by Citizens' Income Trust | Jul 22, 2015 | Opinion
Mary O’Hara, Austerity Bites: A journey to the sharp end of cuts in the UK, Policy Press, 2014, xiv + 320 pp, 1 4473 1560 5, hbk, £19.99
During 2012 and 2013 Mary O’Hara travelled the UK to find out what effects the Coalition Government’s public sector cuts were having by interviewing some of the people affected by them: both those suffering directly from the austerity measures and those working with them to try to mitigate the measures’ effects.
The introduction describes in broad terms the ways in which wages have fallen, poverty and debt have increased, new sanctions have been imposed on jobseekers, and public services have been cut – and all this in the cause of austerity that further damages the economy. Debt has affected so many, it seems like people are always trying to find ways to consolidate their debts and cut them down as much as possible. Turning to articles such as – ‘three ways to clear any outstanding debts‘, to help them get the right assistance in getting that peace of mind.
O’Hara’s visits and interviews reveal the depth of the crisis: increasing food poverty (and hence the rise in the number of food banks); mounting pressure on household budgets as costs rise but incomes – both in and out of work – stagnate; the disruptive effects of the bedroom tax; and the rise of personal debt and of high-street high-interest lenders. They also reveal the increasing stigma imposed on people who cannot find employment, and on people with disabilities and long-term health problems; declining wages and job security; cuts in local authority services on which some of our most vulnerable citizens depend; and rising rents and homelessness.
This is in many ways a familiar story, but what gives this particular telling of it an added authenticity are the excerpts from the interviews. Here we find the voices not of statisticians, journalists, or politicians, but of those suffering the effects of cuts in services. In the concluding chapter, we hear the voices of those voluntary sector workers who are coping with increasing demand, disappearing grants, and staff redundancies. The concluding chapter ends with a description of the way in which the Government and the tabloid press have succeeded in persuading us that the previous Labour Government and the poor are responsible for the country’s financial problems, and therefore for austerity; and with a description of small-scale resistance to that austerity – as if local pressure groups can defeat the Government- and media-driven prejudice to which we have been submitted for the past four years. They can’t.
Perhaps for our readership the most significant finding from O’Hara’s visits and interviews is that ‘the social security system that had protected much of the population from the worst vagaries of inequality was being ripped from its foundations’. She goes on:
I saw at first hand how destabilised and fearful it was leaving people. What I observed during my travels was a society in deep existential as well as economic and political flux. It seemed to me that austerity was generating social and economic schisms faster than they could be tracked, never mind adequately countered. There was a sense of an expanding segregation of the rich and poor, the entrenchment of a ‘them and us’ view of the world that produced not only a lack of social contract but also a political gap so wide as to seem unbridgeable. (p.15)
As a society we need to take to heart what is being said here, and determine to build a new social security system that will protect everyone from ‘the worst vagaries of inequality’ and will heal our ‘social and economic schisms’.
by Karl Widerquist | Jul 22, 2015 | News, Opinion, The Indepentarian
Alaska’s small Basic Income, “the Permanent Fund Dividend” (PFD), has recently come under greater political pressure than — perhaps — ever before.
The PFD is a yearly dividend paid out of an investment portfolio, “the Alaska Permanent Fund” (APF), which is financed by accumulated savings from the state’s oil revenue. The fund has a principal of more than $50 billion, and it paid out a dividend of $1884 to each Alaskan in 2014. The dividend is fully funded by the APF. On its own it is financially sound. Barring a major catastrophe, as long as politicians leave the APF alone, it can continue to fund the dividend long after we are all dead.
Politicians will leave the APF alone, or so most Alaskans thought until recently. The PFD has been so popular that it was known as the “third rail of Alaskan politics,” meaning that any politician who touched it died. But political realities might be changing.
Since 1980 the Alaska state budget has been funded almost entirely by oil revenue. Now with both declining oil prices and declining oil production, the state faces a large budget shortfall. Lawmakers eventually agreed to close the deficit without tapping into the APF and PFD by cutting spending and taping into another state savings fund, but several lawmakers, including the state’s governor, Bill Walker, proposed tapping into APF earnings. The phrase “third rail of Alaskan politics” barely made the conversation.
Cuts to the PFD could be coming in the next few years. Discussing the future of the budget, Governor Walker said, “At this point I don’t see a scenario that doesn’t involve some of the earnings from the permanent fund.”
by Citizens' Income Trust | Jul 10, 2015 | Opinion
Sarath Davala, Renana Jhabvala, Soumya Kapoor Mehta and Guy Standing, Basic Income: A transformative policy for India, Bloomsbury, 2015, xii + 234 pp, 1 4725 8310 9, hbk, xvi + 331 pp, £65, 1 4725 8311 6, pbk, xvi + 331 pp, £19.99
How can poverty be ended in the world’s developing nations? A simple question: and it might have a simple answer. A recent pilot project in India shows that a Citizen’s Income – an unconditional income for every individual – can make a substantial dent in poverty and create the conditions for its elimination.
This book is the report of eighteen-month experiments in which thousands of men, women and children in urban, rural and tribal communities in India were given a monthly unconditional income in place of India’s flawed subsidised food and guaranteed employment schemes. Pilot communities in which cash transfers would replace the subsidy system, and control communities in which they would not, were randomly selected, and the different outcomes in relation to a number of factors were carefully evaluated during the project and at the end.
The first chapter describes how the Self-Employed Women’s Association (SEWA) and UNICEF (the United Nations Children’s Fund) worked with Guy Standing and his colleagues to decide that the pilot project would be of a genuine Citizen’s Income – a universal, unconditional and nonwithdrawable cash transfer – for every individual in the pilot communities. Arguments against such cash transfers are answered. The second chapter describes the project, and the vast amount of work that went into establishing the necessary infrastructure, and particularly into ensuring that everyone in the pilot communities had bank accounts into which their Citizen’s Incomes could be paid.
The rest of the book describes the effects of the Citizen’s Income in terms of improved housing, electricity and water supplies, sanitation, nutrition, health, healthcare, school attendance and performance (especially for girls of secondary school age), and economic activity: by the end of the project, ‘many more households in the basic income villages had increased their earned incomes than was the case in the control villages, and many fewer had experienced a fall in earned income than in the control villages’ (p.139). In the pilot villages, child and teenage labour shifted from wage labour to own account work on family farms and to increased school attendance, bonded labour decreased as debts were paid off, and the purchase of such assets as sewing machines facilitated increased own account economic activity. Women’s status was enhanced by their new financial independence and by SEWA’s involvement, and the elderly and the disabled experienced improved status and living conditions. The final chapter shows that India could afford to pay a small universal Citizen’s Income by reallocating the money currently spent on food subsidy schemes.
SEWA, UNICEF and the researchers are to be congratulated on the establishment, and the significant success, of this pilot project. They have proved that it is possible to implement a Citizen’s Income in a developing country and that the benefits of doing so are substantial. The results are encouragingly similar to those generated by a Namibian pilot project in which Guy Standing was also involved. A significant cumulative case has now been built. Now all that is required is the political will to establish a Citizen’s Income scheme. If that happens then it might be a developing country, rather than a developed one, that implements the first universal Citizen’s Income and reaps the social and economic benefits.
by Joerg Drescher | Jul 6, 2015 | Opinion
In general terms, power is “to make someone want what you want”. You can use hard power – physical force or punitive measures, such as economic sanctions – to achieve this goal. However, there is another way – you can appeal to the reason of those, whose behaviour you want to change, by rewarding (sometimes seducing or bribing) means. The latter is called soft power.
In this article I use the conflict between Russia and Ukraine to show how a basic income – a regular payment to individuals irrespective of their income – could strengthen soft power.
As some of you may already know, I witnessed 2013/14 the revolution in Ukraine. Last year, right after the revolution, Crimea was illegally annexed by Russia and soon after Russia-supported terrorists have started a military aggression against Ukraine in the east of the country. As a response, the European Union, the United States and several other countries have introduced economic sanctions against Russia. This was legally backed up by the General Assembly of the United Nations, when more than 100 countries voted to affirm the territorial integrity and sovereignty of Ukraine and made it very clear that the phoney ‘referendum’ in Crimea was illegitimate and illegal.[1]
However, a group of investigative journalists found out that the realisation of the EU sanctions is not controlled. Each member state decides on its own, whether to implement the sanctions or not. As a result, almost no assets of sanctioned Russian and pro-Russian Ukrainian politicians, officers and businessmen were seized as intended by the EU. Later, the Institute for Economy Research in Vienna conducted a study on how the EU economy could be affected by their own sanctions. The findings showed that in a worst-case scenario about two million jobs and a value added of 100 billion euros could be lost within the European Union, if the sanctions were, in fact, implemented.[2] On top of that, Ukraine is far from being the only problem in Europe. The euro crisis, the situation in Greece, and a swing to the far right are setting alarm bells ringing in the EU.[3]
Thus, an euro-dividend proposed by Philippe van Parijs[4] – a similar idea to basic income – would make the unemployment issue in the EU less dramatic, because it provides a social security net. Either proposal could solve the euro crisis or the situation in Greece, and also help stop driving excluded people to political extremists.[5]
Now you may think that basic income would rather strengthen hard power than soft power, since the EU member states would get an opportunity to sanction Russia without having negative effects on their own economy. Your way of thinking is right. However, basic income does also strengthen soft power.
According to Joseph Nye of Harvard University, a country’s soft power rests on three resources: “its culture (in places where it is attractive to others), its political values (when it lives up to them at home and abroad), and its foreign policies (when others see them as legitimate and having moral authority).”[6]
Taking these resources into account, a basic income could strengthen soft power, because it makes it easier for the EU to implement the foreign policy by imposing sanctions against Russia (legitimated by the UN) and, most importantly, by having a moral authority – as the EU would show it cares about its people and does not leave them economically alone with the effects of those sanctions.
This picture, which was at the barricades on the Maidan in Kyiv, shows that Ukraine wants to go with the EU instead of being dependant on Russian gas and adopting an authoritarian system like in Russia (picture by Ralf Haska)
Thinking back how the “Revolution of Dignity” in Ukraine started, it is obvious that the EU attracted Ukrainians with its culture and political values. When the former president Victor Yanukovych refused to sign a long-negotiated Association Agreement with the European Union, it caused deep indignation among many Ukrainians.[7] Even now, when Ukraine is war-torn and facing huge economic recession, to a great extent, due to the corrupt regime of Yanukovych, the EU is still more attractive than the authoritarian regime of Russia to most Ukrainians.
However, Ukrainians have to pay an enormously high price for their European choice. Beside the fact that there is an on-going military conflict in Eastern Ukraine resulting in tragic human loses, displacement and destruction of homes and infrastructure, they have to accept painful reforms, which decrease their income. They have to face inflation, increasing costs (mainly for energy), the devaluation of the national currency (hryvna lost more than 100 per cent from its value before the revolution) and unemployment (thousands of civil servants lost their jobs in the state sector and the jobs in the private sector are not secure).
A basic income could help Ukraine solve several problems – mainly related to corruption and social politics.[8] Ukrainians are not job-, but rather “income-less”: myriad volunteers have been helping and supporting more than a million internally displaced persons, the army, bereaved family members of killed or wounded civilians and soldiers all over the country. Even the most needy Ukrainians are willing to share what little they have to help and defend their country. The question may arise: what for?
If the EU is selling its moral values by caring more about the welfare of its economy and defending its assumed status quo rather than caring about the well-being of its people, it might lose its soft power by disappointing not only Ukrainians, but also its own people. Therefore, I think a basic income could strengthen soft power – by being attractive through common shared values and bringing back the end of the community of states to its origin: keeping peace within and among countries and in the world.
Sources:
[1] Samantha Power, answer at Facebook, approximately 2:30 minutes, 16. May 2015
[2] Video of Joerg Eigendorf (English, approximately 3 minutes), Die Welt, 19. June 2015
[3] “Strange Bedfellows: Putin and Europe’s Far Right”, World Affairs, by Alina Polyakova, autumn 2014
[4] Video of the lecture by Philippe van Parijs: “No Eurozone Without a Eurodividend” (approximately 1,5 hours), BIEN-Congress in Munich 2012
[5] Interview with Guy Standing (approximately 2 minutes), 14. February 2010
[6] “The Future of Power” by Joseph S. Nye, chapter “Sources of Soft Power”, PublicAffairs, 2011
[7] “Opinion: Basic Income and the Ukrainian Revolution” by Joerg Drescher, 30. December 2013
[8] “Opinion: Universal and Guaranteed Income? A Matter of Basic Rights” by Emanuele Murra, 30. April 2012
Further readings on soft power:
A Theory of Soft Power and Korea’s Soft Power Strategy
by Citizens' Income Trust | Jul 3, 2015 | Opinion
Christopher Balfour, Learning from Difference: 150 years of family endeavour. From Afghanistan and the Americas to the Meon Valley and loss of an airport, Tricorn Books, 2014, 1 1909660 27 4, hbk, 267 pp (along with some diversely numbered pages of photographs), £20. Available from pgwells@btconnect.com and Amazon
You need to be strong to read this book, because it weighs in at 1.5 kg; and you need to have time to spare, because it is long – perhaps rather too long in places. But it is worth the effort, because by the end of it you will have a deeper knowledge of Britain’s industrial history and of its politics, and you will feel that you know both Christopher Balfour and his fascinating collection of ancestors.
Family history is a boom industry, but there are few people who have constructed such a detailed family tree back to the seventeenth century. (Distant relatives are Basil Jellicoe, of Camden Housing Association fame, and Ludwig Wittgenstein, the philosopher.) And there are few people who have gathered so much detail about the lives of parents and grandparents – sometimes too much detail. But having said that, the reader will finish the book knowing a family of independent-minded entrepreneurs – mainly in the aircraft and shipping industries – and feeling deeply the financial and other risks that they took, and their successes and the failures.
The first part of the book is about Christopher’s forebears, but readers of this Newsletter, and particularly those who know Christopher, will value most the second part. Here we hear about Christopher’s time at Eton, his National Service in Libya (he thinks that he should have delayed it to join Rootes the car manufacturer), his rather desultory Cambridge career (he arrived not having decided what to study), a journey by road to Afghanistan (clearly much enjoyed, but it’s where his health problems began), a few years of doing this and that, failing to win Gloucester for the Conservatives at the 1966 General Election, and then being ejected as Gloucester’s Conservative candidate because of his rather independent views. He worked for the Youth Employment, later Careers, Service, in Warwickshire and a London borough; became an independent local councillor in the Forest of Dean ( – independence clearly suited him); employed family capital to become a Name at Lloyd’s (which involved unlimited liability); and at various periods bought, refurbished and sold valuable ancient cars. To those of us who know the quiet-spoken Eton-voiced Christopher, the risk-taking and the general air of chaos of the life recorded come as an interesting surprise.
As a Councillor, Christopher was involved in establishing training projects for people without employment, and battled to raise the earnings disregard relating to Supplementary Benefit (an out-of-work means-tested benefit). As a member of the Conservative Party he was firmly in the ‘One Nation’ camp with people like David Howell and Brandon Rhys Williams, and in the book he argues not only for the Citizen’s Income that they wanted to see implemented, but also for the raising of additional money to pay for it, perhaps by establishing a financial transaction tax.
This is a most honest book in which we meet Christopher, the real person, with his enthusiasms, successes, failures, and humanity. A conclusion that perhaps Christopher might have drawn is that his life mirrors that of our economy during his lifetime: the difficulties of manufacturing industry; the rise and fall of the public sector; and the risks of the financial industry. And there is also a sense in which his life mirrors that of our society: war, the post-industrial world, and the journey from open debate to machine politics. It is easy to see how Christopher’s advocacy for a Citizen’s Income stems from his multi-faceted experience. That life and our economy and society having run so closely parallel, we now await both our economy and our society advocating a Citizen’s Income: and, we hope, implementing it.
by Stanislas Jourdan | Jun 29, 2015 | Opinion
The new centre-right government coalition in Finland committed to run a basic income pilot project. It is however unlikely that a pure unconditional basic income has any chance to be experimented, says BIEN Finland‘s chairman Otto Lehto in this interview.
The Basic income community worldwide is getting excited about the Finnish government’s commitment to launch a basic income experiment. Are you enthusiastic too?
We have certainly reached a historical point. For the first time, in the general elections of April 2015, the majority of the MP’s in the Finnish Parliament have expressed their support, ranging from mild to strong, for basic income. This data derives from the answers given by candidates during the last election. The majority of the Finnish public has also expressed its support for the idea. This is the result of many years of active public debate and discussion, including our much-publicized but ultimately unsuccessful citizen’s initiative campaign (2013).
Otto Lehto
The new government, led by Prime Minister Juha Sipilä from the Centre Party, has committed itself to setting up a pilot project for basic income. However, premature enthusiasm should be dampened by realism. For one, it is not entirely clear whether people understand the term in the same way. Many MP’s support a BIG that is conditional, means-tested and non-universal.
Secondly, there are elements in the government, including powerful ministers, who oppose UBI and will undoubtedly do their best to abort, or at least water down, the pilot experiment.
So there are reasons to be optimistic but also reasons to worry about the outcome.
How will this pilot project be conducted?
The government hasn’t announced the details yet. The public announcements have been sparse. The government should roll out more details in the coming months. In the past, Prime Minister Sipilä has expressed his support for a regional study conducted under the advice of experts.
Has the Centre Party of Finland been a strong basic income supporter in the past?
The party has traditionally been in support of a basic income or a negative income tax, at least since the 1990’s. However, unlike the Greens and the Left Alliance, who have quite detailed calculations, the Centre Party has never specified what kind of a basic income model it supports. In addition, the party has been quiet on the issue for a long time. The youth wing of the party, however, has been working together with BIEN Finland to advocate for a proper Basic Income.
Support for the basic income renewed itself in the party since september 2014, after the new party leader Prime Minister Sipilä, expressed his support for setting up a pilot project in Finland. At the same time, the influential think tank Sitra funded a report by Tänk (November 2014), which provided a roadmap for setting up a pilot project for BIG.
These developments have led to this point. However, the leaders of the party are still divided on whether this should be a proper BIG or a means-tested, conditional form of BIG.
How about the other parties involved in the current governing coalition ?
The other government coalition parties (the True Finns and the National Coalition Party) are equally divided on the issue, so it is unclear on whether a “pure” Unconditional Basic Income has any chance of even being tried. The current leadership of those parties is unfortunately quite opposed to the idea, or at least suspicious of it, even though there are many supporters in the rank and file members of the two parties.
So, although the Centre Party has managed to include the basic income pilot project into the government’s agenda, it is not very high on the list of priorities for the other coalition parties.
And, to complicate matters, the new government has expressed its intention to increasing the work requirement of social security in order to reduce the costs of the welfare system, while at the same time pushing for a basic income experiment! The same ambivalence is reflected in their statements released to the media. The schizophrenic push and pull between these mutually incompatible goals — piloting an unconditional basic income and simultaneously increasing the conditionality of social security benefits – makes predicting the future difficult.
In this context, how will BIEN Finland stand?
The BIEN Finland network has strong existing connections to many of the opposition parties (including the Green Party and the Left Alliance, which are both strong supporters of basic income). Due to accidents of history, we have weaker connections to the government coalition parties, with the exception of a handful of MP’s, think tanks and the youth wing of the Center Party, so we have had little influence on the planning of the basic income pilot project.
Nonetheless, we will continue to proactively offer our expertise to the government. We will follow the developments as they happen, and inform the European network as soon as we know more about the upcoming pilot program.
Thank you Otto!
Credit picture: CC Aaronigma
