by Tyler Prochazka | Jun 4, 2016 | Opinion
One of the masterminds behind the upcoming Swiss referendum on the basic income Enno Schmidt said that no matter the outcome on June 5, he will still have achieved his goal of starting a widespread discussion about the issue.
Schmidt started his basic income advocacy back in 2006 and has been pushing the idea through films, lectures and articles ever since. In 2013, he and others collected over 120,000 signatures in order to get the basic income up for a referendum in Switzerland, which he said was not an easy task.
In anticipation of the upcoming referendum, Schmidt answered some questions about the past, present and future of the basic income in Switzerland and beyond. Some of the quotations have been edited for clarity.
Why did you found the initiative basic income? What was your intention for the initiative in 2006? Have your goal’s changed?
The reason was to make the people more free in their decisions about their life and in their personal responsibility to live according to their own intentions.
The right to political initiatives for everyone in Switzerland and the Direct Democracy made it possible to come up with this proposal to create a general discussion throughout the entire population and to finally achieve a referendum.
The intention was to give all people a basic income unconditional in order to create a society with more variety, less fear, and more productivity in a much broader sense. Also part of the goal was to bring the idea of unconditionality to our otherwise purely functional conceptions of living. Ultimately it represents the question about what it means to be human. The goal did not change but has been enriched with more and more significance. Aspects such as the upcoming data economy, the need to strengthen civil society, the necessary power shift towards the citizens all contributed to this conception.
How did you happen upon the concept of the basic income? Why do you think you were drawn to the idea?
Because the basic income refers to the individual, not to a specific circumstances. It does not determine people, it enables everyone to come into play in society. It does not judge what people do. It’s a base of human kindness and a protection of privacy. It’s about respect and appreciation towards the other and it’s about self-determination. Thus new the new and unforeseen can happen and develop. Today there is no more lack of material goods. The productiveness in the old sense increases with ever less human labor. We need a space for the new productivity as we face our current challenges. We have to rethink the income supply and examine our values. Separating income and work reveals the value of work. No one should be blackmailed with his livelihood. The right to work is the right to do what you really want to do. This right needs a right to income. The unconditional basic income is a democratically coordinated income, not negotiated economically. The logic and beauty of the idea has drawn me.
How would you compare the public’s interest in the basic income in 2006 to the interest/support right now?
Ten years ago, we moved across the country, organized events and let others come up for discussion. We still do. But now the media has come from all over to us and spread the idea worldwide. We started from a little point with nearly no knowledge in society about the idea. And still we are far from a majority convinced of the basic income. But attention and acceptance has greatly increased. Not only in Switzerland. But Switzerland has the benefit of direct democracy. With our campaign for the vote we managed to even get some of the opponents of the basic income to acclaim the concept as the new idea for Europe. The interest grew rapidly after the World Economic Forum in Davos discussed the unconditional basic income as the most innovative and intelligent solution for the upcoming digitalization era, and once again grew rapidly due to the upcoming vote.
How do you feel about your chances with the upcoming vote?
With this vote, we will have established the subject firmly in society. If one in five votes is yes, then that is incredible progress. So much has moved in the minds, in fixed opinions, and new eyes have appeared. It’s the first time in history that this issue is discussed in an entire population with the serious background of a referendum to vote on and decide.
By this vote the majority may vote no, but the vote itself is an opportunity to introduce an unconditional basic income to society. But maybe in ten years the next referendum will result in a majority voting yes. Therefore, it is not so much a question about how we feel about our chances, but we already have taken the chance to create a public and broad debate about the basic income unlike anything seen before. This vote is a milestone on a path on which the debate is getting stronger at home and abroad.
Can you describe the process of getting the initiative on the ballot? How did you feel when the initiative was successfully scheduled for a public vote?
I felt as if the gate was opened for a heavenly reality and a really human approach, for an big event and great chance. When the Federal Chancellery had approved the people’s initiative, we had 18 months’ time to gather at least 100,000 valid signatures of Swiss citizens. This is not online. You have to go on the street in all types of weather. That is not easy. While doing so a new dynamic developed. “Generation basic income” converted the severe toil into a sporting competition. We turned the large number into achievable goals, with each individual collecting visible results, and over the long run a series of successes.
When we submitted 126,000 signatures on October 4, 2013 in the Federal Chancellery, I had the feeling of having made gotten the essentials, that the way was now open for a general major debate in society. The referendum itself is already a point of arrival. We offer the proposal: The citizens vote.
How has your outlook changed for the prospect of the basic income over the last ten years?
I realized early on that a basic income will come. The idea is as strong as the idea of democracy or human rights. It is of the same kind. It is even the same idea. The question is not whether it comes, but how it comes and by whom, by what interests. This prospect has been confirmed over the time. Already in the design of the meaning of an unconditional basic income is its way of being introduced. An unconditional basic income not only allows more flexibility, it also requires more. It comes through the people who are affected or it comes out wrong. It may not come automatically as a result of automation. It may not come from the rich to the poor and not as an economy measure. It should not be a new feudalism, no philanthropic colonialism and not to plug old holes. If the unconditional does not affect everybody, it is for no one. The comprehensive and greatness of this idea became even clearer for me and thus also the possibilities to use it quite differently.
What would the implications be if the Swiss vote yes on the referendum? What would the implications be if they vote no — including for you and your advocacy?
With a majority yes the introduction will be prepared and probably start with pilot projects such as in Finland. This will take some years. About the amount of a basic income and the type of finance it probably will come to next public votes. Also other points of the basic income can lead to new referendums. Overall, I think, it will need 20 years. With a majority no the discussion also will go on. This referendum has given such a strong thrust to the debate. The development will go along as well, just not within the authorities. Also pilot projects can arise in some cities and cantons. And the development in other countries continues. We see things not isolated in Switzerland. We see it in conjunction with the other areas experimenting with the basic income. Another referendum in Switzerland is possible and the introduction will go more quickly. Time does not stand still and an unconditional basic income becomes more and more inevitable.
by Tyler Prochazka | May 16, 2016 | Opinion
Back in the 1990s, China started experimenting with a minimum income guarantee that topped off incomes to a minimum level set by local governments. China called the program dibao, meaning minimum livelihood guarantee, expanding the program nationwide in 2007.
In Beijing the urban monthly dibao standard is 1050 RMB ($161.50 USD) and the rural standard is 800 RMB ($123.04 USD). For urban residents, this is about five dollars USD a day.
However, even this paltry amount often does not make it to those in poverty.
A report by the World Bank found that for every 10 RMB spent on the dibao, only 1 to 2.4 RMB reached individuals in poverty (cited by the Economist). The World Bank also found the dibao program only lowered the poverty gap by 6.5 percent.
Corruption and inability to determine households’ poverty status have plagued the program. According to Lu Yang in the Indian Journal of Labour Economics, based on 2010 survey data only 21 percent of poor households were able to receive the dibao, while more than half of dibao recipients were above the poverty line.
Many local governments go to great lengths to investigate whether dibao households are secretly hoarding wealth, visiting recipients’ homes and observing whether the household has too many “high quality” products to qualify.
Others are concerned with the dibao’s effect on the poor’s effective marginal tax rate. Higher effective marginal tax rates lower the likelihood that a household member will seek work.
If a household’s average income per person goes above the dibao standard, they could sacrifice the entirety of the benefit. Each household member raises the household’s dibao standard by 100 percent. For example, in Beijing where the standard is 1050 RMB per month, a two-person household would face a 2100 RMB dibao standard. In turn, larger households are more susceptible to the problem of high effective marginal tax rates.
In some instances, it is possible that a household will have a 100 percent effective tax rate due to the dibao benefit. In these cases, the household will have the same income regardless of whether a household member chooses to work or not. Based on data from an essay in Population and Development a family of three in Tianjin with one household member employed would have the same income as an identical family that does not work at all. Clearly this has the potential to undermine labor participation if the drop off is this steep in reality.
China plans to lift 70 million people out of poverty by 2020. Such a massive undertaking requires a robust social welfare system. As it stands, the dibao program is not equipped to do this heavy lifting.
However, the dibao does provide a starting point for China to experiment with universal coverage.
The 2014 World Bank report conducted economic simulations that demonstrated expanding dibao coverage was more effective than increasing the benefit size at lowering the poverty gap.
Like the dibao, the central government of China could initiate pilot programs that universalize the dibao cash transfer, eliminating the income and wealth requirements to qualify for the dibao benefit.
Universalizing the program would potentially address many of the issues plaguing dibao, such as the high effective marginal tax rates and low rate of impoverished individuals that receive the dibao.
China’s economic miracle successfully lifted the most individuals out of poverty in world history. To do so, China undertook some dramatic reforms that completely reshaped Chinese society. Now in order to completely eradicate poverty, China may want to take yet another drastic step with a universal basic income guarantee.
by Tyler Prochazka | Apr 28, 2016 | News
Even some free-market advocates are lining up in favor of the basic income. Sam Bowman of the Adam Smith Institute argues that the basic income would be an improvement on the current capitalist system.
First, Bowman argues that the basic income will alleviate in-work poverty. That is individuals that work but are still in poverty. As automation eliminates many jobs, this will be increasingly essential.
Second, Bowman points out that a basic income will lower the complexity of the current welfare system. Instead of having many specific welfare programs, the government would replace it with a simple cash grant.
Third, Bowman believes the basic income would allow for other reforms that would raise living standards. For example, allowing for greater immigration and lowering investment taxes. Moreover, a basic income may replace the minimum wage, which Bowman said causes unemployment for some workers.
Sam Bowman. “A neoliberal case for a basic income, or something like it.” April 18, 2016. Adam Smith Institute.
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.
