by Yannick Vanderborght | Apr 9, 2012 | Opinion
The BRICS Heads of State Summit in Delhi this week presents an excellent opportunity to launch some joint initiatives that would help promote the aims of the meeting, security and stability. Among those, one stands out that could easily be sidelined.
The leaders of India, Brazil, China, Russia and South Africa face a common challenge arising from the fact that their economic growth is leaving a large number of people languishing in dire poverty and economic insecurity. Each country has adopted very different approaches. Without doubt, Brazil has done best, and India, China, Russia and South Africa would be well advised to learn lessons from its experience.
For dealing with poverty, India has relied heavily on hugely expensive subsidies, primarily through the Public Distribution System (PDS). Most of the money poured into those schemes goes astray. Nearly three-quarters of PDS never reaches the poor. Inequality has worsened as well, as it has in China, Russia and South Africa in recent decades.
In China, the share of national income going to capital has risen by twenty percentage points in just over two decades. The Chinese leadership is acutely concerned about the persistent poverty threatening the sustainability of their growth model, marked by a rising incidence of social protests. South Africa has also fared badly, with sluggish economic growth being combined by the persistence of high poverty, chronically high unemployment and shocking inequality.
By contrast, Brazil under President Lula transformed their social protection system to rely extensively on cash transfers, notably its scheme of Bolsa Familia, which since its introduction in 2003 has reached over a quarter of all Brazilians, over 50 million people. In that time, poverty has declined, income inequality has fallen considerably, economic growth has risen while it has fallen in the other BRICS countries as well as in the G20 area in general, and unemployment has fallen to its lowest ever. And women and children have done particularly well.
Cash transfers have been hailed as a primary reason for these successes. President Dilma Rousseff is committed to continuing on that road. There is even a law on the statute books committing the government to introduce a basic income for all as and when economic conditions allow it.
The Bolsa Familia is nominally a conditional cash transfer scheme, providing monthly payments conditional on children attending school and having regular medical check ups. In practice, these have moved to “co-responsibility” commitments, obliging local agencies to provide better facilities as much as being policing mechanisms.
Meanwhile, India has slowly moved into a phase where the Planning Commission and others are more open to use of cash transfers. Regrettably, polemical criticisms have been holding up dispassionate debate. Cash transfers do not rule out other schemes, such as labour projects such as MGNEGS. Nor do they mean government should roll back its development of social services.
At the moment, several experimental cash transfer schemes are in progress in various states. These have been done mostly by non-government bodies, such as SEWA. Lessons learned are mainly positive. But Indian officials and their colleagues in China, Russia and South Africa should organise a joint assessment of the design of cash transfers, drawing on the Brazilian experience, and that of other Latin American countries.
The issue of cash transfers is closely related to one other theme that is scheduled for discussion, financial initiatives. Cash transfers are linked to the need for financial inclusion, an imperative that concerns all five countries. Unless the poor, the emerging precariat and all rural residents are enabled to be part of the money economy, their plight will continue to deteriorate. In this respect, lessons are to be learned by all the BRICS countries, and here India has some recent encouraging experience to pass to their colleagues.
Guy Standing is Professor of Economic Security, University of Bath, England. He is the author of Cash Transfers in India: A Review of the Issues, just published by UNICEF, New Delhi.
by Guest Contributor | Apr 2, 2012 | Opinion
Article by: Almaz Zelleke
The Cato Institute, a non-partisan Washington, D.C. think tank founded in 1977 to promote and disseminate libertarian views, is in danger. Due to a highly unusual and, in hindsight, highly unfortunate shareholder structure for a non-profit, it finds itself at risk of a hostile takeover by two of its co-founders, billionaire businessmen Charles and David Koch. Due to the death of one of the other two shareholders, the Kochs are poised to take control and shift Cato’s mission in a more partisan direction. Liberals and libertarians alike should rue the loss of Cato’s principled, non-partisan voice. Many of Cato’s free-market stands are certainly shared by Republicans, but it routinely ridicules Republican politicians who talk about cutting government spending while voting to increase it, opposes Republican warmongering, and is at odds with most of the party’s positions on social issues like abortion and same-sex marriage.
But the devolution of a libertarian think tank into one more concerned with protecting big business interests like the Kochs’ shouldn’t come as a surprise, despite the unusual circumstances in this case. Libertarianism has always had a latent conservatism due to its advocacy of absolute property rights. Absolute property rights inevitably concentrate economic power, which is why property rights in capitalist economies must be tempered by some redistributive force—welfare state institutions, redistributive taxes, or progressive resource dividends. Libertarians typically justify the inequalities generated by absolute property rights by the economic benefits they provide to all, including those without property. Even when this is demonstrably false—as it is today for the 46 million Americans who live in poverty in the richest country in the world—libertarians are at best grudging supporters of even market-friendly redistributive measures like a negative income tax or a basic income.
Liberalism emerged in the 18th century with the assertion of universal rights of sovereignty against absolute monarchs, but extensions of liberty beyond propertied men were only slowly and grudgingly granted. Liberal democracies granted full political rights to all only in the 20th century; full economic rights—always central to the liberal ideal—remain the privilege of the few. Libertarianism’s latent economic conservatism—conservative in the worst sense, in protecting existing privilege—has always lurked just below the surface. It’s no surprise that the Kochs, who were probably only millionaires when they co-founded Cato in the 1970s, should want their think tank to skew conservative now that they’re billionaires with a lot more to protect from free market competition.
by Yannick Vanderborght | Mar 26, 2012 | Opinion
Most readers here will agree, that Basic Income would be a good way to solve many problems which exist in our societies, but why is the idea not supported by the populace? Even worse! It seems there is a strong resistance against.
Isn’t it strange, that an idea, which suggest to benefit every individual, cannot find broad support? For instance: more than 311 million people in the United States live, but the USBIG-Network has only around 300 Facebook-fans and roughly 250 official members – and not all of them are from the States. In other countries the situation is similar. The portion of people who are active BI-supporters seems to be in the scope of one thousand or even less…
Of course, we could say, quantity does not equal quality – it is better to have some hundreds of high qualified scholars than millions of followers believing in their personal advantage. But this view misjudges the reality of our democratic systems with their majority voting.
At all times every great thought, every good idea which shook the world later, had to walk a hard and sometimes dangerous way against existing resistances. But the democratic system makes it even more difficult. While to contradict a monarch requires some courage, to disagree with a current opinion, the risk of being considered as insane or in the worst case, to be banned, extends the needed courage ad infinitum.
In the past, Basic Income had many more supporters – for instance in the time of Martin Luther King and the citizens’ movement of the 1960s. But we still have nowhere a country-wide Basic Income scheme and maybe hence only orthodox believers kept the idea alive.
Does it mean we who support Basic Income are all brave and open-minded heroes, because we fight the good fight? Or does it rather mean, we are only too dense to find a way of making people more interested in the idea?
I think, this does not reflect the truth. Of course, it would be great to have catalysts in terms of people like Angelina Jolie, Brad Pitt, Lady Gaga or George Clooney who are publicly known for their social commitments and who represent a kind of authority for many youths.
But globally people are searching for alternatives to the current systems. And the number of BI-supporters grows slowly, but steadily. More and more supporters suggest how to bring the idea into the general public, out of the often so called “ivory tower of science.”
One of the main problems is that there is no specific target group which is essential for marketing strategies. Another problem is that those who are affected by poverty are too busy to survive. And other people can choose between countless leisure activities. Most of them do not want to think about social solutions in their rare spare-time. Much less if the idea sounds utopian and for the near future not practical. Furthermore they elected a government exactly for the reason that it would deal with such issues.
Now we could say, it is the fault of governments not implementing a Basic Income scheme. But frankly speaking, governments are not elected to make trials. And there should be no doubt that Basic Income for all would change a lot; it might even cause people to begin to rethink the purpose of their life.
Further I want to question the necessity for governments to promote Basic Income. They got the mandate to maintain their respective society and not to affect the life of millions of potential voters.
As long as their is no insight into the necessity of the end of Basic Income, there is no reason to support this idea. The strongest resistance against Basic Income is the current situation which is considered as unchangeable and while we are powerless it is not wanted, but accepted with all its injustice.
However, the more people get acquainted with alternatives, often caused by their own circumstances, the more they question the given condition.
Maybe we should take this quote from Chekov to heart:
It is unfortunate that we try to solve the simplest questions cleverly, and therefore make them unusually complicated. We should seek a simple solution.
by Citizens' Income Trust | Feb 2, 2012 | Opinion
Peter Dwyer, Understanding Social Citizenship, 2nd edn, Policy Press, 2010, xix + 260 pp, hbk 1 847 42329 0, £65, pbk 1 847 42328 3, £19.99
The number of degree course modules on ‘citizenship’ is increasing, and this book is designed as a core text; but it will be useful not just to teachers and students, but also to social policy practitioners and politicians because the contested and complex concept of citizenship now informs debate on all manner of social policy issues, as this book amply shows.
There is material here on republicanism and liberalism, the development of social citizenship in Britain, political ideologies since the 1950s, class, poverty, gender, disability, race, ethnicity, social Europe, and global citizenship (with a question mark).
Those interested in the tax and benefits system will find relevant material in most chapters – not surprisingly, given the importance of the term ‘citizen’ to much social policy debate and the connections between the tax and benefits system and so many social policy fields.
Of particular interest will be the material on the relationship between class, poverty, citizenship and welfare to be found in chapter 5. Increasing conditionality in relation to benefits policy was a feature of the last government, and we are waiting to see whether the same will be true of the new one. The chapter contains an informative table of new conditionalities in a variety of social policy fields.
Citizenship suggests universalism, but it also has to cope with difference ( – a theme running through the book), and the final chapter outlines three approaches to the relationship between universalism and difference: a Citizen’s Income, group rights, and differentiated universalism.
The erroneous argument that a Citizen’s Income would be ‘too expensive’ is, as usual, offered without evidence. Similarly, the idea that ‘for some a [Citizen’s Income] is a step too far as everybody, freeloaders included, would be able to claim their citizen’s income’ (p.208) receives a response in terms of a participation income rather than the challenge which it deserves. He does concede that ‘freeloaders already receive means-tested benefits and these benefits actively discourage them from seeking employment: a Citizen’s Income wouldn’t do that’, but it’s encouraging to see a Citizen’s Income taken seriously as the feasible corollary to social citizenship.
Given the importance of a Citizen’s Income and citizenship to each other, a future edition of this excellent book would benefit from an extended and better informed treatment of both Child Benefit and Citizen’s Income, which should be treated together rather than separately as they are in this volume.
by Citizens' Income Trust | Feb 1, 2012 | Opinion
Stuart Lowe, The Housing Debate, Policy Press, 2011, 1 847 42273 6, pbk, 280pp, £14.99
Stuart Lowe’s The Housing Debate takes a refreshingly broad view of housing and welfare. Rather than a balanced introduction for students to current debates around housing and social policy, Lowe has a clear case to make. ‘There is mounting evidence that housing is not only an important pillar of welfare states, but, looked at in its broadest sense, has become a foundation.’ (p33)
Through a series of historical and thematic chapters, Lowe argues that there is a fundamental connection between housing systems and the type of welfare states that develop from them and alongside them. In the UK, the growth of home ownership from the mid twentieth-century and the liberalisation of mortgage markets from the 1980s have been integral to developing our asset-based welfare state, where individuals and families use personal wealth to buy into welfare.
In 260 pages, Lowe doesn’t attempt to offer a comprehensive history of housing policy; rather, he draws out key themes and illustrative aspects of housing policy that have helped shape both the current structures of the welfare state and political debates about housing. Historians and welfare experts may occasionally be frustrated by this brevity. Indeed, its introductory style is occasionally prone to over-simplify, oto gloss over important subtleties. This includes, for instance, the changes to social housing to be introduced through the Localism Bill currently before Parliament, which Lowe reduces to ‘effectively creating a mirror image of the tenancy arrangements in the privately rented sector’. (p4) However, readers already interested in tax, welfare and benefits, but who come fresher to the housing debate, will value the clear structure and the balance between history and welfare theory.
The historical account begins by identifying the emergence of a distinct housing policy from Victorian public health concerns, and then traces the socio-economic roots of the modern concept of home-ownership in the interwar years. Those interested in a Citizen’s Income might be particularly taken by Lowe’s comparative analysis of housing markets across Europe and the US. He focuses on the divergence of a municipal approach to housing in Britain, where state housing was an acceptable response to a dwindling private rented market, and Germany, where a social insurance model and related scepticism of a statist approach helped more diverse provision to develop through housing co-operatives. One can see this initial split at the start of the twentieth century extending and deepening. The author’s perception of the 1961 Housing Act is that it was the end of a brief period of reliance on the private rented sector and the return to housing provision by local authorities.
Lowe’s distinctive offer is in Chapters 6 and 8, where he argues for a clearer role for housing in the analysis of welfare states. The Housing Debate neatly contrasts a historical analysis with literature on comparative welfare to argue that different approaches to housing have shaped very different welfare systems. In the UK, this means asset-based welfare. This is, in part, due to home-ownership’s significant initial costs that lead to electorates in countries with high proportions of home-owners favouring low taxes, low interest rates, and low spend social policies. And so one trade off to be made is between home-ownership and pension provision. Lowe identifies examples of explicitly asset-based welfare, including the Child Trust Funds in the UK and the experiment with individual asset bonds for low income families in the US. And as the author indicates in his conclusion, there is much still left to consider in the welfare debate, once we acknowledge that housing is part of a state model where citizens are expected to secure savings and assets to contribute to welfare.
This book has been written to persuade students of social and public policy to take housing seriously. The debate should stretch further than this. It provides a very timely analysis as policymakers turn again to reconsider housing policy in the face of slow economic growth, accelerating private rents, and projections for the costs of social care for an ageing population. This slow economic growth means that people are struggling to sell their homes at the price that they should be. This slows the market down significantly as people cannot then purchase their next home unless they used a let to buy mortgage. This allows homeowners to let out their current home until they can sell it for an appropriate price. This helps the homeowners to move into their next home too.
Jake Eliot
by Citizens' Income Trust | Jan 31, 2012 | Opinion
Daniel Dorling, Fair Play: A Daniel Dorling reader on social justice, Policy Press, 2011, xiv + 397 pp, pbk, 1 847 42879 0, £24.99
In this book Daniel Dorling has brought together fifty-two of his academic papers, newspaper articles, magazine articles, and unpublished essays, to create a nicely structured and really quite devastating critique of our unequal society: devastating because so carefully researched.
The book contains sections on inequality and poverty, injustice and ideology, race and identity, education and hierarchy, elitism and geneticism, mobility and employment, bricks and mortar, wellbeing and misery, and advocacy and action. Most of the sections follow the same pattern: a scene-setter (often a newspaper article); then mainly articles from peer-reviewed journals; and finally a newspaper or magazine article, or occasionally a final journal article, suggesting a policy direction which might reduce inequality.
Thus the section on inequality and poverty opens with an article on murder: ‘Behind the man with the knife is … the man who decided that his school did not need funding, the man who closed down the plant where he could have worked, the man who decided to reduce benefit levels so a black economy grew …’ (p.25). Then come articles showing how economic growth is generally higher in urban areas nearer to London, and that ‘society in Britain has become so divided that very few people live anywhere where they can see how a representative range of folk live’ (p.55). Finally there’s a more political piece: ‘Cameron says he is worried about “deep poverty”, about the poorest in society. But he clearly does not want a redistribution of the money, the land, the work, the educational resources and the “opportunities” that the rich have expropriated from the poor over the past three decades’ (p.59).
There are two respects in which the introduction isn’t quite accurate. Dorling claims that he’s edited the articles and extracts so that they have a consistent style, but there is still a considerable difference between the style of an article written for the Guardian and one written for the peer-reviewed Local Economy. The introduction also says that each section ends with a discussion of what we can do about the inequality evidenced. In many of the sections this is only true in the sense that Dorling asks that a current policy trend should be reversed. In just one section he proposes a new policy direction: a land tax (p.129). I suspect that this is because he’s a geographer and has studied our unequal land distribution and the many other ways in which ‘place … matters in what might inspire (or condition) you. Circumstances matter’ (p.343), and where we grow up has a considerable effect on our opportunities and prospects. In the same vein, Dorling shows how recent Housing Benefit changes will result in ‘the cleansing and clearing out of so many poorer people (and people made newly poor) from more prosperous areas of the country’ (p.99).
As well as being Professor of Human Geography at the University of Sheffield, Dorling is President of the Society of Cartographers, and this book would be worth buying simply for the full-colour maps which say more about inequality than words alone could say. However, the main reason for buying this book has to be the sheer variety of evidence which it offers for an increasing social malaise. We are sleepwalking into a seriously unequal society. A land tax would help to reduce that inequality. To distribute the proceeds as a Citizen’s Income would make even more of a positive difference.
