by Scott Santens | Feb 5, 2016 | Opinion
If you’re new to my writing, you may not yet know that I have a crowdfunded basic income through Patreon. Beginning my campaign for $1,000 per month in late 2014, I reached that goal at the end of 2015, and so this year, at the beginning of every month, I will start the month with $1,000 per month, guaranteed, through the patronage of around 150 supporters on Patreon who incredibly make it possible.
So, what’s it like to have a basic income? How are things different? What is there to learn? I intend to publish an ongoing series of these observations, made through the eyes of a life being lived with basic income. This is the first entry in my “Basic Income Observations Log,” and it’s about the first thing I learned so far, which was last year, when I was actually only a few months into my campaign: security.
Security is one of those words that we all know, but I think few of us fully understand, because I for one didn’t understand it the way I do now until I actually experienced it in a new way. Here’s the thing. We all have a minimum basic income guarantee right now. It is a guarantee of $0. No one is guaranteed anything more than nothing. So we all know what insecurity feels like. We can get a job and reduce that feeling of insecurity, but even when we get a job, that feeling of insecurity is still there. At any moment, we could get fired. At any moment, our employer could go out of business, or downsize, or outsource. Any number of things could happen that could result in our incomes falling back down to a minimum of $0. That possibility is omnipresent.
Oh sure, we’ve developed some things we like to call “safety nets” here in the US, where if you have a job and something happens, maybe you’ll get disability money if you’re able to fill out the forms and pass the tests, of which many who are disabled don’t, so don’t count on that. Maybe you can get unemployment money, if you fill out the right forms and pass the tests, of which many who are unemployed don’t. And if you do get it, that is temporary, so don’t count on that for too long. Maybe you can get Temporary Assistance for Needy Families (welfare), or Supplementary Nutrition Assistance (food stamps), if you fill out the right forms and pass the tests, of which many who are in need don’t. And if you do get it, these both too are temporary and also insufficient, so don’t count on them for too long either, or at all for that matter given how small they are, and who’s making the decisions.
So yeah, basically, don’t count on our safety nets for a feeling of security, because that’s not what they are there for. There is one program intended for actual security, and it’s called Social Security. The way it’s calculated is a little messed up, where what you get for the rest of your life all depends not only on how much you earned up till qualifying, but on how long you can wait to start receiving it. But once you’re on it, it is a source of income you can count on as an American, until the day you die. And unlike the way other programs work, you are allowed to earn anything you want on top of it, without losing your monthly Social Security checks. Essentially, we already have basic income in the US, it’s just means-tested based on age, and the amount varies based on lifetime earnings. But for a significant number of Americans, seniors, they actually do know what it’s like to be able to count on a monthly minimum income guarantee that is greater than $0. In fact, for many it is close to $1,000 per month.
So what have I learned so far as a non-senior with basic income security?
Observation One
As a 38-year-old American who is experiencing a minimum income guarantee of $1,000 per month decades before I’m “supposed to”, I can tell you that income security is a big deal. It’s a bigger deal than I think anyone without it fully realizes. And the thing is, it doesn’t even need to be above the poverty level to feel. It just needs to be greater than $0, and basically enough to afford not to starve. I felt more secure earning only $250 per month, because that amount is enough to afford groceries, or pay half my rent. Believe me, it’s a load off your mind to know there is a smaller gap you need to cover through paid labor to meet your most basic needs. Starting every month with a minimum of $250 is definitely better than starting every month with $0. It is not nothing. It is a small amount, and not what I’d call a basic income, but it provides a feeling of increased security, and that feeling is not small at all.
Since having achieved my $1,000 per month new minimum income floor, I have to say, there is definitely a difference between $1,000 and $500 and $250, but learning that something as seemingly insufficient as $250 still made a difference in my feeling greater security, I consider a notable lesson I’ve learned thus far. And I think it’s something people discount when they worry that $1,000 per month may be too low of an amount, or that anything lower than that amount would be pointless.
Observation Two
There’s another lesson I’ve learned as well in regards to security, that was an entirely unexpected lesson in how what I have is both like and unlike basic income.
What I have is like a basic income, in that I can count on it at the beginning of every month regardless of paid work, and its size is sufficient to lift me above the federal poverty line, but it is unlike a basic income in that it relies on about 150 people as I write this, whereas a basic income would be a legal right backed by the full faith and credit of the United States. Say what you want about that, but it doesn’t change that such backing is considered the most secure in the world. So unlike a government-backed basic income, it is possible for me to lose my crowdfunded basic income, if everyone stops being a patron. However, that same reason is why I feel more security than anyone with a normal paycheck, and I consider this a very interesting observation.
For anyone with a normal job, they can be fired by one person. As a result, their income can fall from $1,000/mo to $0/mo. For me, I would have to be “fired” by 150 people to fall from $1,000/mo to $0/mo. If “fired” by one person, I can fall from $1,000/mo to $990/mo. It is this decentralization of income that creates for me a greater sense of security that is far greater than a standard full-time job situation, but still less than the security a US government provided basic income would provide.
It is this observation that prompted me to create a new milestone on Patreon, where my new goal is not to gain a larger income, (anything over $1,000 will still be pledged to others making the same pledge) but to instead create a more widely distributed income floor. If I were to reach the point of being supported by 1,000 patrons, then I think that would provide a sense of security much closer to that of a true basic income. For if I have 1,000 people all pledging $1/mo, then the loss of 1 person is $1, not like now, where the loss of one person could immediately drop me back down to $900/mo. I now think creating a greater sense of security is key to better duplicating the effects of a basic income, so that’s my new goal on Patreon – greater security.
Observation Three
One other observation I’ve made in regards to security is the effect it has on family. When you are part of a household, increased security of one spills over onto other members of the household. Because I have a basic income, my girlfriend even feels greater security. She has a great job, and she loves it, but again, a job can always be lost, so she worries about what can happen if that were to happen. That’s natural. We all worry about what can happen, however unlikely. But now because I have a basic income, even though she doesn’t, the worst case scenario isn’t as scary. It’s a notable reduction of stress. And therefore, the security of a basic income has household-spanning effects. I would argue there’s even evidence for this, thanks to $4,000 per year casino dividends in North Carolina that resulted in incredible outcomes for the kids.
They know, based on the interviews with parents, that the relationship between spouses tended to improve as a result. They also know that the relationship between the parents and their children tended to improve. And they know that parents tended to drink less alcohol. “There is a lot of literature that shows in order to change outcomes among children you are best off treating the parents first,” said Simeonova. “And these are really clear changes in the parents.” There’s also the question of stress, which the extra money helps relieve—even if only a little. While the added income wasn’t enough to allow parents to quit their jobs, it’s a base level that helped with rent and food and other basic expenses. That, Akee said, is powerful enough itself. “We know that the thing poor couples fight about the most is money,” he said. “Off the bat, this means a more harmonious family environment.”
Definitely read the full article in the Washington Post, but the takeaway is that the stress in households, that exists largely due to a lack of income security, has profoundly negative effects, and when that stress is reduced through greater income security, it has profoundly positive effects, especially on young children.
Basically, a feeling of security is hugely important, and most of us are so used to not having any, that we entirely underestimate the transformative effects that basic income will have on any society that adopts it as policy.
Guaranteeing a minimum amount of income security for every member of a society, through a universal basic income sufficient to meet basic needs, will create the conditions for a society to truly flourish. Of that, I have no doubt. And it will be in large part, due to the mass achievement of one word – security.
by Marc de Basquiat | Feb 1, 2016 | Opinion
Multiple surveys across many countries show an increasing support for the idea of providing every citizen with a monthly lump-sum allowance to ensure everyone can meet their basic subsistence needs. In France, the IFOP (a leading French national market research institute) has shown that this support goes beyond political orientation divisions. From the question: “Are you in favour of implementing a guaranteed basic income for all citizens which would replace most existing allowances?” came a positive answer, depending on the degree of support for one party or another, from 72% to 79% for left wing sympathizers and from 50% to 54% for right wing sympathizers.
However, what would an unconditional basic income in France look like in concrete terms?
The Finland experiment
Since the election in April of the Finnish pro-basic income coalition, the topic has given rise to renewed international interest. All started when the Prime Minister of Finland Juha Sipilä announced the launch of a series of pilots, the most important being a “universal basic income” [1], in order to reform the social security system in response to the evolution of the labour market. This will also allow the evaluation of how to reinforce autonomy and incentives to work, as well as reducing bureaucracy and the complexity inherent in accessing social assistance.
The lead role in this project has been given to professor Olli Kangas (KELA) who has outlined the following schedule[2]: preparation phase from December 5th, 2015 to November 15th, 2016; two-year experimentation starting in 2017; evaluation in 2019.
Olli Kangas explained that the work group will evaluate at least four options:
- a “full basic income” (~800 €) replacing almost all basic and insurance-based benefits;
- a “partial basic income” (~550 €) replacing all basic benefits but leaving intact almost all insurance-based benefits;
- a negative income tax in which benefits would phase out as people earn more money;
- miscellaneous other approaches including a universal income and additional components.
Everyone who has recognised the need for major reforms of our social protection mechanisms perceives the announcement of the Finish pilot as an opportunity. However, we need to give time to our Finnish friends for their project to mature.
Which options are possible in France?
The Association for the Introduction of an Existence Income (AIRE) has been working on these questions since 1989, gathering studies and proposals from numerous experts, philosophers, economists, sociologists, politicians, etc. The French Movement for a Basic Income (MFRB) created in 2013 involves activists from a wide variety of backgrounds, leading actions through the country and enriching proposals by bringing together citizen experiences from the grass-roots[3].
Despite apparent simplicity, an unconditional basic income would require a series of structural choices. Precise adjustment of the parameters would need to be made in order to ensure it performs optimally in terms of justice and efficiency. Considering the vast number of options, it would be fallacious to believe that there is an ideal solution. Actually several options that must be weighted by parliamentary and experts in order to create a consensus that is adapted to the reality of our country.
Our experience leads us to recommend a universal income that would vary based on the beneficiary’s age. In particular the case for children should be processed separately, which means organizing an in-depth discussion about the French family assistance policy. This means replacing all or part of the actual eight allowances[4] by a lump-sum for each child. A key stake is to eliminate the high variability of the State grants according to the child’s rank within the family, the matrimonial status of the parents or the parent’s income (knowing that a single child of a middle-income level couple currently receives a remarkably low grant). The potential variation of the universal income amount according to child age (3, 14, 18 year old thresholds) must also be further investigated.
Similarly a discussion is needed regarding senior citizens. The question of incentive to work disappears with the elderly, but the dependency issue arises. Do we need to define a higher amount above 65 years old? How should the matrimonial life conditions be integrated? The ASPA[5] level (800 € for a single person, 1242 € for a couple) gives an indication but not a clear answer on the solution to be implemented.
The coordination with housing allowances constitutes a third theme to be carefully analysed. Acknowledging the inflationary effect of housing allowances (APL) on the rental market price, some politicians and economists[6] are investigating the potential effects of merging the APL and the RSA[7]. As the AIRE association is attached to the Tinbergen rule[8], we are highly reluctant to support this proposal, but the underlying issues must nonetheless be addressed. In any case, it is important to revisit conditionality links between several allowances and the housing grant, in particular the existence of a problematic “housing lump-sum” component within the RSA.
The last framing issue is to define the scope of beneficiaries for a “universal income”. Despite this designation, it is necessary to limit eligibility to a national community. This needs to be defined in terms of residence and/or nationality, probably through continuity of the rules applying today for the RSA beneficiaries. However, this still creates a variety of fundamental questions, for example the potential right to the universal income for prisoners or asylum seekers (currently receiving the ATA[9]).
Three scenarios for a universal basic income for “active age” adults
Similarly to the Finnish approach, we identify three quite different scenarios to defining a universal basic income that would be paid to any adult in France.
- Baseline: extend the distribution of the “RSA single person allowance” to the whole country population (excluding the housing lump-sum component), being 470 € by month in 2016, financed by a flat tax system replacing several current basic social and family allowances as well as tax mechanisms.
- Maximised: distribute equally to the whole population the entirety of the social protection budget, including pensions and unemployment benefit. This would mean about 800 € per month.
- Dynamic: delete all employment incentives to companies and allowing a massive flexibility improvement in terms of minimum salary, in order to finance a basic income ranging between 500 € and 550 € by month. This would also replace a major part of the social and tax mechanisms but leave intact all insurance-based benefits.
The financial feasibility of scenario A is proven and it does not lead to a large upheaval of the redistribution operating in France. It allows a massive simplification of the social and tax systems, facilitating the daily life of the population and reducing operational costs. This scenario, like the following ones, eliminates many inconsistencies, iniquities, and numerous more-or-less known perverse effects. In terms of microeconomic analysis, it implies a massive evolution neither by an income effect nor by a substitution effect, unlike the other scenarios. However, when it comes to tax in france for non residents, one may have to pay tax on income that comes from French sources. In other words, if you work for a French company, even if you do not reside permanently in France, the income you earn will be taxed.
Scenario B designates the losers: those who contributed all along with their life for pensions and unemployment benefits and who would be left without those related benefits. Neither the AIRE nor the MFRB association support this scenario. Such an approach – if it proves to be meaningful – could be considered only through a very long migration phase from one system to another. This would need to be built cautiously, with the implication of the labor unions. Besides, the high level of the benefit leads to a high income effect, many people being possibly satisfied by this amount without seeking a complementary paid activity. The substitution effect contributes on the same way, due to the high level of contribution necessary to finance it.
Scenario C is probably the most audacious challenge, by lightening massively legal constrains framing the labour market, leaving it up to individual and collective negotiations. Citizens with better secured economic status are then on a better position to decide whether to accept or not professional opportunity offers, or to create their own activity by minimising their personal and family risks. The micro-economic analysis is more ambiguous, the income effect being stronger than in scenario A and on the contrary the substitution effect encouraging the activity thanks to a higher flexibility of the labour market.
Of course, the consensus that will emerge from a parliamentary work gathering representatives of all parties and the support of experts from diverse fields could finally be a combination of those three scenarios with potential integration of others approaches. In any case, no option presented in this note should be excluded without in-depth investigation.
Special thanks to Xuan-Mai Kempf for translating the text from French.
ENDNOTES
[1] https://www.kela.fi/web/en/press-releases/-/asset_publisher/LgL2IQBbkg98/content/universal-basic-income-options-to-be-weighed?_101_INSTANCE_LgL2IQBbkg98_redirect=%2Fweb%2Fen%2Fpress-releases
[2] https://www.vox.com/2015/12/8/9872554/finland-basic-income-experiment
[3] Some discussion papers from the field can be tough however well documented. For instance, in order to rebel against the home control by the family assistance administration: https://www.lesenrages.antifa-net.fr/la-caf-contre-les-femmes/
[4] Family allowances, premium for age, family complement for 3 children, basic allowance for child under three, school yearly allowance, RSA increase for each child, income tax reduction according to the number of children, tax reduction for child schooling.
[5] Solidarity allowance for elderly persons.
[6] Cf. the « Unique social allowance » of François Fillon or the IPP report: https://www.ipp.eu/publication/juin-2015-reformer-les-aides-personnelles-au-logement/
[7] RSA: Revenu de Solidarité Active, is the main French allowance providing a minimum guaranteed revenue.
[8] Based on the name of the first Nobel Prize for Economics winner, Jan Tinbergen, a supporter of an unconditional basic income, who stipulated that for each policy objective, one policy instrument is needed, and one only.
[9] Allocation Temporaire d’Attente.
by Citizens' Income Trust | Jan 25, 2016 | Opinion
Anthony Painter and Chris Thoung, Creative Citizen, Creative State – The principled and pragmatic case for a Universal Basic Income. Report published by the Royal Society of Arts (RSA), December 2015.
This report from the RSA is a most welcome addition to the recent flurry of publications and media interest in Citizen’s Income. It outlines a context – technological change – resulting in
underemployment, unemployment or the need to transition careers with some frequency for many. A Basic Income could provide a foundation to smooth working-life transition; (p. 5)
and an ageing population, requiring more people to spend time on caring for others.
The report notes the growing Citizen’s Income movement; studies a variety of other reform proposals (and particularly a Participation Income and an enhanced contributory system); and argues that polling data that shows that the British public regards ‘making work pay’ as far more important than tackling poverty and inequality provides a powerful argument for Citizen’s Income:
It is Basic Income and Basic Income alone that sends out absolutely clear yet non-coercive signals about the incentive to work. … Basic Income is a foundation for contribution. It incentivizes work but supports other forms of contribution too. In this regard, it is the system of income support that best rewards contribution – albeit contribution defined beyond narrow cash terms. (p. 14-15)
The report describes the UK’s current benefits system, notes that the sanctions regime will increasingly attack the self-employed and the employed once Universal Credit is rolled out, shows how Citizen’s Income would offer the ‘power to create’, and then sets four tests for the idea to pass:
- Does the system accord with a widespread set of moral precepts?
- Is it broadly fiscally achievable within the parameters of existing taxation and expenditure?
- Is it distributionally just when compared to the current system?
- Will greater individual (and civic) freedom and creativity be realized? (p. 18)
The particular scheme that the RSA evaluates in relation to the second and third criteria is based on the scheme published by the Citizen’s Income Trust (CIT) in 2012 but with a few minor variations – you can download the CIT proposal here.
A non-binding contract to encourage contributions to society will run alongside receipt of Citizen’s Income. The fact that it is non-binding, and the recipient’s failure to adhere to an agreed contract would not compromise their receipt of a Citizen’s Income, retains the scheme’s reciprocity – important for its ability to pass the first test – and retains it as one characterized by an initial act of generosity on the part of the state, rather than as one that expects a claimant to prove a contribution before the state reciprocates. There is, though, a danger with such a contract. It would be easy for a future government to make receipt of a Citizen’s Income dependent on adherence to a contract’s conditions, thus turning the Citizen’s Income into a Participation Income, so that it would no longer be a Citizen’s Income and would be loaded with administrative complexity and bureaucratic intrusion in people’s lives – precisely what is not required.
In relation to the levels of Citizen’s Income, the RSA scheme attempts to reduce the losses that poorer families with children might suffer at the point of implementation (which has been recognized as a problem in relation to the Citizen’s Income Trust 2012/13 scheme) by allocating a higher level of Citizen’s Income to the first child in a family, and possibly lower levels to the third and subsequent children. This compromises the definition of a Citizen’s Income, because that requires that every individual of the same age should receive a Citizen’s Income of the same amount: but this is a compromise in theory, and not a new compromise in practice, and so should not overly concern us. This is because in any Citizen’s Income scheme the children’s Citizen’s Income are paid to the main carer: so although in theory every working age adult (or adult over 25 years old, as in the RSA and CIT 2012/13 schemes) receives the same amount, in practice the main carer of children receives their own adult Citizen’s Income and the Citizen’s Incomes of their children. Because allocating different amounts to different children in a family will adjust a total amount paid to an adult that is already variable in relation to the number of the children in the family, no new compromise has in practice been generated. We might hope that if such a Citizen’s Income scheme were to be implemented, then eventually it might prove possible to reduce the compromise by bringing the Citizen’s Income levels allocated to different children nearer to or identical with equality: but as a transitional measure with some useful effects, the RSA’s approach has much to commend it.
A compromise that has nothing to commend it, though, relates to lone parents:
One group that could lose out in the transition to Basic Income in the RSA model are low income, lone parents with children over the age of five. … there may be scope for a transitionary measure whereby lone parents could continue to claim a Child Benefit top-up … introducing an element of household calculation. (p.31)
A lone parent addition would not satisfy the ‘unconditional’ requirement of a Citizen’s Income, and would result in precisely the kind of bureaucratic intrusion into people’s personal relationships that a Citizen’s Income is trying to get away from. If it is felt that lone parents need an additional payment, then an additional and separately administered payment should be made, so that the Citizen’s Income itself is not compromised. We are used to social policies that we can tinker with without destroying them. A Citizen’s Income is different. If we tinker with it, then we destroy it. This lesson has thankfully been learnt in relation to Child Benefit. In 2010 we were told that it would be means-tested. It has not been. Instead, an additional tax charge is imposed on high earning individuals living in households receiving Child Benefit. This is not sensible, because it has resulted in domestic disharmony and in the withdrawal of Child Benefit claims: but at least it does not destroy Child Benefit as a universal benefit. A similar approach could be employed in relation to lone parents in the context of a Citizen’s Income. The Citizen’s Income must never change; but an additional benefit could be established with its own conditionalities and administration.
When the report discusses some alternative Citizen’s Income schemes – such as scheme B in the recent Institute of Social and Economic Research paper, its use of the word ‘modified’ might be somewhat confusing. Scheme B is not a ‘modified’ Citizen’s Income, or a ‘modified’ Citizen’s Income scheme. The Citizen’s Income is a genuine Citizen’s Income. It is simply that scheme B retains more means-tested benefits than some other schemes – it still takes a lot of households off means-tested benefits, or reduces their claims to such low levels that they are likely to come off them. We ought to avoid the use of the word ‘modified’. Either a proposal is for a Citizen’s Income, or it is not; and if it is, then the whole scheme, including changes to means-tested benefits, tax allowances, etc., is a Citizen’s Income scheme. Some schemes, such as scheme B, would be easier to implement than others, such as the RSA scheme. In many ways, the RSA scheme would be preferable to scheme B. So perhaps we ought to regard scheme B as a useful first step, and the RSA scheme as a useful second step.
The RSA report is a long, detailed, well researched, and most useful document, and no short review can do it justice. The minor caveats that I have listed above are precisely that: minor caveats, and areas for continuing research and debate. The RSA is to be highly congratulated on the research project that has led to the report, and on the report itself. There could be no better place to start the next phase of the Citizen’s Income debate than this report.
by Will Wachtmeister | Jan 15, 2016 | Opinion
Malcolm Torry, 101 Reasons for a Citizen’s Income, Policy Press, 2015, xvi + 120pp.
Finding 101 reasons in favour of a Citizen’s Income and then condensing them into a lucid, concise book is probably a lot harder than Malcolm Torry has made it look in this readable and compact collection. 101 Reasons for a Citizen’s Income is a book packed with easy-to-grasp arguments written with clarity from an elegantly simple, practical point of view.
In a way, this is the type of book you would hope for from the director of the UK’s Citizen’s Income Trust, a London-based organisation that promotes debate on the desirability and feasibility of a basic Income, and a BIEN affiliate. Torry keeps it mercifully short – just 120 small pages in total – which is clearly a good way of attracting new, curious readers. Showcasing a complete command of the finer points of the UK’s benefits system, the book’s approach also takes care to appeal to people of diverse political convictions. As a result, this is an excellent introduction for the great number of people who have never even heard of Citizen’s Income, and especially for those newcomers who are already interested in UK social policy.
Torry clearly has the sort of wide repertoire of arguments and skilful presentation that you would expect from someone who is both the current director of the UK Citizen’s Income Trust and an academic at the London School of Economics. Perhaps more tantalizingly for more seasoned Citizen’s Income fans, the author has also experienced the byzantine and counterproductive deadweight of UK social policy from what might have been the best (or worst) seat in the house, the Benefits Office in Brixton in the late seventies.
About this (and other matters) Torry shows a mature restraint, and the book is a far cry from the ranting and raving that this type of professional experience would have induced in other human beings (myself included). It is actually when Torry looks back on his personal experience that he serves up some of the book’s choicest nuggets. At one point he states, as a matter of blunt fact, that whilst working at the Brixton Supplementary Benefit Office “the claimants didn’t understand the regulations, and neither did we.” Deadpan aperçus and reminiscences add a little human interest and colour, and try not being moved – or get mad – by an officer who mutters over his casework “a man leaving, another coming, and then another – and with which of the two is she cohabiting, and who is the lodger?”
Citizen’s Income Trust director Malcolm Torry showcases a complete command of UK social policy (picture: Citizen’s Income Trust)
Otherwise, this is mainly a patient demolition of every defence that could conceivably be mounted of the current UK benefit system. Torry confidently shows that even if the UK system is given the benefit of the doubt at every step, there ultimately can be no justification for a bureaucratic machine that unnecessarily traps – and then horribly stigmatizes – people in poverty and unemployment. He also demonstrates clearly why a Citizen’s Income could solve the overwhelming majority of problems with the current system – especially the perverse work disincentives of means-tested benefits which, contrary to their trumpeted aim, penalise people in many different ways for finding and taking paid work. Presenting Citizen’s Income as the obvious alternative to the UK’s hopelessly unfair and ineffective benefits system is the book’s main point, and Torry makes it with brilliant lucidity and concision.
Elsewhere, Torry also pulls off the feat of invoking Kant’s categorical imperative and Rawls’ veil of ignorance without it seeming forced, weird or pretentious. Personally, I am grateful that the book manages to explain, where others including UK ministers have failed, the UK government’s Universal Credit reform in just a few sentences (spoiler alert: the Universal Credit is “neither universal, nor a credit”). Throughout, British party-political traditions and the sausage factory of Westminster policymaking are very well summarized – despite the book by its nature having little space available for context – as are the ways Citizen’s Income would fit into the wider political picture.
An added bonus is that Torry – bravely but necessarily – at certain points ventures into the uncomfortable tribulations around the resurgence of aggressive European nationalisms and immigration problems. He does so by arguing for the necessity of the social cohesion and the new sense of citizenship that a Citizen’s Income would generate. This is an argument urgently worth debating more extensively, given how much is now at stake in contemporary Europe.
The basic income movement is already a broad church, and a very diverse set of people need to continue to come on board if the policy is to become reality. One of the book’s great strengths is that it is designed to appeal to a wide range of people. From this point of view, it is interesting – and, in my view, somewhat problematic – that the book takes a scattered approach to the topic of innovation; surely, innovation is almost per definition something that everyone finds at least in principle desirable.
Rather than selecting as one of the 101 Reasons something along the lines of “A Citizen’s Income would set free innovation for the common good”, the book mentions innovation in several important but different ways. It offers crucial but somewhat isolated statements like “New software companies have the flexibility to innovate in ways in which the well-established companies cannot”, which is included in the section called “A Citizen’s Income would encourage new enterprise”. It also puts forward an in my view absolutely crucial – but again too isolated – observation that corporations disproportionately reap the rewards of innovation without reinvesting the proceeds: “The gap between wages and the proceeds of productivity is increasing. Less of the proceeds from production is now recycled back into industry via wages and consumption”. Elsewhere, Torry describes the world as having “economies in which innovation and automation are the norms” and being in need of Citizen’s Income to manage the upheaval.
Yet it is in the realm of lack of innovation, in the section called “Basic Income would break a logjam”, that we find what I think is the book’s most memorable passage. Torry describes how the world has today reached one of its periodic crises and is crying out for breakthrough innovation: “technology lying idle, human creativity frustrated, wealth flowing from poor to rich, and finite resources uncontrollably exploited … we are still waiting for the next new key concept. A Citizen’s Income might be just what is required.” In the same section, he describes the “key concept”: the breakthrough that in one fell swoop greatly boosts the well-being of every current and future human being. This is so because a key concept “enable(s) new ideas and new technology to create new kinds of wealth” and history shows how they have “freed the economy from stagnation and have stimulated new creative development, which has then itself stagnated until the next new key concept arrives.”
These are powerful sentences describing something that brings to mind a creative-destruction cycle of innovation in which the cycle is about to be put back into the ascendancy with the key concept of Citizen’s Income. But what is most interesting is that Torry neatly captures the constellations of historical periods in which these new key concepts are launched: “New developments that have set life’s evolution, scientific progress, or the economy free, have usually been prefigured by developments bearing some but not all of their characteristics; they have been symptoms of change as well as its cause; they have created revolutions with immense social implications; and in science and the economy they have had passionate advocates and equally passionate detractors – and, once in place, people have wondered why it all took so long.” In fact, this book already leaves the reader wondering why it’s all taking so long.
by Timothy Roscoe Carter | Jan 9, 2016 | Opinion
Before beginning this essay, let me describe the people about whom I am speaking when I use the term “liberal”. In the American 21st century context, I am essentially describing the people you would likely find in the leadership of the Democratic party. Despite the conservative view of mainstream liberals as radical socialists, they are, at most, cautious reformers. Even that probably goes too far. The way they depict themselves, and probably actually see themselves, is as people who believe in the system, but want it to be fairer, more compassionate, and more efficient. When viewed systematically, the most important of those is efficiency. A look at policy reveals that the primary aim of liberals is using the government to make capitalism work better and more efficiently. This also applies to seemingly non-market concerns like welfare benefits, civil rights, and education.
Let us look at equal pay and anti-discrimination labor laws for women. Some economic theorists on the right argue that such laws are unnecessary. According to them, the market would automatically correct any form of discrimination. If sexist employers refused to hire women or paid them significantly less than their equally skilled male counterparts, other employers would exploit the opportunity to hire the women at higher wages. The productivity gains of the fairer employers would lead to emulation and competition for women workers until parity with men is achieved.
Liberals usually respond by appealing to empirical reality. If this argument were true today, it would have also been true in 1910. We know there was sex discrimination then, as there continues to be today. If markets corrected inefficiencies by themselves, there would never have been any gender discrimination. But liberal arguments do not contradict the claim that sex discrimination is inefficient. Laws preventing gender discrimination may be just and compassionate, but they also make markets work more efficiently. Eventually, laws against gender discrimination turned out to benefit employers as much as they benefited women. In the documentary Inequality For All, Robert Reich showed that employers took advantage of the growing numbers of women in the workforce competing with men for the same jobs, and this was one of the factors that eventually lead to the leveling off of real wage growth that began in the United States in the late 1970s and early 1980s .
This analysis applies across the range of policies pushed by liberals. Consumer protection laws and tort laws may protect and compensate consumers, but they also encourage trade by making it easier to trust strangers in the market. Public health care and education saves and enriches people’s lives, but they also produce a skilled and healthy workforce for employers. Laws that support strong unions help the workers themselves, but they also increase workers’ wages so that they can spend more as consumers. Infrastructure projects provide public goods that are used by all, but they notoriously prioritize the needs of businesses over the needs of the disadvantaged communities where they are inevitably built.
What about same-sex marriage? It is crucial for social justice, but does it help market efficiency to allow people to marry whom they wish? No, it does not, and that is why same-sex marriage provides a useful counter-example. The fact is that same-sex marriage was never really a mainstream liberal goal. Nor was it really a goal of the large mainstream gay rights organizations. The main goal was just for more acceptance of the LGBTQ+ community. If straight people can partake in hookup culture on apps like Tinder then why can’t gay people go on Discreet Gay Dating without being judged for it? If dysfunctional heterosexual couples can have a baby why can’t stable same-sex couples adopt one? Both the politicians and the organizations focused on the acceptances of the community and getting anti-discrimination laws passed, which do serve market efficiency as previously noted. Same-sex marriage as a goal arose from the gay and lesbian grass roots and was pursued more through the courts than through legislation. As late as 2008, all three top contenders for the Democratic nomination for President declared their opposition to same-sex marriage. The speed and enthusiasm with which virtually all of the top Democrats reversed their positions the moment same-sex marriage polled over 50% could certainly cause a person to doubt the sincerity of their previous opposition. But to blame that insincere opposition on political cowardice would be to miss the point. Professional politicians fight uphill battles against initial public opposition a lot. But they also have to pick their battles. And however much powerful liberals may have secretly sympathized with the plight of their gay and lesbian friends who wished to marry, and may have even supported them with donations towards items to help them consumate such a marriage (be it a feeldoe or helping with the ceremony itself), they were simply not going to prioritize a political battle for social justice that would not increase market efficiency, grow the economy, and enrich their campaign donors.
So where does this leave us with basic income? To answer this, we need to examine how liberals approach welfare in general. It is certainly true that they support much more generous benefits than conservatives, they also tend to be even more concerned with separating the deserving poor from the undeserving poor than conservatives, whose main concern is turning whatever welfare spending that does exist into a way to funnel that money into corporate coffers. Liberals usually support robust Earned Income Credits, a kind of negative income tax limited to low wage earners, dropping off quickly above the poverty line. They support benefits for children and the elderly as well as the disabled, although they can be extremely strict about whom they consider disabled. They will give welfare benefits to unemployed single parents sparingly, on a temporary basis, and require education or employment search conditions designed to get the parents back to work as soon as possible. Drug and alcohol abuse are seen as reasons to cut off benefits. For unemployed working age adults, liberals sponsor “Care Not Cash” initiatives, which replace cash benefits with direct services, in the few localities that offer any benefits at all.
The pattern is clear: liberals believe that humans have value primarily as engines of production and consumption. Within this view, welfare is a legitimate tool to push people into the labor market. This ensures that goods and services can be produced. Those who do work and those incapable of working are to be given a sufficient income to take them slightly above the poverty line. This appears compassionate, but the systemic reason is to ensure that they have just enough money that they spend all of it. This way there is sufficient demand for goods and services to be produced, but people can not save enough money to become capitalists or be able to leave the workforce. Indeed, virtually all public assistance programs cut off recipients with any significant savings. While conservatives fight for the direct interests of the capitalist class, liberals fight for the interests of the capitalist system.
I understand that few liberals consciously believe and support the goals and beliefs which I ascribe to them here. They believe they are compassionate people who want to make the system work better for the unfortunate. That is probably true. But it does not matter. Like with institutional racism, the conscious intent of the participants does not matter; it is their actions and the results that matter. And the fact is, if you assume that the primary concern of liberals is market efficiency, you will predict their actions better than if you assume that their primary concern is uplifting the downtrodden or achieving economic and social justice.
Let us look at one more example before we turn to basic income: the minimum wage. One obvious way that the minimum wage fits the pattern I have described is that you have to be employed to benefit from it. A less obvious way is that it looks free, but it is actually a tax that is passed on to consumers, so it is the middle class that pays for it, not the capitalist class.
But the most striking way that the minimum wage fits this pattern is when you look at its amount. Democrats pick a new number every seven to twelve years. They refuse to index it to inflation so they can have at least one winning issue against Republicans every decade. Opponents of raising the minimum wage always mock the arbitrary nature of the new number picked and ask something like, “Why not $100 per hour?” Liberals typically dismiss this mockery with empirical evidence, pointing out that raising the minimum wage has almost never resulted in a loss of jobs, and sometimes results in increased employment due to increased demand.
But as with anti-discrimination laws, just because right-wing critics are empirically wrong does not mean that they do not have a point. What criteria do liberals use to determine how much the minimum wage should be? $100 per hour likely would wreck the economy. But if $10.10 per hour, the current consensus goal of the Democratic Party, would have no ill effects, why not fight for $15, or $20, or $25? Why not commission a study to determine the maximum sustainable minimum wage? Applying the principle that liberals are working to support the capitalist system, we can see where they get their numbers. Liberals pick a minimum wage that puts workers near the edge of the poverty line, where they can be good consumers but never save enough to exit the workforce.
So what can we expect from liberals in the fight for a basic income?
We can start with two broadly optimistic points. First, since liberals are concerned with efficiency, evidence can sway them, and the scientific and empirical evidence is strong that a basic income is cheaper to administer, raises health and education outcomes, and does not cause people to quit working and live an idle life. Masses of healthy and educated people working and spending money churns the economy, and this is good for the capitalist system.
Second, liberals will join the basic income cause with little hesitation when the technological unemployment crisis starts receiving mainstream media attention. While liberals will tolerate significant unemployment because it keeps down labor costs, they will see too large a number of unemployed as wasted potential consumers. This will be especially true if more workers are not actually needed to produce the goods and services that the unemployed could otherwise buy.
Now the caveats.
Let me start off with a particularly American concern. Despite the significant libertarian origins of and current support for a basic income, many people hear the idea of the government giving everyone free money and they think, “socialism”. And in America, this is a problem. Despite the good arguments that could be made that the United States in the 1950s and 1960s had the most socialist economy that has ever existed in human history, America during the Cold War defined itself in opposition to “socialism”. For many, fear of the label has stuck. Conservatives still use “socialism” as an epithet for economic policies they oppose, and many liberals will do or say whatever is necessary to avoid being associated with socialism. If you ask prominent liberals, they will point to surveys showing the unpopularity of socialism in America. This could be a chicken and egg problem: why should most Americans not be afraid of socialism if even liberal leaders oppose it? Fortunately, this also appears to be a generational problem that is going away. Recent surveys of Americans under 30 show support for socialism to be equal to support for capitalism, and the Presidential campaign of Bernie Sanders may be showing that fear of the label “socialism” is overblown.
The next problem with liberals will be to educate them. The facts being on our side will not help if establishment liberals do not know them. The specific problem here is that the misrepresentations of the work participation and family stability effects of the Negative Income Tax experiments that were spread in the mid 1970s are still believed by many establishment liberals. We will have to work hard to correct those misbeliefs.
Another problem will be that if technological unemployment does not reach a crisis point, liberals will simply not prioritize basic income on their own. They will have to be dragged into taking action by political pressure. This will be similar to the example of same-sex marriage, except that instead of claiming opposition up until the public changes its mind, look for liberals to vocalize general support for the concept of a basic income, but not do anything about it. An example of this strategy was how, in the years following the U.S. invasion of Iraq, a lot of politicians of all stripes, including President Bush, voiced support for setting up an Alaska style trust fund to pay oil dividends to all Iraqis, but it never happened. This will be because, even if liberals come to agree that a basic income would be a better policy than the current welfare system, the efficiency benefits to the capitalist system are not great enough to put it on their priority list. Just as the suffering of gays and lesbians who wanted to marry was not sufficient cause to make same-sex marriage a priority, neither is the suffering of the poor. It never has been in the past. Again, this will change when technological unemployment becomes a crisis, and there will not be enough consumers to buy goods and services without a basic income.
The final, and biggest challenge with liberals as allies will be their attempts to dilute the idea of a basic income. While they may become far more generous with the cash amounts, it will be difficult for them not to attach strings and conditions. The reason is that it will be difficult to change their belief that they know how to run the lives of the poor better than the poor themselves. But a bigger danger is that they will try to insist on means-testing. They will try to make the middle-class believe that means-testing will make it cheaper for them. The reality is that means-testing will make the financial burden of a minimum income fall on the middle-classes. This, again, is because the goal for liberals is not economic justice, but making the current capitalist system run better.
In order to relieve the immediate suffering of the poor and establish the principle that poverty is not tolerated in our society, it may be necessary to agree to means-testing to pass an initial guaranteed minimum income. Liberals will trumpet that the job is done. Those of us who count justice as one of our goals need to be prepared to continue the fight.
by Andre Coelho | Jan 8, 2016 | Opinion
What does the future look like? No one knows and it is folly to argue one does. But we can think, we can even try to make predictions, depending on how much risk we are willing to take. To say, as Jeremy Rifkin suggests, that the future will look like a collaborative commons, based upon zero marginal cost, internet-linked nodal, laterally scalable shared green energized economy is all very well, and I definitely resonate with it, but is it inevitable? How zero cost is it? The price of generating an extra energy unit from a photovoltaic panel may be close to zero, but what about the panel itself? Who pays for it?
Proponents will say that photovoltaic panels are cheaper than they have ever been, huge economies of scale were possible in the last few years and any person these days can purchase photovoltaic panels. But is this true? Panels are cheaper than they were some years ago, no doubt, but a person first needs to eat, have a shelter, access some basic form of transportation and energy for cooking, lighting and such. Only after all that is guaranteed, can someone consider the photovoltaic panels, the electric car, or the 3D printer. The “future”, it seems, will not come until poverty is eliminated. Because poor people – 24.4 % of all European population was at risk of poverty in 2014, or 122 million people – cannot participate in this futuristic vision of the world unless their basic needs are met.
You doubt it? Then think about it. In most places, if you run out of money to pay for electricity, it is unlikely that your neighbors will help out by supplying you with some electricity, and even less likely that you will be given a photovoltaic system to produce your own energy. Where I live, at least, if I stop paying the electricity bill, they will cut me off, without a doubt. No matter how generous, how educated, how creative, how tolerant I might have been in life, the power company is completely indifferent: you do not pay, you will have to go without power. Period.
Things might be different in the future – and they certainly will. But at this moment the amount of money one has is less related to levels of education, generosity, creativity or tolerance, and more to status, power, social networks, dominance and violence. Attributing monetary value to people is a trap. The instant you say “this person is worth 1000 euros”, you automatically create an underclass of unworthy people. Those people might even be subject to discrimination and violence you object to, from deprivation and poverty to constant surveillance. So definitions or layers of worthiness cannot solve a core problem in present-day human species: our difficulty to share. To trust.
This is why I defend basic income. It represents a bold and clear statement: human dignity is not and must not be subject to discussions about worthiness or value. These attempts to quantify human beings are bound to fail, since our “value”, if we must speak of it, is incalculable. You cannot calculate it, so there is no use in trying. Basic income is also a crucial tool for participation. You cannot truly participate and contribute to a better society – let’s say by investing in a photovoltaic system – if you do not have the money to meet your basic needs.
This is why major societal challenges like climate change cannot be solved without addressing poverty. Because while there is poverty, people will simply not “do the right thing” when they cannot afford it. If the costs of living in a more sustainable way are higher than what they can afford, there is little choice but to eat whatever they can, drive the most affordable (and most polluting) vehicles. They buy the cheapest appliances which often break down, and if they can’t get a repair company similar to https:www.adamsapplianceco.com to fix it, the appliance then joins many others just like it in a landfill. All these mentioned are still among the major polluters we are trying to eliminate. But until poverty is tackled they will persevere to pollute our world.
