The Associated Press has been reporting that more than 5,000 and perhaps as many as 10,000 Mongolians have been protesting for a resource dividend. Mongolia is a poor nation, currently in the process of developing what appear to be major mineral reserves. Back in 2008, during elections, both of Mongolia’s major parties promised to set up an Alaska-style resource dividend. But the ruling parliament has not so far taken action to do so. The protestors have demanded that the government move forward on its promise. Some are also calling for a crackdown on corruption and the dissolution of the current parliament.
The new Conservative/Liberal-Democratic coalition government of Great Britain has announced that it will rescind the one step in the direction of a universal basic income made by the previous Labour government. In 2002, the Labour government created “the Child Trust Fund” which gave each child born in Britain that year a 250GBP plus another 250GBP when reaching ate 7. The bonds reach maturity when the child turns 18, at which time the bonds would be potentially worth thousands of pounds. The idea was that every child born in Britain should have some small share of inheritance. The ruling government announced that the program will be entirely phased by 2011, so that only children born between 2002 and 2010 will receive any part of the fund.
Stuart White, a professor of Political Theory at Oxford, commented, “So the party of ‘property-owning democracy’ (Tories) and ‘ownership for all’ (Liberals) combine to end the first policy ever to guarantee an asset for all young people.”
Martin O’Neill, a political philosopher at the University of York (UK), pointed out that the announcement of the repeal of the Child Trust Fund was made by Gideon George Osborne, who sits in the British “House of Commons” despite being the heir apparent of Osborne Baronetcy. He stands to become the 18th Baronet of Ballintaylor, and according to O’Neill, Osborne has already inherited a personal trust fund of more than 4 million pounds.
According to Knight Ridder, the Libyan dictator, Colonel Mouammar Kadhafi has pledged to abolish the oil ministry and distribute oil revenues directly to the people. Kadhafi said, according to Reuters, “All citizens have the right to benefit from the oil funds. They should take the money and do whatever they want with it.” He said that the committees that run the oil ministry and other government agencies have failed. “These committees will be replaced spontaneously by real committees to be created everywhere by citizens. Citizens will get part of the oil revenue directly. They don’t need intermediaries.” How these citizen committees will be able to distribute money directly to the people is unclear. Khadafi has made similar statements in the past, and so we should not necessarily expect the creation of a Libyan oil dividend to be imminent.
Overshadowed by the recent turmoil in Iran, the government has been making strong moves toward introducing something very much like a basic income guarantee. According to Hamid Tabatabai, of the International Labor organization, “In January 2010, the Majles (Iran’s parliament) adopted a far-reaching law that progressively replaces subsidies on energy and basic goods with direct cash transfers to the population. The subsidies run into tens of billions of dollars annually, mostly on fuel, and benefit the richer strata of society more than others. Half of the proceeds will be passed on directly to the people through their bank accounts, with the rest used to boost the development of agriculture and industry and strengthen the country’s social security system. Estimated at some 10 to 20 billion dollars in the first year, the transfers would be unconditional, i.e. without any quid pro quo, and universal, except for households who opt out by failing to provide the needed information about their composition and socioeconomic status. In setting the amount of the transfer to each household the law requires consideration of household income but the most important factor is likely to be the household size. Implementation will begin in spring 2010 and take five years.”
Cash transfers are not new in Iran; a variety of programs have been in place for years, but many Iranians, including many in government, see that too much of the benefit of existing programs goes to already well off people. According to Tabatabai, “the concept of a universal, unconditional and regular cash grants emerges almost seamlessly as a by-product of an attempt to address the shortcomings of the present system. However, even if a BIG proves to be a logical and feasible proposition from economic and social perspectives, its prospects would depend on how the subject is broached and argued in the highly charged political environment in the country.”
The situation is developing rapidly as the content and implementation strategies of reforms are being worked out. Tabatabai will present a paper on the Iranian situation at the Thirteenth BIEN Congress in Sao Paulo this June.
Review of Just Distribution: Rawlsian Liberalism and the Politics of Basic Income by Simon Birnbaum. Stockholm Studies in Politics 122, Stockholm University 2008: ISBN: 978-91-7155-570-0
Review by Karl Widerquist, originally published in the Citizens Income Newsletter, 12th February 2009
Simon Birnbaum
Simon Birnbaum is a newcomer to the basic income debate who has quickly worked his way into the basic income movement. He completed his doctorate in 2008 at Stockholm University, and has already been awarded fellowships at Oxford University and at the Catholic University of Louvain in Belgium under the supervision of Philippe Van Parijs. He has only been publishing since 2005, but he has already published six academic articles and chapters, five of which are on basic income.
Just Distribution is Birnbaum’s doctoral thesis. It is not an easy read. It is 240 pages of dense political philosophy that only people who intend to get deeply into the philosophical debate over basic income will want to read in full. It is aimed at people who have already read several of John Rawls’s major works and some of the more philosophical works on distributive justice in general and basic income in particular. However, many of the arguments in this book are of interest to a wider audience, and I will try to give readers of CIT Newsletter a brief introduction to them.
Birnbaum’s starting point in John Rawls’s Theory of Justice, one of the most influential works of political philosophy of the Twentieth Century. Rawls’s most famous proposition, “the difference principle,” stated that the distribution of benefits from the joint social project should take incentives into account, but decision makers should use incentives to maximize the benefit to the least advantaged individual. When do we stop giving more to high achievers? When doing so ceases to be in the interest of the least advantaged people. Such a principle sounds favorable to basic income, but Rawls balked when confronted with the question of whether the difference principle should benefit lazy “surfers” who enjoy the benefits of the social project without contributing. The least advantaged individual in Rawls’s theory is not necessarily the poorest person, but the poorest contributor to the social project, apparently ruling out basic income.
Birnbaum’s project is to admit that the surfer problem exists but to argue that on balance an unconditional basic income would further the overall goals of a Rawlsian economy. The surfer problem is a strike against basic income, but it need not be decisive, if basic income has other benefits that further Rawlsian goals. Birnbaum discusses many such benefits. For example, many contributors would benefit from the assurance of unconditional support. People who contribute to the social project in ways other than paid labor will share more in the benefits they help create and will be better able to make their contribution if an unconditional basic income is available. Subjecting disadvantaged people to extensive supervision to make sure that they are eligible for conditional redistribution is harmful to the self-respect that Rawlsianism is supposed to accord to contributors. Basic income gives workers the power to refuse exploitive working conditions. Finally, there is a large amount of wealth in society that attaches to nonhuman resources, and that can therefore be distributed unconditionally without violating any principles of fairness to contributors.
The latter half of the book responds to criticisms based on reciprocity, responsibility, and feasibility. A regular basic income can be important to upholding the security and autonomy individuals need to make well-informed choices as self-respecting, equal citizens, and it, therefore, helps maintain responsibility. Birnbaum concedes that a contributory ethos is necessary to maintain a Rawlsian society with or without basic income and that basic income might therefore lead to exploitation of those who hold the necessary ethos by those who don’t. However, there is also a tension between the effort to eliminate any such exploitation and the neutrality-based goals of a liberal society. Birnbaum concludes that given the constraints of feasibility, there is a tentative case to be made for a mixed redistributional system with some redistribution coming in the form of conditional benefits and some coming in the form of unconditional basic income.
Review of The Ethics of Stakeholding, edited by Keith Dowding, Jurgen De Wispelaere, and Stuart White, Basingstoke: Palgrave Macmillan, 2003
Review by Karl Widerquist, Citizens Income Newsletter, issue 1 of 2007, revised 2008
In the interest of full disclosure, I must reveal that I am well acquainted with all three editors. Stuart White was my Ph.D. supervisor; Jurgen De Wispelaere is my coeditor of Basic Income Studies; and Keith Dowding invited me to join the Citizens Income Trust. However, none of them asked me to contribute to this volume. Assume these two factors balance out perfectly, and I am the ideal, unbiased reviewer.
From the title, this collected volume of essays sounds like a companion volume to Bruce Ackerman and Anne Alstott’s 1999 book, The Stakeholder Society,[1] and it almost is. All of the chapters touch on their proposal in some way, and the book concludes with a chapter by Ackerman replying to some of his critics in the volume. But the editors’ opening essay defines Stakeholding more broadly than Ackerman and Alstott, as “a particular paradigm within social policy that looks to empower individuals by granting them or helping them to acquire assets or a near equivalent guaranteed future stream of income.” Ackerman and Alstott focus on one such policy, basic capital. That is, a lump sum coming of age grant, which is, in their proposal, $80,000 for all high school graduates who aren’t convicted of a felony by their 21st birthday. Dowding, De Wispelaere, and White consider two other kinds of Stakeholding proposals, universal basic income (which provides a small, lifetime stream of income) and target asset-building (which subsidizes savings and investment). Ackerman and Alstott’s proposal remains the main focus of the book, and the other proposals are discussed largely in relation to the basic capital proposal.
Several chapters put forth Stakeholding proposals. Julian Le Grand and David Nissan discuss the baby bond initiative, a very small basic capital grant, which is since be adopted by the British government. Gavin Kelly, Andrew Gamble, and Will Paxton discuss a proposal for subsidized savings accounts. And Robert E. Goodin discusses an Australian proposal for capital grants to the unemployed. His basic idea is that a person who has been unemployed for a year can propose and investment project to the Department of Social Security. If the Department finds it is feasible, they grant or lend the individual as much as two-years-worth of unemployment benefits to get the project underway. It is a very interesting proposal, but Goodin pays too little attention to the question of whether it will encourage people who might have gone back to work in less than 12 months to stay unemployed for the full year so that they can become eligible for the grant.
Two chapters, one by Stuart White and one by Gijs van Donselaar, discuss the issue of whether unconditional grants allow people who may not be working to take unfair advantage of workers whose taxes support the grant. White concludes that a one-time grant or a temporary basic income can give the disadvantaged greater opportunities and protect them in times of crisis without interfering with a lifetime obligation to contribute to society through work. Van Donselaar is more skeptical, criticizing Ackerman and Alstott’s funding of the stake through an inheritance tax as “a tax on love.” He endorses a modified version that provides a voucher that will ensure that the stake is used only for productive investments.
Three chapters criticize Ackerman and Alstott’s proposal. Cécile Fabre criticizes Stakeholding for being insufficiently egalitarian, but most of her criticism amount to the claim that Stakeholding is merely a step in the right direction rather than the full solution. Carole Pateman addresses Ackerman’s allegation that the choice of basic income over basic capital is paternalistic. She argues that basic income must be preferred to basic capital not for paternalistic reasons but because the power and economic security basic income gives individuals (and that basic capital does not). Robert van der Veen argues that for all of Ackerman and Alstott’s criticism of basic income as paternalistic, their system has quite a few restrictions on individual behavior. There are conditions attached to the stake; individuals are to receive a citizens pension (rather than being told to save their stake for retirement), and in between they advocate substantial welfare state protections. Van der Veen estimates that if Ackerman and Alstott replaced all of these other provisions by adding equivalent values to the stake they could up its value by nearly three fold to $228,000. Van der Veen observes that while Van Parijs is consistently focused on the desire to maximize “real freedom,” some other value unexplained principle, is competing with Ackerman and Alstott’s desire to increase economic opportunity.
Probably the most interesting part of the book is Ackerman’s concluding chapter. Surprisingly, he devotes nearly half of the chapter to a rebuttal of van Donselaar’s exploitation allegation. This had special interest to me, because I have spent more time criticizing van Donselaar than possibly anyone else so far,[2] but even I began to feel for him after the way he was handled by Ackerman. Those with an interest in the exploitation objection will be interested in how Ackerman shows that some of the conclusions van Donselaar draws from his models are assumption-specific, and how he defends liberal education against van Donselaar’s case for training individuals to be more productive. Van Donselaar made the tactical mistake of accusing Ackerman of failing to “think through these conceptual complexities.” Ackerman is a venerable, prestigious political theorist, who was able to dismiss van Donselaar’s accusation with an overwhelming amount of self-citations. Van Donselaar left himself wide open to this and so it was a fair tactic by Ackerman. However, although the response was extremely effective rhetorically, it might have allowed Ackerman to escape more substantive parts of van Donselaar’s criticism.
[2] A chapter in The Ethics and Economics of the Basic Income Guarantee, an article in Political Studies, and these were the result of four working papers on www.usbig.net.
