by Tyler Prochazka | Apr 27, 2016 | News
In the last two years an “avalanche” of support has descended upon the basic income, according to a recent article by Five Thirty Eight. The article cites either planned experiments or growing support for the idea in Finland, the Netherlands, Canada, France and even the United States.
Basic Income Earth Network’s own Guy Standing is quoted as calling the basic income an “essential” policy, especially in a world of “chronic economic insecurity,” which has propelled “extreme” politicians in both Europe and the United States.
One essential point is that the effects of the basic income are not yet fully understood. However, the Give Directly organization plans to change that with a test of the basic income in Kenya, providing 6,000 individuals with a guaranteed income for up to 15 years.
Over the years, the basic income won support from across the political spectrum, even winning Richard Nixon’s endorsement in the 60s. Currently, the United States is left with a complicated bureaucratic system of dolling out social assistance, creating welfare traps as people fear losing part of their benefits with an increase in income.
A basic income has even won over libertarians at the prospect of increased efficiency and ending the paternalism of the current system.
Negative income tax experiments in the U.S. found that there were only modest negative effects on work hours, and people used that time to go to school, for example. In Canada, data from a minimum income study in the 1970s showed those that received the minimum income were healthier both physically and mentally. Boys were more likely to go to school and young girls were less likely to give birth prior to age 25. There was also no substantial effect on working hours.
Andrew Flowers. “What would happen if we just gave people money?”. Five Thirty Eight.
by Tyler Prochazka | Apr 18, 2016 | Opinion
Just because someone is disabled doesn’t mean they’re any less of a person. Most disabled individuals can still work jobs, get into Disabled Dating, have families, go places, etc. However, society has a tendency to discriminate against them and doesn’t offer disabled the same treatment as able-bodied individuals. Is basic income guilty of this too? That’s what we shall be discussing in this article.
The Universal Basic Income movement continues to pick up steam around the world, with reports that Finland is interested in starting its own UBI pilot program, joining a growing list of countries around the world. Still, many important questions surround the details of a basic income system.
One criticism raised even by some supporters is that many recent discussions of the UBI have overlooked the disabled and chronically ill. This is not the first case of discrimination against people with disabilities to affect the U.S financial system. While disabled people are always able to take out disability insurance from somewhere like https://www.leveragerx.com, there is no reason why they should be left out of the Universal Basic Income plan.
For example, in its groundbreaking UBI report the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) mentioned disability only to say specific benefits for the disabled were excluded from its model. This is something very important to the disabled community, many of whom click here to get information about their long-term options.
This silence has led some commentators to be skeptical of the UBI’s ability to accommodate the specific needs of disabled individuals. In an article recently published in the Independent, one critic worried that a basic income would either be too low to assist the disabled or too high to be affordable.
Critics are right to point out those who need special assistance are an important consideration when constructing a UBI scheme.
Fortunately, there are ways to integrate these concerns into UBI models while largely retaining the program’s simplicity.
For instance, an additional supplement for the disabled could be granted based on the severity of the disability. The current structure and eligibility requirements for disability insurance from the U.S. Social Service Administration could be utilized to determine the amount of additional aid.
There are three potential options for such a supplement:
- Provide a simple cash transfer that will allow the individual to spend the money accordingly.
- Provide a cash transfer to an account modeled on the Health Savings Account (HAS) structure. HSAs restrict account purchases to medicinal goods and services, but an individual can generally purchase these goods and services from any provider they see fit. This structure may capture the best of both worlds; it would prevent fraud given that those who are not truly disabled would be unlikely to apply for a supplement that is restricted to purchasing goods and services needed for disabled individuals, while also retaining account holders’ flexibility in choice of private providers.
- Expand in-kind services that cater to disabled individuals. While specific in-kind services that should be expanded are beyond the scope of this article, it is almost certain that existing federal and state services for the disabled would not be altered if a UBI was implemented.
Regardless of which option is chosen, none of them make the UBI “utopian” as some critics have recently charged. By adapting existing governmental structures, policymakers can create a UBI while also making special accommodations for those citizens who do need additional supplements to the basic income. Such a system would still be much simpler than the existing structures of government assistance. In the United States, for instance, the vast majority of the current social services bureaucracy could be eliminated and replaced with a streamlined system that looks at only age and health/disability status to determine the size of the benefit. In fact, for those with invisible disabilities, a UBI would likely be a vast improvement to the current situation.
So far, critics have come up short in offering compelling reasons why accommodating those with special needs will drastically undermine the efficacy of UBI models. Nonetheless, they do raise an important concern, and the UBI movement must make room for discussion regarding how to integrate these needs into the basic income.
by Tyler Prochazka | Mar 26, 2016 | News
Original Article by Jean-Eric Hyafil
On October 30, 2015, the French Prime Minister Manuel Valls, asked MP Christophe Sirugue to write a report on potential social welfare potential (including the means-tested benefit known as Active Solidarity Income (RSA), and various benefits such as disability pension, elderly people pensions, etc.). The aim is to make the system fairer, more efficient and less complex in order to reduce the number of people eligible to these pensions and benefits but not redeeming them. Mr. Sirugue is due to give out his report by the end of March.
The French Movement for a Basic Income (MFRB) contributed to the report (the contribution in French is available here. The contribution has been written thanks to Robert Cauneau, Public finance expert, and Jean-Eric Hyafil, Economist at Paris I University, Jean-Marie Monnier and Carlo Vercellone, Economics professors at the Sorbonne University.
Given the transformation of labour, particularly due to the digital revolution, we recommend to replace the RSA, a conditional and stigmatizing aid given to individuals in poverty, with a basic income based on the principles of unconditional rights and independence.
Nevertheless, establishing a basic income goes along with deep tax reform, yet taxation is not among the missions attributed to Mr. Sirugue for this report. Indeed, his mission was focused on the reform of minimum social benefits.
A short-term reform of the solidarity income (RSA)
Taking into account the constraint of the Prime Minister’s request, the MFRB first formulated RSA reform proposals which could gradually lead to a basic income. For example:
- remove the mandatory status of job seeker to receive the RSA
- change the rule relative to alimony and as a consequence the principle of subsidiarity
- automate RSA payment to all the legal beneficiaries
- individualize the RSA
- pay the RSA ex-ante in order to suppress activation delays
Implementing these proposals would improve RSA’s efficiency in reducing poverty. Nevertheless, even if each and every proposal were implemented, it appears necessary to formulate a global reform integrating another redistribution mechanism: the income tax. Indeed, the first limitation is related to RSA ex-ante payment; this is possible if undue RSA payments could be directly debited to incomes. But such a process should be integrated to a system that allows for income tax withholding.
The second limitation is related to the RSA individualization. A complete individualization (i.e. payment to a person without income, even if he or she lives with a person with a substantial income) is not possible without changing the way the income tax is calculated for a couple.
A middle term reform of the income tax for an introduction of the basic income
The MFRB formulated a second set of recommendations including various proposals for the implementation of a basic income simultaneously with income tax reform. These proposals could be applied on a midterm basis, along with the creation of a withholding system for the income tax.
Following this logic, the MFRB suggests a range of options to show the spectrum of possibility to policymakers. With the introduction of a basic income, numerous reforms become possible, particularly fusions of the income tax for individuals (e.g. “impôt sur le revenu des personnes physiques, IRPP”) and the general social contribution (contribution sociale généralisée, CSG). Indeed, issues have been raised regarding tax exemption policies for income tax, and income splitting, that is whether the income tax apply to individuals or to households.
Fiscal expenses through tax exemption are largely used by wealthy households to reduce their income tax. Therefore, it seems wise to reduce their impact. Yet some of them also play a role in social protection, particularly for the poorest households. For example, tax credits given for paying a nursery school service, and other non-profit organizations.
The MFRB formulates proposals for an adjustment of fiscal expenses (through tax exemption) in order to keep a tax exemption level of around 34 billion euros (the 2014 figure) for the French households, after the merge of income tax and general social contribution (IRPP and CSG) and also a high tax rate (20 percent to 30 percent) from the first euro. Additionally, these proposals would allow shifting the advantage of tax exemption toward poor households.
The MFRB also formulated proposals to switch some fiscal expenses to mechanisms involving “service cheque“, following the principle of drawing rights developed by the tenants of unconditional autonomy. Such a proposal would actually allow the absorption of the benefits associated to the solidarity income (RSA), as discounts for public transportation, school restaurants, sports or culture.
Individualisation of the income tax or household taxing?
The second issue is the income tax individualisation. Nowadays, the income tax is applied to households. Should it be applied to individuals, simultaneously as the implementation of an individual basic income?
In this report, the MFRB presented two alternative solutions. The first considers the fusion of the income tax and the social contribution (IRPP and CSG) into an individual tax. The second integrates the basic income into the income tax system in order to preserve household taxation. This second proposal advantageously avoids a sharp tax increase for households where there is a large income disparity between the couple’s incomes.
Finally, the MFRB considered possibilities of converting some employment subsidies to a basic income, particularly the exemption of employers’ contributions aimed at low salaries (exonération “Fillon”).
With such a broad proposal spectrum, the MFRB wanted to put the minimum social benefits reform in the perspective of a broader and ambitious French redistribution system reform, which would associate the implementation of a basic income with fiscal reform.
The MFRB is pleased that the question of a basic income is currently being considered by French policymakers. On the one hand, this report provides an array of ideas regarding minimum social benefits. On the other hand, a Digital National Council report described the future of organisation in the context of the digital revolution. The expert assessment brought by addressing these issues puts increasing emphasis in the public discussion on the basic income and the new opportunities it brings.
Translated into English by Romain Garbage and Antoine Stéphany
Reviewed by Tyler Prochazka
by Tyler Prochazka | Jan 28, 2016 | News
One of the persistent criticisms of the Universal Basic Income is that it would either entice people to purchase addictive substances, such as alcohol, or enable existing addictions through the added cash benefit. Dr. Katarzyna Gajewska, an independent scholar researching the UBI, has studied this question in the past. Her unique insights deserve further exploration. I recently had the opportunity to interview Katarzyna on the subject.
In the interview, Katarzyna discussed her conclusion that it is “improbable” that a UBI would cause someone to become an addict. She believes that “abrupt measures,” such as taking away an individual’s basic income, should not be how the state manages addictions; instead, the state should find ways to “protect” them from spending their income on addictive substances. This could mean funding more places that provide help for those struggling with addiction, like the services at ARC Rehab for example.
In order to win the political argument, Katarzyna said it is important that the UBI movement advance a “human argument,”. According to her, “the more we de-mystify and understand the unemployed and addicted by telling their stories, the more empathy will be created.”
Katarzyna also believes that the UBI movement should place greater emphasis on how a UBI would transform society:
One can think of the basic income project as a way of transforming culture and daily practices by exiting the competition and alienation that employment system boosts.
If one is liberated from addictions and non-meaningful consumption, basic income could make it possible to engage in the projects that one finds worth pursuing and bring joy into working together.
The entirety of my email interview with Gajewska is reproduced below. Some sections were slightly modified for clarity.
1. A World Bank study found that in Latin America, Asia and Africa cash transfers had little impact on “temptation goods,” such as alcohol. Do you think these findings are applicable to Western countries as well, or what are the limits from this type of study?
Definitely, it is a research question to pursue. The Finnish experimental study on basic income that is about to be produced or the Dutch experiment in the city of Utrecht could be an interesting opportunity to generate several PhD projects on such a question. I would go for a meticulous sampling of addicted (or prone to addiction) individuals with basic income, including as much diversity of individuals as possible in terms of variables like demographic, job history, and variables relevant to addiction. Such a study could be an opportunity to gather a lot of qualitative data and get a new understanding about the relation between income and addiction. The research would reveal whether the UBI contributes to or rescues individuals from addiction, and under what conditions. It seems improbable to me that one would fall into an addiction because of the UBI. A healthy, emotionally fit individual would not be tempted by an excessive substance use in the first place. However, one can address this question in the general survey. Revealing the influence of monetary allowance on addiction (positive or negative), while taking into account other contributors to addiction, would be an important finding to inform social policy makers. Instead of deciding in favor or against a UBI, further adjustments informed by experimental research need to be formulated.
2. How should a basic income scheme handle relatively extreme instances of alcohol and drug addiction? That is, is there a point when the state should intervene and remove an individual’s basic income for undesirable behavior, even if it only causes individual harm?
With or without a basic income scheme, the state should prevent further individual harm by providing therapy measures. Depriving an addict of subsistence may lead to a criminal behaviour, harming family members or friends. A person in an advanced stage of addiction will find all possible means to get a fix while remaining in denial of the addiction. So the costs may become much higher than providing the addict with therapy. Instead of employing someone to detect who is an addict in order to deprive them of their basic income, the state could make a better use of this money and invest in therapists that specialist in addiction. Additionally, there is a whole problem of defining at what stage the addiction justifies such a decision and the administrative procedures involved in it. A more constructive measure would be to offer psychological therapy and organize addicts in work collectives within subsidized enterprises as Johann Hari reports was done in Portugal. Furthermore, physiological deregulation needs to be accompanied by therapy. I have heard of a foundation in Budapest that accompanied addicts with massage therapy. Instead of withholding subsistence means from an addict, one could think of protecting an addicted individual from spending all their income on the addiction. Such measures can include public housing and other basic services such as going to somewhere like this drug rehab in New Jersey, or one that is closer to home.
However, financial resources are relatively irrelevant in pursuing addictive behaviour. In France, a woman who held a high position in a big company became an alcoholic. Alcohol use was widely accepted and even promoted in this male-dominated environment. Once she fainted because of alcohol overuse. Then she got fired and company management informed her that her problem was widely known within the company for quite some time. No one in the company had talked to her about it. She stopped drinking and wrote a book. A person in such a position has probably enough savings not to worry for a while, so it was not the fact of losing money that made her stop in the first place. What protects an alcoholic’s self-illusion is the taboo culture around addiction and others’ fear of confronting the addict about it.
In developed countries where social networks are very loose, it would be difficult to recreate such a structure of belonging to a group that would motivate an isolated addicted person to undergo treatment. It is recommended that alcoholics seek support and treatment from somewhere like DayHab alcohol rehab. In the research on addiction, this is one of the theories that the lack of deep social ties boosts a withdrawal into addictive behaviours. So instead of “healing” an addiction with punishment, social policy needs to take into account the basic human need of belonging to a community. Bruce Alexander, the author of Rat Park experiment that demonstrated the impact of the social isolation on addiction, identifies the main reason for addiction in dislocation, which he defines in the following way: “On a social level it is the absence of enduring and sustaining connections between individuals and their families and/or local societies, nations, traditions, and natural environments. In existential terms, it is the absence of vital feelings of belonging, identity, meaning, and purpose.” While recovery movements addressed this void by creating local initiatives to help people create new ties and feel more integrated, Alexander considers that this is not enough a remedy and advocates transforming the entire society to prevent the conditions that bring isolation and the lack of meaning that push people into addiction.
Addiction poses an enormous challenge on policy makers, us individually and as a society. Taking away an income, or considering that the state should take care of the money is searching an easy way out that turns against us in the long run. Punishment is a sign of hopelessness and helplessness. To question this policy, it is essential to reconnect to our emotions – to understand why punishment appears as the sole solution. Anyone who has had an opportunity to talk to an addicted person, as I have several times, knows how emotionally draining and painful it is to see an addict. Personally, when walking through a town, I would not give money to a person that is obviously going to use it on addictive substances. I look away because I feel powerless. We do it individually and we do it as a society. This is probably why the political solution easiest to envision is not to see it, not to address it, or address it with abrupt measures such as withdrawing income. UBI movement needs to address this reticence that probably is common to many potential supporters.
3. You mentioned there needs to be a “broader vision and a movement needs to stand behind the UBI”. Can you elaborate on this point?
This is my criticism of the UBI movement. We are a movement of many visions and versions of a UBI. This deters potential supporters. For example, during citizen debates I participated in here in France, sometimes we find ourselves not knowing which proposition we are talking about. I believe that it is a high time to elaborate a vision not only of giving people money but also the transformation that we want to achieve by it. For example, the p2p, Transition Towns, and de-growth movements* could join forces together with (at least some parts of) the basic income movement. The vision to elaborate would be less about the logistical and technological solutions and more about the transformation of human relations, organizational structures and dynamics, the trade relations between Western consumers and workers in developing countries, and individuals’ lifestyles. In all of this, the way of organizing production and consumption is crucial. I do not think that giving people money so that they can pursue their shopping addictions, buying imported cheap stuff produced by exploited workers and with high environmental costs, is a political project that can motivate enough people. The capitalist system generates a set of conditionings. We need to heal our relation to work and consumption (including addictive forms of consumption) so that work is a source of meaning and belonging. One can think of the basic income project as a way of transforming culture and daily practices by exiting the competition and alienation that the employment system boosts. If one is liberated from addictions and non-meaningful consumption, basic income could make it possible to engage in the projects that one finds worth pursuing and bring joy into working together. Starting from there, a less consumerist and more communal lifestyle could develop. Western civilization has advanced so much in technology and so little in community living and emotional healing.
To advance the UBI proposal, the movement needs to give a taste of this transformation. Create stories and enact this new way of being together. There are already such examples in place: Rainbow Gatherings are a way of enacting a different way of being together; Occupy Wall Street experimented with organizing logistics; intentional communities generate a new way of living together. Another such example is a free cafeteria, People’s Potato at Concordia University in Montréal where volunteers can drop in and contribute their work. In the interviews I have conducted, some pointed to the integration and breaking of isolation that this project induces. Multiplying experiments of living without conditions and questioning other capitalist premises could become the movement’s agenda. And through these experiments, activists can touch the deeper questions like the healing of addictions and the reflection on the policies and organizational structures that should accompany the introduction of a UBI. Many people in the movement see the potential that would be liberated and the new cultural shift thanks to a UBI, but we can already begin working on this new culture and accelerate the realization of the UBI implementation as a result.
4. Even if evidence suggests the basic income would not have a significant impact on undesirable behavior, the fact that some individuals may abuse the system is a political liability. How does the basic income movement win the political argument?
The argument for or against a basic income (one that effectively liberates citizens from the necessity to be employed to have a decent life standard) is a debate about human nature. So the movement needs to focus on confronting people with the image of human nature they hold and where it comes from. The movement’s strategy should be to help individuals arrive at a deeper understanding of such judgements. The debate needs to be informed by research findings on trauma therapy, addiction, and epigenetics. Bringing scientists from these disciplines on board would be a great strategic choice. When engaging with the political process, the movement should come up with additional research-informed measures to accompany the UBI. The winning argument would be a more specific proposal of the reform to be introduced.
It would be great to mobilize money for academic research, future empirically and qualitatively informed research studies. A senior researcher would need to be enchanted by the idea. Applying the case study method, scientific inquiry should select individuals facing unemployment stigma, addiction, or other difficulties in the Western context. Research funding could be allocated as a UBI to several well selected individuals to study their behaviour under this condition and test other conditions such as basic income combined with therapy.
There are these crowd-funded basic income projects: one in Germany and other for Scott Santens in the US. These are great projects, but why not bring the idea to the next level and allocate such an allowance to a typical “strawman” or scapegoat in the debate who has not even heard of a basic income before? Great material for a documentary. This would also be an occasion to explore the idea of unconditionality and trust. These are the psychological and cultural preconditions to implementing a UBI.
People tend to consider political attitudes or support for a reform as an effect of logical-rational reasoning, so one searches for an argument. But there is some scientific evidence that emotions define our “rational” decisions. So more work needs to be done at this level instead of winning any argument. My take on the reason why the gay movement has experienced many successes is not political process or winning an argument but cultural shift within the society. Gay people came out and took pride in who they are. And they were visible in our friend’s circles and among work colleagues. The same can apply for the strategy for UBI. The more we de-mystify and understand the unemployed and addicted by telling their stories, the more empathy will be created. We should work more on the human argument, the emotional side of it. Like with gay rights, the UBI may be supported by a silent not mobilized majority.
5. Any other important comments?
It is very important to address this question and to learn more about it within the movement. To arrive at any substantial change, we need to meet people at where they are, address their fears. And this requires a better understanding of addiction and healing. Also the problem of alcoholism and addiction is not well understood in our society. By remaining silent about it, we deprive the affected and their close circle from taking action. Media outlets have a role to play. Thank you for bringing it up!
Katarzyna Gajewska (PhD) has contributed, among other publications, articles on unconditional basic income and alternative ways of organizing production. You can find her non-academic writing on such platforms as Occupy.com, P2P Foundation Blog, Basic Income UK, and LeftEast. For updates on her publications, you can check her Facebook page or write to her to get updates by e-mail: k.gajewska_comm AT zoho.com.
by Tyler Prochazka | Dec 20, 2015 | News
On first glance, many may think the idea of giving everyone free money is absurd. However, Sean O’Grady argues in an article in the Independent that a universal basic income, as soon to be tested in Finland and other countries, may have significant merit.
The benefits include lower administrative costs and the elimination of “poverty traps” created when government assistance diminished as an individual’s income rises. Indeed, a basic income might induce more people to work harder.
Despite some worries about implementing a basic income in the United Kingdom, such as the need to cover high housing and childcare costs, O’Grady thinks the British should consider copying the Finn’s new approach to welfare.
Sean O’Grady, “It’s time to copy Finland and give every citizen a basic income”, Independent, December 8, 2015.
