by Andre Coelho | Oct 29, 2019 | News
Gergely Karácsony. Picture credit to: Magyar Hang
It’s Budapest, October 2019, and there’s a new mayor in town. Gergely Karácsony is his name, and has physically taken office on October 17th, arriving at Budapest City Hall on a simple city bike, instead of a couched high-end car used by other famous politicians. More relevant still, Karácsony is known for his progressive, left-wing ideas, contrasting with the Hungarian government far-right policies at the moment, under the iron grip of Viktor Orbán, the country’s Prime Minister.
Karácsony has been elected to lead the Hungarian capital, having run against István Tarlós, the incumbent supported by the ruling coalition Fidesz–KDNP. The former’s coalition comprises several liberal and left-wing parties, including his own Dialogue for Hungary. This united opposition has also gained momentum in other Hungarian urban centers, while Orbán’s Fidesz party still controls rural areas (and part of the urban areas, as far as local elections are concerned). This opposition, however, still looks more like a resolute stand against the Prime Minister autocratic regime, rather than a consistent left-wing progressive movement across the country.
Under his time in office, Karácsony will try to fulfill his campaign promises, namely easing the housing crisis, stop evictions and provide care for the most vulnerable. He also intends to “build a free and green twenty-first-century European city”, which means slashing carbon emissions, investing in public transportation, cycling infrastructure and closing the circle on corruption. On income policy, he has favored the implementation of a universal basic income (UBI) in Hungary, which is the exact opposite of where Viktor Orbán stands, on that issue. The latter has referred to UBI, in fact, as “an utterly unthinkable approach”.
The term “iliberal democracy” has been coined by Orbán himself, as a compact description of his own regime. Over this background, Karácsony’s policies and the left-wing progressive movement he represents couldn’t be more in opposition to the politics that have swept the country for almost a decade now. It remains to be seen if this movement can stand a chance of taking hold of Hungary in the next few years, along with the promise of a more just and humane social system, probably involving something like a UBI. In any case, Gergely Karácsony is a man to be followed closely at the moment.
More information at:
Imre Szijarto, “Hungarians can’t be bought with potatoes”, Jacobin, 27th October 2019
André Coelho, “HUNGARY: Prime Minister Viktor Orbán speaks harshly against basic income”, Basic Income News, March 21st 2017
by Andre Coelho | Feb 20, 2019 | News
What we are going through now is not a disaster, it’s a process. Last time, it took over a century of mass misery and, occasionally mass bloodshed to get through it (…) We should try to do it a lot better and quicker this time.
By Lynette Geddes
International affairs commentator Gwynne Dyer latest book, “Growing Pains: The future of democracy (and work)”, is a balanced and compelling look at the current rise of populism and how a Universal Basic Income (UBI) could be “a tool that might cool the anger (…)”.
The first chapter, titled “A giant orange canary”, claims the election of Donald Trump might actually be good for history as he is the canary in the coal mine of the growing unrest in the developed world. Dyer argues that, contrary to political rhetoric, it is not the immigration of cheap labour, or the out-migration of factories to other countries or free trade that are at the root of the problem. It is automation and the concomitant stagnation of middle-class incomes. The author states that “out of 7 million manufacturing jobs lost in the United States in the past forty years, at least 5 million were lost to automation.”
Dyer briefly outlines the calamities of the twentieth century – economic depression and wars – and draws parallels to our current geo-political conditions. However, he believes it to be widely accepted that the social safety nets that were implemented during that time in all western countries – though to varying degrees – have almost certainly mitigated the conditions that might now lead to similar extremes. But more must be done if we don’t want to slip back into the destruction of the past century.
Dyer argues that humans, unlike our simian ancestors/cousins, are fundamentally egalitarian and that solutions lie in understanding this. Though acknowledging that “non-violent revolution” sounds like a contradiction in terms, history shows us that “people can and will act together spontaneously to resist domination”. He quotes Harold Schneider, economic anthropologist, “All men seek to rule, but if they cannot rule, they prefer to remain equal.”
Throughout the book, two premises arise repeatedly: that income inequality brought about by automation is the problem and that some form of a UBI is a solution. He concedes that the concept of UBI is not new but it is an idea which is compelling, plausible, and gaining traction. It is also one that appears to span the political spectrum. The World Economic Forum (WEF) is a well-known International Institution for Public-Private Cooperation that brings business and political leaders together annually. In January 2017, several of the invited speakers addressed the concept of UBI.
Arguments against UBI, Dyer writes, include the notion that people’s self-respect comes from their job, or that countries can’t afford it, or that giving people “free money” will lead to laziness. He neatly disputes those ideas with facts but also a little facetiously. “As Harvard economist, John Kenneth Galbraith once put it, ‘Leisure is very good for the rich, quite good for Harvard professors – and very bad for the poor. The wealthier you are, the more you are thought to be entitled to leisure. For anyone on welfare, leisure is a bad thing.’”
Dyer closes the book with his opinion that, with climate change physically threatening existence as we know it, there isn’t time to waste on these political issues. “What we need now is a quick fix that reduces inequality to a tolerable level and re-stabilises our democracies, (…) ensuring that everybody has a decent income despite the unstoppable advance of automation, and doing it in a way that does not humiliate those who no longer have jobs.”
Edited by André Coelho
by Sarath Davala | Jan 6, 2019 | Opinion
Written by: Sarath Davala [1]
In the last two weeks, there has been much speculation in some sections of media about Prime Minister Narendra Modi seriously considering Universal Basic Income (UBI) as a policy option. This comes on the heels of the electoral debacle Modi’s party faced in the recent elections in four states, and coincidentally just months ahead of the 2019 parliamentary elections.
This is the second wave of interest the current government has shown toward the idea of Universal Basic Income (UBI). The first wave was in early 2017 when the then Chief Economic Advisor to the Government of India, Dr. Arvind Subramanian, included a substantial chapter [2] on UBI in his annual Economic Survey (2016-17) which was presented to the Indian Parliament. The chapter explored the concept of UBI and observed that it could be a way forward to address poverty. Subramanian stated that a full-fledged UBI may not be feasible in India immediately, though it was possible to think of a Quasi UBI (QUBI) which would identify specific demographic groups in the population and give them an unconditional basic income. One of his speculations was that a QUBI could be to all women citizens, which would ensure that every household will receive a basic income. The discussion within the government did not proceed beyond this point, apparently as the Prime Minister was not convinced at that time of the political dividends flowing from this policy route.
The immediate trigger for the second wave of interest in basic income is the recent elections in the states of Telangana, Rajasthan, Madhya Pradesh and Chhattisgarh. At the time of these elections, the financial crisis affecting farmers became center-stage and the Congress party promised that they would waive farm loans as soon as they came to power. And they did so when they took charge of three states.
In the state of Telangana, the ruling party TRS went a step further by implementing several months before the elections a scheme called Rythu Bandhu, (Farmer Investment Support) which gives to the farmers Rs. 8000 (USD $115)[3] per acre per annum[4]. The cutting edge of the scheme is that it is unconditional, a feature that is considered central to the idea of basic income. Irrespective of whether farmers take up cultivation or not, the investment will be transferred to the farmers. The scheme benefited about 5.8 million farmers who own a total of 14 million acres of cultivable land in Telangana.
In 2017, responding to farmers’ agitation in the state, the Madhya Pradesh government implemented a different kind of scheme for farmers. It was called Bhavantar Bhugtan Yojana (BBY) which originally intended to pay farmers the net difference between the actual sale price and the Minimum Support Price announced by the government. Subsequently, however, the government introduced the notion of a modal rate which is the average of the sale price of a given crop sold in Madhya Pradesh on any given day, and in markets of two other neighboring states.
Both the schemes ran into controversy, particularly the latter. Regarding the Rythu Bandhu scheme, the criticism was that the scheme does not give any benefit to the tenant farmers who actually cultivate the land. Secondly, the scheme was criticized as regressive since it was paying rich farmers as well. The government then appointed J-PAL, a reputed international group based in the Massachusetts Institute of Technology in the United States to monitor and evaluate the scheme. In the initial survey conducted by it after the first round of transfers were made in June 2018 revealed that most cheques were for less than Rs.20,000 (USD $287), and only 0.8% of the farmers received more than Rs.50,000 (USD $718). A follow-up survey by J-PAL revealed that farmers spent the money judiciously with over 77% purchasing crop inputs, and 92% percent saying that they were satisfied with the scheme.
The Madhya Pradesh scheme was criticized because it brought in the notion of a modal rate which was far above the actual sale price. Ordinary farmers, who were unaware of the critical distinction between the actual sale price and the modal price, were in for a shock. Assuming the government would compensate them the difference between MSP and Sale Price, many of them also made distress sale of their produce and then realized that they would get much less compensation. Disappointed with this conditionality, many farmers were unwilling to sign up for the subsequent crop. This was not the only conditional aspect of this policy. The sale must take place during a prescribed window of three months. There was a cap on the volume that a farmer can get compensated per hectare. There was also a proposal that if a farmer sells his produce for less than 50% of the MSP, he becomes ineligible since it is the poor quality of his produce that is the reason for the low sale price, and that government should not compensate the farmer for producing low quality produce. And lastly, the scheme was applicable to only seven specific crops.
It appears that these two schemes and the farm loan waivers are the three primary options that the central government is discussing in order to find an effective response to the distress farmers all over the country are experiencing. Let us consider each one of them.
First, the loan waivers. All the three new Congress governments have announced loan waivers within days after assuming power. Even as these announcements have been taking place, experts from different locations have criticized loan waivers as harmful to the economy. Following these announcements by the new Congress governments, the former RBI Governor Dr. Raghuram Rajan released a document entitled ‘An Economic Strategy for India’ which he co-authored with 12 other well-known economists including the IMF Chief Economist Gita Gopinath and Sajjid Chinoy of JP Morgan, among others. The report advises the government to “… eschew loan waivers that divert resources from needed investment.” Arvind Subramanian in a recent interview severely criticized farm loan waivers as “an inefficient, retrograde and even perverse method of addressing farmers’ distress”. He further added that nearly 50% of the small and marginal farmers cannot and do not borrow from formal banks and they are completely left out of this mode of addressing farmers’ issues. Dr. Urjit Patel who had recently resigned as the RBI governor criticized farm loan waivers as corrupting the credit culture in the country. Addressing his party workers in Karnataka, PM Modi himself called Karnataka government’s farm loan waivers as a “cruel joke on farmers”, and that it benefits only a handful of farmers.
It is clear the farm loan waiver is not likely to be part of PM Modi’s new grand electoral narrative. This now brings us to the other two options. Between the two, the Rythu Bandhu seems to be a clear winner not just because of the electoral gains that the TRS party reaped from its introduction. It is because of certain essential features it has that are unique and demonstrate a clear transformation in the very grammar of welfare policymaking in India.
Firstly, it is an entitlement without having numerous conditionalities. The only conditionality is that the recipient must have a clear title. The curse of various welfare schemes in India is that each one comes with innumerable conditionalities thereby giving extraordinary discretion to inspectors who administer it. Rythu Bandhu makes a departure from this welfare practice. This is based on the assumption that any support given by the government must be given only to the deserving and that we need to ensure that it is spent only for the purpose it is given. Who deserves and who does not is decided by the government. And so is the purpose. Secondly, Rythu Bandhu is a proactive policy and not relief after the calamity has occurred. In fact, some economists such as Ashok Gulati, Arvind Subramanian, Bimal Jalan, etc., have said that it could be a potential agricultural policy for the entire country. The main point is that it is defined as an investment rather than welfare. Thirdly, because it is unconditional and a cash transfer, it is very easy to deliver. The record of delivery of Rythu Bandhu has been very impressive. Except in those cases where the land ownership is in dispute, the majority of farmers in the state have received cash in their bank accounts.
In addition to these innovative features, the TRS government has also added an additional scheme to all farmers called Rythu Bima, a life insurance scheme which provides coverage of Rs. 500,000 (USD $7,179). The annual premium of Rs.2272 (USD $33) per farmer is to be paid entirely by the state government.
This is this grand electoral moment that PM Modi is facing. What is he likely to do? Given that farmers have become quite vocal and that there is hardly any time before the Model Code of Conduct would come into operation around March 2019, he must respond in some form in the interim budget. Most likely, he will implement some version of Rythu Bandhu in combination with an insurance scheme for farmers. While this cannot be called a true UBI, it does carry the spirit of the idea of basic income because of its unconditionality. Normally we would be inclined to dismiss this is an electoral gimmick. We should not forget that in an electoral democracy, change comes in a clumsy way. We must be clear when we are positively moving forward and when we are not. In this case, the Indian political parties are embracing the spirit of basic income. This shift in India’s policy grammar should be seen as a welcome move in our journey to build a better society.
[1] Sarath Davala is the Vice-Chair of BIEN and Coordinator of India Network for Basic Income (INBI).
[2] Universal basic Income: A Conversation with and within the Mahatma
[3] To make sense of these amounts, it is useful to know that the rural poverty line in India is defined on the basic of per capita expenditure, which is half a dollar a day.
[4] This amount will be disbursed twice in a year, one just before Rabi crop season and one before the Kharif crop season.
by Kate McFarland | Aug 19, 2017 | Research
Three members of the Foundation for European Progressive Studies (FEPS) Young Academic Network — Frederick Harry Pitts, Lorena Lombardozzi, and Neil Warner — have published a study on basic income, entitled “Beyond Basic Income: Overcoming the Crisis of Social Democracy?”
The full paper can be read and downloaded here.
Abstract
Across Europe, a crisis of social democracy prevails. Deindustrialisation precipitates a breakdown of the communities, institutions and interests that held the social democratic and labour movements together. A collapse in everyday life passes over into a steady decline in the electoral realm. Elsewhere, a crisis of social reproduction ensues. The relationship between the wage and subsistence weakens, public services face cutbacks and a generalised dispossession of people from the commons continues apace. This triple crisis- of the society of work, social reproduction and social democracy- is a triple crisis of the social. The universal basic income (UBI) is suggested by many as a means by which the social synthesis can be pieced back together.
In this paper we explore whether or not UBI lives up to the claims made for its implementation, and to what extent it addresses these three crises. We ultimately pose the question whether UBI offers a solution to the crisis of social democracy, and whether, on this basis, European social democrats should pursue the policy as a central demand of a new electoral offer. We conclude that the policy cannot be suggested as a solution to the crises of work and social reproduction, at least not without being complemented by a range of other measures. A suite of reforms could strengthen its impact and ensure it is used to nurture and preserve positive social relations that reflect social democratic ideas, rather than contrary outcomes implied in alternative visions of the UBI proposed from both right and left of the political spectrum.
About the Authors
Frederick Harry Pitts holds a PhD from the Department of Social and Policy Sciences at the University of Bath, and is currently a Lecturer in Management at the University of Bristol. His research interests lie in the sociology of work and political economics, with specializations in the creative industries and the future of work.
Lorena Lombardozzi is a graduate student at SOAS University of London, where she holds an MSc in Political Economy of Development. Her dissertation research concerns agricultural commercialization in Uzbekistan’s cotton-food system and its nutritional impacts.
Neil Warner is a postgraduate researcher in the Department of History at Trinity College Dublin, studying perspectives on unemployment and the British Labour Party in the late 20th century.
FEPS is the first progressive think tank to operate at a European level. It has previously supported discussion of universal basic income, convening a panel discussion on the topic in Brussels in February 2016 as part of its Next Social Europe lunch debate series.
The FEPS Young Academics Network, established in March 2009, currently consists of over 50 PhD candidates and recent PhD recipients from a range of disciplines.
Photo: “Unemployment Wall” CC BY-NC-ND 2.0 Luis Colás
by Kate McFarland | Aug 1, 2017 | News
The third Democracy Convention, a project of the nonprofit Liberty Tree Foundation, will be held August 2-6 in Minneapolis, Minnesota.
This year, the convention will include a workshop on basic income and the caring economy.
The workshop, which will be held on the second day of the convention, “seeks to explore how a re-valuing of care-work can solidify the vision of a new economic and societal system, where caring for self, each other, and the planet is the primary focus.” The organizers of the workshop state that a basic income “has much potential as an element of a post-patriarchal economic system that values contributions to society by everyone.”
Speakers at the 75-minute workshop include Liane Gale (Basic Income Guarantee Minnesota, Basic Income Women Action Group), Ann Manning (Women’s Congress for Future Generations), and Kim McKeage (Professor at Hamline University).
The Democracy Convention comprises eight distinct conferences, encompassing topics from racial justice to voting rights to the free press. The Caring Economy & Basic Income workshop takes place as part of the Community & Economic Democracy Conference, which explores solutions to inequality, poverty, precarity, and other economic ills facing Americans today.
Photo: “Caring” CC BY-NC-ND International Labour Organization
