by Kate McFarland | Nov 8, 2017 | News
In an interview with BBC News, Nobel Laureate economist Joseph Stiglitz warned that basic income (citizen’s income) should not be the current priority of the Government of Scotland.
On September 5, First Minister Nicola Sturgeon announced that the Scottish Government would provide funding for basic income trials in the regions of Fife, Glasgow, North Ayrshire, and Edinburgh, where pilot studies of the policy had received the support of local authorities.
During October’s Inclusive Growth Conference, Sturgeon reaffirmed the government’s commitment to supporting trials of basic income, despite acknowledging that the policy might prove infeasible in the end:
Despite the fact that this has some critics, we are going to work with interested local authorities to fund research into the feasibility of a citizen’s basic income scheme.
I should stress our work on this is at a very early stage. It might turn out not to be the answer, it might turn out not to be feasible.
But as work and employment changes as rapidly as it is doing, I think it’s really important that we look and are prepared to be open-minded about the different ways in which we can support individuals to participate fully in the new economy [1].
Stiglitz, who has served as an economic advisor to the Scottish Government since 2012, believes that pursuing a basic income would represent misaligned priorities in light of Scotland’s fiscal constraints. Instead, the distinguished economist urges the government to prioritize benefits targeted to those who need them most, job creation to ensure a job to all who want one, and a livable income for all who work full-time.
When asked about the UK’s interest in basic income during an interview with the BBC’s Sunday Politics Scotland, he replied:
I think the point of a citizen’s income is that it recognizes rights of ordinary individuals–that supporting individuals, social protection, is not aimed at those who have been left behind, but is a basic part of our society.
But I do worry about two things. One, as you say, there are fiscal constraints. Should the scarce money be used to give everyone a basic amount, or should it be targeted at those who have particularly strong needs? I think there needs to be some targeting.
Secondly, over the long run, our responsibility as a society is to make sure that everybody who wants a job can get one. And the underlying problems of the lack of employment and lack of adequate pay–anybody who works full time ought to have a liveable income–those are the issues that, in the long run, we need to address.
Stiglitz has previously been hailed in the basic income community as one of a long Nobel-winning economists who have (reportedly) endorsed basic income. His presumed endorsement took place at the World Summit on Technological Unemployment in February 2015, when he was asked if he supported basic income as a policy response to technological unemployment, and replied “Yes, that’s part of the solution,” before going on to stress that basic income alone is not a complete solution.
In October 2016, Stiglitz again said that “the idea of a basic income is a good idea” in response to a question from Vox reporter Ezra Klein (“What you do think about a universal basic income in America?”). He added, however, that he had not yet made up his mind about the question of whether it is better to target limited resources to those most in need:
If you don’t have a lot of resources, isn’t it better to try to target the limited resources you have at those who really, really need it, the people who are disabled, the people who are elderly without other sources of income, a variety of people who are seriously disadvantaged. The problem with the universal basic income is that you give a flat amount to a large amount of people, and that means, because you have so many people, you can’t give as much as you would to help those who most need it.
He went to note that, “on the other side of the coin, those who most need it have difficulty in navigating the bureaucracy” — a problem that would be avoided by a basic income.
It appears, then, that Stiglitz has not changed his mind on basic income so much as determined that, in Scotland and the UK, fiscal constraints and the need for targeted benefits outweigh the advantages promised by universality.
Watch Stiglitz field a question basic income on Sunday Politics Scotland:
[1] Quoted in Tom Martin, “Sturgeon vows to press ahead with radical benefits overhaul, despite official warnings,” Express, October 21, 2017 (accessed October 27, 2017).
Photo: “Old Scotland” CC BY-NC-ND 2.0 Tatters ✾
by Karl Widerquist | Nov 7, 2017 | Opinion, The Indepentarian
I have just posted a new academic article on my “selected works” cite. It’s called, “Justice as the Pursuit of Accord: Toward a non-utopian theory of justice.” Here’s a brief summary:
The hardest thing for any society to do is to avoid oppressing its least advantaged people. This article argues that well-meaning theories of justice contribute to this problem by employing utopian assumptions that imagine solving unsolvable problems. They eliminate the disadvantages they know and understand, but their overconfidence leads to errors that systematically disadvantage the least powerful people in political, social, and economic terms.
This article previews a theory of justice, I call “justice as the pursuit of accord” (JPA), which by attempting to eliminate these unrealistic assumptions, creates a fundamentally different framework than most prevailing political theories of justice. In this sense, JPA attempts to be an “agathatopian” theory with far more tentative assumptions about what is achievable. The essay introduces JPA as I have outlined it in past works, contrasts it with prevailing theories, and previews JPA property theory as I will outline it in much greater detail in the forthcoming book, Justice as the Pursuit of Accord.
The main difference between JPA and more conventional social contract theories is that JPA assumes the impossibly of a contract that all rational, reasonable people will have reason to accept. Social agreements are inherently insider-outsider agreements. Under those circumstances, the article argues, a just society has a responsibility that is unrecognized by either social contract or rights-based theories of justice: to minimize negative impact of social arrangements on dissenters (the outsiders the insider-outsider agreement). Among other things, JPA provides three arguments for basic income: to protect everyone’s status as a free person, to compensate people for unequal duties imposed on them by a property rights system, and to help minimize the negative impact of all social arrangements on dissenters.
The article is online at:
Karl Widerquist, “Justice as the Pursuit of Accord: Toward a non-utopian theory of justice,” Unpublished Manuscript available at SelectedWorks. Fall 2017.
by Andre Coelho | Nov 7, 2017 | News
Dr. Sean Healy and Michelle Murphy of Social Justice Ireland.
Promoted and organized by the Social Justice Ireland Team, the Annual Social Policy Conference will take place on Tuesday, the 21st of November 2017. The venue will be located at Croke Park, in Dublin, and will last from 9:30 am up to 5:00 pm on that day. Registration can be done online.
Journalist and broadcaster Michael Clifford will chair de Conference. A short description of the Conference is presented by Social Justice Ireland:
“In recent years we have seen increasing divisions within society and between people and the State. Trust between people and the institutions established to serve them has been eroded. Populism and the concept of “fake news” and a post-factual society are gaining traction. This important conference will bring together national and international speakers to address these issues from a range of perspectives.”
More information at:
Social Justice Ireland website (Annual Social Policy Conference)
by Cordelia Holst | Nov 6, 2017 | News
On Thursday, October 19th, activists, social justice advocates, economists, futurists, venture capitalists, writers, community organizers and politicians gathered at the Old Mint in San Francisco – a symbolically poetic building – to talk about Cash. Organized by the Economic Security Project, the goal of the conference was to “reimagine what an economy built on the well-being of everyone could look like.”
Cara Rose DeFabio and Sandhya Anantharaman were the MC’s for the day, introducing each segment, panel or presentation, showcasing a range of thoughts around how cash transfers can shape society. See the full schedule here.
The conference embraced a range of reasons why giving cash through a Universal Basic Income is an appealing concept. Most segments were in a panel format with experts in their field, moderated by one of their own. This allowed participants to see the differences in thinking across the movement as well as its broad appeal, regardless of what brought these thinkers into to the movement. The first panel was a discussion on automation’s effect on the work force, and how UBI could provide economic security during retraining, between jobs, or to supplement part time work. Another panel, with representatives from three different venture funds, discussed how a UBI might encourage entrepreneurship, while a third panel talked through historical and current systemic racist and sexist policies and practices, and how a combination of a UBI plus a wealth tax to help fund it could course correct extreme inequality.
A general acceptance for the benefit of cash transfers seemed to be the most basic common denominator. The audience was educated on the results of past cash transfer and basic income experiments, as well as updates on current experiments. You can view a high level video of some of the outcomes of these experiments here.
Mayor Tubbs of Stockton talked about his plans for a UBI in his city. Elizabeth Rhodes also gave an update on the Oakland Y-Combinator project. Then Joe Huston, CFO of Give Directly spoke to the effectiveness of cash transfers and positive outcomes in their work in Kenya and Uganda. He announced that Give Directly is now involved in its first US based project, where they are giving debit cards with $1500 directly to victims of Hurricane Harvey in the Houston area. He noted the work that still must be done changing perceptions around what people will do when they are given cash unconditionally, joking that employers don’t say, “I would like to give this employee their bonus, but I’m worried they might drink it away,” yet this is somehow common thinking that needs to be changed based on research results.
Aisha Nyandoro, CEO of Springboard to Opportunity spoke about where the current Welfare system in the US fails. She illustrated the challenges that families living in poverty in Mississippi have piecing together welfare benefits from the government – housing voucher, electricity voucher, and food stamps. The system creates poverty traps and the benefits don’t cover many of the real needs these families have, but cash would. Cash would also limit interaction with the system and remove the feeling of being judged, as well as the stigmas around welfare.
Damareo Cooper, Director of the Ohio Organizing Collaborative shared his personal story also highlighting how the current welfare system and prison system fails children and young people, making a convincing case for switching to cash. Almaz Zelleke, professor of Political Science at NYU Shanghai, went further, explaining why a UBI must be paid as cash and not a negative income tax.
Throughout the day, however, there seemed to be a lack of consensus on aspects surrounding universality and unconditionality of a cash transfer policy. The range of standpoints could be seen clearly in a panel with Hawaii State Representative Chris Lee and Alaska State Senator Bill Wielechowski, as well as Joseph Sanberg, the founder of Golden State Opportunity Foundation. Bill educated the audience on the Alaska permanent fund. On the aspect of Universality and Unconditionality he said, “Universality is critical. If the policy was needs-based it would diminish it. The fund is framed as each resident’s ownership of shared resources. This is something that Alaskans share together.”
On the other side of the issue, Joseph Sanberg said, “The social contract is work and you will be able to have economic security.” He tied work requirements to the right to economic security and his efforts have been focused on California Earned Income Tax Credits.
Chris Lee from Hawaii seemed to be working out his state’s position on the issue, noting that for their Earned Income Tax Credits they have expanded the definition of work, looking at where people are spending their hours – for example, caregiving. He did note that his task force is looking at a universal benefit across all economic classes.
Aisha Nyandoro cited the work she does as evidence that work requirements are difficult and policy makers are out of touch on the issue. She invited any policy makers that wanted to get in touch to call her. Anne Price, President of Insight Center for Community Economic Development, explained how racism and sexism shaped current welfare policy around judging who is deserving and who is undeserving. She noted that it is degrading to be on the receiving end of morality, and shared her vision for dignity for all: universal benefits – working or not.
How to pay for it was touched on by some, with ideas ranging from a wealth tax to combat inequality, to a shared patrimony dividends, like Alaska, or some combination of these revenues.
Other highlights of the day included a session by Jane McGonigal from the Institute for the future, and A Frank Conversation about Money with Chris Hughes, co-founder of Facebook and Co-Chair of the hosting Economic Security Project. Jane coached the audience on how to create empathy for our future selves and envision a future with Universal Basic Income. Anna Sale from “Death, Sex, and Money” interviewed Chris Hughes about his thoughts and feelings around his own fortune and why he supports Universal Basic Income.
The organizing team is clearly very competent and professional, as the entire conference ran very smoothly from check in, AV, lunch, and seating. All details were thought out and executed well. Participants had many opportunities to make connections and discuss the themes.
All in all, this was a very important gathering for the movement.
by Eduardo Abreu | Nov 5, 2017 | News
Ellen Brown. Credit to: Signs Of The Times
Writing for Common Dreams, Ellen Brown makes a case for how Universal Basic Income can be achieved without increasing Taxes or Inflation. At first glance, most will consider this not to be possible, but Ellen argues that through quantitative easing, in which money flows directly into the real economy instead of being put into banks, the opposite may turn out to be true. In line with her reasoning, the author quotes Nobel prize-winning economist, Joseph Stiglitz:
“When the government spends more and invests in the economy, that money circulates, and recirculates again and again. So not only does it create jobs once: the investment creates jobs multiple times.”
As a consequence of this economic growth, tax and fiscal revenues increase while demands for unemployment benefits and social programs to help the poor, which are paid by the government, go down. All this strengthens a country’s fiscal position. On the other hand, one might assert that getting “new money” into the economy, supply would grow too large and consumer prices shoot up irreversibly, leaving the central bank unable to retrieve its investment. At this point Ellen quotes Prof. Stiglitz again, who states that money issued by the government, through UBI, simply returns to it in fiscal revenues.
Ellen further elaborates this in the light of the “velocity of money”, the number of times a dollar is traded in a year, which in a good economy is around seven, which means that on each dollar, taxes will be paid seven times, as it changes hands. $1,00 traded seven times on a 26 percent tax results in $1,82 back to the government, more than it initially put out. Also, it is generally taught in economics class that, from the formula “MV = Py”, when velocity of money (V) and the quantity of goods sold (y) are constant, adding money (M) will drive prices up (P). What is not taught, as Prof. John Harvey, quoted by Ellen, pinpoints, is that V and y are not constant, meaning that demand and supply rise together, leaving prices unchanged.
Applying this logic, Ellen sets forth that new demand must precede new supply, that is, employers will add the workers needed to create more supply, once they know there is demand for their goods and services. This has implications for unemployment, for example, which is at 9,4 percent in the US as of January 2017, a condition which at the rise of many innovations may get worse.
Nevertheless, a concern with hyperinflation is thrown around in opposition to this form of injecting money into the economy, to which Ellen Brown quotes Prof. Michael Hudson, who states that most cases of hyperinflation in history stemmed from foreign debt services collapsing the exchange rate, not domestic spending, calling upon the example of post World War I Germany.
In short, UBI can create more demand and drive new productivity by paying a dividend for living in the 21st century, when automation frees us time to engage in more meaningful pursuits.
More information at:
Ellen Brown, “How to fund a Universal Basic Income without increasing taxes or inflation”, Common Dreams, 4th October 2017
