Panel on the politics of Universal Basic Income. What role for activism(s)?
This Call for Papers (CFP) is interested in empirical studies that look at the social and political processes related to the growing interest in universal basic income (UBI), including recent pilot tests and experiments, their design and implementation, either at the local, national or supranational level, in Europe and elsewhere. In particular, it focuses on the role of the civil society, experts, public opinion and grassroot organizations, and their interaction with policy officers, government official and political parties. Examples of questions that are of interest for this panel:
To what extent UBI campaigns and activism have permeated mainstream political and policy discussions? What are the strategies pursued by UBI activists, and how these differ across different locations? When and how are civil society organizations (e.g. trade unions, women and feminist groups, migrants’ associations) willing to incorporate UBI to their demands?
What are the resistances and oppositions that UBI advocates face in their campaigns? How different UBI frames have shaped its reception among different social groups?
Do different welfare systems shape different forms of UBI activism, including aspects such as the frames and strategies these groups put forward? What is the precise role played by experts and public intellectuals in these processes? Does the social crisis triggered by the COVID-19 pandemic open a window of opportunity for UBI ideas?
This CFP aims at gathering papers from scholars working on different aspects of the politics of UBI (or guaranteed incomes, negative income tax, cash transfers), to be presented in the context of the 27th International Conference of Europeanists, Council for European Studies (CES), to be held in Reykjavik, Iceland, June 24-26, 2021. Please send your abstract (300 words maximum) before 11 November 2020 to César Guzmán-Concha, e-mail: email@example.com Please note that all paper authors must also submit their abstracts proposals through the CES online platform before the official deadline: 16 November 2020
McKinsey, the consultancy company, has published an article about the Finland Basic Income experiment.
The final results from Finland’s experiment are now in, and the findings are intriguing: the basic income in Finland led to a small increase in employment, significantly boosted multiple measures of the recipients’ well-being, and reinforced positive individual and societal feedback loops. …
As with any policy analysis, the results of this experiment remain subject to debate and can’t necessarily be generalized. As a result, the experiment does offer an object lesson in the complexity of designing and implementing a randomized control trial of basic income. Nevertheless, more research on basic income is required. We can hope that Finland’s example will inform and inspire others as they set up their own experiments.
The news is written by Chen Xixi and modified by Furui cheng
In the ‘International Basic Income Week’, we three sophomores in CUPL (China University of Political Science and Law) organized an online feature academic report about basic income with Furui Cheng, our academic tutor, on September 13, 2020. The participants included some juniors and seniors, and we are all from financial department of the Business School.
The seminar has two main agendas: the first is a presentation of one very good chapter about Social Dividend of Alaska ‘How Alaska helped Staunch be fouling by mismanaged oil wealth: a lesson for other oil rich nations’ in Jay Hammond’s autobiography by Yu Yang, Huang Xinyi, and Chen Xixi; the second is free comments and discussion of the social dividend governance mechanism. Here are the details of the seminar.
Our report has mainly three aspects: the first part is the background, the second part is the operating mechanism, and the third part is some enlightenment for other countries.
Background 1: Alaska is a state rich in natural resources. In the beginning, oil producers mainly focused on some infrastructure projects, which had greatly expanded domestic spending and so caused inflation to soar and left a mountain of debt. So even though Alaska was rich in resources, the life of the poor did not improve at that time.
Background 2: Alaskan fishermen were dissatisfied with the monopoly that the Seattle tycoons actually enjoyed. When they used fishing gear, because this fishing monopoly benefited a few beneficiaries but sacrificed the interests of many people. Therefore, at that time, many fishermen had a very bad life and lacked services. So, there was a proposal to ban fishing nets, but it was overturned because of various unconstitutionality.
Background 3: The bumpy process of the permanent fund project. The first was that a tax system with the Bristol Bay Company as the main concept was proposed at that time. The main content of such a tax system was to deposit taxes in a relatively conservatively managed investment account, and then distributed a new dividend stock to residents every year. But in the end this tax system ended in failure.
Immediately after, two new regulations were proposed for use tax and the abolition of residential business tax. This was considered a transitional measure to compensate fishermen for their losses. Then such a new regulation was approved because it met the expectations of the people. Then, once again proposed to the legislature a tax system with the Bristol Bay Company as the main concept. But it still ended in failure.
And the country did not follow the concept of fair share distribution proposed by Bristol Bay Company to form a single investment portfolio, but formed companies in more than 200 villages and about 14 regions. Besides, the board of directors was composed of local leaders. This made many lawyers and people who made high salaries in the company happy. In the end, many companies were also on the verge of bankruptcy due to the lack of large capital investment, nepotism and rural policies. This model eventually collapsed. In fact, the failure of this model was mainly because his politics was not separated from the economy and so an independent financial operation system was not formed.
Then they further proposed a fair tax system. Its content was to first determine the state’s per capital property value, and then in this community, if there are some people whose revenue generated by the tax are less than they should be, the state will provide funds for the difference. Conversely, if the income generated by the resident’s 3% tax exceeds the excess income, the excess income will be owned by the state. According to such a fair tax system, all places would be levied the same tax, which meant that the impact on everyone is the same, whether it was the poor or the rich. However, such a fair taxation system eventually met with opposition.
Then, they passed the so-called Alaska permanent fund. It just cut the proposed 50% of the oil lease bonus, royalties and severance payment to 25%, and the severance payment, which accounted for about half of the oil wealth income, was canceled and flowed into the general fund instead. In this way, there was no way to form permanent financial assets. This was also the initial establishment of an Alaska permanent fund. Then they proposed dividend plan and annuity account. The main content of these two proposals was to pay dividends according to the length of residence of the residents. They were approved.
Finally, in 1980, the national government allocated funds to establish the Alaska State Permanent Fund. The bill also proposed that the board of directors is independently responsible for the operation of the permanent fund. In 1982, the Alaska State Legislature also passed a resource fund dividend plan, and then such a permanent fund was formally established.
Next, I will talk about the main ideas and governance mechanisms of the Alaska Permanent Fund.
Its main idea is to avoid excessive waste of resources by establishing a permanent fund. Extract a portion of the income from oil proceeds to the descendants of Alaskans, and convert some of the oil income into permanent and sustainable financial assets.
Then keep resource revenue away from politicians to prevent politicians from wasting resource revenue on government operations and investment projects.
Beginning in 1976, Alaska’s referendum decided to set up a permanent fund to allocate at least 25% of the state’s oil resources and related income to the permanent fund, stipulating that the legislative department has full power to dispose of the income of the permanent fund, but the capital of the permanent fund, the legal department must keep it intact.
Then, in 1978, the legislature decided to establish two corporate entities, the Alaska Enterprise Investment Corporation and the Alaska Permanent Fund Corporation. The Alaska Enterprise Investment Corporation mainly creates short-term benefits for Alaskan citizens and provides financing support for small and medium-sized production-oriented private enterprises and community development projects. Alaska permanent fund company has a large amount of income into the account, but the type of investment it can be given strict restrictions, that is, the prudent investment rules of the common law are used to guide investment. Then it was stipulated in the 1980 bill that 50% of the income from the leasing of mineral resources should be invested in the fund.
The establishment of a permanent constitutional amendment stipulates that at least 25% of the royalties from all natural resource income owned by the state shall be placed in the fund, and the fund shall only be used for investments that can bring asset returns. The implementation of the withdrawal rules means approximately 10% of oil revenue is placed in the fund, and other insignificant mineral revenues are also included. In addition to the royalty savings provided by the constitutional amendments, the size of the fund also increases with legal appropriations. The annual savings make up for the depreciation of the true value of the fund due to the effect of inflation.
Finally, the management of the fund belongs to an independent company, led by a carefully calculated board of directors, and is focused on maximizing the financial returns of the fund. The company’s operations are independent of state revenues and have not been involved in any disputes involving the optimal use of funds. The decision is controlled by the legislature.
The then Governor of Alaska, Jay Hammond, suggested that the annual income of the fund should be distributed according to the requirements of an Alaska Corporate Plan. Citizens of Alaska can enjoy the income of the fund every year. The distribution standard depends on the residence period of Alaska up to 25 years. Residents who live for one year can enjoy a share, and residents who live for two years can Get two shares, and so on. Half of the income of the Alaska Fund is equally distributed to each resident each year. In order to make the program sustainable, the Alaska permanent fund dividend is paid in the form of ordinary income rather than fund income. Citizens of Alaska can get a corresponding share from the permanent fund dividend distribution every year. This fund is composed of public oil revenues. As the fund appreciates, the scale of annual dividends also increases.
If other countries want to apply this model of Alaska, the government should consider the following three questions according to its own situation. One is whether the government has to decide whether to collect rents on privatized resources, and the second is whether the government has to decide whether to create a permanent fund. Third, the government has to decide whether to distribute dividends and what proportion of the proceeds will be used for dividends.
Next, I will take Iraq as an example to talk about how to extend the permanent fund to other countries. Historically, every revolution in Russia, China, France, and the United States was triggered by the gap between the rich and the poor. Take Iraq as an example Under Saddam’s rule, the upper-class lives are rich, the bottom lives are dirty, oil wealth makes a few people fat, but most people are still starving. Transferring part of the country’s oil wealth to citizens and reducing the gap between rich and poor may help prevent further chaos.
What should Iraq do? Alaska’s permanent fund has some major shortcomings, and Iraq should avoid repeating the same mistakes. For example, the dividend plan of Alaska failed to deposit all the state government income that Alaskans received from oil wealth into the people’s account, and did not use their income for other purposes than dividends. Instead, most of it went to the state government. When oil prices rose, the state government succumbed to the interim bill to abolish income taxes and squandered oil revenues. Therefore, the Alaska government today is facing a serious crisis and deficit gap. Iraq should handle this income more appropriately and deposit it in the people’s account or other purposes, instead of spending it lavishly by the government.
How should China learn from the Alaska permanent fund model? China’s resource-abundant regions can establish a distribution model similar to fund management to effectively manage resource returns, so that they can continue to increase in value. Fund income can be managed through investment companies for investment management, which can increase the value of the fund and turn the fund into a sustainable financial asset. The supervisory body of the fund can be supervised by another financial institution or such as the central bank. The account of fund income is open to residents of resource-based areas by investment companies on a regular basis.
The proceeds of this resource fund can be used for the following investments. The first is the investment in human capital, through fund income to increase the level of human capital investment, promote the accumulation of human capital, increase the investment in education funds in resource-based areas, and cultivate technical and professional talents. Increase the supply of human capital and attract and retain senior talents through preferential conditions. The second is investment in technological innovation. Resource-based regions have a single industrial structure, are highly dependent on resources, and have relatively weak technological innovation capabilities. Fund proceeds are used to support technological innovation in resource-based regions. The third is the investment in urban infrastructure, using fund proceeds to invest in infrastructure in resource-based areas, especially urban infrastructure. The last is to support the development of private enterprises. Fund proceeds are used for investment in private enterprises in resource-based areas, encourage and support the establishment of private enterprises, and implement preferential policies for private enterprises.
In fact, the Alaska dividend model has many applications in various countries. I think the social dividend practice in Alaska has a general enlightening significance for the management of public resources. In fact, Venezuela, Brazil, South Africa, Israel and New Mexico in the United States have all advocated the establishment of social dividend like Alaska. Europe has a stronger movement to promote social dividends, which they like to call “basic income.”. The British government has officially run the children’s trust fund in 2004 to establish a capital account for every child born after January 1, 2004. In fact, many rural areas in China have implemented the community stock cooperation system for many years, which is the “local social dividend” based on the value-added income of collective land. In fact, the system conditions for implementing social dividend in China are more favorable than those in many countries, because we have a large proportion of public assets, and we do not need to make many complicated tax designs like other countries.
Alaska’s social dividend practice is very important, not only because it is so far the only real human social policy on the way, not just as an experiment, but has been implemented for almost 40 years! Its implication to future public policy and the use of public resources may have similar importance to land revolution.
Why establish a social dividend fund? And how? What is the difference between this kind of funds and others in the aspect of governance mechanism? How to ensure the sustainability of the funds? How to decide the priority between Dividend and public services? How to avoid the expropriation of the capital and its revenue by different interest groups? And so on. In the process of answering these questions, we are doing this work in the context of reforms in the political, economic, legal, social and cultural spheres.
As undergraduates, I hope you are aware of the frontier issues, reflect on the classics, and foster the ability to change the status quo.
Innovations for Poverty Action has published a research paper, ‘Effects of a Universal Basic Income During the Pandemic’.
We examine some effects of Universal Basic Income (UBI) during the COVID-19 pandemic using a large-scale experiment in rural Kenya. Transfers significantly improved well-being on common measures such as hunger, sickness and depression in spite of the pandemic, but with modest effect sizes. They may have had public health benefits, as they reduced hospital visits and decreased social (but not commercial) interactions that influence contagion rates. During the pandemic (and contemporaneous agricultural lean season) recipients lost the income gains from starting new non-agricultural enterprises that they had initially obtained, but also suffered smaller increases in hunger. This pattern is consistent with the idea that UBI induced recipients to take on more income risk in part by mitigating the most harmful consequences of adverse shocks.
Luca Michele Cigna has written a master’s degree thesis about trade unions’ positions on Basic income: Looking for a North Star? Trade unions’ positions in the Universal Basic Income debate
First, unions’ propensity to support a UBI depends on the degrees of socio-economic insecurity. In contexts characterised by high levels of poverty, unemployment and precariousness, UBI proposals look more attractive in the eyes of union leaders. Secondly, welfare regime generosity is a strong explanans of trade unions’ support. Less encompassing welfare systems encourage trade unionists to regard UBI as a legitimate policy alternative. Third, trade unions’ attachment to the work ethic and the insurance principle affects their preferences for unconditionality and universality in policy settings. Fourth, their role in the industrial landscape, and their degree of organisational inclusivity, have a strong influence on UBI support.
The original plan was for an international conference in Korea in February 2020, but the coronavirus pandemic caused the event to be postponed. An international conference has now been held online, and a wide range of speakers and discussants from around the world have contributed.
Session 1 was on ‘steppingstones to Basic Income: pilots and trials’; and session 2 was about Basic Income financing strategies. The sessions can be seen here.
Session 3 was about modern capitalism, modern life, and Basic Income; session 4 about Basic Income, local currency, and regional economy; and session 5 about the welfare state crisis and Basic Income. Sessions 3, 4 and 5 can be seen here.