Brazil: COVID-19, UBI, and ultraliberalism

Brazil: COVID-19, UBI, and ultraliberalism

Lena Lavinas

It is undeniable that the new wave of engouement for UBI (universal basic income) that has shaken the US, the EU, India and so many other parts of the globe in the wake of COVID-19 has also reached Brazil. Everywhere, the simple idea of guaranteeing a regular income, duty-free, underwritten by the State, appears to be the way forward to mitigate the still unmeasurable consequences of the appalling disruptions brought about by the pandemic. UBI would swiftly reduce income insecurity, preventing poverty; it could also significantly contribute to accelerate the economic recovery in the post-COVID-19 era by stimulating aggregate demand. 

The idea of a UBI was galvanized when governments promptly decided to extend the amount, coverage, and length of different sorts of monetary transfers to confront the gravity of the multiple crises created by the COVID-19 outbreak. Unemployment benefits, job allowances, one-time pay-checks, welfare benefits, or even special forms of credit line have spread out to inject liquidity in the economy. All of a sudden, we have a new opportunity for making the case for UBI. 

Brazil was no exception. The comprehensive national social security system created in 1988 that provides free, universal health care (among many other rights) had been made vulnerable by years of underfinancing. But the system continues to be the most effective and democratic institution when it comes to guaranteeing social rights and wellbeing in Brazil. When the COVID crisis hit, the federal government and Congress could have reinforced social assistance, public healthcare, unemployment insurance, and other job allowances — all constitutive dimensions of the Brazilian social protection system. Instead, they united to favor ad hoc measures that, though sounding generous, are inevitably temporary.

The ultraliberal government of President Jair Bolsonaro backed a bill that Congress approved unanimously early April to adopt an “emergency basic income” program that would last the entire state of emergency declared on March 20, 2020. In principle, this program should expire on December 31, 2020, along with the state of emergency. In Brazil, a state of emergency allows extraordinary spending, suppressing the 2016 cap imposed by a constitutional amendment that impeded any real increase in social spending until 2036 regardless of economic growth or rise in tax revenues. 

It bears reminding that Brazil is the only country in the world to have passed a law on Basic Income in 2004, hours prior to the adoption of the Bolsa Familia Program. Yet the law remained a dead letter and largely unknown to most Brazilians. To date, it remains unclear why the Workers’ Party started its mandate presenting a bill on UBI, which was approved without encountering any opposition, too soon after paying no heed to it. Today, despite the existence of a UBI Law, activists, progressive parties, and members of Congress chose the easiest way out, bypassing the already existing institutional framework. They chose a transitory and short-term program over existing law. This narrowed sighted strategy further debilitates Brazil’s social security system, because it deepens defunding. It also fails to bring greater comprehension of what a UBI is in the public opinion, thereby further diminishing the chances to make it a true, permanent, and unconditional right.  

Today’s “emergency basic income program” provides a three time-payment – now extended to four months – of R$ 600.00, the equivalent of $120 USD per month.  It is means-tested. Anyone over 18 years old (threshold waived for single mothers) living with a monthly per capita household income below half a minimum wage (R$ 552.00 / $110 USD) qualifies. The Minister of the Economy estimates that this benefit has reached 54 million people, encompassing the target-population previous recipients of Bolsa Familia, informal and precarious workers, and the unemployed who registered. Let’s not forget that Brazilian monthly median per capita household income, including labor income and all forms of social benefits, like pensions and welfare schemes, corresponds to R$ 862.00, equivalent to $172.00 USD. A monthly stipend of R$ 600.00 is therefore a very significant figure that amounts to 70 percent of the median per capita income and is three times higher than the Bolsa Familia cash transfer. It was the first time that Brazil set the bar so high with regard to compensatory benefits. 

It is worth noting that indigenous and traditional black communities who were proportionally the most hardly hit by the pandemic have been denied the right to this temporary benefit, which is very telling about the challenges for universalizing rights in Brazil. The mortality rate among indigenous in the Legal Amazon is 150 percent higher than the national average. The deficiency of the specific care system for native peoples, the invasion of their lands by miners who can take the virus into their territories and communities, and continuous deforestation are pointed out as reasons that can explain such a high mortality rate and lethality. Faced with the threat posed by COVID-19 to indigenous communities, opposition parties passed a law in early July in Congress that provides for a set of 16 emergency measures to protect some 800,000 indigenous people. President Bolsonaro, however, immediately vetoed the most important ones, such as guaranteeing the supply of drinking water, food baskets, hygiene products and specific ICU beds for indigenous people infected with the virus, arguing that the Union could not afford mounting non-essential expenditures. Brazil remains a very unequal society and has not yet reckoned with its colonial structures of racialized discrimination. 

The Brazilian Bureau of Census (IBGE) just published the first results regarding the impact of the Emergency Basic Income Program: 38.7 percent of all Brazilian households received the program, with the bottom 40 percent benefitting most. 45 percent of all Brazilians received the temporary emergency workers’ allowance and three-fourths of all monetary transfers benefitted the 50 percent at the bottom of the distribution scale. According to IPEA, this allowance has compensated 45 percent of outstanding earning losses due to the pandemic. It also increased by 2,000 times the average income of the poorest 10 percent. This is good news, especially because the recovery of the economic activity that has been noticed in early July significantly relies on the rebound of household consumption. 

There is now strong evidence that providing monetary transfers at large scale and in substantial amounts that make a real difference in people’s lives is a powerful mechanism to boost economic activity, prevent destitution and humiliation, and help people cope with all sorts of hardships.  

Did the crisis and the measures adopted increase the support for a true UBI? Are Brazilians really aware of the challenge and motivated to fight for it? In 2013, I carried out a national survey to assess how Brazilian society values social policies. There was a specific question on UBI. Back then, 51 percent disagreed, and one-third agreed with the idea of implementing a UBI. The current estimates are unknown since no survey asking the specific question has yet been re-conducted. But let us keep in mind that the current emergency workers’ allowance is no UBI. 

The question is whether or not the evidence aforementioned would suffice to bolster the implementation of a true UBI in Brazil.

During the pandemic, doctors, health workers, and the many who support the universal public health care system (SUS) persevered in order to advance a temporary program, called ICU Beds for All. In Brazil, for every 5 ICU beds fully equipped in the private sector, we have only 1 in public hospitals. The problem is that only 25 percent of all Brazilians have subscribed to private health insurance, whereas 75 percent go public. Given that a significant and growing number of ICU beds were underutilized in the private sector, a campaign was launched to create a pool of ICU beds, coordinated by a public entity, to improve access and sort out the waiting list problem. But no agreement could be reached and today Brazil is second only to the United States, with 1,7 million confirmed cases, and 68,000 fatalities, both figures broadly underestimated given that testing is rather rare in Brazil.  It is now obvious that the COVID-19 pandemic was insufficient to unite Brazilians, even when so many lives are lost. 

This paradox raises two major concerns:   

  1. Is UBI the most urgent need for Brazilians? Will it be possible to couple a universal basic income at a relatively significant amount at least to eradicate abject poverty with other universal social policies that are urgently needed such as public healthcare, good public education, social housing, adequate sanitation? Is this affordable? 
  1. To what extent would endorsing UBI strengthen the social security system already threatened by austerity measures derived from the cap on public spending and by attempts of the Bolsonaro government to fully reshape it through tax reform and the merging of different social benefits restricting them to poverty relief programs?

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In regards to the first question, what would be the cost of a UBI in Brazil? Of course, the cost depends on the design of the program. To get a rough idea of the cost of a very basic program, let us consider a stipend that would be equivalent to the monthly benefit of Bolsa Familia today, which is R$ 200 per month ($40 USD). This amount should be acceptable by all parties and civil organizations across the political spectrum. The difference lies in the fact that it would apply to individuals (UBI) rather than households (Bolsa Familia Program). 

Let us then imagine that when the law was approved in 2004 the Brazilian government decided to implement the program starting with children under 5. Given that it would be impossible to grant a stipend to all Brazilians, the idea is that we would launch a UBI by targeting the children to prevent intergenerational poverty. The new benefit will accompany the beneficiaries throughout their lifetime as an unconditional right. Focusing on children sounds appropriate because the pension system in Brazil provides a satisfactory income security to the elderly: 85 percent of all seniors over 65 receive a public pension, either contributory or non-contributory, whose monthly amount (floor) corresponds to no less than a minimum wage.  

By providing a UBI of R$ 200.00 to children under 5 in 2004, today’s number of potential recipients under 20 years old totals 60,7 million people (IBGE, PNAD 2004 & PNADc 2020). This would cost R$ 323 billion, or 10 times the annual spending with the Bolsa Familia Program (R$ 32 billion or, 4.4 percent of GDP in 2019). The good news is that 57 percent of all stipends would go the bottom 40 percent of the distribution. The current Emergency Workers’ Allowance Program amounts to R$ 150 Billion, consequently less than half of the proposed UBI, reaching an almost equal number of recipients. 

To grant $40 USD a month to 60 million people in 2019 is three times higher than the federal spending, with the public healthcare system (only R$ 117 billion or 1.64 percent of GDP). Such a program would also surpass by 11 percent of all benefits conveyed by the federal government (including higher education, housing, sanitation, labor, and agrarian initiatives), which accounts for R$ 289 billion (Lavinas 2020). 

In 2019, outstanding federal social spending amounted to R$ 1.73 trillion. Paying a basic income of R$ 200.00, therefore at the level of the current anti-poverty Bolsa Familia program, would compromise 27.5 percent of all social spending. That same year federal social spending in kind corresponded to only 4.12 percent. 

Monetary transfers remain the bulk of social spending, accounting for 68 percent. Should Brazil continue to expand cash transfers, to the detriment of providing running water, sanitation, housing, equal standards in education and healthcare? The most recent data from IBGE (2018) show that 31.1 million Brazilians (16 percent of the population) have no access to tap-water, whereas 72.4 million (37 percent of the population) lack proper sanitation. Not to mention decades of deep housing shortage affecting millions of poor and low-income families who end up living in slums, which makes them less immune to all sorts of diseases in times of pandemics. 

The second question relates to the future of the Brazilian social protection system, which was underfinanced for quite a long time, and now risks being completely dismantled. The Minister of the Economy, an old member of the Chicago Boys who worked for the Pinochet Regime, intends to overhaul social security. He initiated a pension reform in 2019, making it harder for informal workers to get a full pension at retirement. 

Now, that same ultraliberal minister proposes the creation of a “Brazil Income Program”, resulting from the merging of a large number of benefits, both contributory and non-contributory. Workers’ rights like job allowances, unemployment benefits, and other benefits alike will all be suppressed and replaced by an anti-poverty program to reach 57 million people, granting a monthly stipend of R$ 232 per month, 15 percent above the average payment of Bolsa Familia. They expect to spend R$ 52 billion per year with this new program, which is less than one percent of the 2019 Brazilian GDP. This means that the coverage against risks and poverty will be shortened and people’s autonomy and wellbeing consequently corroded. 

In addition, the government intends to provide a voucher to pay for private daycare for two million children up to three years old, which will increase prices and fees and discriminate based on income. Lessons from Chile are well-known to envision that in Brazil things could be different. A voucher of R$ 250,00 corresponds to 10 percent of what middle-class families pay for private childcare in cities like Rio and São Paulo. The best daycare centers, however, charge double or triple. According to the government, churches could be interested in providing this service, an idea that breaks with the logic of secularism in the provision of public education. 

Both concerns point to the ineluctable call for a joint perspective associating basic income and universal public provision to democratize access and opportunities by fully de-commodifying wellbeing. Otherwise, under financialized capitalism, a guaranteed income will just serve as collateral propelling citizenry to take out loans and go indebted in order to meet their financial obligations. 

Early July, that same Congress that approved the Emergency Workers’ Allowance Program voted for the full privatization of water supply and sanitation, maybe having in mind that enlarging access to cash to those most affected by the pandemic would also make it easier to expand further a business model grounded in denying basic human rights and ensuring huge profits for pension and mutual funds that today drive investments in infrastructure in developing and emerging countries. After the longest and most severe recession Brazil has faced over a century since 2015 and given the growth projections ahead (-9.1 percent for 2020, according to the IMF), fiscal resources will dry up while competing and clashing issues will fill up antagonisms, stirring tensions. All the care may not be enough in designing social policies if the goal is eventually to forge a truly egalitarian society in the country.

The major differential of a UBI is to de-commodify labor. It is thus equally crucial to de-commodify the social reproduction of labor, by ensuring that education, daycare, healthcare, training, and other basic needs will also be fully de-commodified. Otherwise, UBI will perform as a powerful pro-market mechanism, upholding income-related and highly segmented private provision, mostly through the financial sector, and fueling rather than overcoming discrimination and inequality.  

Book review of Birnbaum, Simon. 2012. Basic Income Reconsidered: Social Justice, Liberalism, and the Demands of Equality

Book review of Birnbaum, Simon. 2012. Basic Income Reconsidered: Social Justice, Liberalism, and the Demands of Equality. Basic income guarantee series. New York: Palgrave Macmillan, 246 pp.
ISBN 978–0–230–11406–7
Published in Ethical Perspectives, vol.3, 2014, p.464-5.

Roberto Merrill (University of Minho)

In his book Basic Income Reconsidered: Social Justice, Liberalism, and the Demands of Equality, Simon Birnbaum builds a defence of an unconditional basic income which is based on three pillars: the first consists in a radical-liberal interpretation of John Rawls’ theory of justice,  the second offers a reconstruction and defence of Van Parijs “jobs as gifts” argument for basic income, and the third proposes a definition of a work ethics which is not perfectionist and is compatible with state neutrality.

The book is divided in three parts.

The first part of the book, untitled  “A Society of Equals: Radical Liberalism, Self-Respect, and Basic Income” is divided in two chapters, the first one being devoted to a defence of  a rawlsian case for basic income, and the second chapter is an examination and refutation of the claim that only contributors are entitled to social rights. The general aim of the chapter is to defend an understanding of Rawls’ theory of justice as fairness, in particular Rawls’ theory of primary goods, including self-respect, which can be compatible with the promotion of a basic income as the best way to protect the status of the least advantaged as free and equals throughout their lives.

A first convincing strategy proposed by Birnbaum in arguing for a rawlsian case for basic income is to recall that John Rawls, following the work of James Meade on property-owning democracy, argued that justice must also achieve resource equalization ex ante rather than only corrective adjustments ex post. Ex post justice is what the welfare state in capitalist societies already does and it’s not working. A basic income should thus be considered as an adequate illustration of a public policy which contributes to realize the ideal of a property-owning democracy. Furthermore, according to Birnbaum paid work should not be considered as a necessary condition of rawlsian self-respect, otherwise it would imply a perfectionist conception of self-respect incompatible with liberal neutrality (Birnbaum, 2012:61).

Another convincing argument proposed by Birnbaum allowing to block a potential objection to a defence of basic income from the rawlsian conception of society as a system of cooperation is to distinguish two conceptions of cooperation: a thick and a thin one. A thick conception of cooperation implies both economic and political cooperation and a thin conception implies only one of them (Birbaum, 2012: 68). Furthermore, both economical and political cooperation can be thick or thin. According to Birnbaum, a thick conception of cooperation, which implies labour market participation is in tension with some of Rawls basic intuitions about justice and therefore should be rejected. If true, this clears the way for a compatibility between Rawls’ conception of social cooperation and a basic income, and thus for radical liberalism.

The second part of the book, untitled “The Exploitation Objection against Basic Income: Equality of Opportunity, Luck, and Responsibility”, is also divided in two chapters.

The first chapter consists of a review and a refutation of the main variants of the “exploitation objection” against the defence of a basic income such as formulated by Philippe Van Parijs in his book Real Freedom for All, which, according to Birnbaum, offers the best defence against the exploitation objection. The main variant of the exploitation objection examined is the “restriction objection”, according to which the distribution of the pool of resources is only for those that are willing to work and are involuntary unemployed (Birnbaum, 2012: 34-35). In this chapter, Birnbaum examines Van Parijs’ controversial claim according to which employment rents, incorporated in wages of privileged jobs, must me considered as resources to which all are entitled. Birnbaum distinguishes a weak and a strong version of this objection and argues that Van Parijs “jobs as gifts” argument, according to which the employment rents should be considered as common resources to which all have an equal claim, survives the strong version of the restriction objection. However, this is only possible if some qualifications related to the “long term stability of justice” are incorporated to the argument. These qualifications are developed in the second chapter, in a clear and convincing reconstruction and defence of Van Parijs “jobs as gifts” argument for basic income. According to Birnbaum, if Van Parijs’ argument is to be successful in rejecting the exploitation objection, apart from accommodating the “stability of justice” clause, it also needs to accommodate some considerations regarding the social and economical conditions of basic autonomy (which are fleshed out in part one of Birnbaum’s book).

The third and last part of the book, untitled “The Feasibility of Basic Income: Social Ethos, Work, and the Politics of Universalism”, is divided in two chapters. The first chapter proposes a conception of a “work ethics” which is compatible with liberal neutrality. Contra Van Parijs, Birnbaum argues for a non obligatory work ethos which avoids any perfectionist implications, by proposing a wide definition of an ethos of contribution which includes activities that are not “productivist”. However, Birnbaum acknowledges that his anti-perfectionist definition of a work ethics, although having the advantage of being compatible with neutrality, also exposes itself to the structural exploitation objection, since it does not protect self-sacrificing individuals to be exploited by selfish ones (Birnbaum, 2012: 160). But this is not the freedom that liberal neutrality should protect, nor the freedom that radical liberal egalitarians seek to promote through the implementation of a basic income. For this reason Birnbaum tries to avoid this consequence of his redefinition of the work ethos by introducing the notion of a “minimal autonomy” to which all individuals must have access if they are to avoid ethical servility and make well informed choices about their life-plans (Birnbaum, 2012: 162). As a neutralist, one might worry here that Birnbaum’s minimal autonomy constraint implies a work ethos and a duty to contribute which after all may not be compatible with liberal neutrality, although it clearly is less perfectionist than the alternative of a strictly productivist ethos while at the same time resisting well to the exploitation objection.

The last chapter proposes an exploration of the political implications of radical liberalism, in practical policy issues, such as political legitimacy, environmental sustainability, and gender equity. The author explores these issues in a clear and well informed way. The book ends with a realistic proposal by arguing for a gradualist implementation of a basic income scheme. Overall, the book is a major contribution to the liberal egalitarian literature on basic income.

Juan Cole, “Almost Human: How Robots, Race and Neoliberalism killed Detroit and what it Means for You”

Detroit_Skyline

Detroit Skyline

With Detroit being allowed to go into bankruptcy, the author analyzes the significance of this event and its economic implications. He proposes all citizens receiving a basic stipend from nationalized automated production.

Juan Cole, “Almost Human: How Robots, Race and Neoliberalism killed Detroit and what it Means for You”, informed COMMENT, 2013 December 4

Simon Birnbaum, Basic income Reconsidered: Social justice, liberalism, and the demands of equality

‘Radical liberalism … holds a substantial universal and unconditional tier of social rights to be one of the ideal requirements of liberal-egalitarian justice.’ (p.8) Equality and freedom can and should be pursued at the same time, a universalist welfare state is the means to this combination, and an important element of such a welfare state is a Citizen’s Income. This is the agenda that Birnbaum has pursued through the research project of which this book is the outcome: an agenda with which he constantly contrasts more conditional forms of welfare state based on ideas of ‘reciprocity’.

In his introductory chapter, Birnbaum locates his treatment between the quite general theorizing of John Rawls and an empirical approach more concerned with feasibility: ‘between’ in the sense that his ‘feasibility’ takes the long view and does not allow short term political realities to determine feasibility in the longer term, and in the sense that his method is one of ‘reflective equilibrium’: a moving backwards and forwards between different propositions in an attempt to resolve contradictions.

In Rawlsian fashion, the first part of the book argues for a Citizen’s Income on the basis that it maximises the economic prospects of the least advantaged member of society more effectively than would more conditional benefits systems. The second part answers the objection that a Citizen’s Income requires taxation and therefore exploits workers. Birbaum follows Philippe Van Parijs in showing that much of the income earned through employment is the result of resources that belong to all of us, and that taxing earned income is therefore a redistribution of gifts. The argument is then extended to jobs: if they are gifts, then everyone has a claim on their value.

The third part of the book tackles feasibility. Birnbaum argues that a Citizen’s Income ‘would be particularly well-suited to foster economic initiatives, meaningful work and a rich associational life’ (p.169), making formal reciprocity requirements unnecessary; and he finds that ‘basic income proposals that seek to build on and develop the social insurance and in-kind benefits of existing welfare state institutions are far better suited to serve objectives [of political legitimacy, sustainability, and gender equity] than radical replacement strategies’ (p.204).

The book is full of enlightening argument, and particularly compelling is a method which sets out from a situation in which a Basic Income has been implemented and then studies a situation in which it has been abolished. This method is well employed on p.59 to demolish the ethical argument for ‘welfare to work’ policies.

The book is also full of quite dense argument which assumes some acquaintance with the terminologies and literatures of moral philosophy and political economy: but readers without such an acquaintance will still find the book invigorating because the argument is both thorough and coherent, and because it contains a persuasive riposte to arguments for a welfare state based on enforced reciprocity. (It is no surprise that Stuart White has the longest author entry in the index after John Rawls and Philippe Van Parijs.) In social policy terms, the book is a persuasive argument for a Citizen’s Income and against both today’s ‘welfare to work’ benefits structure and a Participation Income.

Anyone coming to this book will need to work hard at it, but the work will be worth it.

Simon Birnbaum, Basic income Reconsidered: Social justice, liberalism, and the demands of equality, Palgrave Macmillan, 2012, xii + 246 pp, hbk, 0 230 11406 7, £62.50
https://us.macmillan.com/basicincomereconsidered/SimonBirnbaum

BIRNBAUM, Simon (2010), 'Radical liberalism, Rawls and the welfare state: justifying the politics of basic income'

BIRNBAUM, Simon (2010), ‘Radical liberalism, Rawls and the welfare state: justifying the politics of basic income’, Critical Review of InternationalSocial and Political Philosophy, 13(4): 495-516.

In response to recent policy trends towards linking social rights moretightly to work requirements, this article argues that those sharingRawlsian commitments have good reasons to prefer a radical-liberal policy agenda with a universal basic income at its core. Compared to its main rivals in present policy debates, the politics of basic income has greater potential to promote the economic life prospects of the least advantaged in a way that provides a robust protection for the bases of social recognition and non-subservience. The argument seeks to establish that these concerns should be ascribed priority in the most plausible balancing of Rawlsian objectives and that doing so generates a strong case for basic income. As recent arguments for basic income have suggested that Rawls’ theory is insufficient to make the case for such a reform, this analysis also demonstrates that a powerful argument for basic income can be built on Rawlsian foundations alone.

Author’s email: simon.birnbaum@statsvet.su.se