by Andre Coelho | Jan 13, 2019 | News
Milton Friedman once gave a lecture in which he demonstrated, in a very particular logic, that the so-called “free lunch” was a myth. The origin of the term is unknown, but in early twentieth century it was already in use. Since then it has been so frequently employed that people have been explaining and rationalizing over it up to the present. In physics, to do something – which is called “work” – is to spend energy, and so, physically speaking, there is nothing ever for “free” (free from some energy usage). However, in economics, “free”, and particularly the “free lunch” term refers to an opportunity cost that always exists, because the human imagination is infinite (at least in possibilities), and the Earth resources are limited. So, Friedman’s logic is that there will never be a “free lunch” because spending money somewhere always takes money away from something else (the opportunity cost). Others believe, however, that these “costs” and the inability to provide “free lunch” is only a reflex of a scarcity mentality that, for instance, considers that money – an imaginary construct – is finite and that its management amounts to a zero-sum game (if I win, you lose). An alternative belief is that, while acknowledging that physical resources are scarce (Earth is a finite planet), their distribution can be made available to everyone, and we could be living in a “free lunch society”, if only we shifted our mentality of scarcity to one of abundance, and generously shared those resources among every human being on Earth.
Given this introduction of the “free lunch” dilemma and what could be the transformation of our way of life into a “free lunch society”, Christian Tod, an Austrian economist and filmmaker intelligently used the term to name his most recent production: “Free lunch society”. The film is due to come out on iTunes on January 22th 2019 and on DVD on February 5th 2019. Previously, a short version of the film (50 min.) had already been presented at the Basic Income Earth Network’s (BIEN) Conference at Tampere, Finland, last August 2018.
The movie is composed as a documentary, featuring interviews, animation and film footage from all over the world, and announces itself as follows:
“What would you do if your income were taken care of? Just a few years ago, an unconditional basic income was considered a pipe dream. Today, this utopia is more imaginable than ever before. FREE LUNCH SOCIETY provides background information about this idea and searches for explanations, possibilities and experiences regarding its implementation.
Globalization, automation, Donald Trump. The middle class is falling apart, but we hear more talk about the causes than about solutions. From Alaska’s oil fields to the Canadian prairie, from Washington’s think tanks to Namibian steppes, FREE LUNCH SOCIETY takes us on a grand journey to answer one of the most crucial questions of our times.”
The film’s trailer can be watched here:
More information at:
Free Lunch Society website
Free Lunch Society Twitter account
by Andre Coelho | Jan 11, 2019 | News
Flowers, on the way to the mountain. Picture credit to: Rookie’s Journal
Sikkim, the second smallest state in India, has grown a reputation, over the years, for environmental consciousness, ethnical diversity and tourism. It is also the home of one of the most educated people on Earth, with a 98% literacy rate. Moreover, in the last couple of decades, policies in the state have been implemented in order to reduce poverty, which presently sits below 8% (from a 41,4% in 1994). The Sikkim Democratic Front (SDF), the democratically elected party governing the state since 1994, has written basic income into its manifesto for the 2019 Assembly elections, and aims to have it implemented by 2022.
SDF’s MP in New Dehli’s Lower House of Representatives (Lok Sabha), Prem Das Rai, has said that “our party and Chief Minister Pawan Chamling (…) are committed to bringing in Universal Basic Income. This, we will do three years of coming back to power in the state”. This initiative is not intended as a pilot test, but as an actual implementation, hence Prem Das Rai words: “Basically, it’s an income given to families irrespective what do they do. In Sikkim, it will be for everyone and every household.”
As for financing the basic income scheme, SDF officials are considering surplus energy generation revenue (from hydropower) and redirecting costs from welfare programs which cease to be relevant. Restructuring the tax edifice and using tourism revenues are also future financing routes to cover for basic income. In any case, Prem Das Rai is confident that this is “not just a feasible idea, but a very positive idea”.
About this issue, basic income activist Scott Santens has written, on Twitter: “What makes this news so big in my opinion is the fact they’re talking about full universality, unlike what’s being discussed at the national level right now, where cash may be targeted to the poorest 33% of the country and thus not actual UBI. This news out of Sikkim is actual UBI.”
More information at:
Liz Mathew, “Sikkim says it will become first state to roll out Universal Basic Income”, The India Express, January 10th 2019
André Coelho, “India: 2019 General Elections and basic income”, Basic Income News, January 9th 2019
by Andre Coelho | Jan 9, 2019 | News
Indian woman worker with spectacles. Picture credit to: Sarah Day
New ideas seem to be running dry in the Indian political context. Within Congress, Government (BJP – Bharatiya Janata Party) and opposition parties (ex.: AAP – Aam Aadmi Party). Tweaking with the minimum support prices for food production and/or with the multiplicity of welfare programs is not going to substantially change rural population’s main concern, which is declining real wages (purchasing power after adjustment for price variations). These have been steadily falling since 2014, ever since the BJP came to power, which means that to stay too focused on the former issues will not probably get BJP reelected this year. Also farm loan waivers (credit write off) has been used as a political tool, especially by the opposition (mostly center and left-wing) parties, given the high indebtedness rates of rural families (over 50%) and their dependency on predatory lenders (also over 50%).
However, according to political analyst Saubhik Chakrabarti, from The Economic Times, loan waiver is not going to be decisive for these next elections, even though it has been flagged by the opposition in regional suffrage (which has won three states from BJP). This decisiveness might very well come from pushing the basic income policy, an old new idea that has been hot in India ever since the 2016-2017 Economic Survey Report featured a whole chapter to it. And this applies to both parties / coalitions with a shot at forming a government in 2019, because what really impacts real wages is not topping crop prices or forever trying to fix a broken welfare distribution system (very complex and prone to corruption). A real difference may come from directly and unconditionally giving people what they need the most, economically: money.
Even though there will be no time to properly design, let alone implement a basic income scheme regionally – and even less likely a national implementation – before this year’s elections (latest in May), Chakrabarti suggests that one or more pilot tests could be tried out. According to him, that could be done “in chosen districts, accompanied by a blaze of political publicity, [being] enough to take to voters, with the promise that re-election will lead to an across-India UBI program.”
More information at:
Saubhik Chakrabarti, “Doling out a universal basic income scheme may be Narendra Modi’s best chance to win 2019 mandate”, The Economic Times, 24th December 2018
“Farm loan waiver: How to nip it in the bud”, The Economic Times, 7th January 2019
Kate McFarland, “India: Government Economic Survey presents case for basic income”, Basic Income News, February 4th 2017
by Andre Coelho | Jan 7, 2019 | News
A new series of demonstrations have erupted in France: the “gilet jaunes [yellow vests]”. This movement started in 2018, from an online petition which had grown 300 000 signatures large by October. From there, massive street demonstrations have followed, with some violent eruptions, particularly in France (but in other regions of the world too). The causes for discontent have been mainly economic, related to taxes on fuels, income taxes, minimum wage and the monopoly of large retailers in villages and cities (which end up asphyxiating small businesses). However, the list of claims grows larger, including demands like eliminating homelessness, financial incentives for home insulation, protecting national industry (in France) and a cap on salaries (at 15000 Euro/month). It even includes the controversial claim that the production of hydrogen vehicles should be incentivized, instead of electrical ones (even though hydrogen for vehicles is produced using electricity).
The basic income movement in France (MFRB – Movement Français pour un Revenue de Base) has written on the “yellow vests” phenomena. In this article, it is suggested that demands from the “yellow vests” movement are aligned with the basic income idea. However, the list of demands above mentioned do not refer basic income, and do not question the conditionality of the present system of benefits and taxation. These do contain the immediate call for taking people off the streets (ending homelessness), but no further ideas on how to do it.
On the other hand, these social events and demonstrations have spurred discussion and public appearances voicing the basic income concept. Public figure and philosopher Abdennour Bidar, has defended basic income as a way to “stop strangling citizens with economic constraints”, on France TV (C La Suite). Cyril Dion, a known French filmmaker and environmental activist, has also supported basic income, alongside Bidar, as a way to both reduce acute inequalities and bring forward true environmental protection. According to him, there can be no ecology without social justice, which is also the opinion of other French thinkers and activists, such as Guy Valette. Also, on the political ground, Benoît Hamon (individually and under his recently formed Génération.s. party) has been defending the basic income policy in France, ever since the beginning of the last presidential elections.
More information at:
[in French]
Movement Français pour un Revenue de Base, “Gilets jaunes: le revenu de base comme réponse aux inégalités et à la pauvreté [Yellow Vests: basic income as a response to inequality and poverty]”, December 5th 2018
by Andre Coelho | Jan 6, 2019 | News
Michael Howard. Picture credit to: University of Maine
Michael Howard, a professor of Philosophy and Political economy at the University of Maine, who also specializes in environmental issues, has published an article on how a carbon fee and dividend might help to solve an impending climate disaster.
In this article, Howard speaks of a recent bill (November 2018), introduced to the House of Representatives of the United States, supported by Democrats and Republicans, “that would reduce CO2 emissions [from the US] by 40% in 12 years, and 90% by 2050”. Called the “Energy Innovation and Carbon Dividend Act”, it aims to impose a 10 US$/metric tonne fee on carbon fuels produced or imported, rising to 15 US$/metric tonne, if the referred CO2 emissions goals are not fulfilled.
The generated revenue would be saved at a Carbon Dividend Trust Fund, and be unconditionally redistributed annually to all US citizens. Estimated point to a US$ 3456/year for a family of four (as an example). Of course, fuel prices would go up, but according to the Regional Economic Models Inc (REMI), “most households would receive more in cash dividends than they would pay in higher fuel costs”. That and an estimated amount of 2.1 million extra jobs over 10 years, and reduced mortality in 20 years (due to declining air pollution).
If the bill is passed, present-day authority of the US Environmental Protection Agency (EPA) over carbon emissions will be suspended, but only to be re-installed if CO2 reduction goals are not met. Nevertheless, the expectation is that this Energy Innovation and Carbon Dividend Act will reduce carbon emissions from the US “far more than the Obama administration’s Clear Power Plan”. On social grounds, according to Howard, the bill is progressive, as far as taxation is concerned, and the dividend is fair and acceptable by the public at large.
More information at:
Michael Howard, “We have two years to avoid climate disaster. A carbon fee and dividend will help”, Bangor Daily News, December 18th 2018 (link to article not accessible from Portugal)
