by Yannick Vanderborght | Apr 28, 2014 | Opinion
No doubt most Basic Income News readers are aware of an interesting intersection where the arguments for basic income overlap with the arguments on how to best control global warming.
In his book, “Storms of my Grandchildren,” climate scientist James Hansen proposes a global carbon tax with the proceeds to be distributed to everyone (he calls it fee-and-dividend).
In other words, Hansen sees a worldwide basic income as a major component in solving one of our most important environmental challenges.
How to get there is the question.
In his book, Hansen proposes that the different national governments each implement a fee-and-dividend system. The fossil fuel fees collected by each country would be distributed as carbon dividends to the residents within their own borders.
Although it might have some effect on a few nations in the short-term, such an approach is unlikely to achieve the desired long-term results.
Nations with limited fossil fuel production but large populations would only have small dividends to distribute, and so little incentive to participate.
Those nations with large fossil fuel industries and small populations would find the temptation to produce and sell untaxed product on the black market attractive.
A better approach might be to bypass the national governments and go directly to the people of the world.
I have posted a petition on Care2 calling for a global carbon tax that takes that approach.
The petition is addressed to the secretary-general of the United Nations and calls for a worldwide referendum on the question.
Such a worldwide vote would be difficult to achieve but far from impossible. Don’t forget that the U.N. organized and ran an election in Kampuchea when much of that nation was still controlled by the Khmer Rouge.
Here in British Columbia, we have a carbon tax of $30 per tonne.
According to Wikipedia, the burning of fossil fuels produces about 30 billion tonnes of carbon dioxide in the world each year.
A carbon tax of $30 per tonne of carbon dioxide would therefore raise about $900 billion per year.
Assuming there are about 5 billion adult human beings on the planet, the carbon tax proposed in my petition would provide each of them with a basic income of roughly $180 per year – effectively doubling the incomes of hundreds of millions.
No doubt most Basic Income News readers can point out many advantages of such a global carbon dividend. However, I would like to identify two that seem to me, as a layperson, most important.
The first would be simplicity. It would be relatively easy to identify those who are eligible to receive the benefit (age 18 and over), which would lessen the possibilities for corruption.
The second is that it would not be charity. The lives and livelihoods of every human being are being put in danger by global warming. The proposed carbon dividend would therefore be in partial compensation for that risk.
Such a global fee-and-dividend system would not solve all the world’s problems – but it would be a step in the right direction. It would help us to get a handle on global warming and global inequality – two of our biggest problems.
It would also open the door for reform and democratization of the United Nations (“No taxation without representation”).
The petition seeks to get 100 million names. This is modeled on the Swiss precedent, where 100,000 signatures on a petition are enough to get an important initiative taken to referendum. The world’s population (7 billion and rising) is about 1,000 times larger than that of Switzerland (8 million).
I don’t really expect the Care2 petition to achieve that number. I do hope, however, that some international organization will pick up the idea and run with it.
You can view the petition (and hopefully sign it) at: www.thepetitionsite.com/286/384/042/petition-for-a-referendum-on-a-global-carbon-tax
by Citizens' Income Trust | Apr 21, 2014 | Opinion
Discussions of the advantages of a universal unconditional and nonwithdrawable benefits will generally list both the lower marginal deduction rates that individuals would experience compared with those imposed by means-tested benefits, and such social benefits as a greater social cohesion generated by everyone receiving the same Citizen’s Income. What is not always recognised is that changes experienced by one individual might cause changes for another.
Take an example from our current social security system. If a mixture of sanctions and incentives leads to someone previously unemployed finding employment, then, if the supply of jobs at the National Minimum Wage is relatively inelastic – that is, if the supply of jobs does not rise to match a rise in demand for jobs – someone else will not find employment who might otherwise have done so. 1 If the supply of jobs at any particular wage rate is instead elastic, then one person finding employment will not damage the chances of someone else doing so.
Let us now suppose that a Citizen’s Income scheme has been implemented. Lower marginal deduction rates will mean that individuals will be more likely to seek and to retain employment. Greater demand for jobs would mean that wages would tend to fall. As Anne Gray points out in her article, this might lead to the Government implementing a robust National Minimum Wage or a Living Wage. If employment at a particular wage rate is inelastic then there will be people seeking employment who cannot find it; but if it is elastic then there will be sufficient employment. The question for further research is therefore this: Would the existence of a Citizen’s Income make the supply of jobs more elastic? The Namibian pilot project 2 found that the answer to this is ‘Yes’. Self-employment increased substantially in the context of a Citizen’s Income. The security of the Citizen’s Income had increased people’s willingness and ability to start small businesses and seek out ways in which they can help themselves get through their initial startup, from raising capital to using ach payment processing for small business to help streamline the operation. The same would be likely to happen in the UK if a Citizen’s Income were to be implemented. This suggests that employment at the National Minimum (or Living) Wage would indeed be elastic, that those who wanted employment would be able to find it, or they would be able to create self-employment, and that the kind of active labour market programmes to which we have become used would no longer be required and would no longer risk depriving of employment those seeking it.
by Scott Santens | Apr 14, 2014 | Opinion
The purchase of Oculus by Facebook for $2 billion is the new best example of the growing inequality inherent in 21st century capitalism – what Paul Mason describes as the The Fourth Wave. A few people just got really rich, while the thousands of people who helped build the company from nothing, through $2.5 million of crowdsourced capital and a thriving open-source developer community didn’t. Every single funder and every single developer should be given their share of cash and Facebook stock. But of course that won’t happen, and even if it could happen, how would this share be calculated, especially as far as the developers are concerned?
Jaron Lanier also describes this phenomenon in his book “Who Owns The Future” where the increasing inequality we see in the information economy is being driven by what he refers to as “siren servers”, where those with the most computing capacity in control of the networks earn all the money, while those responsible for creating the actual networks don’t. He suggests this could be rectified by somehow adding a price value to information exchanges and processing, making it more expensive for central server farms to operate in a way that transfers money to those comprising the actual networks. He doesn’t know exactly how this could be achieved, but feels a solution to this problem is very important to our future.
I submit that one solution to this problem is to instead of the attempt to create a price value for information exchanges, we recognize the overall value of these exchanges, and thus the need to transfer part of the surplus unjustly gained by those running the largest fastest servers to those comprising the actual networks.
A monthly netizen’s dividend in the form of an unconditional basic income would represent an acknowledgement of the share naturally belonging to those who actually comprise all of the networks, of these surpluses not presently being shared with them. In a world of ever-rising productivity and perpetually stagnant wages, this recognition would help resolve our growing problem of the few with the machines getting extremely rich on the backs of the many, while the many get nothing but broken promises.
Palmer Luckey helped build something great, but he did not do it alone. Without the Oculus community he would be just another VR dreamer with a phone tied to his face. He and his executive and creative teams did not create billions of dollars in value on their own. The billions transferred to the Oculus team from Facebook, who themselves only exist because of those who comprise the Facebook network, is entirely disconnected from the thousands of funders who made it possible, and the thousands of people in the open-source community who worked together to help improve the product and reveal what was possible with it. That none of these people will receive anything for being completely integral to creating the value seen by Facebook as worth the billions to purchase it, plainly shows the need for remuneration, and therefore the justification for basic income as representing our society as a whole sharing in the value created in our own networking.
by Ian Orton | Apr 7, 2014 | Opinion
The increasing use of conditional cash transfers (CCTs) has perhaps been one of the most significant additions to the social development agenda of late. CCTs are now key components of many governments’ poverty elimination programmes and feature centrally in the UN’s current Social Protection Floor initiative.1 The mainstream media has also taken note and lent support in favour of their adoption.2
CCTs have delivered some impressive results in terms of reducing poverty and inequality, and are credited with numerous other positive human development outcomes. However, opinions on the status of CCT conditionalities in terms of human rights remain mixed. Some argue that CCTs are contradictory in nature (imposing obligations on rights) and therefore obstructive to the human rights agenda, while others stress the importance of obligations complementing those rights. The paradox is that CCTs may be positive along one dimension (reducing poverty) but not others (compromising human rights).
Moreover, there is no conclusive evidence to show that the conditional mechanism has anything to do with the aforementioned positive effects of CCTs; rather, conditionality is much more to do with politics and improving their acceptability. Perhaps conditionality is just a convenient mechanism by which to placate the paternalist twitch3 (that is to say, they provide sufficient behavioural controls to quench the demands of those social classes that finance social transfers)? In this sense, conditionality ensures continued political support and represents a ‘necessary evil’ to realize human rights through a non-prefigurative approach (that is, one in which the means are not consonant with the ends). One wonders if the conditional question ultimately boils down to a question of faith in human nature (or a lack of it), and whether the poor need to be “nudged” in the “right” direction or given the resourced freedom to develop in ways that they individually deem fit. If true, this poses the question: why not dispense with the conditional dimension rather than risk rights violation? A question I will return to later.
The first position, that CCTs violate human rights is straightforward: human rights are unconditional, universal and indissoluble in character, their fulfilment cannot be based on supposed “deservingness”. In this sense, CCTs are clearly detrimental to securing human rights… End of story! And since income security is the main delivery mechanism employed in advanced societies for realizing the human right to social security it is therefore unacceptable to deny a person (parent or child) that fundamental right; a right that might be violated through the imposition and enforcement of conditionalities. Concerns are further compounded by the fact that the fulfilment of the conditions may not entirely depend on the beneficiaries, but also on the availability and quality of the basic social services. How can individuals fulfil conditions if the requisite services do not exist, are inadequate or their distant location makes the opportunity cost of access prohibitive? Remote, difficult-to-reach or deprived areas where vulnerability is high, are typically characterised by the absence of such services. In such places, the high opportunity costs of meeting conditions of CCTs may penalize the most vulnerable who are least able to meet conditions. Responsibility for protection is therefore shifted from the state on to the individual.
Using conditionalities to promote human rights?
While seemingly counter-intuitive to the preceding argument, conditionalities can also be advocated from a rights-based perspective. They have been invoked as a way to promote a combination of rights and as a means to facilitate their materialization. This represents an important shift, as, although universal in principle, in practice rights have remained unfulfilled for many if not most of the poor (as per the looming post-MDG deficit). In other words, CCTs may represent a concrete way to bridge the gap between the legal basis of rights and their practical fulfilment. It is argued that this can be achieved because it is recognized that the situational knowledge of beneficiaries, and their behaviour, are key factors for the materialization of rights. In addition, CCTs can also positively influence the behaviour of non-beneficiaries who may wish to gain access to participation. More broadly, it is argued that conditionalities bind not only the beneficiaries, but also the public authorities to create the necessary conditions (for example, basic services availability) for their fulfilment. This is why CCTs are now presented as a vehicle for co-responsibility.
Continuing in this vein, rather than impede human rights, CCTs may have an important recursive function that permits further enhancement of service delivery and therefore maximizes opportunities for rights realization: lack of compliance with conditions does not have to trigger a punitive approach leading to the exclusion of the beneficiary. Instead, non-fulfilment can also be understood as having a revealing function, highlighting the vulnerability of individuals. This sheds light on the balance—or the lack of it—between the solutions provided and the needs of the beneficiary. Thus, non-fulfilment could kicks-start a positive feedback loop signalling to the authorities that perhaps the delivery of essential health and education services is lacking, or that there is a need for other services (for example, counselling, job training). Consequently, further inquiry leads to progressively improved solutions.
Far from undermining rights fulfilment, the existence of conditionalities might strengthen the bargaining power of some household members thereby facilitating the fulfilment of their rights and promoting their status within the household. This aspect can be particularly important for women and children. However, this point also illuminates the inherent gender bias of CCTs whereby fulfilment of conditions is a responsibility often bestowed on women, and therefore gender inequality is reproduced by anchoring women in existing roles, for example reinforcing the idea that caring is a maternal duty and simultaneously infantilizing men as potential carers.
But is conditionality morally acceptable or even effective?
For others, conditionality represents a form of paternalistic social engineering writ large4 where the design of CCTs is at best guided by a benevolent paternalism (saving us from ourselves), and at worst, by a mean-spirited cynicism, showing little faith in the poor to know what is best for themselves and their families, and reinforcing the belief that recipients are somehow social misfits wholly responsible for their condition. In this cynical sense, conditionality offers social policy makers a means to limit the adverse effects of decision making that may be inconsistent with human development goals or, arguably, with the best interests of household members. For instance, CCTs obligate the ‘poor’ to prove that they are not ‘lazy’. The morality of this approach is dubious and resonates frighteningly with Bentham’s project of creating an ‘architecture of choice’, and with ‘nudge-esque’ social policy.It also fulfils Foucault’s prediction that society will tend increasingly toward the panopticization of human behaviour. As a result, conditionality not only poses a threat to human rights; it chips away at freedom and personal responsibility, depriving humans of agency and the opportunity to consider and select forms of life which are both satisfying and rational.
As intimated early, much of the discussion thus far is underpinned by the presupposition that the conditional mechanism is pivotal in producing positive social outcomes. However, the efficiency of conditions has rarely been studied separately from the programmes that include them; therefore some argue that there is almost no evidence that conditions make any major difference.5 More study is clearly needed to disaggregate the effects of the conditional mechanism and the actual cash payment. Perhaps there is a need to recognize that the presumed effectiveness of conditions has attained something of the doxa status, or a kind of Emperor’s Clothes: an idea we think with and through, but not about. We should be cautious of such seemingly self-evident truths, whose employment really is more a matter of faith than anything based on scientific rigour. CCTs continue to be an increasingly popular means for reducing poverty. However, that CCTs should remain conditional is clearly not universally agreed. If the conditional mechanism is not the pivotal factor, then why not dispense with it and behavioural conditionalities? Perhaps a movement toward unconditionality could offer a way forward. While unconditional cash transfers (UCTs) are not automatic fulfillers of human rights, arguably they reduce the risk of human rights violations when it comes to the right to social security, with the bonus of being freedom enhancing. However, when it comes to other rights (such as education, basic health care), like CCTs, UCTs must be embedded in a wider social policy framework of adequate social services and monitoring, in order to facilitate rights maximization and materialization. Elsewhere it has been argued that cash transfers do not need to be made conditional on school attendance to impact on children’s education.6 Even the (unconditional) old-age pensions in Brazil have helped to increase school attendance, and there is evidence that the cash paid through the Namibian pension scheme has ultimately been spent on children’s education in spite of the absence of conditions. The recent pilot studies on UCTs in India, which have exhibited many similar positive results, also support this view.7
This debate is unlikely to be settled in the foreseeable future, but unconditionality can reduce the risk of human rights violation ex ante receipt of benefit, whilst continuing to reduce poverty.
FOOTNOTES
1 In 2012, Recommendation 202 on social protection floors was adopted as a new international labour standard at the International Labour Conference.
2 See: The Economist. 2013. “Cash to the poor, pennies from heaven: Giving money directly to poor people works surprisingly well. But it cannot deal with the deeper causes of poverty.” The Economist, October 26.
3 Standing, G. 2002. Beyond the New Paternalism: Basic Security as Equality. London: Verso.
4 Standing, G. 2011. The Precariat: The New Dangerous Class. London and New York: Bloomsbury Academic.
5 Hanlon, Joseph. Armando Barrientos. David Hulme. 2010. Just Give Money to the Poor: The Development Revolution from the Global South. Sterling VA: Kumarian Press.
6 Department for International Development (DFID). 2005. Social transfers and chronic poverty: Emerging evidence and the challenge ahead, A DFID Practice Paper.
7 Standing, G. 2012. Cash transfers: A review of the issues in India. Social Policy Working Paper Series – 1. UNICEF India.
by Citizens' Income Trust | Mar 28, 2014 | Opinion
Malcolm Torry, Money for Everyone: Why we need a Citizen’s Income, Policy Press, 2013, xiv + 300 pp, 1 44731 125 6, pbk, £24.99, 1 44731 124 9, hbk, £70
Malcolm Torry delivers a blockbuster argument in favour of a Citizen’s Income to wholly or partially replace current benefits. His book is well-researched, well-informed, well-written, and is articulate and readable. His main argument is that, given widespread acceptance of a benefits scheme of some sort, then a Citizen’s Income is by far the best option. Specifically it avoids the disincentives of very high marginal deduction rates of current benefits which create the familiar unemployment and poverty traps. According to Torry, a Citizen’s Income would incentivise employment, training, new business formation, women’s participation rates, and can even reduce teenage pregnancy in Namibia. It is socially cohesive. It is less expensive administratively, less intrusive into the private detail of people’s lives, and less distorting of the markets for labour, goods and services. The Iain Duncan Smith / Steve Webb universal credit comes close, but is based on households rather than individuals as a Citizen’s Income would be, and is therefore deficient.
Torry’s very thorough presentation is worthy of the LSE tradition to which it belongs, established by major figures such as Richard Titmuss whom he frequently quotes. It offers a substantial social commentary. The excellent essay on poverty in chapter 11 is a classic case. Torry works as a vicar in London, and so has widespread awareness and understanding of the life situation of people with lower income struggling with a range of adversity, and this gives him great insight into the effect of benefits systems in the population. His deep study of the benefit system itself enables him to offer a uniquely powerful synthesis. The strength and extent of his argument for a Citizen’s Income appears to render it uncontentious. It is only cynical civil servants whose jobs may be at risk who stand in the way, together with inertia in the political system.
Due to its thorough coverage, the book is long, and sometimes repetitive. The argument on marginal deduction rates is repeated too often. But the main weak point is the lack of attention to economics, since herein lies one of the most powerful objective arguments for a Citizen’s Income. Torry’s uncertainty in economics appears immediately on page 1 where he writes ‘Citizens might spend it (a Citizen’s Income) on goods and services, thus creating employment; or they might save it, making lending and investment possible’. The first part of this sentence is thoroughly Keynesian and correct, whilst the second part is thoroughly neo-classical and incorrect. Saving in the Keynesian paradigm does not enable investment, but by reducing demand, reduces investment which businesses plan to meet demand.
Only on page 122 does Torry mention the economics argument for a Citizen’s Income, where he presents Stewart Lansley’s argument that ‘income inequality reduces productivity’, so that wages and therefore consumption reduce, leading to the current crisis that only greater equality can resolve. Even this ignores an alternative powerful economics argument that the crisis has been driven by technology increasing productivity, reducing the wage and consumption element of output, raising output GDP above disposable consumer income, which has been corrected with unsustainable credit. According to this argument, the technology-led wage reduction is inevitable and inexorable, and contrary to Lansley’s proposal, only a Citizen’s Income can replace consumer credit in order to raise consumption to match output GDP. In this model the Citizen’s Income would need to be spent rather than saved, perhaps by being distributed on stored value cards with the value expiring over time. It needs however an alternative theory of money, i.e. that money is virtual and its distribution only has to respect output GDP and not be supported by gold reserves or government debt. This removes the need for Torry’s argument on the affordability of Citizen’s Income – it is output GDP which makes it affordable. These arguments would add considerably to Torry’s case. They also dismiss current deficit reduction and austerity policies as the nonsense they are.
by Citizens' Income Trust | Mar 21, 2014 | Opinion
David Reisman, The Social Economics of Thorstein Veblen, Edward Elgar, 2012, vii + 338 pp, hbk, 0 85793 218 1, £90
The dust jacket suggests that Thorstein Veblen’s writings are ‘difficult to read and understand’. Perhaps they are, but most of the many passages quoted in Reisman’s book are not. ‘The institutional structure of society subsists and we live within its lines … with more acquiescence than dissent’ (quoted on p.7). ‘The propensity for achievement – the instinct of workmanship – tends more and more to shape itself into a straining to excel others in pecuniary achievement’ (quoted on p.54). Advertising shifts ‘given articles of consumption from the footing of superfluities to that of necessary articles of livelihood, necessities by conviction of morals and decency rather than by requirement of subsistence or physical comfort’ (quoted on p.150).
As Reisman shows, it was the waste at the heart of capitalism that bothered Veblen rather than any exploitation of the workers; and whilst we might now question Veblen’s enthusiasm for the Russian revolution – an enthusiasm understandable from within his own context – we shall understand perfectly his perception that aggressive nationalism can trump economic rationality.
Reisman has constructed a coherent structure out of Veblen’s thought. Whether that structure is Veblen’s or Reisman’s must remain an open question, because Veblen’s thought, as represented in Reisman’s book, could equally well be understood as a somewhat rambling exploration of the fascinating complexity of the institutions of the world of his time. But what is clear is that Veblen – correctly, in the view of this reviewer – thought the life of human society to be best understood as a changing network of changing institutions. Reisman shows that Veblen saw himself as a somewhat Darwinian social scientist, attempting to understand the causes of things, and that for him the social caused the economic rather than the other way round. Human interaction therefore ‘belongs in the field of the sociologist’ (quoted on p.2), and economics belongs in that context, not vice-versa.
This is all rather salutary. It suggests that however much we might reason the economic feasibility and desirability of such social policies as an extension of universal benefits to new demographic groups, if this is not the direction in which society is evolving then we might be wasting our time. On the other hand …
