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?

————————————————————

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.  

Basic Income: Remittances from Nowhere

Basic Income: Remittances from Nowhere

How a World Basic Income can be sort of mostly free.

The economic downturn associated with the coronavirus is causing a humanitarian and economic disaster. Now is the time to push for a World Basic Income (WBI) paid to every human on the planet. It should be high enough to cover the cost of living, at least in the developing world. This payment would not just stave off hunger and extreme poverty, but also work as a general stimulus for the global economy, which faces a potentially catastrophic contraction.

While the greatest benefits of this payment would be felt in the developing world, where the increase in income would be bigger in proportion to their current income, it would also provide important benefits to the developed world.

A WBI would pump demand into the global economy by raising the non-wage incomes of the population as a whole, including workers. This would reshape the global labour market, lessening migration pressures and the severity of cross border wage competition, because workers in and from the developing world, protected from absolute destitution, would be less inclined to work in appalling conditions for miserable wages.

There would also be a dramatic increase in consumer spending power in developing nations, which would increase the number of workers required to meet domestic demand for goods and services, meaning fewer still would be available to work producing exports to the developed world. At the same time the market for exports from the developed world would expand.

This would compound the original effect, and further strengthen the position of workers in the US “rust belt,” and equivalent populations in other developed countries, whose jobs would become harder to send offshore.

WBI would do this without the implementation of tariffs, which might spiral into a trade war, further contracting the global economy. A WBI is a mechanism that can achieve the same goals in terms of protecting developed world jobs and wages, without adding to the contractionary pressures that the global economy faces.

A payment like this is not a new idea, it even has a dedicated NGO, simply called “World Basic Income.” They propose a payment of $30 USD a month. Which they say could be funded using “rents” on global commons like airspace, and “international taxes” such as a carbon tax.

But it is a mistake to assume that we have to first “gather up” the money before we can pay it out.

Since the pandemic began, they are also starting to question this. Having recently pondered whether in “emergency times such as these, borrowing or currency creation could also be used to quickly generate the money needed.”

This is an encouraging sign. But they still seem to be of the view that money creation or borrowing as inherently problematic, if perhaps necessary given the current situation. This is the wrong way of thinking about it. Money creation and deficit spending are not signs of desperation, foolishness, or failure. They are necessary tools for good economic management, in relatively “normal” times as well as emergencies. It is not that, as it is sometimes put, “deficits don’t matter”, it is that deficits are good. The theory behind this is a little complex but it can be summarised as it is here by Cory Doctorow:

Government debts are where our money comes from. Governments spend money into existence: if they “balance their budgets” then they tax all that money back out again. That’s why austerity always leads to economic contraction — governments are taxing away too much money.

There’s one other source of money, of course: bank loans. Banks have governments charters to loan money that they don’t actually have on hand (contrary to what you’ve been taught, banks don’t loan out their deposits).

When there’s not enough government money in circulation, people seek bank loans to fill the gap. Unlike federal debts, bank loans turn a profit for bank investors. The more austerity, the more bank loans, the more profits for the finance sector (at everyone else’s expense).

The empirical case is pretty simple, and arguably even stronger: The US government has run deficits nearly every year since the early 30s. For all its current woes, the US is in a far better economic state now than it was then. In fact, some of the best years, like the “post-war boom,” were immediately preceded by the highest levels of deficit spending (the largest injections of cash into the real economy).

The same is true for most developed economies. Governments always promise budget surpluses, but rarely deliver. And that’s a good thing, because what they practice is better than what they preach.

So when it comes to a universal basic income, even in the “good” times, the best answer to the question: “how will we pay for it?” is that we will not pay for it.

At least not all of it, not directly, and certainly not upfront. If we do pay for it upfront, we suck as much money out of the economy as we pump in.

A “costed” or “revenue neutral” UBI plan would help protect the poorest from the effects of the crisis, but it would stunt the stimulatory effect we are also aiming to achieve. There would still be some stimulatory effects. Transferring income to poorer people leads to a greater portion of that income being spent, so the velocity of money (the overall rate of spending in the economy) increases and with it GDP. But expanding supply and velocity simultaneously, as a fiat-funded UBI could, would work much better.

In essence, we should just get the money the same way we ultimately get all money: We just collectively believe it into existence. This has the advantage that it doesn’t require us to convince or compel anyone to pony up in advance. And it would mean we could pay a higher WBI, starting perhaps at $1.90 USD a day, the UN’s “internationally agreed poverty line” , and then, when the sky doesn’t fall, rising further, perhaps to as much as five or ten dollars a day over the course of several years or a decade.

Of course, no one can predict in advance how people, and therefore the world economy, would really respond to a payment of this level. No one knows what the ideal level for a WBI is. But there’s no reason to think it is zero.

The global charity and advocacy organisation Oxfam does not back a WBI, but does explicitly recommend a kind of fiat money creation, or something very much like it. In a recent media briefing entitled Dignity Not Destitution it lays out suggestions for responding to the hardship caused by the pandemic. The plan includes the allocation of a trillion dollars worth of Special Drawing Rights, which are interest-bearing assets, a bit like treasury bonds, created by the IMF. SDRs are defined in relation to five major global currencies and can be used by nations to pay back debts to the IMF, or traded with each other for liquid currency.

By rapidly increasing the supply of this “paper gold”, as they did following the 2008 financial crisis, the IMF could help nations around the world increase their liquidity, allowing them to spend money to help the needy. This has also been requested by a number of nations and the IMF has said it is “exploring” that option.

Here we see a pattern emerging at the global level which resembles closely that developing at the level of national policy discourse.

Modern Monetary Theory advocates like Stephanie Kelton argue that the US government cannot run out of money any more than a sports arena can run out of points. But they do not support UBI, arguing instead for a Federal Job Guarantee. UBI advocates like Andrew Yang want a UBI but think they need to pay for it pretty much upfront with increased tax revenues.

But a growing cohort of thinkers are beginning to examine what happens when these herecies intersect. UBI advocate Alex Howlett is one of them. He coined the term Consumer Monetary Theory or CMT to distinguish his view from MMT. Another is Geoff Crocker, who talks of “Basic Income and Sovereign Money”. Martin Wolf, associate editor and chief economics commentator at the Financial Times, also backs both soft money theory and a UBI, as does Australian heterodox economist Steve Keen.

The four thinkers listed in the bottom right square all have unique perspectives, and among them only Howlett identifies their work with the CMT title. However it seems useful to me as an umbrella term for those who agree with MMT regarding the nature and constraints of government spending, but who promote a Basic Income rather than a Job Guarantee.

It is important to note that both MMT and CMT do think tax policies matter, just not in the ways we are usually told they do. One role they see for taxes that is relevant to this proposal is the idea that taxes demanded by a government in a specific currency help ensure the value and widespread acceptance of that currency, another is the way taxes help manage the build-up of currency and the amount of spending in the economy to prevent inflation.

In conventional thinking, taxes fill a bucket, the “government coffers”, and spending is a hole in that bucket, through which money escapes. In soft currency thinking, spending is the inflow of money, the bucket is a flower-pot — representing the economy — which requires frequent watering. Taxes are the drainage holes, there to stop the soil getting too saturated.

If we were to look clearly at the flowerpot representing the world economy, we would see the soil is bone dry. It is worst at the edges, where the dieback has already started, but the center, where the roots are thickest and thirstiest, is not far behind. The plant is starting to wilt. The good news is that the water is free. It is time to get the hose, attach a spray nozzle, and spray.

The Great Global Monetary Hack

The world lacks a true global reserve. The US dollar is the main currency of global trade, but that role is diminishing, and in any case it is managed by a government and central bank who are only mandated to pay attention to the needs of the global economy as and when these needs affect their domestic goals.

In terms of a truly global, globally managed, reserve, SDRs are the closest thing we’ve got. We cannot use them directly for a WBI, since they can only be held by nation states and other “designated holders”. But these are considered durably credible enough that their value held in 2008, even as the total stock increased roughly 10 fold, from around $20 billion to $200 billion. The additional trillion Oxfam have recommended be created, divided by 8 billion is $125 per person, or 34 cents a day for a year. It is not enough. But we’re getting somewhere.

Since individual human beings cannot hold SDRs, which are, formally, not money. We could issue a new currency, tied to these. A People’s Bancor, in honour of Keynes’s proposed global currency.

The basic framework would be:

  1. The IMF announces it will be holding an auction of SDRs starting in say, three months time, and continuing at regular intervals from then onward, that these auctions will be conducted using the new currency: the People’s Bancor.
  2. The IMF creates digital wallets for the citizens of all participating nations and starts to issue these new digital credits (which may be cryptographically minted) at regular intervals directly to every adult individual on the planet.
  3. Governments exchange national currency to obtain PBs. Either directly or by accepting them as a means of (partially) paying (some) taxes. This would cause businesses, individuals and exchanges to gain confidence in the new currency.
  4. Governments buy SDRs from the IMF with PBs, which are then taken out of circulation.

Poorer nations, especially, could be guaranteed a certain quota at a set price, separate to the portion auctioned in batches.

Another way to validate this currency would be by charging global taxes in it.

A United Nations could create a world tax authority and through it could demand taxes in this new currency. These should be demanded, at least at first, from the national governments themselves, who would thus be compelled to buy PBs using local currency.

So long as the monetary metabolism can be kept active, substantially more can be issued in currency than is collected in taxes.

A carbon tax is, of course, an important idea. And so is a tax on military budgets, if you think about it. This is a great opportunity to go after tax havens and the many billions held there illegitimately?

We must avoid this temptation to fix everything at once, and stay focussed. The number one priority is for these global taxes to validate the currency. And we need it to happen fast. We do not have time for nations to enter into complex multilateral bargains over the rules of such a system. We need something that is equally attractive to all parties.

What I suggest is that, at least at the start, we tax the money itself. At the end of each financial year, the government could be liable for a sum of PBs equal to, for example, 20 percent of the amount received by their population over the previous 12 months.

As it happens, this stands in stark contrast to the position taken by Howlett, who as I mentioned before coined the term Consumer Monetary Theory. He says that “tax revenue is meaningless” and that we should therefore focus on taxing the specific behaviours and phenomena we want to discourage. Since we want economic activity, money is the worst thing to tax. This is a rule I generally agree with, but this is one case (and there are others) where it makes sense to make an exception.

By removing the complications implicit in attaching these initial taxes to anything in particular, we remove reasons for various countries to say no. If we view the government as an extension of the population, which it rightly should be, then all we are asking them to do is accept a dollar, on the basis they will later have to pay back 20 cents.

Imagine a simplified example where a country’s population receives 100 PBs a year in total.

Here’s how that would play out over the next twenty years:

As the graph shows, the national stock of PBs would grow over time as the amount received by the population outpaces the amount the government has paid in global taxes. So long as the rate of taxation is less than 50 percent, this will be the case.

This rate wouldn’t, obviously, be something that we could “set and forget” but would be a policy lever, similar to central bank interest rates, which could be adjusted in response to real world results. If the currency starts to lose value, the rate should be increased, if its value is too high relative to national currencies, it should be decreased.

Such an agreement would be most perfectly championed by the G20, then implemented by the IMF and UN in concert, with the IMF issuing the currency and the UN collecting (and destroying) it.

But any group of nations collectively representing a significant chunk of world product could also create their own version of this through a treaty outside existing global structures. This currency club could grow gracefully, one new member country at a time. Countries should be free to opt out at any time, making joining the obvious choice.

It would have to have a central administrative office, with dedicated staff alongside observers and advisors from member nations working to regularly assess the effectiveness of the current settings, and adjust UBI levels, taxes due, the number and type of SDR sales (assuming IMF cooperation), and so on.

Perhaps the best thing about this plan is the lack of downsides. It is, I contend, counterintuitively plausible that national governments would sign up for such a plan, especially as the economic crisis, likely to be the worst in a century, deepens.

If it does not work, then the currency will be stupidly cheap and the participant governments will easily be able to get enough to cover their obligations.

If it does work, and the value of the currency holds, then their economy is experiencing a sudden inflow of valuable currency, equivalent to a steady and substantial increase in remittances. There would be, inevitably, some cost to the local governments, in that they would either exchange their national currency for PBs, or accept it in taxes (instead of their national currency). But every dollar, pound, yen, rupee or dinar spent in this manner would have many times the stimulatory effect of normal spending, since when you buy one PB, you validate the rest out there in circulation. They could also just just print the money with which to make these transactions, since their own citizens will in most cases accept this as payment.

Governments that do not want to do this, or could not for some reason (a lack of their own currency, for example) could simply introduce a new tax on the wealthy and/or high-income earners, payable in PBs. This would compel these better-off members of society to exchange some of whatever currency they have for PBs. The effect of this transfer would be similarly multiplied as the other PBs in circulation were validated by it. Whether it is stimulatory spending or this tax-driven redistribution, you get much more bang for your buck this way than you would usually.

If it works too well, and the new currency is valued too highly against local currencies, making it difficult for governments to meet their tax obligations without inflating their own currencies, that means we can print and distribute more, until the price of a PB falls (while the value of the basic income increases), or lower these tax obligations.

This plan will not solve every problem, but it would be the biggest economic stimulus, and the greatest step towards ending deprivation, so far in the history of humanity. It is of course optimistic to imagine that our leaders are capable of seeing clearly enough, and acting boldly enough, to set a plan like this in motion. But sometimes a crisis can bring out the best in people, and the economic crisis, which will extend beyond the pandemic, may not give them the option of sticking to conventional responses.

Written by: Austin Mackell

In Solidarity with Black and Brown Americans: How UBI Offers a Path Forward

In Solidarity with Black and Brown Americans: How UBI Offers a Path Forward

We stand at a crossroads. Our great depression threatens to create a larger and more permanent underclass in the United States, as Congress loots the economic system for over $5 trillion in bailouts for the wealthy. Brave protestors and disaffected rioters have taken to the streets to speak truth to American white supremacy, even in the midst of a pandemic that threatens the lives of Black and working-class Americans the most.

George Floyd’s murder inspires unimaginable pain. We lost a soul, a neighbor, a friend, and for many—a brother—to the hands of injustice. Breonna Taylor and Ahmaud Arbery. Eric Garner, Tamir Rice, Laquan McDonald, and Kalief Browder. Countless people have been stolen from their families. From every city in America. Because they were black. 

To say that Black Americans live in a state of terror at the hands of unjust policing, vigilantes, and the criminal justice system is an understatement. To many, it is a militarized occupation of the cities built by their labor, in this century, and the labor of their ancestors dating back almost four hundred years. 

If you name a disease in American society, whether it be heart attacks or COVID-19, poverty, or evictions, Black Americans are disproportionately brutalized. The underlying disease is white supremacy, in all its heinous and hidden forms. It hides in white systems. And it hides in white people’s hearts. The United States never achieved freedom for Black Americans. As Fredrick Douglass noted, as wage slavery and disenfranchisement replaced slavery after the Civil War, “Emancipation for the Negro was freedom to hunger, freedom to the winds and rains of heaven, freedom without roofs to cover their heads… it was freedom and famine at the same time.” 

Universal basic income, an unconditional payment to all rooted in the belief that everyone has a right to natural resources and the economic fruits of our labor, represents a way to make economic freedom a reality. For Black and brown Americans, it will help counter many of the innumerable barriers to voting: the cost of voting documents, forced relocation, the inability to take off work to vote, intergenerational nihilism, and the economic insecurity that makes it impossible for poor Americans to run for office themselves. Universal Basic Income posits that an individual’s right to life, particularly in a world scourged by a pandemic, should not depend on the profit-driven interest of a corporate employer. Its philosophy contends that the more conditions put on accessing economic relief, the harder it is for people to use and access it — as any person who has received welfare or applied for unemployment benefits will tell you.

In his address to Stanford in 1967, Martin Luther King Jr. famously said that riots “are the language of the unheard” for those denied suffrage or recourse through the political system. Less appreciated is what he said immediately after: “Now one of the answers it seems to me, is a guaranteed annual income, a guaranteed minimum income for all people, and for all families of our country.”

Rooting his philosophy in a politics of hope, King called on us to implement policies that fundamentally transform government. Because millions have taken to the streets, the elite finally listens in fear, making this transformation possible. Universal Basic Income is fundamental for restoring democracy, a social contract that lays the groundwork for peace and justice. We need this compromise more than ever as inequality reaches record levels, authoritarian regimes strip ordinary people of their rights, and the destruction of our planet continues unabated. With more climate and pandemic crises on the horizon, how long will it take elites to realize that this economic system threatens the rise of violent populism?

As authoritarianism reasserts itself in the  United States, Brazil, India, China, and Russia with mass surveillance and information warfare, the window for a peaceful resolution is fast departing. Now more than ever, Black and brown Americans and their allies have shown us that our only hope is taking action to demand our rights be protected. And we must be willing to risk our lives to ensure those rights are backed by transformational policies like Universal Basic Income.

Let us use this moment to demand comprehensive racial and economic justice for our nations. We owe George Floyd no less. 

 

Article By James Davis
Picture Creator: Jesse Costa
Picture Copyright: Jesse Costa/WBUR

A corona is the halo of light during a solar eclipse

A corona is the halo of light during a solar eclipse

Time for a new story

A corona is the halo of light around the solar eclipse. The coronavirus crisis can ensure a more balanced economy. Care and solidarity must support our economy and society.

Under a crystal-clear sky and the chirping of birds, our economy glides into a state of slow motion. Foremost, the virus is a drama and poses a great risk for society and its people. Next to that, it is also a strange experience. It is quiet, mostly dogs with their owners populate the streets. 

Only “vital functions” are fulfilled. Non-vital employees have to stay at home or work from home. They are not really necessary. Childcare is only available for people who work in healthcare, and other employees that we really cannot do without. The rest must arrange childcare themselves. Raising children is a vital function in society, and suddenly childcare is too. 

This is remarkable. Our view of the economy and income is rapidly changing. Our values change. The term “Working Netherlands” takes on a different meaning than before. Our health is number one, and better-paid employees sit at home these days. We have traded shopping for a quiet walk. Nature makes itself heard, people no longer dominate everything.

Crucial reflection

And that new reality leads, next to all the illness and disruption, to crucial reflection. Considering how we have organized our society and our economy. We reflect on the value of well-paid, low-paid, and unpaid labor for the economy and our society. We reflect on the value of (working) time. And we reflect on what everything is all about.

Ever since the coronavirus spread throughout the world, there is great appreciation for the people who work in healthcare. Everyone now sees that these vital functions are worth a lot, but that at the same time they are not the highest-paying jobs. 

It started with applause from balconies in Spain and Italy, followed by applause and flags in the Netherlands. A standing ovation. Professionals take care of the sick and are at risk themselves. This crucial interest is now visible and visibly appreciated.

In addition, there are care activities that are not paid. We also applaud all these unpaid people! Unpaid care activities, such as care for children, family, for the earth, the environment, social contacts, and culture, are vital as well. And this is more visible as well. In this time of crisis in the Netherlands, we are seeing more solidarity and more unpaid voluntary initiatives.

A different world

The current old economy is being hit hard, and we will soon have to deal with it when this is over. We are curious to hear what Prime Minister Rutte will say on behalf of the national government. Will it again be: “Buy the car you wanted for a long time”, trying to stimulate consumerism? Or does this crisis bring a different vision and a different world closer than ever?

Will there be a reflection on our incomplete society with our focus on rules and procedures? We need a vision of how we can organize society differently. A society where not money but people are completely central again. 

Once again: paralyzing the current economy gives us time to reflect on this and think about a different economy. An economy in which we realize that it mainly consists of services and care. An economy in which solidarity and security of existence are paramount.

Making unpaid work visible

The crisis is a disaster, but it also shows us where we come short. And it brings up essential questions. How can we take better care of each other? How can we take better care of our Earth? How can we also make unpaid intrinsically-motivated care work visible in our economic model?

We should think about care credits. Some examples: a pension for unpaid caregivers, a universal global price for oxygen, better reimbursements for volunteers. And yes, we should consider a universal basic income.

These proposals and ideas can be a lever for changing values ​​and appreciation for all the (unpaid) care work and solidarity that is now visible in this crisis. And these measures can be a safeguard to achieve a different society and a new economic model. Because there is no one who has never been taken care of, and everyone will ever take care of someone.

A corona is the halo of light around the solar eclipse. A fragile light shines behind the dark. The coronavirus crisis can provide a more balanced picture of the economy. It is not the banks and stock markets, but it is solidarity and care that support our economy and society.

It’s time for a new story.

 

Jan Atze Nicolai 

Political thinker and poet

Member of the Board of Vereniging Basisinkomen (BIEN member)a

Income Movement Endorses Three UBI-Supporting Candidates in Primary Elections on Super Tuesday

Income Movement Endorses Three UBI-Supporting Candidates in Primary Elections on Super Tuesday

Blogger’s note: this post is by a guest contributor, Stacey Rutland. The opinions expressed are hers alone. They are not necessarily shared by me or by the Basic Income Earth Network. -Karl Widerquist

Super Tuesday is extra super this year!

Three incredible congressional candidates are running on UBI and taking on the establishment in California (LA, SF, and Southeast CA). Income Movement is proud to endorse David Kim, James Ellars, and Agatha Bacelar.

Follow them, donate to them, vote for them. Or reach out to your friends and family who are in these districts and make sure they know there is a candidate on their ballot worth supporting. First and second place move onto the general in California which means all three of these candidates are super competitive.

Real change happens at the ballot box. It starts now. #incomemovement #ubi #basicincome

UBI Candidate Highlight: Super Tuesday

There are three UBI candidates running for Congress with primaries tomorrow! 24 hours is more than enough time to make a difference. Tweet, share, and bother your friends in California to vote for these basic income advocates. We’ll be highlighting more candidates across the country soon.

Agatha Bacelar: Congress, CA-12 (San Francisco)
Primary Election: March 3, 2020
Running against Nancy Pelosi is a 28-year-old Brazilian immigrant and San Franciscan. She’s running for Congress because we must act on climate, must reduce systemic inequalities, and must make our representatives reflective of and responsive to the people. San Francisco has a powerful legacy. Agatha believes it’s time to reclaim its roots and elect a Congresswoman who will represent the 100%.

Follow Agatha on Twitter | Donate to Agatha

James Ellars: Congress, CA-08 (Southeast CA)
Primary Election: March 3, 2020

James is the fourth of six children, and grew up in a working class family in southern California. James supports policies like Democracy Dollars and the Freedom Dividend paired with a VAT. Income Movement is proud to support James Ellars for Congress.

Follow James on Twitter | Donate to James

David Kim: Congress, CA-34 (Los Angeles)
Primary Election: March 3, 2020
David is an attorney, author, and community activist running against an establishment Democrat. David’s parents immigrated to the U.S. from Korea. David is running to pass basic income and medicare for all, relieve student debt, and eradicate poverty for all. Income Movement is proud to support David Kim for Congress.

Follow David on Twitter | Donate to David

This is only the beginning. And we can only do something great with your help. Join us!

Guest Contributor:
Stacey Rutland

Blogger’s note: this post is by a guest contributor, Stacey Rutland. The opinions expressed are hers alone. They are not necessarily shared by me or by the Basic Income Earth Network. -Karl Widerquist

Stacey Rutland

Stacey Rutland

Stacey Rutland is one of the cofounders of Income Movement, an organization looking to build create a sustained national movement for basic income.