beg or to work at terrible jobs. Means tests are equally degrading since food stamps and similar programs tend to restrict what we can buy, again stigmatizing the poor. This argument is quite different from the libertarian case for a basic income since it does not view basic income as a replacement for the welfare state. Rather it asks basic income to serve a discrete and limited purpose: making sure nobody falls through the cracks.

And if one agrees that we need to root out subordination, we will need to do much more than pass a basic income. A just society would not just eliminate penury and then leave people to their fates. It would also strive for a fair distribution of power. This point strikes me as obvious, but we can miss it by focusing on unemployment and poverty. A society in which a few make decisions and the many take orders is an oligarchy, not a democracy.

This is what I mean by the “social democratic” case for a basic income: it would help build a post-industrial welfare state by alleviating dire poverty. But it is unlikely to pass and would do little good unless coupled with other efforts to ensure broadly dispersed power, including a substantially revamped public sector and new and stronger regulations around work.

The public sector agenda should begin with a massive investment in human services. This would include primary, secondary, and higher education; childcare and elder care; health care; and mental health services. All of these are critical to human flourishing and economic growth, especially in a technologically advanced economy. There is also the added benefit that these sectors are among the least vulnerable to automation since they require interpersonal communication and human judgment: turning them into basic rights of citizenship would create millions of jobs.

Extensive job training and placement programs for unemployed workers would reduce the devastations associated with job losses. This should be coupled with a guarantee that the government will stand as employer of last resort, as William Darity and Darrick Hamilton have advocated. Classic WPA-style public works would be one option, but we might do more good by thinking locally: retrofitting houses and other smaller buildings for energy efficiency, as john a. powell and others have suggested, or building and repairing local parks and schools, or training unemployed workers for jobs in childcare, education, elder care, or health care. Some subset of the projects could be identified through participatory budgeting or other deliberative processes and carried out in partnership with local governments or organizations.

Then we should consider unconditional cash benefits in some form, ideally a generous basic income, especially if technological unemployment becomes significant. But we need to design it correctly. If certain immigrants are denied a basic income, then we must establish a transparent pathway to citizenship and ensure that they enjoy generous wages. Currently many states restrict convicted felons from voting or collecting many public benefits. If that pattern holds with a basic income, that group could also become a pool of menial labor.

Paying for all of this would not be easy, of course, which is why it may make sense to take baby steps. Unconditional cash grants to parents, for instance, would go a long way toward alleviating poverty and would be less politically controversial than unconditional benefits for the able-bodied and childless. Or perhaps a participation income, in which citizens would be entitled to cash benefits on the basis of some qualified civic service each year, though this would be less desirable than a public jobs guarantee combined with other generous benefits.

As we wait for the politics to catch up with the policy, however, the “baby steps” approach can inch us closer to meeting social needs, developing a highly trained workforce and rebuilding faith in the public sector.

Then there are the near-intractable problems of improving private sector work and limiting corporate power. Of course what makes work “good” is hard to define, in part because it is so dependent on social context and individuals’ preferences. We look back fondly on the industrial era in part because manufacturing jobs delivered high wages and benefits, but those jobs only became “good” after workers organized and forced firms to raise wages and reduce hours. Manufacturing jobs were also physically and emotionally punishing, and factory workers’ pride was often based on a perverse ethic of masculine suffering.

It is easier to say what bad work is. There is certainly no shortage of it these days: many workers earn low pay, have long or unpredictable hours, and are vulnerable to arbitrary treatment. Raising the minimum wage and reducing the standard workweek to thirty-five or even thirty hours would help. So would the public investments in human services discussed above, since those new jobs would require significant judgment (ensuring a degree of worker autonomy) and current law extends many democratic norms to the public sector already. A public jobs guarantee would give workers the security of knowing that an alternative always exists if a private-sector job proves unendurable.

The centerpiece of reform efforts should be the encouragement of collective bargaining between workers, their employers, and whatever other firms enjoy economic power over them. That will require reforms to bring our labor laws into sync with the reality of what work now looks like. Rather than requiring workers to organize shop by shop, we could encourage bargaining at the corporate level, such that all McDonald’s workers, for example, would be in one bargaining unit, regardless of whether their restaurants are franchises or owned by the parent corporation. Better still, we could put all fast food workers nationwide in one bargaining unit empowered to negotiate with an association of fast food companies. Similarly workers could be granted bargaining rights with the firms at the top of their respective supply chains: Uber drivers would have bargaining rights vis-à-vis Uber, and Walmart and Target would have duties toward the workers who produce, process, and move goods to their shelves, including production workers, warehouse workers, farm workers, janitors, and many others.

This would work a major change in our labor law system, but the elements are already being built on the ground. On the company side, growing market concentration makes such bargaining quite plausible technically, if not politically. A national association of retail workers need only drive a settlement with Walmart, Target, Macy’s, Gap, and a few others to raise standards. Where once taxi drivers would need to negotiate with hundreds if not thousands of medallion owners, now drivers can negotiate with Uber and Lyft directly.

Unions and other worker organizations have been dealing with these issues for decades and have developed workable models of organizing and bargaining that demonstrate proof of concept. For example, the Coalition of Immokalee Workers (CIW), an organization of farm workers in Florida, has pressed many major retailers and restaurants to join a “fair food program” under which they commit to paying more for produce and to rooting out slavery, corporal punishment, and other abuses in the fields. CIW succeeded despite having no collective bargaining rights at all and no legal employment relationship with the retailers and restaurants involved. They instead relied on high-visibility worker action, consumer boycotts, and creative media strategies.

Legal scholar Kate Andrias has argued that these efforts reflect an emerging model of unionism she dubs “social bargaining,” in which workers demand that firms accept responsibility through their supply chains to a degree that exceeds the letter of the law. This strategy relies on public protest as well as more conventional union strategies—a kind of bargaining in the public green—and often utilizes state legislative power to backstop organizing efforts.

National legislation could encourage robust social bargaining in a variety of ways. Some states allow their departments of labor to constitute “wage boards” empowered to set wages within particular industries upon consultation with labor, firms, and the state. The federal government could follow suit, expanding the mandate of such boards to include issues of employee status, hours of work, and other basic standards. The federal government could also make it easier for workers to obtain union representation without enduring a contentious organizing process. Drawing from the Seattle legislation that established collective bargaining rights for Uber and Lyft drivers, firms could be required to disclose lists of workers to any worker organizations that meet basic indicia of independence and capacity.

It is crucial to emphasize the utility of social bargaining in today’s economy. It would better reflect contemporary production relationships among firms, suppliers, and workers. It may even be relatively acceptable to large firms, insofar as it would seek to equalize wages across a sector and would not encourage detailed bargaining over worksite-specific minutiae, which employers have good reason to resist. And it could be carried out through organizations less formal than classic unions, which seem more appealing to contemporary workers. Of course, as with the public benefits outlined above, passing labor law reforms will not be easy. But how else can we realistically enhance workers’ bargaining power?

These three policy shifts—a basic income and other economic security guarantees, vastly expanded social programs, and new rules to encourage social bargaining—would supplement and reinforce one another. Better educational policies should help employers by ensuring a mobile, highly skilled workforce, and public health care and other social insurance would reduce the costs of employment. A basic income and a public jobs guarantee would enable workers to stand up for themselves more readily. Unions representing broad swaths of the precarious workforce would have incentives to push for a robust welfare state and even a basic income. Those unions could also reduce elites’ domination of our politics, which may otherwise prevent implementation of a basic income, limit its generosity, or set it up to fail.

As many will realize, this institutional arrangement looks a bit like the Scandinavian “flexicurity” model—a portmanteau of “flexibility” and “security”—which combines high wages; extensive welfare and job training programs so workers can move between jobs; and relatively flexible employment policies that enable firms to hire, fire, and reassign workers at will. Such economies are quite open to technological innovation, but these institutions help ensure that its benefits are shared more equitably than they are in the United States. Not coincidentally, Scandinavian welfare states seem to be evolving toward a basic income, as the policy would fit nicely within flexicurity. But collective bargaining plays a crucial role in that system: without powerful unions, it is not clear that flexicurity would have developed in the first place, much less endured.

A basic income is a simple and elegant way to redistribute resources. But there are no simple, elegant solutions to complex political and economic challenges. A decent future of work and welfare requires a basic income—and much more.

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Brishen Rogers is Associate Professor of Law at Temple University’s Beasley School of Law.

Boston Review

​Basic Income, for a Free Society and a Sane Economy. PART 3: IS A UBI ETHICALLY JUSTIFIABLE? – Philippe van Parijs, Yannick Vanderborght. 

Of all objections to a basic income one sticks out above all others—and is more emotional, more principled, and more decisive in the eyes of many. It relates to its being unconditional in the sense of being obligation-free, of not requiring its recipients to work or be willing to work. Someone can concede that a basic income would provide an effective way of reducing poverty and unemployment while still being fiercely opposed to it on ethical grounds.

This objection comes in two main versions.

In one version, the “perfectionist” one, the underlying principle is that work is part of the good life and hence that an income granted without some work requirement amounts to rewarding a vice: idleness.

In the other version, the “liberal”one, the underlying principle is not about virtue but about fairness. As Jon Elster puts it, an unconditional basic income “goes against a widely accepted notion of justice: it is unfair for able-bodied people to live off the labor of others.”

How can this objection be refuted?

How can the proposal of an unconditional basic income be vindicated against this sort of objection?

Enjoying a basic income without doing any work constitutes unfair free riding — that is, it violates some norm of reciprocity, some conception of justice that stipulates that income should be distributed according to people’s productive contributions.

This accusation should be relativized and the accusers should temper their indignation.

The introduction of an unconditional basic income, far from increasing injustice as characterized, could reduce it.

If one is serious about denying an income to those able but unwilling to work, this denial should apply to the rich as well as to the poor.

UBI is a problem for those who, in today’s socioeconomic context, want to refuse to the poor the leisure the rich can get away with.

A modest unconditional income that would give to the poor, as well, the option of some chosen leisure would address the unfairness of such double standards.

Should a morality that stigmatizes an access to an income without work and thereby tries to restrict material gratification to those willing to contribute to society’s production not be abandoned when technological progress is leading to overabundant workers?

We have moved from a situation in which, say, 90 percent of the population were required to satisfy everyone’s basic needs in food, housing, and clothing, to one in which, say, 10 percent suffice.

Those who want to reduce the working week today do not want to do so in order to reduce a burden, but rather in order to share a privilege. In this context, should one still be as outraged as in the past at able-bodied people living off the labor of others?

Once the basic-income regime is in place, only a tiny minority will take advantage of it in order to do nothing or very little. This can be expected because the universal nature of a basic income, which makes it combinable with recipients’ other income, gets rid of the inactivity trap created by means-tested schemes.

Experiments with basic-income-type schemes suggest that even when freedom from obligation causes a fall in the labor supply, this does not translate into an expansion of leisure as idleness, but rather into an upsurge of productive activities in a broader sense such as education, childcare, and engagement in the community.

If one can expect only an insignificant minority of really lazy scroungers, there is no big clash between basic income and justice as reciprocity to get worked up about.

In order to avoid penalizing unfairly people who are sick, and wrongly assumed to be lazy, a modest unconditional income can be justified as the least bad measure.

For those truly concerned about free riding, the main worry about today’s situation should not be that some people get away with doing no work, but rather that countless people who do a lot of essential work end up with no income of their own. A huge amount of essential, productive work currently goes unpaid, as it is performed at home.

If there is massive free riding anywhere, it is within the traditional family structure in the form of men free riding on the unpaid work done by their partners.

An obligation-free basic income may well prove the least bad way of tackling free riding. The best feasible approximation of the principle that income should be distributed according to work does not exclude a basic income. It rather requires one, pitched at such a level that a further increase would worsen the injustice stemming from overpayment of the truly lazy more than it would reduce the injustice stemming from underpaying those who currently care for children, the elderly, or the disabled without any form of payment.

At present, the intrinsic attractiveness of a job and its remuneration are positively correlated . This can be viewed as a form of free riding or exploitation by the better paid: thanks to their bargaining power, they can do jobs they enjoy while benefiting from the toil of people who have no option but to accept low-paid jobs that the better paid would hate doing. A basic income, being obligation-free, would strengthen the bargaining power of the most vulnerable participants in the labor market and would therefore mean that the irksomeness of a job, its lack of intrinsic attractiveness, would be better reflected in the pay it commands. With irksomeness better compensated for, unfair free riding will not expand but shrink.

It is to a conception of distributive justice, not of cooperative justice, that one must appeal in order to best defend the fairness of an unconditional basic income.

An unconditional basic income is what we need if what we care about is freedom, not for just a few but for all.

Adopting such a conception of distributive justice generates a strong presumption in favor of an income paid to all in cash, on an individual basis, without means test or work test, indeed in favor of such an income paid at the highest sustainable level.

It makes sense to distribute this income at short and regular intervals throughout people’s lives, possibly at a lower level for children and a higher level for the elderly.

And for analogous reasons, it makes sense not to give the whole of this highest sustainable income in cash, but to allocate part of it in particular to free or heavily subsidized education and health care and to the provision of a healthy and enjoyable environment, at the cost of a lower cash basic income.

In all sorts of ways, but for most of us primarily as part of our earnings, we benefit very unequally from what was freely given us by nature, technological progress, capital accumulation, social organization, civility rules, and so on. What a basic income does is ensure that everyone receives a fair share of what none of us today did anything for, of the huge present very unequally incorporated in our incomes. And if given to all and pitched at the highest sustainable level, it ensures that those who receive least receive as much as is durably feasible.

“Current productive power is, in effect, a joint result of current effort and of the social heritage of inventiveness and skill incorporated in the stage of advancement and education reached in the arts of production; and it has always appeared to me only right that all the citizens should share in the yield of this common heritage, and that only the balance of the product after this allocation should be distributed in the form of rewards for, and incentives to, current service in production.” George D. H. Cole

Much of what we earn must be ascribed, not to our efforts, but to externalities which owe nothing to them.

“How large are these externalities, which must be regarded as owned jointly by members of the whole society?” Herbert A. Simon

The appeal of the conception of distributive justice on which our principled justification of basic income rests depends on our realizing the extent to which our economy functions as a gift-distribution machine, as an arrangement that enables people to tap— very unequally —our common inheritance.

In actual life, the opportunities we enjoy are fashioned in complex, largely unpredictable ways by the interaction of our innate capacities and dispositions with countless other circumstances such as happening to have a congenial primary school teacher or an inspiring boss, to belong to a lucky generation, to have a native language in high demand, or to get a tip for the right job at the right time.

The granting of a basic income to everyone should therefore not be misunderstood as aiming to equalize outcomes or achievements. Rather, it aims to make less unequal, and distribute more fairly, real freedom, possibilities, and opportunities. Granting a basic income to all helps equalize what people are given— the material substratum of their real freedom— and only as a consequence , indirectly and more roughly, what they achieve with what they are given.

A defense, on grounds of justice, of an unconditional income paid in cash does not presuppose a blind faith in the perfection of the market, but it does assume sufficient trust in the idea that prices reflect how valuable goods are in a sense that is relevant to determining a fair distribution of access to them. It therefore assumes an economy largely governed by something like a duly regulated market. It seems reasonable enough to suppose that this will remain the case for the foreseeable future.

Note, however, that granting to all an unconditional income does not increase dependence on the market. Quite the contrary. Because of its freedom from obligation, a basic income contributes to weakening the cash nexus, to de-commodifying labor power, to boosting socially useful yet unpaid activities, to protecting our lives against forced mobility and destructive globalization, and to emancipating us from the despotism of the market.

The conception of distributive justice is one that belongs to a family of conceptions commonly labeled liberal-egalitarian.

It is liberal in the sense that it does not rest on a particular conception of the good life but instead is committed to respecting equally the various conceptions of the good life that are present in our pluralist societies.

It is egalitarian in the sense of taking as a baseline an equal distribution of the resources people have at their disposal in order to try to realize their conceptions of the good life.

Justice is about sustainably maximizing the prospects of those with the worst prospects, not about equalizing prospects even at everyone’s expense.

Discussing proposals aimed at making our societies more just is important. Without such proposals, there is no hope— neither for ourselves nor for generations to come. But, for there to be hope, what is being proposed must be not only desirable but also realizable.

***

Philippe van Parijs & Yannick Vanderborght

Basic Income, for a Free Society and a Sane Economy. PART 2: FROM UTOPIAN DREAM TO WORLDWIDE MOVEMENT – Philippe van Parijs, Yannick Vanderborght. 

The year 1795 was when the magistrates of Speenhamland set up a means-tested cash benefit scheme that started looking like a genuine minimum-income scheme , but soon led to a backlash. It was also when the book in which Condorcet first formulated the general idea of social insurance, much later to become the main principle of our welfare states, was published. And it was the year when one of Condorcet’s closest friends started writing a short piece that, while it was barely noticed at the time and soon forgotten, would be rediscovered and recognized two centuries later as the first proposal of something quite close to a genuine unconditional basic income.

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Thomas Paine (1737–1809)

In a pamphlet entitled Agrarian Justice (1796) and addressed “to the Legislature and the Executive Directory of the French Republic,” Thomas Paine (1737–1809), by then a prominent figure in the American and French revolutionary movements, put forward a scheme radically different from both public assistance and social insurance. In it, he proposed 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 sterling, as a compensation in part, for the loss of his or her inheritance, by the introduction of the system of landed property. And also, the sum of ten pounds per annum, during life, to every person now living, of the age of fifty years, and to all others as they shall arrive at that age. 

With their fifteen pounds per capita, a young couple “could buy a cow, and implements to cultivate a few acres of land.” The bulk of the fund would finance the payment of a strictly individual, universal, unconditional basic income to every man and woman aged fifty or more.

“It is the value of the improvement only, and not the earth itself, that is in individual property. Every proprietor, therefore, of cultivated lands, owes to the community a ground-rent for the land which he holds; and it is from this ground-rent that the fund proposed in this plan is to issue.

It is proposed that the payments, as already stated, be made to every person , rich or poor. It is best to make it so, to prevent invidious distinctions. It is also right it should be so, because it is in lieu of the natural inheritance, which, as a right, belongs to every man, over and above property he may have created , or inherited from those who did. Such persons as do not choose to receive it can throw it into the common fund.”

Thus, what Paine proposed was a universal, obligation-free, individual cash payment, but not throughout adult life.

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Thomas Spence (1750– 1814)

It did not take long, however, before his proposal was radicalized into a genuine lifelong basic income.

In The Rights of Infants, a pamphlet published in London in 1797, the English schoolteacher and activist Thomas Spence (1750– 1814) formulated the proposal he claimed he had tirelessly defended since his youth.

All land and houses of each municipality should be entrusted to a committee of women, their use should be auctioned off, and part of the proceeds should be used to cover all public expenditures, including for the construction and maintenance of buildings, and the taxes owed to the government.

“And as to the overplus, after all public expences are defrayed, we shall divide it fairly and equally among all the living souls in the parish, whether male or female; married or single; legitimate or illegitimate; from a day old to the extremest age; making no distinction between the families of rich farmers and merchants and the families of poor labourers and mechanics.”

“Personal property is the effect of society; and it is as impossible for an individual to acquire personal property without the aid of society, as it is for him to make land originally. Separate an individual from society, and give him an island or a continent to possess, and he cannot acquire personal property. He cannot be rich. All accumulation, therefore, of personal property, beyond what a man’s own hands produce, is derived to him by living in society; and he owes on every principle of justice, of gratitude, and of civilization, a part of that accumulation back again to society from whence the whole came.”

Spence’s plan was debated by some radical English reformers in the 1820s, before sinking, along with Paine’s, into oblivion.

***

In London on February 21, 1848, the Communist League published a little book that the young German Karl Marx had finished writing in Brussels , in a great hurry, the previous month: the Manifesto of the Communist Party.

On March 28, a document was seized by the police at the house of Joseph Kats, brother of the Jacob Kats (1804–1886) who was a writer and prominent member of Brussels’s Association Démocratique, of which Marx was vice chairman.

Project of a New Social Constitution

Written in Flemish and titled Project of a New Social Constitution, this document stipulates that “the earth is the universal heritage of the people”and that “its fruits must be equally distributed among all of them”; and that “all personal property rights over real estate are abolished”; and that all land, whether built on or not, will be rented out by the state with their revenues “regarded as the fruits of nature in order to be distributed equally among all members of society in as many equal parts as there are people, no one excluded”.

This is clearly an unconditional basic income justified unwittingly in fundamentally the same way as the schemes proposed half a century earlier by Paine and Spence. But the short document is not more specific. Nor is its author known.

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Joseph Charlier (1816– 1896 )

Nor is there any known connection with a book-length development of the same idea published in Brussels later that same year.

Compared to Marx’s Manifesto, its contemporary, Solution du Problème Social, is equally ambitious and no less original. But it is less engagingly written, and little is known about its author— a certain Joseph Charlier (1816– 1896 ). It had no noticeable impact at the time or indeed at any later point. Thomas Paine had advocated a basic endowment for the young and a basic pension for the elderly. Thomas Spence had advocated a genuine basic income at a municipal level.

Charlier’s book offers the first developed plea for a genuine basic income on a national scale: a uniform “territorial dividend” to be paid every quarter to each “indigenous” resident of the country, whether male or female, whether adult or child, and to be funded by rents on all properties, whether built or not.

Nature was created for the sake of meeting everyone’s needs. Therefore, he argued, private land ownership is incompatible with justice, and the state must ultimately become the sole owner of all land and all buildings on the land.

The revenues from this rent would provide all households with an income sufficient to cover their “absolute needs” and thereby provide “a sovereign remedy for the plague of pauperism.” Yes, the level of the dividend will be such that “the state will secure bread to all but truffles to no one,” he argued. “Too bad for the lazy; they will have to get by with the minimum allowance. The duty of society does not go beyond this: to assure to everyone his fair share in the enjoyment of the elements that nature has put at his disposal, without usurpation by some people to the detriment of others.”

“It is no longer the worker who will have to bow before capital, it is capital, reduced to its true role of collaborating agent, that will have to negotiate with labor on an equal footing.

Undoubtedly, by raising and improving the material condition of the masses, the implementation of a guaranteed minimum income will make them choosier in the choice of their occupations; but as this choice is usually determined by the price of manpower, the industries concerned will need to offer their workers a salary high enough to compensate for the inconveniences involved. Therefore, the proposed scheme will have as an immediate consequence a reparatory remuneration for this class of people presently condemned to misery by way of reward for their irksome and useful labor.

It is the only rational and just solution that should be given to the social question, no offense to my more or less self-interested contradictors. There are truths which one neither wants nor dares to face.”

His 1848 book seems to have been barely read at the time and his subsequent writings seem to have been just as quickly forgotten.

***

John Stuart Mill (1806– 1873)

This cannot be said of another, far more authoritative author who joined the tiny team of isolated early basic income supporters at about the same time.

The year 1848 not only saw the publication of Marx’s Manifesto and Charlier’s Solution. It was also the year that John Stuart Mill (1806– 1873) published the first edition of his Principles of Political Economy, one of the founding classics of modern economics.

Mill identifies and recognizes the structural problem inherent in public assistance to the poor: while the consequences of assistance itself are beneficial, he writes, the consequences of relying on it “are for the most part injurious.” But unlike Ricardo, Hegel, or Tocqueville, this did not make him advocate a return to private charity. Subject to some conditions, he wrote, “I conceive it to be highly desirable that the certainty of subsistence should be held out by law to the destitute able-bodied, rather than that their relief should depend on voluntary charity.”

What are these conditions? Essentially that there should remain an incentive to work— that is, that the condition of the person receiving help should not be made as desirable as that of “the labourer who supports himself by his own exertions.” If that is the case, there will be no need to set up a system of forced labor for the undeserving poor—that is, “an organized system of compulsion for governing and setting to work like cattle those who had been removed from the influence of the motives that act on human beings.” Moreover, “the state must act by general rules. It cannot undertake to discriminate between the deserving and undeserving indigent. The dispensers of public relief have no business to be. inquisitors.

”What is needed, therefore, is neither private charity nor workhouses, but a legal guarantee of subsistence for all the destitute, whether able-bodied or not, whether “deserving or not.”

“This System does not contemplate the abolition of private property, nor even of inheritance; on the contrary, it avowedly takes into consideration, as elements in the distribution of the produce, capital as well as labour. In the distribution, a certain minimum is first assigned for the subsistence of every member of the community, whether capable or not of labour. The remainder of the produce is shared in certain proportions, to be determined beforehand, among the three elements, Labour, Capital, and Talent.

The scheme guarantees “certainty of subsistence” to all, whether able-bodied or not. No inquisitorial distinction is made between the deserving and the undeserving. Yet incentives are preserved through the remuneration of labor, capital, and talent as a top-up over and above the minimum that has been “first assigned.

The social problem of the future? How to unite the greatest individual liberty of action, with a common ownership of the raw materials of the globe, and an equal participation of all in the benefits of combined labour.”

***

Bertrand Russell (1872–1970).

“The great majority of men and women, in ordinary times, pass through life without ever contemplating or criticising, as a whole, either their own conditions or those of the world at large. They find themselves born into a certain place in society, and they accept what each day brings forth, without any effort of thought beyond what the immediate present requires. Almost as instinctively as the beasts of the field, they seek the satisfaction of the needs of the moment, without much forethought, and without considering that by sufficient effort the whole conditions of their lives could be changed.” Bertrand Russell

Something more akin to a real public debate took shape in Britain shortly after the end of World War I.

The first to open fire was the mathematician, philosopher, nonconformist political thinker, militant pacifist, and Nobel laureate Bertrand Russell (1872–1970).

In Roads to Freedom, a short and incisive book first published in 1918, he argues for a social model that combines the advantages of socialism and anarchism:

Anarchism has the advantage as regards liberty, socialism as regards the inducement to work. Can we not find a method of combining these two advantages? It seems to me that we can. Stated in more familiar terms, the plan we are advocating amounts essentially to this: that a certain small income, sufficient for necessaries, should be secured to all, whether they work or not, and that a larger income, as much larger as might be warranted by the total amount of commodities produced, should be given to those who are willing to engage in some work which the community recognizes as useful.

“The necessaries of life should be free, as Anarchists desire, to all equally, regardless of whether they work or not. Under this plan, every man could live without work: there would be what might be called a ‘vagabond’s wage,’ sufficient for existence but not for luxury. The artist who preferred to have his whole time for art and enjoyment might live on the ‘vagabond’s wage’, traveling on foot when the humor seized him to see foreign countries, enjoying the air and the sun, as free as the birds, and perhaps scarcely less happy.

One great advantage of making idleness economically possible is that it would afford a powerful motive for making work not disagreeable; and no community where most work is disagreeable can be said to have found a solution of economic problems.

Modern technique has made it possible for leisure, within limits, to be not the prerogative of small privileged classes, but a right evenly distributed throughout the community. The morality of work is the morality of slaves, and the modern world has no need of slavery.

When education is finished no one should be compelled to work , and those who choose not to work should receive a bare livelihood, and be left completely free; but probably it would be desirable that there should be a strong public opinion in favor of work, so that only comparatively few should choose idleness.”

***

Dennis Milner (1892–1956)

In the same year as Russell’s Roads to Freedom, the young engineer, Quaker, and Labour Party member Dennis Milner (1892–1956), published jointly with his first wife, Mabel, a short pamphlet entitled Scheme for a State Bonus.

Using an eclectic series of arguments, they argued for the introduction of an income paid unconditionally on a weekly basis to all citizens of the United Kingdom. Pitched at 20 percent of GDP per capita, the “state bonus”would be funded by contributions from everyone “with any income at all,” and should make it possible to solve the problem of poverty, particularly acute in the aftermath of World War I.

As the state bonus scheme is based on the moral right to the means of subsistence, any obligation to work enforced through the threat of a withdrawal of these means is ruled out. “Persuading people to work,” the Milners wrote, “is an educational problem. Starvation must not be used as an educative force, for it only makes inefficient workers.” Having gained access to the “primal necessities of life,” workers will be “in a fairer position for bargaining” about wages. Better wages, in turn, “will mean a greater demand for necessities, and thus a steadier state in all the staple industries.”

***

Clifford H. “Major” Douglas (1879–1952)

Clifford struck by how productive British industry had become after World War I and began to wonder about the risks of overproduction. How could a population impoverished by four years of war consume the goods available in abundance, when banks were reticent to give them credit and their purchasing power rose only very slowly? To solve this problem, Douglas proposed, in a series of books and popular lectures and writings, the introduction of “social credit” mechanisms, one of which consisted in paying all households a monthly “national dividend.”44 The social credit movement enjoyed varying fortunes. It failed to establish itself in the United Kingdom but attracted many supporters in several parts of Canada.

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George D. H. Cole (1889–1959)

The first holder of Oxford’s Chichele Chair of Social and Political Theory, Cole was fully aware of the earlier pleas by the State Bonus League and the social credit movement. In several books, he consistently defended what he seems to have been the first to call a “social dividend”and “basic income.” Incomes, he argued in 1935, should “be distributed partly as rewards for work, and partly as direct payments from the State to every citizen as ‘social dividends’, a recognition of each citizen’s claim as a consumer to share the common heritage of productive power. The aim should be, as speedily as possible, to make the dividend large enough to cover the whole of the minimum needs of every citizen.

“If the maximum a man could earn came to no more than the amount of his social dividend, the incentive to earn it, in a society living nearly at a common standard, would be fully as powerful as the incentive to earn many times as much in the class-ridden society of today. For the demand for little luxuries and larger supply of substitutable necessaries is the keenest of all human demands.… Earnings will become, under such a system, more and more of the nature of “pocket money,” without any loss of the incentives to effort such as absolute equality of incomes would involve. Work will have its sufficient reward; but the main part of national income will no longer be distributed as a by-product of industry.”

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James Meade (1907–1995)

He defended the “social dividend” with even greater tenacity than Cole. The idea is present in his writings from the 1930s onwards as a central ingredient of a just and efficient economy. And it is still at the core of Meade’s Agathotopia project, which he advocated with great enthusiasm in the last years of his life: partnerships between capital and labor and a social dividend funded by public assets are there offered together as a solution to the problems of unemployment and poverty.

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Robert Theobald (1929–1999)

From the early 1960s, Robert Theobald started advocating a “guaranteed income” on the grounds that automation was at the same time making goods abundant and workers redundant. The guaranteed income, he argued, “is essential for both short-run and long-run reasons. In the short run, it is required because an ever-growing number of people—blue-collar, white-collar, middle-management and professional—cannot compete with machines; in the absence of the guaranteed income the number of people in hopeless, extreme poverty will increase. In the long run, we will require a justification for the distribution of resources that is not based on job-holding.”

Ultimately, as also suggested by the title of one of Theobald’s books, Free Men and Free Markets (1963), what must guide this distribution is a concern for freedom for all: “A guaranteed income provides the individual with the ability to do what he personally feels to be important. The guaranteed-income proposal is based on the fundamental American belief in the right and the ability of the individual to decide what he wishes and ought to do.

The need is clear: the principle of an economic floor under each individual must be established. The principle would apply equally to every member of society and carry with it no connotation of personal inadequacy or implication that an undeserved income was being received from an overgenerous government.”

Along with other activists and academics, Theobald was one of the chief authors of a report sent to President Lyndon Johnson in May 1964 that urged the government to address the “cybernation revolution” by guaranteeing an adequate income to all:

“We urge, therefore, that society, through its appropriate legal and governmental institutions, undertake an unqualified commitment to provide every individual and every family with an adequate income as a matter of right. The unqualified right to an income would take the place of the patchwork of welfare measures— from unemployment insurance to relief— designed to ensure that no citizen or resident of the United States actually starves.”

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Milton Friedman (1912–2006)

Friedman, the founding father of “Neoliberalism”, never advocated a basic income but he did popularize a proposal that, though different from a basic income, can be partly defended on the same grounds: the negative income tax.

If we want to alleviate poverty, he argues, “the arrangement that recommends itself on purely mechanical grounds is a negative income tax.”

A negative income tax amounts to a uniform refundable tax credit. Even in the versions closest to a genuine basic income, it lacks one crucial feature of it: its being paid upfront to all. But the two ideas have enough in common for the discussion of one of them to be relevant to the discussion of the other.

The negative income tax, in his view, should replace the bulk of America’s welfare programs:

“We have a maze of detailed governmental programs that have been justified on welfare grounds— though typically their product is “illfare”: public housing, urban renewal, old-age and unemployment insurance, job training, the host of assorted programs under the mislabeled “war on poverty,” farm price supports, and so on at incredible length. The Negative Income Tax would be vastly superior to this collection of welfare measures. It would concentrate public funds on supplementing the incomes of the poor—not distribute funds broadside in the hope that some will trickle down to the poor.”

“I see the negative income tax as the only device yet suggested by anybody that would bring us out of the current welfare mess and still meet our responsibilities to the people whom the program has got in trouble.”

Thus, what justifies a guaranteed income, in Friedman’s view, is only a damage-control argument.

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Friedrich Hayek (1899–1992)

Hayek us the other founding father of “Neoliberalism” and Friedman’s colleague at the University of Chicago and fellow Nobel Memorial Prize winner.

From The Road to Serfdom (1944) to Law, Legislation and Liberty (1979), Hayek unambiguously supported a minimum-income scheme as a permanent feature of a free society. He does reject “the security of the particular income a person is thought to deserve” because “it can be provided only for some and only by controlling or abolishing the market. ”Instead, “the security of a minimum income,” which can be “provided for all outside of and supplementary to the market system,” is “an indispensable condition of real liberty”.

“There is no reason why in a society which has reached the general level of wealth which ours has attained, the security of a minimum income, should not be guaranteed to all without endangering general freedom. There are difficult questions about the precise standard which should thus be assured.… but there can be no doubt that some minimum of food, shelter and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody .” And even more firmly: “The assurance of a certain minimum income for everyone, or a sort of floor below which nobody need fall even when he is unable to provide for himself, appears not only to be a wholly legitimate protection against a risk common to all, but a necessary part of the Great Society in which the individual no longer has specific claims on the members of the particular small group into which he was born.”

Hayek never specified the institutional setup most appropriate to secure this “uniform minimum income”.

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James Tobin (1918– 2002)

Starting in 1965, the Yale economist and Nobel Memorial Prize winner James Tobin published a series of articles in which he defended what he initially called a “credit income tax.” This scheme was not meant to replace the whole system of public assistance and insurance schemes, let alone to help extinguish the welfare state altogether, but rather to reconfigure its lower component so as to make it a more efficient and work-friendly instrument for improving “the economic status of the Negro ” or for “raising the incomes of the poor,” to quote the titles of two of Tobin’s articles.

With his colleagues Joseph Pechman and Peter Miezkowski, Tobin published in 1967 what can be regarded as the first technical paper on negative-income-tax schemes, in a broad sense that covers the upfront-basic-income variant. In the scheme they proposed and analyzed, each household was to be granted a basic credit at a level varying with family composition, which each family could supplement with earnings and other income taxed at a uniform rate. In their view, this “credit income tax” was as preferably to be administered through “automatic payments of full basic allowances to all families, except those who waive payment in order to avoid withholding of the offsetting tax on other earnings.” It could therefore be regarded as a household-level “demogrant”: universal and obligation-free, though not strictly individual.

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John Kenneth Galbraith (1908–2006)

In the first edition of his best seller The Affluent Society (1958), the Harvard economist expressed great skepticism as to the possibility of a guaranteed minimum income: “An affluent society, that is also both compassionate and rational, would no doubt, secure to all who needed it the minimum income essential for decency and comfort. It can use the forthright remedy of providing for those in want. Nothing requires it to be compassionate. But it has no high philosophical justification for callousness. Nonetheless any such forthright remedy for poverty is beyond reasonable hope.”

The best hope he saw for the reduction of poverty “lies in less direct but, conceivably, almost equally effective means,” such as education and slum clearance.

In an article published in 1966, however, he expressed a very different view on what could be reasonably hoped, repudiated the “strongly traditional” approach to poverty he had held until then (“we should help them to help themselves”), and argued:

“We need to consider the one prompt and effective solution for poverty, which is to provide everyone with a minimum income. The arguments against this proposal are numerous, but most of them are excuses for not thinking about a solution, even one that is so exceedingly plausible. It would, it is said, destroy incentives. Yet we now have a welfare system that could not be better designed to destroy incentives if we wanted it that way. We give the needy income, and we take away that income if the recipient gets even the poorest job. Thus we tax the marginal income of the welfare recipient at rates of 100 percent or more. A minimum income, it is said, would keep people out of the labor market. But we do not want all the people with inadequate income to work. And there is no antidote for poverty that is quite so certain in its effects as the provision of income.”

The second edition of The Affluent Society (1969) reflects this radical change of mind. The passage quoted above remained unchanged up to the sentence “Nonetheless any such forthright remedy for poverty is beyond reasonable hope,” but at that point made room for the following paragraph: “Within the last ten years, the provision of a regular source of income to the poor, as a matter of broad social policy, has come to seem increasingly practical. The notion that income is a remedy for indigency has a certain forthright appeal. As elsewhere argued, it would also ease the problems of economic management by reducing the reliance on production as a source of income. The provision of such a basic source of income must henceforth be the first and the strategic step in the attack on poverty.”

The “elsewhere argued” refers to a chapter titled “The Divorce of Production from Security,” completely rewritten for the second edition so as to support the following position: “For those who are unemployable, employable only with difficulty or who should not be working, the immediate solution is a source of income unrelated to production. In recent years, this has come extensively into discussion under various proposals for guaranteed income or a negative income tax. The principle common to these proposals is provision of a basic income as a matter of general right and related in amount to family size but not otherwise to need. If the individual cannot find (or does not seek) employment, he has this income on which to survive.”

“Everybody should be guaranteed a decent basic income. A rich country such as the US can well afford to keep everybody out of poverty. Some, it will be said, will seize upon the income and won’t work. So it is now with more limited welfare, as it is called. Let us accept some resort to leisure by the poor as well as by the rich.”

***

In 1968, consistently with his revised conviction, Galbraith supported, along with James Tobin, Paul Samuelson, and Robert J. Lampman, a petition signed by over one thousand economists calling for the US Congress to adopt “a system of income guarantees and supplements.”

In the meantime, academics had been joined by other components of American civil society. Thus, at its inaugural convention in August 1967, the National Welfare Rights Organization (NWRO) adopted as its first goal: “Adequate income: a system that guarantees enough money for all Americans to live dignified lives above the level of poverty.”

***

Martin Luther King, Jr. (1929–1968)

In his last book, Where Do We Go From Here?, published the same year, King wrote:

“I am now convinced that the simplest approach will prove to be the most effective, the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income. The dignity of the individual will flourish when the decisions concerning his life are in his own hands, when he has the assurance that his income is stable and certain, and when he knows that he has the means to seek self-improvement.”

***

President Lyndon B. Johnson (1998 – 1973)

In January 1968, President Johnson had already set up a Commission on Income Maintenance Programs which included, along with several businessmen, economists Robert Solow and Otto Eckstein. Johnson insisted: “We must examine any and every plan, however unconventional.”

Published in November 1969, the final report recommended, as an alternative to the existing welfare system, a “basic income support program” that would take the form of a “direct federal cash transfer program offering payments to all, in proportion to their need.”

***

President Richard Nixon (1913 – 1994)

Before this report was published, however, Republican Richard Nixon had taken office as president in January 1969 after winning the election against Democrat Hubert Humphrey. He immediately launched the preparation of the Family Assistance Plan, an ambitious public assistance program that would provide for the abolition of the aid program targeting poor families (AFDC), and incorporate a guaranteed income with financial supplements for workers. The plan came close to a household-based negative income tax, but with one major difference: the legislation made provision for a reduction of benefits “if recipients refused to accept suitable employment or register for job training”.

“In the final analysis, we cannot talk our way out of poverty; we cannot legislate our way out of poverty; but this Nation can work its way out of poverty. What America needs now is not more welfare, but more ‘workfare.’”

***

Senator George McGovern (1922 – 2012)

In January 1972, however, as the controversy about the Family Assistance Plan reached its height, a considerably more ambitious guaranteed income plan managed to attract much attention.

One of the candidates for the Democratic presidential nomination, Senator George McGovern, with Tobin and Galbraith on his campaign team, decided to incorporate a basic-income proposal into his platform. Labeled “minimum income grant,” “national income grant,” or sometimes “demogrant,” it consisted of paying every American a yearly installment of $ 1,000. “I propose that every man , woman, and child receive from the federal government an annual payment . This payment would not vary in accordance with the wealth of the recipient. For those on public assistance, this income grant would replace the welfare system.”

The proposal he mentioned in greatest detail is one by James Tobin, which “calls for the same payment to be made to all Americans”: “the payments are made on an individual basis. Thus, there would be no incentive for a family to break up in order to receive higher total”.

***

The Presidential election took place in November 1972, and Nixon won a landslide victory, just a few weeks after the final demise of his own Family Assistance Plan. These events marked the end of the short but spectacular appearance of basic-income-type ideas in the US debate.

Four large-scale experiments took place in the United States between 1968 and 1980. Initiated by the federal administration in connection with the preparation of Nixon’s Family Assistance Plan, these unprecedented experiments were a major landmark in social scientific research. Never had there been a scientifically motivated social experiment on such a scale. Households were randomly assigned to groups enjoying the benefit of a negative-income-tax scheme for a number of years and to control groups that continued living under existing arrangements. The main goal was to establish the effects of the guaranteed-income scheme on various indicators such as weight at birth, school performance, divorce rate, and above all, labor supply.

Among the most discussed effects of these experiments were an uncontroversial yet relatively modest reduction in the labor supply of secondary earners and an alleged increase in the divorce rate in one of the experiments. Such results contributed to killing for many years the political attraction of basic-income-type proposals in the United States, even among some of their keenest supporters.

***

Dauphin

Under the influence of the US debate, several official reports discussing a “guaranteed annual income” were published in Canada in the early 1970s. These reports inspired the so-called Mincome negative income tax experiment, conducted in 1975– 78 in the city of Winnipeg and in the small town of Dauphin (Manitoba) at the request of Canada’s federal government.

Data collection was interrupted after two years, however, and the results were never officially published. It was only many years later that they were analyzed. The very fact that the Canadian government lost interest long before the experiment was completed confirmed that the North America of the 1970s was not ripe for a major new step towards something that would start resembling an unconditional basic income.

***

Jay Hammond (1922–2005)

And yet it was North America that hosted, just a few years later, the most decisive step towards a basic income in the strictest sense of the term. This happened with barely any connection to the big US debate of the late 1960s and early 1970s.

In the mid-1970s, Jay Hammond (1922–2005), the Republican governor of the state of Alaska from 1974 to 1982, secured ownership of the Prudhoe Bay oil field, the largest in North America, for the citizens of Alaska (rather than for all US citizens). However, he was concerned that the huge wealth generated by oil extraction would benefit only the current generation of Alaskans. He therefore proposed setting up a fund to ensure that this wealth would be preserved for future generations, thanks to the investment of part of the oil revenues.

In 1976, the Alaska Permanent Fund was created by an amendment to the State Constitution. In order to get the current Alaskan population interested in its continuity and growth, Governor Hammond conceived of a dividend paid annually to all residents. “The Dividend concept,” Hammond explains in his memoirs, was “based on Alaska’s Constitution, which holds that Alaska’s natural resources are owned, not by the State, but by the Alaskan people themselves.”

A genuinely universal basic income paid to all legal residents at the same level, including newcomers and foreign nationals.

The program was first implemented in 1982. Since then, every official resident of Alaska for at least one year is entitled to an equal annual dividend. Around 637,000 applicants qualified in 2015. This dividend corresponds to some proportion of the average financial return, over the previous five years, of the Alaska Permanent Fund.

Although Alaska’s oil dividend is by no means sufficient to cover an individual’s basic needs, at its maximum, it reached about 20 percent of the official US poverty line for a single person and it never exceeded 4 percent of Alaska’s GDP per capita, it is clearly a genuine basic income: it is an obligation-free cash payment made to all on an individual basis. Is it surprising that it should have been introduced by a Republican administration?

Is it surprising that the Alaska dividend scheme has not been emulated elsewhere? Perhaps. There are now over fifty countries with sovereign wealth funds similar to the Alaska Permanent Fund. Yet, despite various proposals, Alaska’s dividend scheme remains unique so far.

***

Since the mid-1980s, the history of basic income is no longer a set of isolated national developments, completely independent and mostly ignorant of each other. Thanks to the existence of an international network, to the power of the internet, and to the spreading of the idea, new initiatives around basic income are now happening every day and are being echoed worldwide.

***

Philippe van Parijs & Yannick Vanderborght


World Economic Forum: 15-hour weeks, basic income & doughnuts. Could these ‘big ideas’ end inequality? – Ross Chainey. 

At an unusually divisive time for politics in the West, there’s one thing most people can agree on: the economy is not working well enough, for enough people.

Right now, just 1% of the world’s population holds over 35% of all private wealth, more than the bottom 95% combined. According to Oxfam, the eight wealthiest individuals in the world – all men – have the same wealth as 3.6 billion of the world’s poorest. The world could see its first trillionaire in the next 25 years, yet one in nine people go to bed hungry every night and one in 10 of us still earns less than $2 a day.

And while the problem is truly global, it also exists within countries – including some of the world’s most advanced economies. By the late 2000s, income inequality had risen in 17 out of the 22 OECD countries, including by more than 4% in Finland, Germany, Israel, New Zealand, Sweden and the US.

Inequality is, as Jaideep Prabhu, a Professor of Business at Cambridge University, writes, “the defining social, political and economic phenomenon of our time.” The latest Global Risks Report agrees. The report ranked “rising income and wealth disparity” as the most important trend that will shape the world in the next decade.

The rise of anti-establishment populism, as well as concerns about the revolution in robotics and artificial intelligence, suggest that a revival of economic growth alone may not be enough to address the widening gap between rich and poor.

With capitalism in need of fundamental reform, here is a list of some of the bold ideas that could challenge the status quo.

Universal Basic Income

“Consider for a moment that from this day forward, on the first day of every month, around $1,000 is deposited into your bank account – because you are a citizen,” writes the author Scott Santens in this article.

Universal Basic Income, or UBI, is not a new idea (experiments have taken place in the US, Canada, Namibia, India and Brazil, while Finland and the Netherlands plan to follow suit), but this “social security for all”, which would guarantee a starting salary that is above the poverty line for the rest of your life, is experiencing a revival.

“Rising inequality, decades of stagnant wages, the transformation of lifelong careers into sub-hourly tasks … all of these and more are pointing to the need to start permanently guaranteeing everyone at least some income,” says Santens.

While critics argue that a UBI is unaffordable and would encourage people to do nothing, some advocates believe it would help to soften the blow of automation and give us the freedom to do something we really enjoy. “I firmly believe that a Universal Basic Income is the most effective answer to the dilemma of advancing robotization,” argues Dutch economist Rutger Bergman. “Not because robots will take over all the purposeful jobs, but because a basic income would give everybody the chance to do work that is meaningful.”

Redistribution

We should share more of the world’s wealth, or face the populist consequences. That was one of the over-riding messages from Davos 2017.

Oxfam’s Winnie Byanyima said it was time to “rebalance this unjust economy,” and other high profile voices agreed. “Individuals and societies need to be smart and well organized to emerge as ‘winners’ in a new renaissance,” said Oxford academic Ian Goldin. “They should create social safety nets for the dispossessed” through greater wealth distribution.

Jack Ma, the founder of Alibaba and one of China’s most successful businessmen, urged countries to avoid the mistakes made by the US, which he said has squandered its wealth on foreign wars instead of investing in infrastructure and education. “You’re supposed to spend money on your own people,” he argued.

In the session Squeezed and Angry: How to Fix the Middle-Class Crisis, Christine Lagarde, chief of the International Monetary Fund who warned Davos participants about the dangers of inequality back in 2013, didn’t mince her words. “It’s an opportune time to put in place the policies we know help,” she said. “When you have a real crisis, what kind of measures do we take to reduce inequality? It probably means more redistribution.”

Wealth redistribution, of course, means higher taxes for higher earners (though some would argue that this would stifle growth), which is what then US Vice-President Joe Biden argued for in Davos. We need to take “common sense” steps, he said, such as “implementing a progressive, equitable tax system where everyone pays their fair share.” He also proposed providing free college education for all.

A 15-hour work week?

Most of us would like to work less, but would forcing us to spend fewer hours at our desks be good for the global economy? Rutger Bregman thinks so.

The world’s major economies are richer than they’ve ever been, yet excessive work and pressure is killing us, he argues in his book, Utopia for Realists.

“As we hurtle through the first decades of the 21st century, our biggest challenges are not too much leisure and boredom, but stress and uncertainty,” he writes in this piece for The Guardian.

If we worked less and cut out pointless jobs, we’d make fewer errors and have time to do the things we enjoy. Furthermore, countries with shorter working weeks consistently top gender-equality rankings, while “countries with the biggest disparities in wealth are precisely those with the longest working weeks.”

Bregman isn’t the only one to call for a shorter working week. James W. Vaupel, from the Max-Planck Odense Institute for Demographic Research, argues that we should only work 25 hours a week (though we should keep this up until we’re 80). “In the 20th century we had a redistribution of wealth. I believe that in this century, the great redistribution will be in terms of working hours,” he said.

Doughnut economics

While growth at all costs has lifted millions out of poverty, it’s also left a lot of people behind and ravaged our environment. Is the solution to be found in … a doughnut?

In her book, Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, Oxford University’s Kate Raworth argues for a radical overhaul of our traditional economic models. What’s the point of a thriving economy if people, and the planet, continue to suffer?

“Humanity’s 21st century challenge is to meet the needs of all within the means of the planet,” she says. “In other words, to ensure that no one falls short on life’s essentials … while ensuring that collectively we do not overshoot our pressure on Earth’s life-supporting systems, on which we fundamentally depend.”

Raworth’s “doughnut” is a diagram showing social and planetary boundaries, between which lies an “environmentally safe and socially just space in which humanity can thrive.” The model “allows us to see the state in which we now find ourselves,” Raworth writes. At the moment, there are billions of people who still live in the hole in the middle, while several of the planetary boundaries have been breached.

The purpose of economics, says Raworth, should be to help us enter that safe space and stay there.

Open borders

Fears over immigration may have played a central role in the Brexit vote and US election, but at a time when the world has more barriers than ever before (three-quarters of all border walls and fences were erected after the year 2000), is there a case for tearing them down?

Closed borders are one of the biggest barriers to global equality, says Bregman. “Just take for example someone who lives in Nigeria and has exactly the same skill set, the same education as someone who lives in the UK or the US, but they earn about eight times less,” he told Business Insider.

“So the right passport is worth a lot of money. It’s a huge source of global inequality.”

A World Bank study estimated that if developed countries were to take in just 3% more immigrants, the world’s poor would have over $300 billion more to spend, while there is a huge body of research that shows how carefully managed global migration and ethnic diversity strengthens a country’s long-term economy.

“In a world of insane inequality, migration is the most powerful tool around for fighting poverty,” writes Bregman.

***

by Ross Chainey, digital media specialist at the World Economic Forum

Eyewitness News

Basic Income, for a Free Society and a Sane Economy. PART 1: THE INSTRUMENT OF FREEDOM  – Philippe van Parijs, Yannick Vanderborght. 

To rebuild confidence and hope in the future of our societies, in the future of our world, we shall need to subvert received wisdom, shake our prejudices, and learn to embrace radical ideas. One of these, simple but crucial, is that of an unconditional basic income: a regular cash income paid to all, on an individual basis, without means test or work requirement.

The idea is not new. Since the end of the eighteenth century, it has occurred to any number of bold minds. Today, however, the conjunction of growing inequality , a new wave of automation , and a more acute awareness of the ecological limits to growth has made it the object of unprecedented interest throughout the world.

Yes, a better world is possible, and in order to achieve it, it is necessary to be imaginative and enthusiastic. But intellectually honest discussion that does not elude inconvenient facts and embarrassing difficulties is just as indispensable.

A basic income is not just a clever measure that may help alleviate urgent problems. It is a central pillar of a free society, in which the real freedom to flourish, through work and outside work, will be fairly distributed. It is an essential element of a radical alternative to both old socialism and neoliberalism, of a realistic utopia that offers far more than the defense of past achievements or resistance to the dictates of the global market. It is a crucial part of the sort of vision needed to turn threats into opportunities, resignation into resolution, anguish into hope.

1: The Instrument of Freedom

Action is urgently needed on many fronts, from the dramatic improvement of our cities’ public spaces to the transformation of education into a lifelong activity to the redefinition of intellectual property rights. More than on any other front, action is needed to restructure radically the way in which economic security is pursued in our societies and in our world. In each of our societies and beyond, we need a sturdy floor on which we can stand as individuals and as communities. If we are to stem our anxieties and strengthen our hopes, we must dare to introduce what is now commonly called a basic income: a regular income paid in cash to every individual member of a society, irrespective of income from other sources and with no strings attached.

In the past, a broad consensus existed between the right and the left that continued growth would keep unemployment and precariousness in check. Today’s unprecedented interest in basic income in the more affluent parts of the world is evidence that this consensus has ended.

Thus, the expectation that meaningful work will be lacking easily leads to the conviction that the growing jobless population must be provided with some means of livelihood.

But there are two very different ways of fleshing out this conviction, and one of them is very unattractive. It consists of expanding the old model of public assistance first born in the sixteenth century and instantiated by today’s guaranteed-minimum-income schemes of a conditional sort.

People are entitled to continuing handouts on the condition that they remain destitute, and can prove it is involuntary.

Thus, if conditional minimum-income schemes are the only way of addressing the expected lack of meaningful jobs, it seems that the technological progress that is meant to liberate us is going to enslave in poverty a growing part of the population instead.

The proper way of addressing today’s unprecedented challenges and of mobilizing today’s unprecedented opportunities does require a minimum-income scheme, but of an unconditional sort.

It is strictly an individual entitlement, as opposed to linked to the household situation; it is what is commonly called universal, as opposed to subjected to an income or means test; and it is obligation free, as opposed to tied to an obligation to work or prove willingness to work.

Basic Income remains however conditional in one important sense. Recipients of it must be members of a particular, territorially defined community. In our interpretation, this condition must mean fiscal residence rather than permanent residence or citizenship. This excludes tourists and other travelers, undocumented migrants, and also diplomats and employees of supranational organizations, whose earnings are not subjected to the local personal income tax. It also excludes people serving prison sentences, whose upkeep costs more than a basic income, but who should be entitled to it from the minute they get out.

A basic income does not only need to be paid regularly. Its amount must also be stable enough and, in particular, immune to sudden declines. This does not mean that it should be fixed. Once in place, it can meaningfully be linked to a price index or, even more meaningfully, to GDP per capita.

A basic income cannot be mortgaged; its beneficiaries must not be allowed to use its future stream as a guarantee for loans. This requirement flows naturally from viewing basic income not as a top-up on other incomes but rather as the bottom layer for every person’s income, which current legislation usually protects against seizure.

The word “basic” in basic income is meant to convey the idea of a floor on which one can stand because of its very unconditionality. It is a foundation on which people can build their lives in various ways, including by topping it up with income from other sources.

A basic income should not be understood as being, by definition, a full substitute for all existing transfers, much less a substitute for the public funding of quality education, quality health care, and other services.

Unconditional Basic Income means far more than existing conditional minimum-income schemes. It does not operate at the margin of society but affects power relations at its very core. Its point is not just to soothe misery but to liberate us all. It is not simply a way of making life on earth tolerable for the destitute but a key ingredient of a transformed society and a world we can look forward to.

Fundamental to the concept of a basic income is that it is paid in cash and not in the form of food, shelter, clothes, and other consumer goods. a fair and efficient distribution of cash, especially in an era of electronic payments, requires far less bureaucracy than a fair and efficient distribution of food or housing. Cash distribution is also less prone to clientelistic pressures, lobbying of all types, and waste through misallocation. Furthermore, when cash is distributed rather than food it creates purchasing power in the areas where poor people live, boosting local economies rather than depressing them, as the distribution of imported free food tends to do.

A basic income is not meant to replace all services provided or funded by the state. A combination of mild paternalism, awareness of positive and negative externalities, and concern for the preconditions of competent citizenship can easily override the argument for cash in the case of some specific goods such as basic health insurance and education at the preschool, primary, and secondary levels. Such provisions in kind can be defended in terms of the long-term interests of the individuals concerned, and also in terms of societies’ interests in maintaining the healthy and well-educated workforces and citizenry that are crucial to well-functioning economies and democracies. Analogous arguments can be made for provisions of safe and enjoyable public spaces, and some other public goods and services. For all these reasons, making a strong case for a basic income paid in cash is consistent with supporting public provision of various services in kind.

UBI is paid to each individual, and at a level independent of that individual’s household situation. Direct payment to all individual members of the basic income to which they are entitled can make a big difference insofar as it affects the distribution of power within the household. For a woman with low or no earnings, control over the household’s expenditures will tend to be greater and exit options will tend to be less forbidding if she receives a regular income as an individual entitlement for herself and her children than if her existence and that of her children entail a higher net income for her partner.

Under existing, conditional minimum-income schemes, how much an individual is entitled to depends on the composition of the household. There are two reasons why the amount to which an individual is entitled should be independent of the size of the household to which he or she belongs.

The first is that cohabitation is hard to confirm. The more general the trend towards informality and volatility in the formation, decomposition, and recomposition of households, the more that competent authorities are stuck in a dilemma between arbitrariness and unfairness on one side and intrusiveness and high monitoring costs on the other, and consequently the stronger the case for a strictly individual transfer.

Differentiating according to household composition also has the effect of discouraging people from living together. While it might seem paradoxical, a more strictly individual tax or benefit scheme is a more community-friendly one. The degressive profile of a household-based scheme creates a loneliness trap: people who decide to live together are penalized through a reduction in benefits.

Other negative effects follow. The mutual support and sharing of information and networks stemming from cohabitation is weakened. Scarce material resources—space and energy, fridges and washing machines—are underutilized. And the number of housing units for a given population increases, leading to less dense habitats and hence greater mobility challenges. As concern for the strengthening of social bonds and the saving of material resources intensifies, the argument against household differentiation grows stronger by the day. In the pursuit of sustainable freedom for all, cohabitation should be encouraged, not penalized.

UBI is unconditional in the sense of being universal, not subjected to a means test. The rich are entitled to it just as much as the poor. And it is unconditional in the sense of being obligation free, and not being subjected to a willingness-to-work test.

The combination of these two unconditionalities is crucial. The former frees people from the unemployment trap, the latter from the employment trap. The former facilitates saying yes to a job offer, while the latter facilitates saying no. The former creates possibilities, while the latter lifts obligations and thereby enhances those possibilities. Without the former, the latter could easily foster exclusion. Without the latter, the former could easily foster exploitation. It is the joint operation of these two features that turns basic income into a paramount instrument of freedom.

A basic income operates ex ante, with no means test involved. It is paid upfront to rich and poor alike, regardless of the income they derive from other sources, the property they own, or the income of their relatives.

With a basic income paid automatically to all legal residents, access to benefits does not require any particular administrative steps. Moreover, society is then no longer visibly divided between the needy and the others, those who need help and those who can manage on their own. There is nothing humiliating about receiving a basic income granted to all members of society. This does not only matter in itself for the dignity of the people involved. It also enhances effectiveness in terms of poverty alleviation. Thus, by avoiding complication and stigmatization, a universal scheme can achieve a high rate of take-up at a low information cost.

The fact that one remains entitled to the basic income irrespective of any other income one may be earning, is important not only for freeing people from a lack of money. It also matters for freeing them from exclusion from work.

Under a means -tested scheme, even precarious earnings cancel the entitlement to part or all of the benefits. Rational avoidance of uncertainty contributes to trapping welfare recipients in situations of unemployment. The risk is compounded by the very nature of many of the jobs the most disadvantaged would qualify for: jobs with precarious contracts, unscrupulous employers, and unpredictable earnings. If they are unsure about how much they will earn when they start working, about whether they will be able to cope, or about how quickly they might lose the work and then have to face more or less complex administrative procedures in order to reestablish their entitlement to benefits, the idea of giving up means -tested transfers holds less appeal.

The contrast between a means-tested minimum-income scheme and a basic income should be clear. The former provides a safety net that fails to catch a great many people it should catch, and in which many others get trapped; the latter provides a floor on which they can all safely stand.

This difference may be of little significance as long as the trap catches only a small minority of people suffering from various handicaps. It becomes of central importance when, for the reasons sketched above, a large and growing proportion of the population is at risk of getting trapped. One reason often given for not raising the level of means-tested benefits is precisely that it would catch even more people in the unemployment trap.

It is true, indeed self-evident, that universality is achieved at a far higher level of public expenditure. Paying a given sum of money to all costs far more money than paying it only to the poor. But there is cost and there is cost. Much of the cost, if the scheme is funded by taxation, consists in taking money with one hand and giving it back with the other hand to the same households. The rest simply represents a redistribution of private spending between different categories of the population. This is quite different from a budgetary cost that involves the use of real resources, such as to build infrastructure or employ civil servants.

A basic income is a regular cash income that is individual and universal. It further differs from conditional minimum-income schemes in having no strings attached; it carries no obligation for its beneficiaries to work or be available on the labor market. It is paid without any such conditions. Homemakers, students, and tramps are entitled to it no less than waged workers and the self-employed, and those who decided to quit no less than those who were sacked. No one needs to check whether its beneficiaries are genuine job seekers or shirkers.

Work quality can be expected to get a big boost as a result of both today’s existing jobs’ being improved and many non-existing jobs’ becoming viable. In particular, the average quality of the jobs performed by the most vulnerable can safely be expected to increase. This is why so many people committed to freedom for all like the combination of universality and freedom from obligation. This is why they want a basic income.

It seems hard to deny that basic income, owing to its multidimensional unconditionality, constitutes a powerful instrument of freedom. But is it sustainable?

A common worry is that the supply of labor will be badly affected by the combination of an obligation-free minimum income and increased taxation of the productive activities required to fund it. It would be wrong, however, to reduce the economic impact of a basic income to its immediate impact on the supply side of the labor market. By providing an unconditional floor, a basic income can be expected to help unleash entrepreneurship by better buffering the self-employed, worker cooperatives, and capital-labor partnerships against the risk of uncertain and fluctuating incomes. Even more important is the expected longer-term effect on human capital.

Coupled with a redirection of the educational system towards lifelong learning, such a more flexible and relaxed labor market should be far better suited to the development of twenty-first-century human capital than a market that makes a rigid division between young students and mature workers.

This positive impact concerns not only the human capital of the present working population, but also that of their children. Like other ways of making family income more secure, basic income can be expected to have a beneficial effect on children’s health and education.

To the extent that it addresses the unemployment trap, it reduces the number of children whose eagerness to work is negatively affected by their growing up in households without anyone employed. Above all, by facilitating chosen part-time work and promoting a smoother conciliation of work and family life, it enables parents to devote more attention to their children when this is most needed.

Making an economy more productive, sensibly interpreted, in a sustainable fashion is not best served by obsessively activating people and locking them in jobs that they hate doing and from which they learn nothing.

It is arguably not only fair but also economically clever to give all, not just the better endowed, greater freedom to move easily among paid work, education, caring, and volunteering. This intimate connection between the greater security provided by a basic income and the expansion of a desirable form of flexibility makes basic income an investment rather than a cost. It also explains why a basic income can be viewed as an intelligent, emancipatory form of “active welfare state” and an emancipatory interpretation of what an active welfare state could be.

In this case, activation is a matter of removing obstacles such as the unemployment and isolation traps, and empowering people with easier access to education and training, in order to give them a wider spectrum of options for paid or unpaid activities. It consists of freeing them to work rather than forcing them to work. It forms the core of an emancipatory active welfare state, in sharp contrast also to the means-tested minimum-income schemes typical of “passive” welfare states that focus their transfers on the inactive and thereby keep them inactive.

True, by providing an obligation-free income, a basic-income scheme can be viewed as desacralizing paid work: it legitimizes pay without work for all, not just for the disabled and the rentiers able to live on income from property or securities. But by providing a universal floor to which income from other sources can be added, it can nonetheless also be viewed as an instrument of activation that will help other instruments, such as retraining or social work, do a better job. Being obligation-free, basic income can help to “de-commodify ”human labor; but being universal, it also helps to “commodify” the labor of people who would otherwise remain excluded.

A basic income is fully compatible with the view that recognition and esteem are not earned by self-indulgence, but by service to others. A basic income is there to facilitate the search by all of us for something we like to do and do well, whether or not in the form of paid employment. Many at some stages in their lives might best contribute to the well-being of those close to them or of the human community as a whole through unpaid activities, from running voluntary childcare initiatives to contributing to Wikipedia. However, most people at the “working age” stages in their lives will best contribute through some sort of paid work, whether or not within a firm, whether or not on a full-time basis. A social norm that values this—a work ethic in this sense—is consistent with a basic income, indeed contributes to its sustainability, without cancelling the liberating impact associated with the expansion of the range of ways in which this social norm can be met.

Involuntary unemployment is a major issue for people committed to freedom for all. Growth has routinely been offered as the self-evident remedy for unemployment. But strong doubts have emerged as to the possibility and desirability of sustained growth in rich countries and about its ability to provide a solution to unemployment. A basic income offers an alternative solution that does not rely on an insane rush to keep pace with productivity growth, subsidizing low-paid work with low immediate productivity and by making it easier for people to choose to work less at any given point in their lives. At the expense of material consumption? In developed countries, certainly. And deliberately so—because our economy not only needs to be efficient. It must also be sane. And sanity requires us to find not only a way of organizing our economy that does not make people sick but also a way of living that is sustainably generalizable. An unconditional basic income is a precondition for both.

Philippe van Parijs & Yannick Vanderborght

‘Utopia for Realists’ Rutger Bregman on Basic Income and More – YouTube

Full Interview

For roughly 99% of the world’s history, 99% of humanity was poor, hungry, dirty, afraid, stupid, sick, and ugly.

But in the last 200 years, all of that has changed. In just a fraction of the time that our species has clocked on this planet, billions of us are suddenly rich, well nourished, clean, safe, smart, healthy, and occasionally even beautiful.

A Free Basic Income For Everyone Is The Answer To (Pretty Much) Everything. So believes historian Rutger Bregman – Leigh Campbell. 

Things aren’t as bad as they seem, if you just take a look at history — and that’s what historian Rutger Bregman does in his book, Utopia for Realists

The book, which has become an international best seller, explores our current place in history. It looks at levels of poverty, famine, wealth, homelessness and unemployment and uses history to evaluate how far we’ve come. Right now we are living in the utopia which was dreamed of in the Middle Ages.

“I think that the big problem of today isn’t so much that we don’t have it good, but that we have no vision of where we want to go next.”

Bregman uses history to take aim at many of the world’s current welfare systems that simply don’t work. Laying blame and distrusting people in poverty by ways of restricted and difficult support systems only perpetuates the issue, and history shows that.

“What history can show us is that the way we have structured our society and our economy right now is not natural. We are living in incredibly rich countries and there are still millions of people living in poverty, when it doesn’t have to be that way. It can be different. That’s why I try to use history to throw open the windows and show to people that we can do things differently. People have tried different things in the past that have worked, and we can do that again.”

These ‘things’ Bregman refers to that have been trialled in the past is the distribution of a free basic income. Free money for everyone — a modest amount but enough to lift those living in poverty out of it and enough to help everyone else do more with their lives. You don’t have to work for it, you don’t have to answer for it and you don’t have to be poor or homeless — everyone gets it. It’s a revolutionary idea that’s immediately met with doubts. But history shows it works.

“The first thing that people think is that free money will make people lazy. If we gave everyone an unconditional basic income then they will probably stop working. Then I always ask them what would they do with a free basic income, and about 99 percent of people will say ‘oh, well I wouldn’t stop working, I have dreams and ambitions, but it’s the other people you’d have to worry about’.”

Huffington Post

Watch Bregman’s TEDTalk on the concept of ‘free money’.

Addressing uncertainty in basic income – Michael Lewis. 

As someone interested in basic income (BI), I read a fair amount about the topic. I read pieces by supporters and opponents, as well as those who might be considered more neutral. I’m often struck by the degree of uncertainty concerning implementation of BI.

A popular argument for BI these days is based on concerns about the possibility of mass technological unemployment. Some in the “tech industry” contend that BI will become necessary as automation replaces more and more human laborers in the years to come. This has led to a debate among economists and others regarding whether automation will result in a net loss of jobs (for humans) big enough to warrant the need for something like BI. Both sides of this debate bring evidence to make their cases. But in the end, we simply don’t know for certain if and when automation will lead to a net loss of jobs for us human beings.

Assuming BI might be implemented in a society which would still require a fair amount of human labor power, we’d like to know what impact BI would have on people’s inclination to sell their labor or, more commonly, “work.” A BI could affect labor supply in at least two ways.

One is that people who received an income they didn’t have to work for may be inclined to work less. The second possible effect has to do with how BI would be financed. If it were financed by an increase in income taxes, this could also reduce labor supply. The reason is that a large proportion of many people’s incomes are earnings, meaning that an income tax is largely a wage tax. A higher wage tax has two possible effects on labor supply.

On the one hand, such an increase could cause people to work less because with the higher tax (and all else equal) their take home pay is smaller than it was before, creating an incentive to work less. On the other hand, a smaller take home pay means one would have to work more than before to maintain their standard of living. This would create an incentive for people to work more not less. If BI were implemented, we have no way of knowing which of these effects would dominate the other.

Leaving the labor market (but still related to it), another area of uncertainty has to do with how people would spend their time, assuming they did reduce their labor supply. Opponents of BI worry that people would use their time “unproductively”, while proponents tend to argue that individuals would engage in more care work or pursue “self-actualization” through pursuing education, writing poetry, starting a business, and the like. But if we’re being honest, regardless of which side of the debate we’re on, we must admit that we don’t have much of an idea what the relative proportion of unproductive to productive activities would be, assuming we could even agree on how to categorize activities as unproductive or productive.

A third area of uncertainty is related to personal relations and household composition. BI could have an effect on who lives with whom, who marries whom, who has kids or not (as well as how many to have), etc. As a society, we obviously differ when it comes to our values about such matters, meaning we might differ on the desirability of BI. But we don’t really know for sure how implementation of BI would affect “family life.”

Now I’m not saying we’re completely in the dark when it comes to questions of BI’s effect on labor supply, use of non-wage time, etc. Economists, sociologists, and others can draw on theory to help us think through these matters. And, by this point, there’ve been several experiments/studies (as well as more recent “startup” studies) which offer a lens on what might happen if BI were implemented. But we should be careful not to overestimate how much help we can receive from such experts, as well as the studies that have been (and are being) conducted.

Considering the many BI experiments (as well as proposed ones) around the world, we need to be cautious about what lessons might be learned. The philosopher Nancy Cartwright, well known for her work in the philosophy of science, has a phrase that’s quite relevant to this discussion: “it works somewhere.” Cartwright frequently utters this phrase within the context of discussing randomized controlled trials (RCTs), the so called gold standard of empirical research in the social sciences. Her point is that even if a well-designed RCT shows that a policy works in one context, that doesn’t necessarily mean it’ll work in another one. This is relevant to BI studies because they’re being conducted, or proposed, in a variety of different contexts. So if we find out that something works in India or Finland, that doesn’t mean it’ll work in Japan or the U.S. In the article cited above, Cartwright goes into great detail about why generalizing experimental findings from one context to another can be so difficult. For those interested in what we might learn from BI experiments, I think her work is quite instructive.

When engineers design systems, such as buildings, bridges, etc., they also must face uncertainties. They don’t know for sure what loads the systems will end up having to bear, they don’t know if there will be earthquakes, they don’t know how forceful the winds will be, etc. One of the things engineers do to deal with such uncertainties is include safety factors in their designs.

For example, suppose an engineer is designing a structure and wind, seismic, and other data indicate that it’ll have to bear a load of 1000 kg. Suppose also that the engineer wants a safety factor of five. Then the load which the structure should be able to bear isn’t 1000 kg but 5×1000 = 5000 kg. So a safety factor is a multiple used to increase the strength or robustness of a system beyond that which is thought to be required to account for uncertainty in what’s thought to be required.

Those of us designing policies don’t have the luxury of being able to use simple equations, which include safety factors, the way engineers do. But perhaps we should adopt a similar safety factor mentality. Implementation of BI would be a complicated undertaking, involving a great deal of uncertainty. Perhaps BI supporters should consider how to increase its robustness in response to labor supply reductions, as well as other unanticipated effects. I admit I’m not exactly sure how to do this. But I believe it’s something worth thinking about.

Michael Lewis

Getting Basic Income Right – Kemal Dervis.  

Universal basic income (UBI) schemes are getting a lot of attention these days. Of course, the idea – to provide all legal residents of a country a standard sum of cash unconnected to work – is not new. The philosopher Thomas More advocated it back in the sixteenth century, and many others, including Milton Friedman on the right and John Kenneth Galbraith on the left, have promoted variants of it over the years. But the idea has lately been gaining much more traction, with some regarding it as a solution to today’s technology-driven economic disruptions. Can it work?

The appeal of a UBI is rooted in three key features: it provides a basic social “floor” to all citizens; it lets people choose how to use that support; and it could help to streamline the bureaucracy on which many social-support programs depend. A UBI would also be totally “portable,” thereby helping citizens who change jobs frequently, cannot depend on a long-term employer for social insurance, or are self-employed.

Viewing a UBI as a straightforward means to limit poverty, many on the left have made it part of their program. Many libertarians like the concept, because it enables – indeed, requires – recipients to choose freely how to spend the money. Even very wealthy people sometimes support it, because it would enable them to go to bed knowing that their taxes had finally and efficiently eradicated extreme poverty.

The UBI concept also appeals to those who focus on how economic development can replace at least some of the in-kind aid that is now given to the poor. Already, various local social programs in Latin America contain elements of the UBI idea, though they are targeted at the poor and usually conditional on certain behavior, such as having children regularly attend school.

But implementing a full-blown UBI would be difficult, not least because it would require answering a number of complex questions about goals and priorities. Perhaps the most obvious balancing act relates to how much money is actually delivered to each citizen (or legal resident).

In the United States and Europe, a UBI of, say, $2,000 per year would not do much, except perhaps alleviate the most extreme poverty, even if it was added to existing social-welfare programs. An UBI of $10,000 would make a real difference; but, depending on how many people qualify, that could cost as much as 10% or 15% of GDP – a huge fiscal outlay, particularly if it came on top of existing social programs.

Even with a significant increase in tax revenue, such a high basic income would have to be packaged with gradual reductions in some existing public spending – for example, on unemployment benefits, education, health, transportation, and housing – to be fiscally feasible. The system that would ultimately take shape would depend on how these components were balanced.

In today’s labor market, which is being transformed by digital technologies, one of the most important features of a UBI is portability. Indeed, to insist on greater labor-market flexibility, without ensuring that workers, who face a constant need to adapt to technological disruptions, can rely on continuous social-safety nets, is to advocate a lopsided world in which employers have all the flexibility and employees have very little.

Making modern labor markets flexible for employers and employees alike would require a UBI’s essential features, like portability and free choice. But only the most extreme libertarian would argue that the money should be handed out without any policy guidance. It would be more advisable to create a complementary active social policy that guides, to some extent, the use of the benefits.

Here, a proposal that has emerged in France is a step in the right direction. The idea is to endow each citizen with a personal social account containing partly redeemable “points.” Such accounts would work something like a savings account, with their owners augmenting a substantial public contribution to them by working, studying, or performing certain types of national service. The accounts could be drawn upon in times of need, particularly for training and re-skilling, though the amount that could be withdrawn would be guided by predetermined “prices” and limited to a certain amount in a given period of time.

The approach seems like a good compromise between portability and personal choice, on the one hand, and sufficient social-policy guidance, on the other. It contains elements of both US social security and individual retirement accounts, while reflecting a commitment to training and reskilling. Such a program could be combined with a more flexible retirement system, and thus developed into a modern and comprehensive social-solidarity system.

The challenge now – for the developed economies, at least – is to develop stronger and more streamlined social-solidarity systems, create room for more individual choice in the use of benefits, and make benefits portable. Only by striking the right balance between individual choice and social-policy guidance can modern economies build the social-safety programs they need.

Social Europe

BitNation: Recent Advances in Cryptocurrency See Basic Income Tested | Basic Income News. 

Swarm Redistribution Theory. 

Johan Nygren, a basic income activist, is currently exploring if basic income can be implemented using cryptocurrency.

Cryptocurrency are digital currencies whose value and number of units are regulated by encryption techniques, outside of any central banking system. A cryptocurrency-based basic income will be funded with taxes.

A cryptocurrency-based basic income will be funded with taxes grown within a peer-to-peer (P2P) network. P2P is an architecture for building computer networks that’s focus is on equality and sharing among peers, each user consuming and supplying information to the network. Nygren’s experiment aims to use decentralized ‘swarms’ of users to distribute a basic income through what Nygren calls ‘dividend pathways’.

A dividend pathway is “the world’s first peer-to-peer financial security,” where every transaction opens up a pathway, to a global network of connected users. RES, Nygren’s crypto-currency, is then shared through a branching scheme with all who are connected to the pathways – those on the BitNation network. The branching scheme is analogous to our network of veins, pumping information instead of blood.

This model tests whether a network can electronically divert income to users, in this case using a small tax levied on financial purchases and exchanges made over a system called BitNation; the process is called Swarm Redistribution. Nygren writes that “the whole experiment is public, transparent, auditable, [and] includes a close-down switch in case a bug is discovered.”

BitNation, a Decentralized Borderless Voluntary Nation (DBVN), provides public services to its naturalized citizens. As a virtual jurisdiction, the main difference from traditional governments is voluntary allegiance to its constitution – membership is open to anyone and involvement limited only by the user. As a blockchain-based structure, government activities are transparent. Its mission, according to founder Susanne Tarkowski Tempelhof, is to “get rid of geographical apartheid” and offer “better and cheaper governance services.”

Nygren’s swarm redistribution theory assumes that ongoing transactions with the crypto-currency RES will infuse BitNation’s cybereconomy with a branchwork (think the blood analogy) of paid-forward value additions. This would mean extracting essentially a value-added tax (VAT) along the way and pooling a coffer for the basic incomes’ distribution. The model theorizes that growth is incentivized by the desire for personal return and altruism, or a desire to contribute to social resilience (more information can be found here).

BitNation’s current population of nearly five thousand users with roughly fifty thousand daily transactions involving the cryptocurrency ETH could eventually provide the structure for a basic income for its users.

Read More:

Johan Nygren, “Resilience – game theory of incentive-based basic income using Taxemes and branching schemes” Steemit – Resilience, November 2016.

Johan Nygren, “Swarm Redistribution live experiment, could a “Decentralized Basic Income Swarm” grow their own taxes?” P2P Foundation, January 4 2017.

Johan Nygren, “Using P2P value maps and universal darwinism for a crypto basic income system” Resilience Press, Feb 19 2016.

Ian Allison, “Bitnation launches Decentralised Borderless Voluntary Nation Constitution with Ethereum” International Business Times, February 17 2016

BasicIncome.org

Ryan Greenaway-McGrevy argues the changing basis of economic prosperity demands a fundamental rethink of the way society is organised.

The idea of a state giving away money to its citizens with no strings attached doesn’t sound like a sustainable economic policy, but that is exactly what Finland began doing at the start of 2017.

The 2,000 participants in Finland’s radical experiment, randomly chosen from those on welfare, will each get 560 euros ($860) a month – and the payment will continue even if they get a job. The hope is that providing a basic income will offer recipients financial security and allow them to make life plans.

It is not the first time a universal basic income (UBI) has been trialled. Pilot schemes have been run in Namibia, Ontario, Manitoba, Utrecht and elsewhere. And, in recognition that technology is displacing jobs, Silicon Valley start-up accelerator Y Combinator has begun a basic income experiment in Oakland, California to provide what its president, Sam Altman, calls “a cushion and a smooth transition to the jobs of the future”.

In 2016, the New Zealand Labour Party expressed interest in something similar, citing a scheme proposed by economist Gareth Morgan that would see every adult New Zealander given a basic income of $210 a week. The then Prime Minister John Key was quick to dismiss the concept as unaffordable and “barking mad”.

Greenaway-McGrevy counters that the changing basis of economic prosperity demands a fundamental rethink of the way society is organised. A guaranteed income would challenge the notion that people are only valuable to society if they are in paid employment.

“Finding a job for life is likely to become increasingly difficult as technology advances and roles become automated, so we need to think hard about where self-worth really comes from,” he says.

“The industrial revolution also caused massive disruption, but over the long term it led to an increase in everyone’s standard of living. Technology is a good thing if everyone can share in its benefits.”

Greenaway-McGrevy, says many of the proposals to redistribute wealth have strings attached that cause people to change their behaviour, so the assessment of any scheme needs to take account of the wider economic incentives and impacts.

For example, welfare for the unemployed, which is intended as a financial safety net, and which is only paid while a person is unemployed, can act as a disincentive for people to take low-paid or temporary work. A basic income, which is paid irrespective of other income, would remove that barrier.

“A UBI would be a one-shot welfare policy that would replace much of the complicated system we have now and would be far less costly to administer. But the cost of paying every citizen a basic income would be substantial, and so it would need to be implemented as part of a broader restructuring of the taxation system,” he says.

Greenaway-McGrevy suggests that such a restructure might include implementing a proper capital gains tax or a land tax, and doing away with progressive income taxation which, at the other end of the pay scale, can encourage tax avoidance. In any case, he says, a flat income tax coupled with the UBI could be quite progressive, because the supplementary basic income would be tax free.

One of the possible side effects of a UBI could be to raise wages in low-paid jobs such as in supermarkets, fast food outlets and cleaning services as these became less attractive to job seekers. As a result, the price of many goods and services would rise, at least in the short term, says Greenaway-McGrevy.

“So, inflation is most likely to come through the wage channel.”

He also stresses that many other welfare policies create disincentives for firms to hire people. Minimum wages, for example, can contribute to higher unemployment as firms that are reliant on lower-paid workers respond by reducing their workforces.

“If we agree that it is the State’s job to help those who are less well off, let’s do it directly, and not force firms to do it by default.”

Interest.co.nz

UBI, Realistic Goal or Pipedream? – The Opportunities Party. 

A number of people have asked me what the ultimate objective of “The Opportunities Party” is. We have a tonne of policies, so which are the most important? What are we trying to achieve?

It’s a more than fair question given that the policies we’re promoting are radical by recent New Zealand measure – although I’d argue they’re not by historical comparison in the land of the 1893 Woman’s Suffrage Electoral Bill, our 1938 Social Security Act, 1975 Treaty of Waitangi Act and 1987 NZ Nuclear Free Act.

The answer is simple: reform of the tax and benefit system is central to creating a fair and prosperous society. If our ultimate goal of an Unconditional Basic Income (UBI) were enacted, that would certainly rank alongside the other pioneering policies listed above.

Instead of continuing to be pioneers, agile and farsighted, New Zealand has lost its mojo of late and our society has degenerated into one where Establishment parties are loath to provide leadership on anything lest they lose votes. This. in a society where more and more people are living their day-to-day lives on a treadmill of fear, is unacceptable lethargy and intellectually lazy.

The “fear” I’m referring to is the trepidation we all feel from job insecurity, astronomical housing costs, the future we’re leaving for our children and grandchildren, and of course our own future once we’ve passed our ‘used by date’ insofar as paid work is concerned. It’s ironic that we should have these emotions when on paper our society is markedly more prosperous than it’s ever been – at least insofar as GDP measures and even GDP per head is concerned.

So at TOP we say “stop”. Enough is enough of this imbalance of power – New Zealanders need to care for our most vulnerable citizens and ensure all participants pay their fair share of tax. This stuff is not hard, but there has to be a will. Sadly we don’t see that from National; and Labour really has yet to prove itself given that these trends have been underway for 30 years now.

So what is The Opportunities Party’s philosophical approach? You have had plenty of policy detail from us for each of our TOP 7 Policy Priorities, you know our whole package is fiscally neutral (meaning any spending initiatives are accompanied by detail on the source of funding), and you know that we are championing the rights of those at the wrong end of the inequality gulf that has opened so widely since 1990.

But where are we heading? We’ve introduced the first steps toward a UBI (Unconditional Basic Income) which will sit at the centre of the rejuvenated approach to fair capitalism, but we haven’t laid out how we’ll make that truly universal yet. We know how to, but the first step has to be integrity in the tax regime – and our Policy #1 confronts that head on. We can’t  be sure the public is up for and it’s essential before we even dream of making a full UBI a reality.

We’ve suggested that the level a UBI can be set at is confined by (a) fiscal affordability and (b) the minimum wage. In short it cannot cost so much that taxpayers can’t tolerate the tax burden nor as high that the incentive to perform paid work is removed. With those constraints in mind you end up with a UBI that plays a role more akin to bridging finance as people are between jobs or retraining or off work for family reasons. It does not replace targeted benefits but it does allow us to roll them back significantly – particularly those that are the worst of witch hunt welfarism – the impossibly tightly targeted ones with the atrociously steep abatement rates or poverty traps. Returning the humanity to social assistance and getting rid of this victim targeting that gives the Hard Right their jollies, is a priority at TOP.

Ultimately a UBI will be affordable with an income tax regime that has a single or flat tax rate –the UBI makes the lower of the graduated tax rates redundant. And progressivity of the overall tax regime remains because we include accumulated capital (or wealth) within the tax base. Wealth is far more accurate indicator of ability to pay than income is.

It will take time but it is certainly possible. A future where everyone pays their fair share of tax, where our tax and welfare systems are hugely simplified, where the stigma and poverty traps associated with welfare are removed, and where unpaid work is honoured. It won’t happen overnight, but it will happen.

TOP

The Opportunities Party – UBI and Thriving Families. 

The Opportunities Party is starting along the road to an Unconditional Basic Income (UBI) by ensuring two groups are the first to get it.

As covered in the book, The Big Kahuna, a UBI:

  • empowers people through giving them more choices on how to spend their time, invest their means;
  • recognises the contribution of the 1 million people who work but are not paid, and without whom our society would collapse;
  • provides a cushion to lessen the impact of the casualisation of work;
  • eliminates the poverty trap, the disincentive to work accompanying targeted benefits; and
  • winds back the dehumanisation and stigmatisation of benefit targeting.

The major constraints on how high that a UBI can be set includes its cost to the taxpayer and its relativity to the rewards for paid work. If fiscal overload is to be avoided then the taxpayer cannot be expected to foot the bill for whatever level of UBI proponents dream of. Likewise, the incentive to seek paid work cannot be undermined by the level of the UBI otherwise the resultant lack of labour available and the rising costs of production faced by New Zealand firms, would impart serious consequences to our economy.

A full UBI is our firm objective but requires first that integrity be restored to the income tax regime as per Policy #1 and then we will introduce further taxation reform to fund this aspiration. It is unlikely that a UBI will ever totally replace targeted social assistance but it certainly will markedly reduce our reliance on targeting, with its stigma-laden selection criteria and its perverse impact on behaviour.

A UBI can relieve poverty without creating poverty traps. This will be increasingly important as the job market becomes more and more disrupted. The key difference between the UBI concept of social assistance and the targeted approach of the current regime is the absence of work testing. There may be broad criteria for certain types of UBI – age, income, family type for example – but those delineations will be nowhere near as granular and onerous as the poverty traps that targeted, work-tested benefits entail. In time there will be an underlying UBI for everybody – it must be modest of course and not compromise the incentive to take paid work.

The Policy … 

The Opportunities Party UBI Policy

Want to Increase Goodwill? Implement a Universal Basic Income – Natalie Shoemaker. 

It’s difficult to deny the attractive qualities a Universal Basic Income (UBI) holds. A radical policy such as this could right many of the inequalities that exist in our societies, says Eva Cox, a former program director of Social Inquiry at the University of Technology, Sydney.

“Brought together, it is clear that a Universal Basic Income (UBI), if implemented appropriately, could help address historic gender, race and material inequities,” Cox wrote in an essay for the Green Institute, titled Why a Universal Basic Income Can Address Historic, Gender and Material Inequities. 

She argues there’s a bias in how we calculate the GDP, which does not account for many unpaid activities that contribute to the health of our society and economy. “My case for changing the paid work bias is based on wider traditions that recognize the value of widely diverse ways of living and contributing to the common good and personal wellbeing.”

At its core, the purpose of a UBI is to create opportunity and freedom where it formerly never existed. It would help ease the frustration many factory workers in America’s heartland are facing with the rise of automation and give those in poverty a chance for something better. This movement has a message centered around creating a fair start for everyone, and challenging misconceptions surrounding the very nature of work. It’s an idea that has had promising outcomes for society in at least one past study.

But many economists question it’s practicality. It’s an expensive system to be sure, which is why many countries (the Netherlands, Finland, and Canada) are launching pilot programs to test how it might best be implemented and whether the return is worth the investment.

Cox argues that a UBI would not only recognize the unpaid contributions people already make through volunteer projects and societal demands, it could also encourage its expansion. “It would allow people to redirect some of their energies to unpaid roles, encourage creativity, enterprise and goodwill,” writes Cox. She continues:

“If we accept officially that people are not essentially lazy or work-shy, we can change the current assumption that welfare payments need to be mean and stigmatising, with sexist and racist overtones. Removing requirements to search for paid work or prove incapacity, would enable many more people to feel value and return a sense of agency.”

Universal Basic Income is an idea that has long been discussed by history’s great thinkers, but is finally being tested. Whether its time has come is still being debated and trialled, but many hope it can narrow the inequality that causes so much societal tension. The proof of its worth will be in the data.

Big Think

Why we should all have a basic income | World Economic Forum – Scott Santens. 

Consider for a moment that from this day forward, on the first day of every month, around $1,000 is deposited into your bank account – because you are a citizen. This income is independent of every other source of income and guarantees you a monthly starting salary above the poverty line for the rest of your life. What do you do? Possibly of more importance, what don’t you do? How does this firm foundation of economic security and positive freedom affect your present and future decisions, from the work you choose to the relationships you maintain, to the risks you take?

The idea is called unconditional or universal basic income, or UBI.

It’s like social security for all, and it’s taking root within minds around the world and across the entire political spectrum, for a multitude of converging reasons Rising inequality, decades of stagnant wages, the transformation of lifelong careers into sub-hourly tasks, exponentially advancing technology like robots and deep neural networks increasingly capable of replacing potentially half of all human labour, world-changing events like Brexit and the election of Donald Trump – all of these and more are pointing to the need to start permanently guaranteeing everyone at least some income.

A promise of equal opportunity

“Basic income” would be an amount sufficient to secure basic needs as a permanent earnings floor no one could fall beneath, and would replace many of today’s temporary benefits, which are given only in case of emergency, and/or only to those who successfully pass the applied qualification tests. UBI would be a promise of equal opportunity, not equal outcome, a new starting line set above the poverty line.

It may surprise you to learn that a partial UBI has already existed in Alaska since 1982, and that a version of basic income was experimentally tested in the United States in the 1970s. The same is true in Canada, where the town of Dauphin managed to eliminate poverty for five years. Full UBI experiments have been done more recently in places such as Namibia, India and Brazil. Other countries are following suit: Finland, the Netherlands and Canada are carrying out government-funded experiments to compare against existing programmes. Organizations like Y-Combinator and GiveDirectly have launched privately funded experiments in the US and East Africa respectively.

I know what you’re thinking. It’s the same thing most people think when they’re new to the idea. Giving money to everyone for doing nothing? That sounds both incredibly expensive and a great way to encourage people to do nothing. Well, it may sound counter-intuitive, but the exact opposite is true on both accounts. What’s incredibly expensive is not having basic income, and what really motivates people to work is, on one hand, not taking money away from them for working, and on the other hand, not actually about money at all.

Basic income in numbers

What tends to go unrealized about the idea of basic income, and this is true even of many economists – but not all – is that it represents a net transfer. In the same way it does not cost $20 to give someone $20 in exchange for $10, it does not cost $3 trillion to give every adult citizen $12,000 and every child $4,000, when every household will be paying varying amounts of taxes in exchange for their UBI.

Instead it will cost around 30% of that, or about $900 billion, and that’s before the full or partial consolidation of other programmes and tax credits immediately made redundant by the new transfer. In other words, for someone whose taxes go up $4,000 to pay for $12,000 in UBI, the cost to give that person UBI is $8,000, not $12,000, and it’s coming from someone else whose taxes went up $20,000 to pay for their own $12,000. However, even that’s not entirely accurate, because the consolidation of the safety net and tax code UBI allows could drive the total price even lower.

Now, this idea of replacing existing programmes can scare some just as it appeals to others, but the choice is not all or nothing: partial consolidation is possible. As an example of partial consolidation, because most seniors already effectively have a basic income through social security, they could either choose between the two, or a percentage of their social security could be converted into basic income. Either way, no senior would earn a penny less than now in total, and yet the UBI price tag could be reduced by about $220 billion. Meanwhile, just a few examples of existing revenue that could and arguably should be fully consolidated into UBI would likely be food and nutrition assistance ($108 billion), wage subsidies ($72 billion), child tax credits ($56 billion), temporary assistance for needy families ($17 billion), and the home mortgage interest deduction (which mostly benefits the wealthy anyway, at a cost of at least $70 billion per year). That’s $543 billion spent on UBI instead of all the above, which represents only a fraction of the full list, none of which need be healthcare or education.

So what’s the true cost?

The true net cost of UBI in the US is therefore closer to an additional tax revenue requirement of a few hundred billion dollars – or less – depending on the many design choices made, and there exists a variety of ideas out there for crossing such a funding gap in a way that many people might prefer, that would also treat citizens like the shareholders they are (virtually all basic research is taxpayer funded), and that could even reduce taxes on labour by focusing more on capital, consumption, and externalities instead of wages and salaries. Additionally, we could eliminate the $540 bill in tax expenditures currently being provided disproportionately to the wealthiest, and also some of the $850 billion spent on defence. 

Universal basic income is thus entirely affordable and essentially Milton Friedman’s negative income tax in net outcome (and he himself knew this), where those earning below a certain point are given additional income, and those earning above a certain point are taxed additional income. UBI does not exist outside the tax system unless it’s provided through pure monetary expansion or extra-governmental means. In other words, yes, Bill Gates will get $12,000 too but as one of the world’s wealthiest billionaires he will pay far more than $12,000 in new taxes to pay for it. That however is not similarly true for the bottom 80% of all US households, who will pay the same or less in total taxes.

To some, this may sound wasteful. Why give someone money they don’t need, and then tax their other income? Think of it this way: is it wasteful to put seat belts in every car instead of only in the cars of those who have gotten into accidents thus demonstrating their need for seat belts? Good drivers never get into accidents, right? So it might seem wasteful. But it’s not because we recognize the absurd costs of determining who would and wouldn’t need seat belts, and the immeasurable costs of being wrong. We also recognize that accidents don’t only happen to “bad” drivers. They can happen to anyone, at any time, purely due to random chance. As a result, seat belts for everyone.

The truth is that the costs of people having insufficient incomes are many and collectively massive. It burdens the healthcare system. It burdens the criminal justice system. It burdens the education system. It burdens would-be entrepreneurs, it burdens both productivity and consumer buying power and therefore entire economies. The total cost of all these burdens well exceeds $1 trillion annually, and so the few hundred billion net additional cost of UBI pays for itself many times over. That’s the big-picture maths.

The real effects on motivation

But what about people then choosing not to work? Isn’t that a huge burden too? Well that’s where things get really interesting. For one, conditional welfare assistance creates a disincentive to work through removal of benefits in response to paid work. If accepting any amount of paid work will leave someone on welfare barely better off, or even worse off, what’s the point? With basic income, all income from paid work (after taxes) is earned as additional income so that everyone is always better off in terms of total income through any amount of employment – whether full time, part time or gig. Thus basic income does not introduce a disincentive to work. It removes the existing disincentive to work that conditional welfare creates.

Fascinatingly, improved incentives are where basic income really shines. Studies of motivation reveal that rewarding activities with money is a good motivator for mechanistic work but a poor motivator for creative work. Combine that with the fact that creative work is to be what’s left after most mechanistic work is handed off to machines, and we’re looking at a future where increasingly the work that’s left for humans is not best motivated extrinsically with money, but intrinsically out of the pursuit of more important goals. It’s the difference between doing meaningless work for money, and using money to do meaningful work.

Basic income thus enables the future of work, and even recognizes all the unpaid intrinsically motivated work currently going on that could be amplified, for example in the form of the $700 billion in unpaid work performed by informal caregivers in the US every year, and all the work in the free/open source software movement (FOSSM) that’s absolutely integral to the internet.

There is also another way basic income could affect work incentives that is rarely mentioned and somewhat more theoretical. UBI has the potential to better match workers to jobs, dramatically increase engagement, and even transform jobs themselves through the power UBI provides to refuse them.

A truly free market for labour

How many people are unhappy with their jobs? According to Gallup, worldwide, only 13% of those with jobs feel engaged with them. In the US, 70% of workers are not engaged or actively disengaged, the cost of which is a productivity loss of around $500 billion per year. Poor engagement is even associated with a disinclination to donate money, volunteer or help others. It measurably erodes social cohesion.

At the same time, there are those among the unemployed who would like to be employed, but the jobs are taken by those who don’t really want to be there. This is an inevitable result of requiring jobs in order to live. With no real choice, people do work they don’t wish to do in exchange for money that may be insufficient – but that’s still better than nothing – and then cling to that paid work despite being the “working poor” and/or disengaged. It’s a mess.

Basic income – in 100 people

Take an economy without UBI. We’ll call it Nation A. For every 100 working-age adults there are 80 jobs. Half the work force is not engaged by their jobs, and half again as many are unemployed with half of them really wanting to be employed, but, as in a game of musical chairs, they’re left without a chair.

Basic income fundamentally alters this reality. By unconditionally providing income outside of employment, people can refuse to do the jobs that aren’t engaging them. This in turn opens up those jobs to the unemployed who would be engaged by them. It also creates the bargaining power for everyone to negotiate better terms. How many jobs would become more attractive if they paid more money or required fewer hours? How would this reorganizing of the labour supply affect productivity if the percentage of disengaged workers plummeted? How much more prosperity would that create?

Consider now an economy with basic income. Let’s call it Nation B. For every 100 working age adults there are still 80 jobs, at least to begin with. The disengaged workforce says “no thanks” to the labour market as is, enabling all 50 people who want to work to do the jobs they want. To attract those who demand more compensation or shorter work weeks, some employers raise their wages. Others reduce the required hours. The result is a transformed labour market of more engaged, more employed, better paid, more productive, workers. Fewer people are excluded. 

Simply put, a basic income improves the market for labour by making it optional. The transformation from a coercive market to a free market means that employers must attract employees with better pay and more flexible hours. It also means a more productive work force that potentially obviates the need for market distorting minimum wage laws. Friction might even be reduced, so that people can move more easily from job to job, or from job to education/retraining to job, or even from job to entrepreneur, all thanks to more individual liquidity and the elimination of counter-productive bureaucracy and conditions.

Perhaps best of all, the automation of low-demand jobs becomes further incentivized through the rising of wages. The work that people refuse to do for less than a machine would cost to do it becomes a job for machines. And thanks to those replaced workers having a basic income, they aren’t just left standing in the cold in the job market’s ongoing game of musical chairs. They are instead better enabled to find new work, paid or unpaid, full-time or part-time, that works best for them.

The tip of a big iceberg

The idea of basic income is deceivingly simple sounding, but in reality it’s like an iceberg with far more to be revealed as you dive deeper. Its big picture price tag in the form of investing in human capital for far greater returns, and its effects on what truly motivates us are but glimpses of these depths. There are many more. Some are already known, like the positive effects on social cohesion and physical and mental health as seen in the 42% drop in crime in Namibia and the 8.5% reduction in hospitalizations in Dauphin, Manitoba. Debts tend to fall. Entrepreneurship tends to grow. Other effects have yet to be discovered by further experiments. But the growing body of evidence behind cash transfers in general point to basic income as something far more transformative to the future of work than even its long history of consideration has imagined.

It’s like a game of Monopoly where the winning teams have rewritten the rules so players no longer collect money for passing Go. The rule change functions to exclude people from markets. Basic income corrects this. But it’s more than just a tool for improving markets by making them more inclusive; there’s something more fundamental going on.

Humans need security to thrive, and basic income is a secure economic base – the new foundation on which to transform the precarious present, and build a more solid future. That’s not to say it’s a silver bullet. It’s that our problems are not impossible to solve. Poverty is not a supernatural foe, nor is extreme inequality or the threat of mass income loss due to automation. They are all just choices. And at any point, we can choose to make new ones.

Based on the evidence we already have and will likely continue to build, I firmly believe one of those choices should be unconditional basic income as a new equal starting point for all.

World Economic Forum

Why we should put ‘basic’ before ‘universal’ in the pursuit of income equality – John Quiggin. 

Providing a basic income to all that’s not enough to live on makes no sense. The first order should be a guaranteed minimum income for those who need it

John Quiggin, an economist, Professor and Research Council Laureate Fellow at the University of Queensland, has written a recent article for The Guardian on how a functional conception of UBI would look despite the current and successional neoliberal course. Quiggin argues that the political cautiousness of centre-left parties has resulted in their failure to provide radical alternatives to neoliberalism since its inception in the 1970s. The article outlines that the UBI offers a potential alternative to the present economic standing. The question is, how to introduce it in such a way as to render it achievable.

Where many proponents of UBI stress the “universal” aspect of the idea, Quiggin suggests that our emphasis should instead be on the “basic” aspect to begin with. That way we could start by providing a sufficient income to those most in need with the intention of expanding it to the entire population. This would meet the objective of ensuring that everyone has at least a basic income from the outset, and it could be achieved by building on structures that are already in place.

Quiggin claims that it would be more effective to introduce sufficient income support in a model more likened to the “guaranteed minimum income” which would then become universal incrementally, rather than starting with a small universal payment and increasing the level over time, until an adequate level of income is reached. This would significantly reduce the risk that the program would be disbanded or derailed before meeting the target of being adequate enough to live on, which would likely take several decades. Quiggin explains “Of course, an attempt to expand access to income support will be politically difficult, more so than advocacy of a small universal payment. But, in an environment where the economic and political order is breaking down around us, political caution is a road to oblivion. Social democratic parties need to break with their current role as the responsible managers of the status quo, and offer a radical vision for the future. An expanded, and ultimately universal, basic income is such a vision.”

The idea of a universal basic income (UBI) has been around for a long time. However, it has seized the imagination of large sections of the public only very recently, in the wake of the global financial crisis and the subsequent political upheavals.

The failure of the market liberal (or neoliberal) economic order that has been dominant since the 1970s is evident to just about everybody. This has presented a big problem for the parties of the centre-right, supporters of the “hard” version of neoliberalism exemplified by Margaret Thatcher. But it has presented an even greater problem for the parties of the centre-left, which capitulated to neoliberalism in the 1990s, but sought to retain their relevance by offering a “soft” version, sometimes described as a “Third Way”, along with claims to superior, less ideological, management.

None of this works in political terms any more. The right has mostly managed to retain its support by stoking resentment against various ethnic, religious and cultural minorities. But the left needs new and exciting ideas, after decades of defensive managerialism. A UBI seems to fit the bill.

As a vision of the future, there’s plenty of appeal in the idea of a society in which everyone has sufficient resources to meet their basic needs, regardless of their assets, abilities or the way they choose to live their lives. But once we return to the realm of electoral politics, the unavoidable question arises: how do we get there from here? Given the obvious impossibility of implementing a UBI in one or a few terms of governments, what should be the first steps?

For a variety of reasons, the most ardent supporters of a UBI are more excited by the first term “universal” than by the second, “basic”. Logically, this leads to the idea that we should begin with a small universal payment, which would gradually increase in value to the point where it becomes sufficient to meet basic needs.

Alaska’s Permanent Fund Dividend, paid out of the invested proceeds of oil royalties is often cited as an exemplar of this approach. The fund, which began operations in 1982, paid out about $2100 to every Alaskan resident in 2015.

There’s an obvious problem here. $2,100 a year is $50 a week, a handy addition to the budget but not nearly enough for a person to live on. So, in the absence of independent income (say, from private investments), the number of Alaskans who have been freed from the need to work, or meet the demanding conditions for unemployment benefits, is approximately zero.

Nor is there any real prospect that this will change. Even if the dividend were to double or triple, it would not provide a poverty line income as defined by the US government, let alone a decent living standard. And, in the absence of an unlikely oil bonanza, there’s no reason to expect any increase at all.

In practical terms, a strategy of starting with a small universal benefit, and gradually increasing it, can yield no real impact for several decades. Over the course of such a period, it’s virtually certain that some real or imagined budgetary emergency would see the program curtailed and ultimately scrapped.

The alternative is to start with “basic” rather than “universal”. That is, begin by providing sufficient income to support a decent standard of living to those most in need, then expand it to the entire population. This approach is often referred to as a guaranteed minimum income (GMI), and is seen by many UBI supporters as a second-best “residualist” scheme.

In reality, however, provided the objective of ensuring that everyone has at least a basic income is achieved, UBI and GMI schemes are almost identical. To be more precise, in terms of the ultimate distribution of income and effective marginal tax rates (including the effects of means-testing basic payments) any UBI is equivalent to a GMI with the same guaranteed payment and similarly progressive taxes, and vice versa. For wage earners operating under the pay-as-you-earn system, there would be no difference in net pay, just a different way of calculating it on the payslip.

The main difference is that the UBI requires collecting more taxes from people on high incomes and returning some of that revenue to the same people in the form of a universal payment. The appeal of making the payment universal must be weighed against the “churning” costs of collecting and returning it. In an integrated tax-welfare system, such as that we have in Australia, these costs, while real, are not huge. For taxpayers, the UBI could be implemented as a tax rebate, which would cancel out the extra tax relative to a GMI. So, if we actually achieved a genuine GMI, transforming it to a UBI would be largely a matter of definitions.

But the problem of the ultimate design is less important than the choice of a path to get there. Compared to “universal first” the “basic first” approach has the merit that we are already part of the way there, and the next steps involve clear, and feasible, political demands.

The basic old age pension in Australia is around 28% of male total average weekly earnings (MTAWE) for single pensioners and 42% for couples. This income has proved sufficient to eliminate, almost completely, poverty among the old, who were once the most exposed to privation. The same level applies to service pensions, disability support pensions and carer payments.

By contrast, unemployment benefits (now given the Newspeaky name Newstart) were briefly set equal to old pensions at 25% of MTAWE under the Whitlam government. However, a long series of cuts and freezes have reduced access to benefits and cut their relative value to around 18% of MTAWE today. That’s been combined with aggressive attempts to claw back benefits from anyone who might possibly have received income in addition to their benefits, culminating in the recent data matching fiasco.

Any demand to increase access to basic incomes therefore involves a direct assault on the policy directions that have prevailed for at least the past 25 years. It links an ultimate, currently unattainable objective to immediate political struggles. Until they capitulated to neoliberalism in the 1980s, this combination of currently achievable goals and and an ultimate objective of transforming society was the standard approach of social democratic political parties.

Of course, an attempt to expand access to income support will be politically difficult, more so than advocacy of a small universal payment. But, in an environment where the economic and political order is breaking down around us, political caution is a road to oblivion. Social democratic parties need to break with their current role as the responsible managers of the status quo, and offer a radical vision for the future. An expanded, and ultimately universal, basic income is such a vision.

BasicIncome.org

Preparing Our Economy And Society For Automation & AI – Robert Reich. 

Professor Reich comes to Google to discuss the impact of automation & artificial intelligence on our economy. He also provides a recommendation on how we can ensure future technologies benefit the entire economy, not just those at the top.

Social Europe

Funding basic income through data mining – Basic Income News – Craig Rhodes. 

We are fast entering an era in which there’s going to be a chronic shortage of jobs for millions looking for employment. That trend is only going to accelerate. Everyone’s job is on the line now. If we don’t begin to address this problem, then we will suffer long-term consequences: mass unemployment and political alienation of millions because jobs are fast disappearing mainly due to automation.

My suggestion is strategic not tactical. The details can be worked out in committee negotiations.

Corporations are mining nearly every piece of online data that we as individuals produce and then selling it to the highest bidders including the NSA for hundreds of billions per year. It’s an unregulated modern day gold rush happening under our very noses without notice. We as individuals should be compensated for our data in the same way that corporations are compensated for their data. Copyright law should protect us in the same way it protects corporations. Terms of Service Agreements should be outlawed. Copyright laws should be amended or rewritten.

There’s a reason Google and Facebook do not bill us. We’re not their consumers — we’re their product. The lion’s share of profits made by Google, Facebook, AT&T, Verizon, and scores of other corporations are from the data we produce. Facebook’s billion plus users are the largest unpaid workforce in history.
If a corporation profits from our data, whether it be browsing history, emails, buying habits, contact lists etc. then they should have to pay us for it just as we must pay for their movies, music, software and more. Such compensation might go a long way toward alleviating our chronic employment problems as well as help the working class who are losing jobs faster than any other demographic. It would not be welfare nor would it involve raising taxes. It would be payment for services rendered in the form of a subsistent guaranteed income similar to the Alaskan model.
Manufacturing jobs are not going to come back. And in time automation will begin to affect the professional class as well. Those who depended on such jobs should be dealt with or our nation is going to suffer catastrophic consequences.

This and many more initiatives should be included in a robust strategy. We must be bold.

Basic Income News

As robots take jobs, Europeans mull free money for all – NZ Herald. 

The radical notion that governments should hand out free money to everyone — rich and poor, those who work and those who don’t — is slowly but surely gaining ground in Europe. Yes, you read that right: a guaranteed monthly living allowance, no strings attached.

In France, two of the seven candidates vying to represent the ruling Socialist Party in this year’s presidential election are promising modest but regular stipends to all French adults. A limited test is already underway in Finland, with other experiments planned elsewhere, including in the United States.

Called “universal income” by some, “universal basic income” or just “basic income” by others, the idea has been floated in various guises since at least the mid-19th century. After decades on the fringes of intellectual debate, it became more mainstream in 2016, with Switzerland holding a referendum — and overwhelmingly rejecting — a proposed basic income of around US$2,500 ($3518) per month.

“An incredible year,” says Philippe Van Parijs, a founder of the Basic Income Earth Network that lobbies for such payments. “There has been more written and said on basic income than in the whole history of mankind.”

But before you write a resignation letter to your boss in anticipation of never needing to work again, be warned: there are multiple questions, including how to finance such schemes. Here is a look at the issues

NZ Herald

How the Heck We’ll Pay for a Universal Basic Income – Natalie Shoemaker. 

How would the government pay to provide Universal Basic Income to every citizen? It’s one of the harder questions relating to this topic. Frank Stilwell, a Professor Emeritus in Political Economy at the University of Sydney, says there’s an “inevitable uncertainty” surrounding UBI and its economic consequences, which all depend on how it’s implemented. 

Many conservatives think a UBI might be a means to replace the welfare system—one way UBI could be funded. Boyce and Barnes point out that “Past proponents of the idea include the revolutionary Thomas Paine, civil rights leader Martin Luther King, Jr., free-market econ­omist Milton Friedman and President Richard Nixon.” 

BigThink

The Scottish pioneer whose plan for a basic income could transform Britain – Kevin McKenna. 

In the city where Adam Smith developed the free-market theories that inspired Thatcherism nearly 300 years later, a young Labour politician is pursuing an economic vision that takes a drastically different approach to “the wealth of nations”. Councillor Matt Kerr, an anti-poverty specialist on Glasgow city council, has been exploring how people become enslaved by poverty – and how they can escape it.

A meeting in Glasgow last month with Guy Standing, the radical economist who founded the Basic Income Earth Network inspired Kerr to seek cross-party support to pilot a “universal basic income” in parts of Fife and Glasgow. He acknowledges that these are very early days and that there are many obstacles ahead, but the move makes him the most senior incumbent politician in Britain to contemplate a radical scheme that only a few years ago was considered beyond the political pale.

The universal basic income concept is so simple you are tempted to ask why it has never been seriously looked at before. It offers something for everyone across the political spectrum. It works on the premise that individuals are guaranteed a minimum regular payment unconditionally.

The Guardian 

Basic Income Won’t Fix Everything, We Need More Innovative Social Ideas – Natalie Shoemaker. 

A Universal Basic Income (UBI) will not fix everything, it’s not supposed to, it’s a start for some people and a boon for everyone.

But don’t let the prospect of a little free money stop us from pursuing more progressive regulations and reforms.

UBI is meant to provide a floor, a standard, which no one can fall beneath. But giving people unconditional free money shouldn’t be the end of the conversation.

A basic income can potentially help break down the stigma and conditionality of many government payments, and improve work incentives and equity. However, where it is used to replace other components of social policy, whether through ‘buying out’ public services or reducing the ‘need’ for fair labour laws and job creation, it may instead serve to entrench the inequalities of a neoliberal world.” Ben Spies-Butcher

UBI is about how we make society and our economy better, and it’s never just about giving people unconditional free money. It’s a small part of a larger conversation about how we fix many of the issues within our system.

BigThink

Want to Boost Employment? Get Rid of the 8-Hour Work Day – Natalie Shoemaker. 

It’s time to acknowledge that the 8-hour day isn’t going to work anymore. We need to stop talking about creating more jobs and start talking about shortening the work week.

The conversation surrounding Universal Basic Income (UBI) is a conversation about how we take our economy to the next level and make life better for everyone, and many believe we get there by having people work less.

“The first thing we have to recognize is that we live within a broken system where there is no necessary connection between hard work and wealth,” writes Godfrey Moase, the Assistant General Branch Secretary at the National Union of Workers in Melbourne, Australia. “Our future prosperity won’t come from us individually working harder and longer—some of the poorest people in the world endure lives of unceasing toil.”

Moase points out in his essay “On Shorter Working Hours” that it’s not just that the division of labor is unbalanced, it’s that the future of work is changing. The automation of transportation and manufacturing will edge out workers, and those wheels have been in motion for some time already. Many in America’s heartland voted for President-elect Donald Trump because he promised to bring the factories back from China.

Here’s the reality: China is a scapegoat.

The factories have been coming back, and the jobs? Not quite as much. Because of the rise of automation, factories have been hiring only a fraction of the workers.

It’s here we must come to accept that technology, if we’re open to it, will make a future of less work possible. However, we have to rid ourselves of the idea that we need to work 40-hours a week in order to be accomplished.

We have to stop asking for more jobs to be created and start demanding a reform—8 hours of work a day isn’t feasible anymore, according to Juliet Schor, a sociologist and economist at Boston College:

“If you don’t have reductions in hours, it’s almost impossible to keep your population fully employed. If we had shorter hours of work, if we were able to take productivity growth, overtime in the form of shorter hours, we could re-employ those 26 million under- and unemployed people much more rapidly.”

What’s more, we need to realize there’s also value in leisure from a health and environmental standpoint.

Leisure is time to create, invent, educate, care for our family, and more.

Leisure—a better life—is what our parents and grandparents have been working towards.

BigThink 

The Big Kahuna. Comprehensive Capital Tax + Universal Basic Income. – Gareth Morgan. 

We’re like those people, you probably know them, even if only from the mirror, who have stuffed their houses with all the latest “labour-saving devices” purely so that they have more time to… work. It’s hard to avoid the conclusion we’ve all gone a little bit funny about money.

We may have slightly lost track of the benefits, the sheer quality of life that the affluence of the West affords, but we’re in danger of completely losing sight of the obligations.

Our forefathers arrived determined that whatever kind of society they built here, it wouldn’t make the same mistakes as the Old Country.

They didn’t question the equal worth of individuals, nor that this translated in practice into the need for the state to redistribute wealth to ensure a dignified existence for all. That, in essence, is a key purpose of transfer policies, or at least, it was, until everyone seemed to forget

The tax and transfer system came to represent little more than the electoral equivalent of an automatic teller machine: push the right buttons, and it will reliably deliver votes. Any thought of the actual purpose of the thing has been lost in the scramble for political advantage. Little wonder it’s been apparent for quite some time that the system is sick.

The intervention of the state via tax and transfers is intended to redistribute resources from some in society to others.

We’ve all but lost sight of why we tax and transfer in order to redistribute, the extent of redistribution that we deem desirable and whether or not we achieve those objectives.

The first reform we recommend covers an issue that successive tax studies have recommended be addressed by New Zealand governments in order to lift economic efficiency.

It’s a comprehensive capital tax (CCT) that all owners of productive capital (land, buildings, structures, plant and equipment, intellectual property) are annually liable for.

Hand-in-hand with the CCT proposal, we alter the income tax régime to a single “flat” rate on every dollar of income. All income, whether cash or in kind, is captured for taxation purposes. This is what the CCT achieves.

Resources are taken from those who have relatively more in society and given to those who have relatively less: it’s a “progressive” scheme.

The greatest source of means for the well off isn’t income (which can be manipulated to appear artificially low), it’s wealth, and the present system largely leaves that beyond the reach of the redistributive machinery.

The redistributive goals of our society have been reduced to assistance of last resort. Like an ambulance at the foot of the cliff, it kicks into action only when a person’s lot has fallen so far below what society deems adequate that our compassion is engaged.

The second reform is directed at making quite explicit the redistribution objective of the state, by paying every adult an unconditional basic income (UBI).

This is a quite different approach to the present one. The UBI provides for every adult to receive enough to eat, clothe and house themselves, unconditionally, this being the universal entitlement to an adequate basic income.

In a society that produces far more than required for the basic needs of food, clothing and shelter, why shouldn’t a basic income be guaranteed? If nothing else it’s a signal that the society is sufficiently developed for all to live in dignity.

But what of the person who chooses unpaid rather than paid work? The economy comprises a raft of unpaid occupations, parenting, care of the elderly, volunteer organisations such as sports clubs, artistic or creative pursuits, and so on. The amount of time that anyone can spend on these is largely limited by their access to independent means, their own income or wealth, or that of an earning spouse.

This book is about a revolution in our tax and transfer system, not the next step in an incrementalist journey of patching up the current, structurally compromised régime.

—————-

Gareth Morgan

from his book: The Big Kahuna, Turning Tax and Welfare in New Zealand in its head.



Political economy, social policy, psychology, ending Neoliberalism, Trump . . . and other facts of our times.

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