by Tyler Prochazka | Dec 16, 2016 | Bios & background Info
Biography
Tyler Prochazka was born in Kansas. In high school, he got involved in competitive policy debate, which spiked his interest in government policy. In 2010, Western Kentucky University’s speech and debate team recruited him to compete on the team. Prochazka received degrees with honors in Economics, International Affairs and Asian Religions and Cultures. His honors’ thesis was a comparative analysis of Chinese and American youth political perceptions. While at WKU, he also learned Mandarin and studied abroad in China three times.
Prochazka has participated in research fellowships and internships at the American Enterprise Institute, National Center for Policy Analysis and Rand Paul’s (R-Kentucky) Bowling Green Senate office. Currently, Prochazka is completing a Master’s degree in Asia Pacific Studies at National Chengchi University in Taiwan through the Fulbright scholarship.
Advocacy
Prochazka’s interest in the basic income began while attending WKU, where he started reading about the libertarian case for a basic income in Reason magazine. In the summer of 2015, Prochazka started volunteering for the Basic Income Earth Network after watching a documentary featuring Guy Standing.
Since 2016, Prochazka has been the features editor for BI News. He has concentrated much of his research on the feasibility and implications of implementing a basic income in Asia Pacific countries. For his WKU economics thesis, Prochazka conducted an economic analysis of the minimum income guarantee in China (dibao) and the prospects of replacing the dibao with a universal basic income.
While studying in Taiwan, Prochazka is working with the Taiwanese basic income organization to plan events and promote the concept in the Asia Pacific. Prochazka also helps run the Facebook page Libertarians for Basic Income.
Capitalism and Basic Income
One of the appeals of basic income, Prochazka argues, is the positive economic impact it would have, especially as a replacement to the current welfare state. It would dramatically lower bureaucracy costs and lower effective tax rates for low-income individuals, allowing these individuals to work more if they choose.
A basic income has the potential to open the market place for everyone, making finding suitable jobs and starting businesses easier. Prochazka believes that if libertarians are serious about expanding and sustaining the free market, a basic income is a necessary step.
Media references
Article cited in Libertarian ticket could spoil Clinton party, CNN, 2016
Interviewed at New Taipei City Festival, Taiwan, 2016
Referenced in WKU sees record success in national scholarships, WBKO ABC News, 2016
Featured in WKU debaters visit Plano Elementary, BG Daily, 2013
Non-BIEN Publications
Would the Lee-Rubio Tax Plan Help Lower-Income Households?, National Center for Policy Analysis, 2015
The World in Transition: A Comparative Analysis of Youth Perceptions in China and America, WKU Honors Thesis, 2015
When you click Accept: concerns over new IT policy spark debate, WKU Herald, 2013
by Tyler Prochazka | Dec 14, 2016 | Opinion
In his new Kindle book Mending the Net, author Chis Oestereich describes how a basic income can address some of the “wicked problems” facing humanity.
For Oestereich, the basic income can help society rethink its consumption patterns and possibly upend the “treadmill of subsistence.”
In the book, Oestereich predicts that the economy could be headed toward a recession. In the interview he said that basic income can be a “shock absorber” of economic downturns. Without a basic income, Oestereich said he worries that the next recession will be much worse than the last for many people.
One of the most unique effects of the basic income is its potential to change how we view careers and allow “self-determination,” Oestereich said.
“By standing individuals up on an income floor, we could open the door for many to create unique, fulfilling lives that might not otherwise be possible,” he said.
The full interview can be found below.
You said in the book: “A universal program removes the opportunity for politicians to erode benefits in a death by a thousand cuts scenario”. Can you explain why you think universal basic income evades austerity?
I don’t think it evades austerity in general as there are other programs to cut that could still greatly impact lives, but rather that it evades austerity because since it is universal, any cut must be done to everyone. Means testing programs are a game of continually shifting goal posts wherein a small adjustment to a qualifying measure can mean the difference between families having enough to sustain themselves, and coming up short. By shifting to a universal program the goalpost moves could no longer trim away at those on the margins.
Chris Oestereich
I’ve heard some say providing a greater array of people more money through basic income would exacerbate environmental degradation with their new consumption? Considering lower income individuals spend a higher percentage of their income. What do you think the overall effect on the environment would be from basic income?
I think environmental impacts are one of several valid concerns around basic incomes. That’s why I advocate for significant testing to see what we can learn. Some people may be enabled to purchase and consume more goods and services as the direct result of a UBI, but I think that’s an argument for finding an appropriate level of UBI that’s not so large that it allows people to go from living lives of unfulfilled needs, to being enabled to live destructive lifestyles. But I think some of us might cut back on some work and consumption that are part of today’s treadmill of subsistence. Take away the need for a full-time job to get by and some of us might only work three or four days a week and consume less resources through commuting and other related efforts. We need to gain a better understanding of the effects of a widely-implemented UBI, and then we might need to update social norms to align with systemic needs. And it’s possible that we could gain unexpected positive effects like those experienced in Utah where giving homeless people places to live resulted in reduced use of medical care.
You mentioned that we are probably counting down to a recession. How would a basic income address the issues of economic recession?
I called UBI an economic shock absorber because it would be there to blunt the negative impacts anytime the economy went south. (If we had a UBI in 2007, how many of the millions of people who lost their homes to foreclosure might have squeaked by without falling into those dire circumstances?) With a little something coming in each month comes a modicum of hope, rather than the steady drumbeat of a straight-line declining balance in your checking account. But if we don’t have a UBI in time for the next recession, I think we can expect that the outcome of the next one will be worse than the last one—at least for some segments of the population—as losses from the Great Recession “were disproportionally concentrated among lower income, less educated, and minority households.”
Why do you think the profit motive is destructive? And how does basic income help address the profit motive force?
I don’t think the profit motive is inherently destructive. But when it’s the sole focus of an organization, the profit motive allows businesses to hold extractive relationships over their employees. When a person has no other means of subsistence, the terms of employment are often highly-unfavorable. Give an unemployed person a decent monthly payment via a UBI and the choice is no longer one of zero income or an extractive employment relationship, so the calculus around the decision changes tremendously. Instead of being in a take-it-or-leave-it scenario with only savings (if that) to fall back on, you have a choice of tightening your belt and squeezing by on any savings you have along with your monthly UBI check. It would give workers a little bit of leverage in scenarios where they often have none.
You mentioned “If you hear someone talking about Milton Friedman and basic incomes in the same breath, it’s probably safe to assume that they’re looking for overall cost savings to reduce their personal tax burden.” Do you think libertarians that support basic income are primarily concerned with bringing down costs? And along those lines, do you think a coalition including fiscal conservatives and libertarians on basic income is possible?
My sense is that libertarians are primarily concerned with optimizing their personal tax effects. If a UBI could reduce administrative costs, and they would end up with a net financial benefit, you’d probably have their ears. But if they ended up paying more into the system, I think you’d quickly stop hearing about how great it was. So, I think they could be willing partners up to a point, but that they’d likely drop off from the cause at some point, and that they would eventually oppose efforts to increase the amount of UBI payments. My thought is that we could probably work together to get the proof of concept testing done, but that in working to make an initial UBI happen libertarians might become a drag on the effort as they would likely be aiming for systemic savings, rather than an outcome that would be measured in improved lives.
What inspired you to write this book?
Mending the Net wasn’t planned. I was invited to write chapters for a couple of different books, the ItsBasicIncome project that will be published out of the UK soon, and another anthology around environmental issues. I wrote them both independently and then realized that they would fit together nicely in a Kindle single format as the essays offer two different perspectives on “why” we ought to consider trying UBIs. (Readers will have to look elsewhere for the “how” argument as that’s not my bailiwick.)
As for the topics of the essays, I’ve never been a big fan of the rat race, and I’m a huge proponent of self-determination. Basic incomes help along both of those lines. By standing individuals up on an income floor, we could open the door for many to create unique, fulfilling lives that might not otherwise be possible.
What is your involvement in the basic income movement?
I guess I’m sort of a passionate advocate, but I certainly don’t see myself as a movement leader. There are others (like Guy Standing and Scott Santens) whose work I regularly look to for ideas and updates on the topic. For my part, I’m working to systematically address all wicked problems. To that end, I’m currently working on a book on the UK’s Brexit issue, as well as the second anthology from the Wicked Problems Collaborative (my publishing company), that will look at the promise and peril of our rapidly advancing technological environment.
by Tyler Prochazka | Dec 12, 2016 | Opinion
This week, I had the opportunity to be a guest on New York University’s Students for Criminal Justice Reform podcast. I spoke with Thurston Powers about the positive effects a basic income may have on American society.
One overlooked potential benefit is the effect of basic income on crime rates. I noted that a basic income could create more stable households and increase the likelihood of parents spending time with their children. Unstable and low-income households are linked with creating long-term issues for children that grow up in these situations. The fact that crime could be higher due to these circumstances speaks volumes about how important it is for families to have access to an income that can help them provide for their children without them having to consistently work to keep a roof over their heads. Crime happens all the time, and the use of firms such as Salwin Law Group, as well as similar other legal representation, may be used to show evidence on how financial issues have provided this base for criminal activity, not as an excuse but as a show of how the system needs to change to help people in these situations.
Those that critically point out single mothers work slightly less under a basic income do not understand this is probably a good thing. Considering it is single mothers in the data that show reduced work hours, it is likely they are spending their extra time raising their child. In the long-run, raising a well-adjusted adult will produce social and economic dividends.
In fact, research shows that basic income experiments have resulted in increased social cohesion. Studies have shown increased school attendance after the introduction of a basic income-type grant. In Namibia, there was about a 40 percent drop in crime in areas where the basic income was introduced.
While it is highly probable the basic income would improve some of the factors that lead to crime, I said in the podcast there is virtually no chance a basic income could increase crime. Frankly, the conservative narrative surrounding welfare is just not true.
The problem is not that welfare recipients become lazy, it is that the structure of welfare can discourage work. This is because welfare benefits diminish sharply as low-income individuals improve their wages — which is precisely why a basic income is more effective.
I also noted that most research demonstrates that overall people will not work less, and in some cases may work more if it benefits them, under a basic income. For libertarians that are interested in creating an effective solution to deal with the upcoming wave of automation, a basic income is the most efficient answer.
Listen to the full podcast below:
https://www.youtube.com/watch?v=iW6KgITEdT0&feature=share
by Tyler Prochazka | Nov 29, 2016 | Opinion
Europe has received a lot of attention for its recent moves toward experimenting with a basic income policy. What has been lost in this focus are the developments that are taking place in the rest of the globe, including the world’s second biggest economy: China.
Cheng Furui is one of the organizers of the China Social Dividend/Basic Income Network, and has done extensive research on China’s social safety net. In the interview below, she said a basic income would resolve many of the problems facing China’s current welfare program.
As the international economy faces increasing automization, Cheng said basic income is a potent answer to this issue in China.
“I believe that basic income and China’s status quo are aligned because it is in accordance with the essence of both socialism and the market economy,” she said.
The full length interview is below:
What is different between Universal Basic Income and China’s Minimum Livelihood Guarantee (Dibao)？
Dibao is China’s Minimum Livelihood Guarantee program. Anyone with an income below the minimum can receive a supplementary income up to the standard. In this way, Dibao is unconditional: no one can take away someone’s right to the Dibao income. The Dibao only provides a grant to those that are below the Dibao income standard. Thus, the government must conduct strict evaluations of recipients’ economic situations, which creates a lot of implementation problems and issues of abuse. By contrast, Universal Basic Income provides the grant to every person, regardless of income. Moreover, China’s Dibao benefit has a large discrepancy across different regions, consistent with the regional economic inequality that China already faces. Here is more information for reference: China’s MCA.
How do the Chinese view basic income? Do the Chinese generally understand about this policy?
Most Chinese don’t know about the basic income concept. Nonetheless, there are some places that are currently carrying out this policy, although they do not call it basic income. The areas that are implementing basic income all have different situations. The differences are not just regional, even neighboring areas have large differences depending on the community members’ organizational depth and shape.
Why should China implement basic income? What type of impact would it have?
The foundation for China’s implementation of basic income comes from China’s public ownership system itself. State owned enterprises, urban land, and mineral resources already exist, much like Alaska in the United States. Every person should have a share of public resources. This relies on the profit from the public resources being utilized as a basic income revenue, not only does everyone receive equal payment. This means the government does not have to collect more taxes from the rich only to give back to every person.
Chinese history applies the profit from publicly owned resources to supplement the country’s public finances, therefore lowering the private sector’s tax rate. In turn, conducting large scale investment in service sector and infrastructure development, including constructing railroads, and the systems that support the economy such as education and healthcare. These systems provide benefits to the vast majority of people. During China’s period of urbanization and gradual improvement of infrastructure and even completion of these projects, the profit of public resources perhaps can be used as a benefit to each person. Certainly, this will lower society’s overall wage rate or working hours. Simultaneously, some places have collective ownership of resources, and most of Chinese social dividends come from these resources.
What is the status of China’s basic income movement?
The basic income concept is currently only being discussed among Chinese academics and there are currently few researchers of the policy. However, the general public is already exploring implementation of basic income, also it is genuinely that every person in those areas can enjoy the local basic income. For example, much of the revenue for basic income programs is contributed by the collective organizations’ dividend bonus.
Since the founding of the People’s Republic of China, rural China has implemented collectivization of land, the household farm quota system allows the individual to use the land for production, but they cannot sell the land to others. During the movement toward urbanization, one part of the land was acquired by the government. Some of these collective resources that were taken were compensated with urban-based resources, in turn producing new benefits. From there, it produced social dividends within these communities. Looking at the entire country, this was not a rare case.
In BIEN News, I recently introduced these types of cases. China is putting into effect the policy of ‘separation of three land rights’ (ownership, contracting right, and operating right), which will promote the land right equity investment Recently, our main work has focused on excavating the essence of these cases, evaluating the likelihood of wide-spread promotion of this policy. Under the recent pessimistic economic environment, we want to offer a feasible path forward.
Does basic income suit China currently? Does it fit with Chinese culture?
I believe that basic income and China’s status quo are aligned because it is in accordance with the essence of both socialism and the market economy. However, Chinese culture encourages labor and looks down upon laziness. With the development of automatization, machines will continue to replace human labor. As a result, Chinese people will start to rethink this issue. If a basic income is put in place, after it is implemented it is feasible that the entire country will uniformly cut down on the weekly work schedule. Previously China had a six-day work week, and now it has been cut down to five days. In the future, it is possible it can be reduced to a four-day work week.
Additionally, China’s various regions have had drastically different levels of development, and the cost of living differences are also quite large. The social security system has not yet achieved nationally uniform administration. Public resources and financial data also need to be gradually made more transparent. This lack of transparency has impeded the ability to evaluate the potential impact of basic income.
About the interviewee:
Cheng Furui is doing her Post-doctoral program in Chinese Academy of Social
Science. She got her PhD in Tsinghua University. Her research interest is social
policy. “Social Assistance and Poverty Alleviation Divergence: A Capability
Approach” is her $rst published book based on her doctoral dissertation,
which explores Chinese social safety net in details. She is a voluntary news
editor of BIEN now. She is also one of organizers of China Social
Dividend/Basic Income Network: bienchina.com
by Tyler Prochazka | Nov 7, 2016 | Opinion
I recently led a roundtable discussion on basic income at National Chengchi University (NCCU), which was attended by students from various countries. The participants vigorously debated whether a basic income would result in inflation, with some parties worrying that the greater spending power will push up the demand for goods and, in turn, prices. The increased prices could possibly erode much of the spending power from a basic income.
To confirm whether these worries were justified, I reached out to three experts on basic income (BI), co-editors of the Ethics and Economics of a Basic Income Guarantee, to see what the research says about basic income and inflation.
It turns out: it depends.
Overall, the scholars agreed that there could be some areas where prices are pushed up, but that it would depend on how the BI is implemented.
Knowledge about the topic is limited since none of the BI research has looked at inflation, nor have the experiments been long enough to get a true idea of the BI’s effect on prices.
Dr. Steven Pressmen, former professor of Economics and Finance at Monmouth University, said this means economists “therefore must fall back on theory to answer the question about the inflationary consequences of a BIG (basic income guarantee).”
Dr. Michael Lewis, associate professor at Silberman School of Social Work at Hunter College, added that “multiple variables affect inflation”: if government spending is reduced in some area after a basic income is introduced, there would be a simultaneous push-and-pull effect on inflation.
Pressman also said that the outcome of a basic income on inflation will be based on “the overall condition of the economy and how a BIG is financed.”
According to Pressman, there are several potential scenarios that could play out.
If the economy is near full employment, then a BI would likely “push up prices rather than employment.” Also, since much of the gains in income from a BI would go to people in poverty and “people with low income tend to spend any extra income that they get,” then total spending will increase along with inflation.
On the supply side, Pressman said there are two important factors: taxation and labor.
If a basic income is financed by sales tax or value added tax (VAT), then this will increase prices and inflation. Second, if BI gives employees more leverage to increase wages, firms may “try to pass along these costs to consumers in the form of higher prices,” Pressman said.
On the other hand, Pressman said that financing a BI is paid for by reducing other government spending means “there should be little or no inflationary impact of a BIG.”
Dr. Karl Widerquist, co-chair of BIEN and associate professor at Georgetown University SFS-Qatar, said that Denmark’s economy demonstrates that spending on welfare such as basic income should not lead to inflation “taking away all those workers’ gains.”
“There is nothing special about Basic Income spending. It is not any more likely to cause inflation than any other spending,” Widerquist said. “It is not any more difficult to use taxes and borrowing to counteract inflationary pressure caused by Basic Income spending than it is to counteract inflationary pressure caused by military spending or any other kind of spending.”
Regardless, some inflation may not be such a bad thing for the economy, according to Pressman. He pointed to the Japanese deflationary spiral in the 1990s as to why some inflation may help an economy.
For policymakers considering a basic income, it may be useful to think about adjusting the BI benefit depending on economic conditions.
“It also may (make) sense to think about a variable BIG — one that increases as unemployment rises and falls as the economy gets closer and closer to full employment. This too will reduce the inflationary impact of any BIG program,” Pressman said.
Although more research needs to be done, it appears a basic income is unlikely to contribute to inflation in a substantial way because there are so many factors that influence prices.
“Policy matters, and sensible fiscal and monetary policies can ensure that more egalitarian social policies are consistent with low inflation,” Widerquist said.
