by Citizens' Income Trust | Mar 1, 2013 | Opinion
The thesis of this book is that there is a ‘good life’ which can be defined independently of our subjective desires, and that it is possible to determine the elements of that good life and some of the means for attaining it.
The first chapter sets out from Keynes’ prediction that increasing automation would enable us to experience a good life at the same time as working shorter hours: but Keynes ‘did not understand that capitalism would set up a new dynamic of want creation which would overwhelm traditional restraints of custom and good sense’ (p.42) – and, as the Skidelskys correctly note in chapter 2, capitalism ‘has given us wealth beyond measure, but has taken away the chief benefit of wealth: the consciousness of having enough’ (p.69).
Chapter 3 surveys pre-modern economic thought, and particularly Aristotle’s, for whom money is the servant of the good life rather than being an end in itself. The Skidelskys then divert us down two cul-de-sacs in order to back us out again. They explore the modern ‘happiness economics’, find it methodologically and ethically suspect, and decide that the pursuit of happiness is no more likely to lead to the good life than is the pursuit of money:
Our proper goal, as individuals and as citizens, is not just to be happy but to have reason to be happy. To have the good things of life – health, respect, friendship, leisure – is to have reason to be happy. (p.123)
Similarly, the authors urge us not to argue from the dangers of climate change to a necessity to reduce economic growth. They prefer a ‘good life environmentalism’: the pursuit of an objectively good life which requires us to treat nature kindly because ‘harmony with nature is part of the good life’ (p.140).
Chapter 6 is the heart of the book because it describes the good life in terms of a set of ‘basic goods’, defined as goods which are ‘universal, meaning that they belong to the good life as such … final, meaning that they are good in themselves, and not just as a means to some other good … sui generis, meaning that they are not part of some other good … indispensable, meaning that anyone who lacks them may be deemed to have suffered a serious loss or harm’ (pp.150-52). On the basis of this definition the authors list seven basic goods: health, security, respect, personality (‘the ability to frame and execute a plan of life reflective of one’s tastes, temperament and conception of the good’ (p.160)), harmony with nature, friendship, and leisure.
The authors study indicators related to the elements of the good life and find that in many ways life in the UK is less good than it was forty years ago. They recommend a ‘non-coercive paternalism’ (p.193), and at the heart of their prescription is an argument for a Citizen’s Income on the basis of their definition of the good life. For instance: leisure and self-directed activity are necessary constituents of the good life, so to enable more people to be employed part-time, which a Citizen’s Income would do, would enable more people to experience the good life.
It is unfortunate that the book advocates the pursuit of the good life purely in terms of our generation of homo sapiens, and explicitly does so in the chapter on ‘limits to growth’. A good life for the planet, and a good life for future generations, are surely just as important as the good life for us. The reader will need to decide whether the Skidelskys have made an adequate case for downplaying that importance. It is also a pity that the book contains no separate bibliography.
But having said that, it is a pleasure to see a book which in general so cogently combines a clearly formulated principle, diagnosis of our current plight, a clear route towards a desired end, and detailed policy prescription designed to take us along that route.
We are of course most encouraged that the Skidelskys have concluded that the attainment of the good life requires a Citizen’s Income.
Robert Skidelsky and Edward Skidelsky, How Much is Enough? The Love of Money, and the Case for the Good Life, Allen Lane/Penguin Books, 2012, xi+243 pp, hbk, 1 846 14448 6, £20
by Citizens' Income Trust | Feb 28, 2013 | Opinion
‘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
by Citizens' Income Trust | Feb 4, 2013 | Opinion
Since the 1990s, on average the Indian economy has been growing at over 6% a year. Yet hundreds of millions remain mired in poverty, and inequality has grown steadily. For decades, although there are 1,200 centrally-funded social policies on the statute books and hundreds more at state level, successive governments have relied largely on the Public Distribution System (PDS) to redress poverty.
The PDS subsidises consumers via subsidised grain, rice, sugar and kerosene if they have a Below Poverty Line (BPL) card or something similar. Producers of many goods receive huge subsidies as well. Altogether, subsidies eat up 7% of GDP.
They do not work. The system is wasteful, inefficient, market-distorting, regressive and deeply corrupt. Rajiv Gandhi famously said that 85% of subsidised food did not reach the poor. The Deputy Chair of the Planning Commission said in 2009 that only 16% of it reached them. Others have estimated that for every Rupee spent 72% is lost in transit.
While continuing with the PDS, in 2005 the Congress Party, long regarded as the bastion of Indian democracy, launched a grandiose National Rural Employment Guarantee Scheme (NREGS), supposedly guaranteeing every rural household 100 days of labour a year at the minimum wage. Huge numbers have supposedly benefited, vast sums spent, many eulogies uttered.
In reality, ghosts have been resurrected, recorded as having done labour. Most rural people have had few if any days of labour under the scheme (renamed to give it the status of having Gandhi’s name preface it). Much of the money has gone into local bureaucrats’ pockets. One study estimated that only 8% of recipients had been employed for 100 days in one year. Another suggested that only a minority of projects had been completed, another that it has not reduced rural poverty at all. Corruption is endemic. The scheme only awaits a journalist to write a book entitled The Greatest Social Policy Scam in History.
Meanwhile, something remarkable has been brewing. A radical alternative has been gaining ground. In 2009, led by SEWA (the Self-Employed Women’s Association), we launched the first of three pilot cash transfer schemes. The principle is simple: Give people cash, a basic income, instead of subsidies or make-work labour. And do not attach conditions, directing people how to spend the money; they can work that out for themselves. We do not claim credit for what has happened since, for other factors have contributed. But the pilots have proved timely.
The first, financed by UNDP, took place in a low-income area of Delhi, where hundreds of households were offered the alternative of continuing with the subsidised items or receive a monthly cash transfer of equivalent value. Many initially chose the cash. Later, when we did the evaluation, many more wished to do so. Although a political campaign was organised, involving physical violence towards our women fieldworkers, the results have been very positive, with improvements to living standards.
Meanwhile, with financial help from UNICEF, we launched a bigger pilot in the state of Madhya Pradesh. In eight villages, for eighteen months, every man, woman and child has received an unconditional monthly cash transfer. Over 5,500 villagers have been recipients. We have been evaluating the effects by comparison with people living in comparable villages, in a so-called randomised control trial.
Such pilots take a long time. Politics does not wait. Suffice it to note that the results of this and the third pilot in tribal villages are heart-warming. Even though the amount paid is very modest, about 30% of bare subsistence, we have observed improvements in nutrition, school attendance and performance, women’s status, economic activity and sanitation. Many villagers have told us they want a substitution of cash for subsidies. More have come round to that as experience has been gained.
What seems to happen is that the cash provides liquidity and a sense of security that infuses confidence and gives people a greater sense of control over life. So the positive effects exceed the value of the transfer.
It is what has happened back in Delhi that is so intriguing. In the past few months, we have been asked to brief senior officials, and they have been emboldened to push cash transfers into the centre of national debate.
In November, the Prime Minister went on television to announce the government is to launch a cash transfer scheme, rolling it out to 51 districts in 2013 by raising the price of kerosene and compensating people by cash paid into bank accounts. Not to be outdone, on December 15, Delhi’s Chief Minister launched an unconditional cash transfer scheme in her state for those omitted from the cap put on BPL card holders. A torrent of media comment has followed.
The Congress Party has been converted. Earlier this month, its leader Sonia Gandhi, the Prime Minister and several Cabinet colleagues descended by helicopter on a village and announced its cash transfer policy to a crowd of 30,000.
Indian social policy is at a crossroads. Opposing cash transfers, a group of diehard supporters of the PDS have been promoting a Right to Food bill that would universalise the PDS and subsidised food. They have also organised hostile protests. They claim cash benefits would lead to abandonment of public social services.
They are being Canutish. The PDS is literally rotten, as Delhi’s Chief Minister has admitted. Often grain comes in sacks that contain numerous small stones to make up the weight; often the grain and rice are stale; often villagers travel long distances only to find the rations are not there. All this is ignored. Let them be supplicants, say the paternalists in effect.
The risk now is that, in the rush to operationalize cash transfers across the country, design faults and excessive politicisation will put back the cause for years. Here we have a lesson for government. In the villages receiving the basic income, the payments have been an extra, not a substitute for something. We asked everybody to open a bank account within three months of receiving their first payment. There were predictable teething problems. But soon, everybody had accounts, with help from our colleagues. In that time, suspicions were allayed and support for cash transfers strengthened.
The government is doing it the wrong way. It is raising the price of a subsidised item, kerosene, telling people they will be compensated through a bank and by means of an identity card, the Aardaar. But, as the government’s pilot has shown, many will lose in the short-term since they do not have accounts and cannot obtain the cash. This risks a backlash.
The solution must be based on realising that while villagers are always on the edge financially a government can take a medium-term perspective. If they rolled out their scheme to those 51 districts by offering extra money in the first year while stating that everybody must open a bank account in that time, the fiscal cost will be small. In the second year, they could phase out selected subsidies, sharing the gains by disbursing a third of the subsidy in additional payments while saving the fiscal coffers the other two-thirds. Remember that most money spent on subsidies does not reach the intended beneficiaries.
Will wisdom prevail? One cannot be optimistic. It is a pre-election year and Congress is set on making cash transfers what a leading politician has called “a game-changer”, an election-winning measure. This will galvanise opposition. Everybody would gain if only the politicians had the wisdom to de-politicise the reform. The Government should set up an independent Cash Transfers Commission to oversee the process and to ensure the level of benefits is set by economic criteria and not raised just before elections.
How much better it would be if unconditional, universal, individual cash benefits were rolled out slowly and quietly. We know they have made a great difference to the lives of those thousands of villagers in our pilots. We have heard their stories, seen their children and analysed the data gathered by our fieldworkers. There is a great chance of transforming Indian social policy. Let us hope the politicians take it.
by Citizens' Income Trust | Jan 24, 2013 | News
At the Great Lakes Commons Gathering at Notre Dame University in the United States last October James Quilligan, who has recently spoken at a series of seminars in London, proposed a Great Lakes Commons Trust and Community Bank. ‘Bioregional trusts are an emerging horizon in environmental sustainability and financial stability for the people of a common resource area. … The purpose of a bioregional trust is to safeguard a resource for future generations. Just as some communities across the world have become adept at preserving, creating and replenishing their local commons, bioregional trusts can also apply the principles of subsidiarity, polycentricity and inclusive decision-making to the protection and production of resources that are shared on a broader scale. Integrative commons management contributes not only to a clean and healthy biological environment, but also to people’s social well-being. In addition, a bioregional trust may generate funds which could be used for ecological restoration as well as a basic income for the people of a region.
For more on James Quilligan’s proposal, go to:
https://thefinancelab.ning.com/events/meetings-with-remarkable-commoners-james-quilligan-finance-lab-ch?xg_source=activity
