by Kate McFarland | Jan 13, 2017 | News
In a recent interview and article, economist James K. Boyce defends a universal basic income of $200 per month, funded in part by taxes or fees on carbon emissions and financial transactions.
Boyce, an economics professor at the University of Massachusetts at Amherst and program director at the Political Economy Research Institute, recently co-wrote a article on the topic with entrepreneur Peter Barnes, who authored the 2014 book With Liberty and Dividends for All. The article was originally published as “$200 Dollars a Month for Everyone? Universal Income from Universal Assets” on Triple Crisis, a blog devoted to finance, development, and the environment. It has also been republished on Medium as “How To Pay For Universal Income”.
Boyce and Barnes argue that a modest basic income could be funded from “universal basic assets” — wealth that is rightfully owned by all members of society, such as that which is derived from appropriation of the commons (e.g. extracting minerals or timber from the land or releasing pollutants into the atmosphere). They argue that universal basic assets also include a portion of wealth generated from society’s financial and legal infrastructure.
On their view, a portfolio of such commonly held assets could (and should) be used to fund a citizen’s dividend of $200 per month to all Americans, distributed automatically via wire transfers to individuals’ bank accounts.
Boyce provides further explanation of the proposal in an interview with Kim Brown of the Real News Network (see video below).
In the interview, while elaborating upon the idea of universal basic assets, Boyce compares and contrasts his proposal with Alaska’s Permanent Fund Dividend (PFD), which provides all Alaskan residents with an annual basic income ($1022 in 2016) from the revenues on a permanent fund created from royalties on the sale of the state’s oil. Boyce notes that whereas Alaska’s PFD incentivizes drilling for more oil, a carbon tax and dividend would dis-incentivize carbon emissions, thereby promoting more sustainable energy production.
Boyce further articulates his ethical justification for a citizen’s dividend in response to a question concerning whether it is fair to give money to those who don’t work for it: “All we’re talking about is returning to people the money that comes from uses of assets we all own or should own in common. So, it’s not about handing out free money. It’s about not letting people use those assets for free. That’s the real handout.”
A transcript of the interview is available on the site of the Real News Network (“Universal Basic Income: A Solution to Inequality, Economic Instability, and Climate Change,” November 21, 2016.)
Cover Photo: CC BY-NC-ND 2.0 Pembina Institute
by Kate McFarland | Jan 12, 2017 | News
The Finance Minister of the northern Indian state Jammu and Kashmir (J&K) has endorsed what he calls a “universal basic income” — which would entail the replacement of existing subsidies with direct cash transfers — for all residents currently in poverty.
Finance Minister Haseeb Drabu presented the J&K state budget in a speech on Wednesday, January 11. The budget proposals included what was called “universal basic income”, though Drabu also stated that this universal basic income would be distributed only to those living below the poverty line.
As the economist Himanshu (Jawaharlal Nehru University) noted in remarks to Mint, Drabu’s proposal is more properly designated a “targeted cash transfer” rather than “universal basic income” (which he called a “European concept”).
Although Drabu’s proposed reform is not universal, the use of direct and unconditional cash transfers in poverty relief would be a significant step in the direction of what is more traditionally called “basic income”. Further, like many economists and politicians who are attracted to the idea of a basic income for India, Drabu defended the policy by pointing to inefficiencies in the nation’s current systems of aid. He was reported in the Indian press as stating, “Not only will it [direct cash transfers] eliminate all the leakages, the cost of delivery will also be reduced dramatically.”
Drabu also said, however, that executing the plan for a cash transfer system would require “not only concurrence but help from the central government as well”.
This might not be an unrealistic hope. The national government of India has expressed murmurs of interest in universal basic income, which will be a theme of the Economic Survey released at the end of this month. In recent weeks, some misleading reports in the news media have suggested that India has already endorsed or is about to implement a basic income; most of these reports, however, were based on a misconstrual of remarks reported in an interview with economist and BIEN cofounder Guy Standing. Standing has since clarified his remarks in an editorial in The Financial Express and in a statement on Basic Income News.
References
Asit Ranjan Mishra, “Jammu and Kashmir commits to idea of Universal Basic Income,” Mint, January 12, 2017.
“Budget initiates radical restructuring, reforms,” Greater Kashmir, January 12, 2017.
Article reviewed by Danny Pearlberg.
Cover photo: Chatpal, Kashmir by sandeepachetan.com, CC BY-NC-ND 2.0
by Kate McFarland | Jan 12, 2017 | News
Finland’s basic income experiment is now underway, with the first payments having been mailed this week. With the experiment generating much media attention, here is a review of some of the basics.
On January 1, 2017, Finland launched an experiment in which 2,000 individuals–randomly selected from a pool of unemployment benefit recipients–will receive unconditional cash payments of €560 (about 590 USD) per month for two years.
The first payments were sent out on Monday, January 9.
The main goal of the experiment, as it presently stands, is to determine whether unconditional cash transfers are more effective than means-tested unemployment benefits with respect to promoting job-seeking and employment. Olli Kangas, leader of the research team at Kela that designed the experiment, has recommended expanding the experiment to other target populations (including “other persons with small incomes” and individuals under age 25).
The Sample
The test subjects comprise 2,000 individuals between the ages of 25 and 58 who were receiving unemployment benefits from Kela (the Social Insurance Institution of Finland) as of November 2016. These subjects were randomly selected from a pool of about 175,000 individuals nationwide.
To avoid selection bias, participation in the experiment was mandatory for those selected.
Kela reports that, of those selected, 87% had been receiving the Labour Market Subsidy, while 13% had been receiving the Basic Unemployment Allowance. These programs provide taxable payments of €32.80 per day, five days per week, to those (and only to those) who are officially registered as unemployed job seekers. The benefits are subject to withdrawal if a recipient turns down an offer of work or training. Furthermore, if a recipient takes temporary or part-time employment, the amount of the benefits is decreased (as a general rule) by 50 cents per euro in earned income over €300 per month.
The Basic Income
Those included in the study population will be paid a monthly basic income of €560 for a period of two years. Unlike the Labour Market Subsidy and Basic Unemployment Allowance, the amount of the benefit does not decrease if the recipient earns additional income (regardless of the amount of earned income).
The basic income is not subject to tax. However, it is counted as income for the purpose of determining eligibility for additional social assistance.
Kela notes that there are some circumstances under which payment of the benefit might be terminated, such as moving abroad or entering military service.
Research Objectives
The Finnish government is interested in testing basic income as a way to remove work disincentives in the current welfare system as well as to reduce bureaucracy.
Kela plans a study of the trial in which the group of the 2,000 individuals receiving the basic income is compared with a control group consisting of all individuals in the original target population who were not selected to receive the benefit. The study will examine, for one, differences in employment rates between these groups.
Information about individuals’ employment status will be gathered through register data. Kela will be conducting no interviews or questionnaires of the test subjects, since such interventions have the potential to influence behavior. (Kela has also expressed concern about interviews with test subjects conducted by the media.)
It is possible that the experiment will be expanded in subsequent years–as research team leader Olli Kangas has recommended–to test different levels of basic income or different taxation models, or to include additional population groups. However, no firm plans have been made, and moving forward with any expansion is contingent on the amount of funding allocated to the experiment by the Finnish government.
More Information
The latest information about the study can be found on Kela’s “Basic Income Experiment 2017-2018” webpage: https://www.kela.fi/web/en/basic-income-experiment-2017-2018.
Thanks to Danny Pearlberg for reviewing this article.
Photo: Saariselkä, Finland CC BY 2.0 Ninara.
by Kate McFarland | Jan 12, 2017 | News
Economist Klaus Schwab, founder and executive chairman of the World Economic Forum, expressed optimism about unconditional basic income (bedingungsloses Grundeinkommen) in an interview with Hamburger Abendblatt, a daily newspaper in Hamburg, Germany. Schwab called the idea “basically plausibly” and predicted that discussion about it would develop over the next decade.
The Hamburger Abendblatt interview covered a range of topics related to globalization and digitalization. At one point, the reporters asked Schwab about his assessment of US President Donald Trump’s contention that he will bring back jobs from Asia and Mexico. In reply, Schwab pointed out that some industry might return to the US in the form of “digitized factories”.
Schwab then broached the idea of unconditional basic income in response to a follow-up question about the future of work: if industry is becoming digitized, what should be done for “those for whom there is no longer any work”?
In Switzerland, there was recently a referendum about the unconditional basic income. At least 23% of the citizens voted for it. Even I assent the idea for a basic income is basically plausible. Furthermore, I believe in 10 years the discussion about it will be far more ahead than now.
In response to a question about the effect of a basic income on attitudes toward work, Schwab asserts that a basic income could be seen as recognition for certain types of work, such as care work, that are important to society but currently paid relatively low wages:
I deny that people would then put their hands in their lap and sit lazily at home. A nurse in Germany with 2000 euros gross pay might today feel worn out. If, however, she were to receive a basic income, she might see it as recognition, and she would have a different basic attitude towards her work. In the future, if jobs are swept away due to digitalization, we need on the other hand a humanization of society. Industrial jobs will be gone, but there will be more social work to be done, like medical and health care.
The World Economic Forum is best known for its annual meeting in Davos, Switzerland. Held each year in January, the Davos meeting brings together approximately 2,500 invited guests, comprising top business executives, political leaders, and distinguished academics, for a series of panels and discussions of pressing global economic, political, and social issues.
The Davos meeting itself has already proven receptive to discussions of basic income. This year, the event will include a panel on basic income, featuring BIEN cofounder Guy Standing. Last year, the event held a forum on a “world without work”, in which Nobel laureate Sir Christopher Pissarides expressed support for a basic income guarantee, and was the site of the dancing “robots for basic income”.
Full interview with Schwab (in German):
Hannes Koch and Jörg Quoos “Schwab: ‘Gewinner müssen mit Verlierern solidarisch sein’,” Hamburger Abendblatt, January 9, 2017.
Translation assistance by Ronald Heinrich. Reviewed by Danny Pearlberg.
Photo CC BY-NC-SA 2.0 World Economic Forum
by Kate McFarland | Jan 11, 2017 | News
A panel discussion and Q&A on a universal basic income for the UK was held in Sheffield in November 2016. Watch the video below.
The Festival of Debate, hosted by the British nonprofit organization Opus Independents, is a series of panel discussions, debates, lectures, and artistic performances related to social, political, and economic issues in the UK. The series was launched prior to the general election in May 2015 and has been continued through 2016.
On November 23, 2016, the Festival of Debate held a two-hour Q&A and debate on universal basic income in Sheffield, England, held at the DIY arts space DINA. After opening statements, the floor was opened to questions, concerns, and criticisms from the audience.
Topics addressed include: “How could Britain fund a UBI?” “Why spend that money on UBI? Why not improving NHS, public services, job creation, etc?” “With automation, will there even be enough jobs in the future?” “How should we define ‘work’?” “How could we deal with freeloaders under the UBI?” And many others.
PANELISTS (viewers’ left to right):
• Simon Duffy, Director of the Centre for Welfare Reform and member of Basic Income UK.
• Andrew Gamble, Emeritus Professor of Politics at University of Cambridge.
• Kitty Stewart, Associate Professor of Social Policy at the London School of Economics and Research Associate at Centre for Analysis of Social Exclusion. (Stewart is the main critic of basic income on the panel.)
• Jonathan Bartley, Co-Leader of the UK Green Party, which endorses universal basic income as part of its platform. Replacing Bartley after about 1 hr 20 min (when Bartley leaves to catch a train) is another Green Party member, Laura Bannister, who recently founded World Basic Income.
Photo (Sheffield) CC BY-NC-ND 2.0 Paolo Margari
