by Jason Burke Murphy | Aug 16, 2017 | Opinion
I hardly ever respond to anything in writing if I am not remembering it at least a year or so later. The piece I am remembering is an episode of the podcast Freakonomics called “Is The World Ready for A Guaranteed Basic Income?” I recommend it as an introduction.
I am going to give you a quote and then I want you to keep reading.
Sam Altman runs Y Combinator, a technology venture capitalist firm that has had some great successes and is now interested in funding social science research that will include basic income. Here is the quote, which came up during his interview in this podcast episode:
Maybe 90 percent of people will go smoke pot and play video games. But if 10 percent of the people go create new products and services and new wealth, that’s still a huge net win.
We are back to the couch potato. This character appears in a lot of objections to basic income. Altman concedes that there will be couch potatoes. He just thinks that is a good price to pay to get more entrepreneurs, even only a few of them. I appealed earlier for the reader to keep going because most people in my orbit would not like this quote. (If it sounds good to you, then I guess I should still urge you to keep reading.) I will explain why some will push back and why I ultimately do not.
We are starting to see increased support for as well as new sorts of negative reactions to the idea. Not very long ago, basic income advocates were often introducing the idea to specific audiences. This meant one could get away with starting where you thought the listener would react best. If you were talking to someone on the left, you might call it a “strike fund for all”. If someone is more liberal, you would emphasize that a basic income reaches people that welfare is supposed to help. With libertarian types, you start with the efficiency and non-bureaucratic character of a basic income. I have been very impressed by recent writing that emphasizes basic income’s ability to remedy asset inequality for people of color and women.
Now, I am very pleased to see more people who have already heard about basic income from someone. Sometimes they caught the wrong person for them. As we explain basic income, we will need to separate the policy (giving everyone an unconditional cash grant) from the project (which can range from left to right).
A quote like Altman’s can swing a listener in different directions. I know this from my social media work. I imagine people running different movies in their head. Some hear “new products and services and new wealth” and visualize start-ups and think it all sounds great. Others try to imagine a world working well with 90 percent of people not doing anything anyone else wants them to do and they just can’t see that working out well. Others hear this and worry that basic income is part of a larger scheme to organize our lives around Silicon Valley capitalists. To them, Altman seems to overly glorify the tech entrepreneur. Other writers are more desperate in labeling basic income a “neo-liberal plot”, which would make you laugh if you went to one of our Congresses. We would not want to merely swap one set of capitalists for another.
I have not met Sam Altman. His other statements show that he also finds basic income interesting because it directly answers a moral mandate to make sure people are clothed, fed, and sheltered. I highly recommend the rest of the podcast. My objective here is to explain why I think we ought to look at this quote charitably. I will show in what way I think his quote is true. I also want to propose an alteration that makes it much more palatable for those I see reacting negatively.
No One is Saying Ninety Percent of Society Will Hit the Couch
Altman is not talking about a whole society in which only 10 percent work. He is saying that even if we lose some work-time to lame leisure (pot and video games), we will make it back even if only 10 percent start up new enterprises. Nor is he saying that he knows that we will get one successful start-up for every nine lives lost to the coach. He is only saying that losing nine to the couch would be an acceptable price to pay if we gain a start-up, which would offer something someone wants and would also be offering jobs. This is very plausible.
Most people with a basic income will live a lot like they do now. They will have a more stable income. They will worry less about many of their friends and family. They will have a plan if they need to train for a job or pay bills between jobs. This cuts into the number of people who would choose the couch. Work can be a place where we get recognized for our talents and for our cooperativeness. And jobs pay money. In fact, you can still count on a basic income if you take on a job. And you can count on it if you change your mind.
The problem now is that employees have very few options when workplaces go sour. Basic income creates one option (work for no one) and enables people to survive while they search for and train for other options. This will increase pressure on workplaces to improve.
I used to be suspicious of most rhetoric surrounding markets. I think that was because so much of it ended up with a conclusion like “Therefore, government should do less/nothing.” I have come to value markets more and more. Now, I want them for everyone. A basic income secures the capability to participate in markets for everyone. There are many sections of the United States that get very little government or market attention. That would be less likely with a basic income in effect. You will also see more start-ups under a UBI because failing doesn’t risk losing everything. Most entrepreneurs now come from the upper one percent of our society. Whole communities aren’t going to see much startup soon if we wait for the elite to try to make money there.
Add Caregivers and Organizers To The Mix
Someone organizing a non-profit, a political organization, or even an informal social scheme fits under Sam Altman’s phrase of “new products and services and new wealth.” He is not confining his hopes to technological startups.
Robert Putnam’s book Bowling Alone, written in 2000, lays out the loss of social networks and the harm that has caused most Americans. These can be voluntary associations, political clubs, fraternal organizations, or sports leagues. Participation has declined as work-hours per household has increased. This means that many will look for alternative ways to interact with like minded Americans, especially when it comes to sporting events.
There is a strong link between organizational affiliation and many different metrics for happiness or meaningfulness. We also see more affiliation in communities that have more political power and that generate more market activity. (There is likely a causal loop there. Lack of power and lack of market options may often precede losses in organizational depth. And a lack of organizational depth may well often precede losses in money and power.) Social-capital comes hand in hand with capital-capital.
Michael Lewis and Eri Noguchi apply Putnam’s work, and combine it with survey data, to give us strong reasons to think that we would see improvements in civic networks as well. Declines in civic participations can be shown to coincide with an increase in work hours. People who value civic participation will have an option to do so.
If you want to know how a basic income will benefit society, let’s make it clear that we are including “organizers” within our understanding of “entrepreneur”. Our culture is one that has to be reminded of this. Once we expand our understanding, we can look around and see how many people are trying to participate in institutions that organize in pursuit of truth, justice, and beauty.
Examples will help here: church committees, symphony boards, rotary clubs, sports leagues, poetry circles, craft guilds, environmental organizations, identity-based youth groups, identity-based cultural organizations, music bands, theater companies, unions, political organizations, lobbying organizations, etc. This list could go on a very long time.
At this point, I want to share a little bit of what I learned as a community organizer in Arkansas for ACORN. Organizing is difficult. There are many ways in which it is not like entrepreneurship at all. You aren’t selling anything. All organizations have trouble finding this skill set. It is also difficult to get the resources together for full-time organizing. We would often hire someone who loved the mission of the organization but had to leave for pretty small increases in money. It might also prevent the loss of organizers to the for-profit sector.
Please note: I have noticed that a large section of the US internet is trying to malign the very term “community organizer” but my argument includes organization of groups I disagree with.
The ratio of organizers to members goes beyond the one to nine ratio that Altman imagines. About six of us at Arkansas ACORN served around 5,000 households if you are only counting dues payers. The community that responded to our work was larger than that. There were meetings every month. People debated goals and tactics. Political leaders were interviewed or protested. Organizations that despised us did the same things, though often with more funding from fewer people.
Every time I hear the term “couch potato” brought up as some sort of nightmare case for basic income, I remember that I sat on thousands of couches, urging people to get active, to get involved with their community’s decisions. I know that with a basic income, we would have had more organizers and more active members. Rival organizations would have had the same benefit. We will live in a more democratic place.
I am still involved in political work, even though I am not employed to do it. I also have been published as a poet and as a photographer, though not paid. You will find a lot of people working on magazines, readings, and websites in which the true, the good, and the beautiful are debated. A lot of people can see how to raise some money doing cultural, social, or political work but they can’t get to a decent level. A basic income would generate audiences for artists, philosophers, preachers-good and bad. A thriving art world is full of disputed art. A thriving philosophical culture will have disputed philosophical projects. We will live in a more interesting place.
Norman Rockwell “Freedom of Speech”
Finally, we should look at the decision to care for a family like we would a “start-up”. The “caregiver” has started a “career” that works for many people like a vocation. For each caregiver, there is at least one other person, usually more, benefiting in a meaningful way. Economists often do not count care for children and elders unless someone is formally paid to do it. A basic income would enable people to say no to employment if someone they love needs them. We will live in a more caring place.
In fact, Robert Putnam shows us in his research, as do Michael Lewis and Eri Noguchi in theirs, that the “stay-at-home” mom was often a civic association organizer as well.
More markets, more culture, more democracy, more care. This looks to be well worth investing 3% of our GDP and letting a few people stay home.
When I read the comments and notes that come with all basic income articles, I can see that some people would worry about people not working because of basic income. Basic Income enables people not to work. Kate McFarland points out that a basic income enables people to say no to all social useful activity. But we are far away from that. Some people will live incorrectly. Many people live incorrectly now. Basic income is a good bet for increasing socially useful work.
- More entrepreneurs means more people are offered employment.
- More organizers mean more people are being invited to venues where what is true, what is good, and what is beautiful are debated and plans are made.
- More caregivers mean more people are taken care of.
Therefore, most likely, for every couch potato, we will have better reasons than ever to get off the couch.
About the author:
Jason Burke Murphy teaches philosophy and ethics at Elms College in Western Massachusetts. He serves on the board of US Basic Income Guarantee Network and recently presented at their North American Congress. He helps with social media for US Basic Income Guarantee Network. He has written before for Basic Income News. His most read piece so far is “Basic Income as Proposal, as Project, and as Idea.”
by Julen Bollain | Jul 28, 2017 | Opinion
The Spanish publisher RBA has just released a new book by Daniel Raventós, Renta básica contra la incertidumbre (Basic Income against Uncertainty), in its “los retos de la economía” (Economic Challenges) collection. The book updates the most important developments in basic income and discusses recent writings. The collection, in which the book is included, is not academic, but one which presents the basic elements of today’s concerns (inequality, the welfare state, and so on) to non-specialist readers, in such a way as to serve as a basis for further study.
Raventós’ book not only discusses the theoretical issues of basic income, but also gives an account of the social and political situation which has led to this proposal becoming widely known and regularly debated in social movements, the media, political parties and trade unions. Just a few years ago, this was unimaginable. Some people were complacently asserting that basic income could never be openly recommended because it would “shock” or “repel” the population, or at least a good part of it. It would have to be introduced, if at all, through the back door.
Well, we have lived to see the day! Here we offer an extract from the introduction of Renta básica contra la incertidumbre, which will soon appear in an Italian edition. The book has six chapters in which Raventós discusses the normative aspects from the standpoint of political philosophy (with particular reference to property and freedom); how basic income has been received in social movements like feminism and environmentalism, as well as in trade unions; how to finance it; experiments with basic income in various parts of the world; the role of basic income in an increasingly unequal world, in which mechanisation is advancing at a dizzying pace; and the paradox of support from both the right and left.
“Basic income will be paid out to people simply because they exist as citizens or accredited residents, independently of gender, ethnic group, income, sexual orientation, religious affiliation or lack thereof. Hence, like universal democratic suffrage, basic income is a proposal with the formal characteristics of laicism, unconditionality and universality.
Basic income has to confront considerable intellectual, social, philosophical, economic and political resistance, often in the form of questions. Is basic income a just proposal? Do people who disdain a salaried job have the right to an unconditional cash transfer? Will it abolish poverty? Aren’t the usual welfare state conditional cash transfers a better way to combat poverty? Will people get or stay in jobs if they have a basic income? Wouldn’t it be better to aim for full employment? Would workers have better bargaining power if they received a basic income? How would basic income affect migratory flows of impoverished people from poor countries to rich countries? Would everyone, both rich and poor, gain with a basic income? Would or wouldn’t women benefit from a basic income? Given the threat of robotisation in many areas of work, does basic income have something to offer?
Since inequality between a tiny minority of extremely rich people and the rest of the population is constantly increasing—as Joseph Stiglitz, Nobel-Prize-winning economist and others have pointed out and studied—would basic income be a good idea? If basic income has supporters on both the right and left, are they advocating the same thing?
Then there is the most frequently repeated objection, also in the form of a question. Can basic income be financed? In fact, it would be more precise to say that it was “most frequently repeated until recently”. Although there are not many studies which demonstrate in detail and with technical competence how basic income can be financed, those that have been published are compelling. Whatever they might have in common, each region and each country is different in economic terms, but financing a basic income would have to take the form of changes in budgetary priorities and reforming tax systems. For example, there are proposals advocating the introduction of special mechanisms for taxing financial transactions.
These reforms would bring about a substantial reduction in inequality of income distribution and allow for simpler, more coherent tax and welfare benefits systems. Basic income is not a panacea or a quick-fix for all the world’s social and economic problems but, in view of many who study and espouse it, this measure would mean that people would be better equipped to participate in productive activities, social inclusion would improve, communities would be stronger, political and social participation would be revitalised, and there would be a significant reduction of poverty and all the problems that go with it.
Basic income is not a political economy, per se, but would be part of one, as well as a general project aiming to guarantee and underpin the material existence of the whole population. It might also be seen as a kind of indemnity for past and present wrongs since it requires more privileged citizens to contribute towards achieving the right of existence for everyone. And herein lies one of the main political obstacles for basic income.
This is also the point which makes it possible to explain the apparent paradox of left and right support for basic income. The book notes that the difference depends on financing. The left focuses on additional taxes on the rich, while the right wants to trim down existing welfare to pay for basic income.
“In other words, the left-wing position does not entail any cuts to existing social services or social rights, in education, health, support for dependents, housing, etc., all of which are essential in any welfare state worthy of the name.”
by Guest Contributor | Jul 24, 2017 | Opinion
Written by: Mark McCarron, Pheonix Digital Currency
Phoenix Digital Currency is a new, open, peer-to-peer, cryptocurrency, which will be entering full release in the next few months. Similar to Bitcoin, in that anyone can set up a client/server, we’re quite different from other cryptocurrencies at the same time. Our currency is pegged to the dollar, has a fixed valuation, is anonymous and comes with advanced anti-theft features.
It has also been designed with the needs of enterprises and retailers in mind, both to provide consistent pricing and easy integration into existing environments. We don’t, however, see this as the be-all and end-all of how currencies can function. When Bitcoin first emerged, it showed the world that currencies could evolve. This is how we see Phoenix Digital Currency and we have planned for this from the outset.
When looking at the issue of Universal Basic Income, we were quick to understand that governments cannot afford this. Where does the money come from? Taxes on the rich, more public debt or simply loans? None of these seems very likely, but the AI revolution is almost here and we need options before people are unemployed in large numbers.
One idea that Phoenix Digital Currency has been exploring is a single underlying currency option. Whilst on the surface you would have your nation’s respective currency, behind the scenes, it would be part of a single, broader currency. A universal currency is one that is not traded as a commodity, it is merely branded differently within each nation. This means that currency cannot devalue, as devaluation must occur with respect to something.
Why is this important? Well, let’s say I wanted to print off $50 million for everyone on the planet and offer them $500,000 per year. With currency as a commodity we can’t do that, as no one would view our currency as having worth. But with a single underlying currency, there is no one to convince.
Inflation and demand are the next big issues. Normally this idea would fall flat here, but with AI almost upon us, the cost of labour to business will remain fairly flat rather than increasing to ridiculous levels as businesses try to tempt employees back to work. A fast food burger won’t suddenly cost $1 million because staff are looking for $100,000 per hour.
This means that we can achieve the goals of a Unified Basic Income in a manner which doesn’t burden the taxpayer. In fact, it is even possible to end taxation altogether as a principle of economics.
This has been a short introduction to an idea, known as ‘Formal Proposal Number One’. Please join us at phoenixdigitalcurrency.com to share your ideas.
All features articles are opinion pieces, and express opinions not endorsed by Basic Income Earth Network or Basic Income News.
by Guest Contributor | Jul 21, 2017 | Opinion
Written by: Dr Petra Bueskens
Harper discovered she wasn’t alone when she packed up her house, stopped paying rent and took her four-year-old son, Finn, on a six month “holiday” up north to warmer climes.
“I found in every camp site, especially the show grounds as they’re the cheapest ones that still have facilities, there were a couple of other single mums and their kids. I was also travelling with a friend and her son, so there were often five or six of us and a bunch of kids at each campsite. Up north there’s even more. Over time we became familiar with each other.”
Harper gave up her home because she couldn’t afford the rent and have any quality of life. Paid work put her in a double bind: if she worked, she lost most of her Centrelink payments; if she didn’t work there wasn’t quite enough to make ends meet. So, she worked and stayed poor. These are the poverty-traps that keep many single mothers working-poor and unable to dig out.
When she stopped paying rent, her landlord was very understanding, Harper said. But at the end of the day, he had a business to run and Harper understood that. He issued her with a notice to pay rent or quit (learn more about that here) and she made the decision to pack up and leave.
In Australia now, there is a clandestine group of mobile single parents, mostly mothers, who have found they cannot, on Centrelink benefits and low-paid casual work, meet the cost of living. They have chosen instead to travel and live with their children in camping grounds and caravan parks around Australia, particularly in Northern NSW and Queensland, where living outdoors is relatively easy. For as little as $10 a night at national parks and showgrounds and up to $25 at caravan parks that have showers, washing machines and other facilities, they live on the move. Harper and Finn travelled between both-a few days roughing it in national parks followed by a return to “civilisation”, taking showers, washing clothes and sharing dinners with friends at caravan parks. Here Finn could play with other children, some of whom were becoming familiar as they met in parks across Victoria and NSW. The vibe at the caravan parks sounds convivial-better than yelling at your kids to get ready for childcare and school, so you can go to a low-paying job and never see them-but also a little Orwellian: this is not a holiday; it’s homelessness with benefits. For some, getting a caravan and living in a caravan park might be a worthy alternative until they can find something else. However, these women are a little worried about whether they would be able to get a caravan of their own. While there are a wealth of tips available for buying a caravan, you can see this buying guide for an example. It is different when you don’t have an income.
Harper announced her “holiday” to friends and family on social media. Here they could follow her adventure in photos and status updates. “I had to call it that; I couldn’t admit to myself it was anything else”. The 6-month, 12-month or indefinite camping “holiday” is a functional, adaptable and resourceful response to the poverty traps single mothers so often find themselves in, and since the “welfare reforms” of the Howard years and Gillard’s removal of the sole parent pension for those with children over eight (ironically on the historic day of her misogyny speech), it is no surprise that this practice is growing. The truth is, some single parents can no longer work within the system; it is simply too hard. So, like other vulnerable mobile populations, they’re outside of it.
Harper told me there is a Facebook group dedicated to this practice but asked I didn’t share the name as it’s currently illegal to have no fixed address-or in other words, be homeless-and in receipt of Centrelink benefits, arguably when you need it most! People who have given up their home for long term camping and travel, often mixed with sleeping in their cars, provide the addresses of family and friends to meet eligibility criteria; in reality, paying rent has become too expensive.
With the turn to surveillance of welfare recipients-take the 2015 case of Tania Sharp whose Facebook status update of her pregnancy was used against her in court as evidence of welfare fraud-we move to a new kind of welfare state: the surveillance state. This is a net, but, far from a safety net catching people who fall, the analogy is closer to a fishing trawl where the recipients-disproportionately poor women and children-are being hunted and caught. The infamous robo-debt scheme also disproportionately catches single mothers in its “net”. There’s no safety in this net; rather there’s punishment, gender specific punishment, for not being “safely” ensconced in patriarchal marriages or well-paid jobs. Most so-called “welfare cheats” are single mothers.
Universal Basic Income (UBI) is a radically different concept-nobody has to apply, prove their worth, pretend they have or do not have a home, justify their sex-life or living arrangements, or fill out 20 page complicated and often contradictory forms. There are no deserving and undeserving poor, no recipients cast as “cheats”. The underlying philosophy is completely different: everyone has a right to a share in the collective wealth; they don’t need to bear a stigma or struggle for recognition, and unpaid care work is socially valued.
With the massive rise in the cost of living, particularly the cost of housing over the last decade, but also energy and telecommunication bills, many can no longer afford to meet their monthly payments or, like Harper, if they can, there is absolutely nothing left over and the stress involved in achieving this end makes daily life a struggle. Harper found she was cutting corners everywhere: meals were less nutritious, she didn’t have time to cultivate social relationships, and her mothering was compromised. When she gave up her house (a share house), sold almost all of her belongings and hit the road, she felt a freedom and control over her life she hadn’t had since Finn was born. Travelling for six months lifted the burden she felt around managing dual roles and her payments were not automatically chewed up on rent and bills. Harper had time with her son-literally all day long-which she cherished and claims healed their relationship.
“It felt like Finn was always between me and what I needed to do [go to work]. I had to rush and he wanted time; I had to put him in childcare and he wanted to be with me; he was always clingy and demanding and had begun acting out; I found him difficult to be around. I could never afford holidays so we never got a break from this stress and pressure. This is why I called it a holiday because it was a break from this cycle of exhaustion and poverty and stress.”
Travelling meant Harper was able to reconnect with her son. He also had playmates in the caravan park with their communal yet contained play areas. Harper had friends to share dinners with. There is now a small but growing population of homeless single parents who live this way; they’re home-schooling their kids or still have pre-schoolers. They’re on the move-but not in any socially sanctioned way. They’re not travelling like young people, or middle-income families or retired baby-boomers. Not quite refugees, but certainly rendered so vulnerable that they are unable to take root and live in society, or at least not permanently. They are on its “flexible” fringes recast as mobile passengers; not quite in and not quite out. While I laud the innovative adaptation to circumstances, which not only gets out of the iron triangle (working to pay the rent and paying the rent to work; paying for the car to drive to work to pay for the car) but solves a number of other problems of modern living: highly regulated schedules, less and less time for children and relationships, leisure based on meaningless consumption. Nonetheless, there is still a remainder: “chosen” homelessness is not an answer, at least not at the structural level, to the problem of (single) mothers’ poverty. It is an idiosyncratic not an institutional solution.
This is one story of poverty and homeless that is emerging on the fringes of our society. I have another …
Naomi rents her beautiful four-bedroom home on Airbnb every weekend for around $800. She has three teenage kids who stay at their friends’ houses or accompany her to her parents’ houses, one and two hours away respectively. On occasion they have driven further afield for a bed. As a wife and mother who took “a long time”1 to complete her studies while caring for her three children, Naomi doesn’t have great employment prospects. Into her mid-40s now and currently going through a divorce, she has very few avenues for earning an income and can no longer rely on her breadwinner spouse. She doesn’t have the track record for professional employment despite now having multiple degrees. She applies for many jobs, has been shortlisted for two and has been given none. The gig economy provides an instant if unstable solution to the immediate problem of income. She doesn’t need an uninterrupted CV, a talent for bullshit and three professional referees to list her home on Airbnb, but neither does Airbnb give her any job security or superannuation. This is why she needs to think about superannuation planning because if she doesn’t think about this now, it may affect her finances in the future. Although she’s a long way off retiring, it still needs to be considered. She’s thinking about Uber too; she has a people mover-good for mums with large families and, as it happens, trips to the airport from her regional home. The gig economy is not and never will be a substitute, but it has certainly stepped in to fill a yawning economic gap. Living in a trendy tourist town and thanks to marriage to a high earning spouse, Naomi owns-at least for now-a beautiful home. She’s no doubt spent money on homely touches like poster artwork to add some personality to the rooms, among other things. She enjoys hosting and also rents rooms during the week. However, after eight hours of laundry, making beds and cleaning to hotel standards, she has to clear out of her own home for the weekend, every weekend. Everyone she and her children stay with has the sense that this is not an independent visit but a need, which puts a strain on relationships.
Naomi’s weekend homelessness is also a novel and adaptive solution to the crisis of income in her system, but it comes at a cost: the children are disrupted in their routines. “The kids and I find it really disruptive, but how else can I make $800 to pay the mortgage and bills? How? The bank would reclaim the house if I didn’t do this”.
Naomi only receives a small Centrelink benefit since her kids are all teenagers and she’s supposed to get a job. The problem is she’s both over and under qualified-she has several degrees, including a postgraduate research degree, but almost no work experience. There isn’t a lot of casual work in regional Victoria and she is still actively mothering; or, as is the case with older kids, ferrying them around. “I still need to pick the kids up from the bus stop, take them to their friends’ places and after school activities, cook them dinner, make sure they’re doing their homework”. For Naomi, being away at a job and adding an hour each way for commuting isn’t an option as a lone primary carer. Then there’s the emotional fall-out of the divorce. The children need her to facilitate and foster their lives. What job realistically accommodates this?
“I don’t have the years of experience and so without Bob paying the mortgage and bills and not being eligible for single parent support, this is how I’m living. Running a BnB suits me and at least I can be there for the kids.”
Naomi would prefer a job but this is her novel solution for now. The gig-economy is stepping in to fill the gap, albeit poorly.
Mothers and basic income
UBI offers an alternative to these poverty traps that are increasingly ensnaring women in the space between low-income waged work, declining welfare and unstable, abusive or non-existent marriages. It makes a new gender contract possible and facilitates women’s economic independence. Women have gained this independence as individuals-the individuals of the liberal social contract-but they have not done so as mothers. As we shall see, on almost every index mothers earn less, have less time to earn more, undertake the great majority of unpaid care work, and suffer the highest pay and promotion gaps and, here’s the rub: most would prefer to care for their children, especially when they’re young. As Catherine Hakim’s large-scale research shows, most mothers prefer to combine paid work with care work, while up to 20% prefer to stay at home full-time (2000). Basic income offers mothers, especially single mothers, a means to achieve economic independence at a modest standard while disentangling this from the interlocking and mutually reinforcing institutions of marriage, employment and welfare. In a modern liberal-democratic society, this is the proper foundation of liberty, of mothers’ liberty.
Women’s unpaid care work used to be “paid for” through the institution of marriage (as it often still is, albeit in modified form). That is, through the distribution of the husband’s wage to the whole family. This was the basis of the family wage that sanctioned men being paid at a higher rate than women. However, with men’s declining employment rates and stagnating wages, rising rates of divorce and more children born out of wedlock, poorer mothers’ access to a share of our collective wealth has declined. Women have always had lower wages and a radically compromised capacity to earn an income if they are the primary carers of their children (as most women are); this is not new. What is new is that under neoliberalism all people are required to maintain a full-time secure attachment to the labour force over a lifetime, regardless of their capacity to do so. Now that marriage is both an optional and a soluble institution, this situation has become acute for separated, divorced or never married mothers and we see it showing up in the feminisation of both poverty and homelessness.
From the opposite perspective, what I find interesting, immersing myself in the focus on automation and precarity in the broad basic income literature, including academic and journalistic articles alike, is the assumption that precarious access to employment is something new. Certainly, on a mass scale it is for most (though not all) men and the spectre of middle class professionals losing their jobs-something already happening in fields like journalism and academia and likely in the health sector next-is a very significant social and economic change; but for all but the most privileged women this economic precarity is the historical and contemporaneous norm. Thus, while a full-time, well-paid job over a lifetime is the route to economic security, notwithstanding the rhetoric of gender equality, very few women have ever had such jobs. So, my argument isn’t just that basic income is the only viable macro-economic answer to increasing economic inequality-specifically, the decline of full-time, secure jobs-but that it is a crucial answer to the as yet unresolved issue of gender justice under capitalism.
While I support a basic income for everyone, I think it is important to identify the specificity of mothers in this debate, given both the tendency to ignore the centrality of gender justice and the extent to which, when gender is centred, motherhood is glossed over. In fact we need to make the socio-economic impact of becoming a mother and of mothering work explicit.
Women who are not mothers, not-yet mothers, or long past actively mothering dependent children are all in quite different socio-economic positions (although of course the structural effects of mothering last a lifetime). It’s not that gender doesn’t matter; it’s just that motherhood matters more.
We can look at this demographically variegated landscape by looking at the gender pay gap and then looking at how motherhood impacts this.
In Australia, women’s full-time wages were 82.8% of men’s, with a wage gap of 17.2%. The gender pay gap has grown over the last decade from 14.9% in 2004, to a record high of 18.8% in February 2015 before falling slightly again in 2016. As a result women are earning less on average compared to men than they were 20 years ago!
However, this figure is calculated without including overtime and bonuses, which substantially increase men’s wages, or part-time, which substantially decreases women’s wages. In other words, “83 cents in the dollar” substantially overstates wage parity. When this difference is factored in, the pay gap widens to just over 30%. And in the “prime childrearing years” between ages 35–44, this gap widens to nearly 40%.
A more realistic figure is gained by looking at full-time versus part-time earnings as well as average male and female earnings directly. Here we see the pay gap more clearly. For example, in 2016, average weekly earnings were $1,727.40 for male employees and $1,010.20 for female employees (a difference of close to $720 per week). However, most mothers work part-time which exacerbates this pay gap yet again.
If we consider full-time and part-time work, the wage disparity widens further. Compare the $1,727.40 for full-time male employees with $633.60 for part-time female employees; now we have a gap of over $1100 per week! Close to half of all Australian women worked part-time in 2015–16-44% (double the OECD average). However, this figure rises to 62% for mothers with a child under five and almost 84% for those with a child under two. Close to 40% of all mothers work part-time regardless of the age of the child, while only 25% worked full-time.
The remainder, it needs to be remembered, were out of the workforce altogether. As the ABS put it, “Reflecting the age when women are likely to be having children (and taking a major role in child care), women aged 25–44 years are more than two and a half times as likely as men their age to be out of the labour force.”
Age of youngest child is a key predictor of women’s labour force participation although it has almost no bearing on men’s labour force participation and when it does it is in the opposite direction: fathers of younger children typically undertake more paid work. Moreover, a quarter of all female employees work casually and their average weekly earnings were just $471.40. Think about that-a quarter of all working women earn less than $500 a week! These days that barely covers the rent let alone food, bills, and educational and commuting costs.
Occupational segregation and motherhood wage penalties also kick in to this mix. If we look at labour force participation, we see that coupled mothers have higher rates of participation than single mothers given the additional support they receive with childcare and income.
Given the average full-time male wage is significantly higher than the average female wage and, moreover, that women carry the overwhelming share of unpaid care and domestic work and thus typically work parttime in their key childrearing years-and, we should remember, fully a quarter do not work at all!-this is not simply a matter of two incomes being better than one, which is of course true, it is that access to a share of male monopolised wealth-that is, to put it in stark terms, access to a husband-is essential for mothers to avoid poverty.
In broad terms, the closer we are to mothering dependent children, including especially infants and preschoolers, and the further we are from access to a male wage, the poorer we are as women.
Never married single mothers with dependent children are the worst off and it moves progressively from there, with young, educated, urban, never-married, childless women earning very close to, and in certain cases in the US, outstripping average male wages. This contrast gives us a sense of the variegated nature of women’s socio-economic position and again highlights that mothers are a distinct group and, more fundamentally, that the life course transitions of marriage and motherhood continue to negatively affect women’s (independent) socio-economic status.
Often when we’re talking about women’s lower labour force participation and lower earnings, then, we’re actually talking about mothers’ lower labour force participation and lower earnings and, more specifically again, we’re talking about mothers with dependent children; although the lasting effects of care labour means women across the spectrum have reduced earnings, assets and retirement savings if they have mothered.
To highlight this point, Australian sociologist and time use scholar Professor Lyn Craig has shown that many of the socio-economic disadvantages affecting women are, in fact, specific to mothers.
As she says,
“… the marker of the most extreme difference in life opportunities between men and women may not be gender itself, but gender combined with parenthood. That is, childless women may experience less inequity than women who become mothers.”
Another important reason we need to differentiate mothers from women is that over the last 40 years the standard female biography has changed significantly. Whereas once adulthood was by and large synonymous with marriage and motherhood for women, on average women now have a long stretch of adulthood-from the late teens to around age 30-before they have a first child.
For educated and/or unpartnered women, the birth of a first child is often later again into the 30s and sometimes up to 40. Moreover, while only around 10% of women did not become mothers in the mid and later twentieth century, this has now risen to 24%. So, not all women are mothers and many women experience a large chunk of adulthood before they become mothers and after they are actively mothering dependent children.
So there are structural and individual injustices that are specific to mothering dependent children, including an unequal division of domestic labour, unequal access to jobs given the unpaid work load at home, employment built on an implicit breadwinner model that is incompatible with parenting (including school hours, school holidays, sick children and so on), discrimination in the workplace and, in the event of unemployment and/or divorce, an increasingly punitive welfare state and a high risk of poverty. Single mothers and their children make up the bulk of those under the poverty line in the western world. In Australia, of all family groups, single parents constitute the largest single group of those living in poverty (proportionally).
Marriage is no longer the safety net (or gilded cage) it once was with just over 30% of marriages ending in divorce in Australia and predicted to rise to 45% in the coming decades. Additionally, fewer people are entering into marriages and cohabiting relationships have even higher rate of relational breakdown than marriages.
This means a large and growing number of women who are mothering children are caught in this literal economic no-man’s land without adequate access to waged employment, a breadwinner husband, or welfare. I am not suggesting that access to a husband is a right; I am suggesting that the liberal dissolution of the institution of marriage has not been followed with any viable economic alternatives for mothers. Basic income is the obvious choice to stop a large and growing number of women sliding into poverty.
Mothers undertake the bulk of unpaid care work, without which our society would cease to function. To turn this around, we need to ask: is it acceptable that as a society we free-load on this care?
Mothers’ economic autonomy-that is the very foundation of their citizenship and their liberty- is undermined by the extant intersection of the institutions of marriage, employment and welfare. It is on this basis that I am identifying mothers, and more still single mothers, as a specific socio-economic and political group in urgent need of basic income. This is a human rights crisis given that lone parent families are one of the fastest growing family forms in western societies and, moreover, that women head 80-90% of these families.
Unlike the contemporary issues put forward for basic income-namely, mass unemployment from automation and digitisation-the issues facing mothers are not new. Indeed they have been with us since the very inception of capitalism and the waged-labour system. Moreover, they are among the most compelling, given that women and their dependents comprise the majority of the poor. With the liberalisation of markets and marriage, a large and growing body of women and children, such as Harper and Naomi, are being left out of the social contract. Basic income is the critical policy answer to this problem.
Dr Petra Bueskens is an Honorary Fellow in Social and Political Sciences at the
University of Melbourne, a psychotherapist in private practice at PPMD Therapy and
a columnist at news media site New Matilda. She is the author of Mothering and
Psychoanalysis: Clinical, Sociological and Feminist Perspectives
See the original Green Institute PDF here.
by Dawn Howard | Jul 19, 2017 | Opinion
Topher Brennan is a progressive candidate from the state of California, currently running for US Senate. A self-professed “policy geek”, Brennan holds an undergraduate degree from the University of Wisconsin and a master’s degree in Philosophy from the University of Notre Dame.
Brennan recently put forth a plan for implementing a basic income with his timely essay “The case for a basic income guarantee”. In it, he provides various examples of failures within the current welfare system – specifically the SNAP (food stamps) program – and discusses replacing SNAP, as well as the group of programs known as OASDI, with a basic income.
You can read the full article here.
Dawn Howard: Please give our readers a little background into when and how you first became aware of basic income.
Topher Brennan: I’ve been aware of the concept of basic income for a long time, but I think I may have first heard about it in Robert Heinlein’s novel For Us, The Living, which I would have read back in in college, maybe even high school. I don’t remember what my initial reaction was. I may have thought “sure, that might make sense in the distant future, when everything is automated”—but by high school I was already a big fan of individual autonomy, so it wasn’t long before I figured out you could do something like that right now.
DH: Have you been following any of the current basic income pilot studies happening across the globe? If so, how do the design models and results of these pilots influence your own concept of its potential implementation?
TB: Most of the really exciting research I’m aware of is still ongoing. That said, I’m a huge fan of the charity GiveDirectly. I believe their basic income study hasn’t launched yet, but their research on one-time, no-strings-attached cash transfers provides strong evidence that when you give poor people money it really does lead to big improvements in their lives. It doesn’t all just get wasted on booze or anything like that.
I’m not sure I can claim this influenced my support for basic income—I was pro-basic income long before I knew about GiveDirectly, and the results of their research seem totally unsurprising to me. The reason the free market mostly works well is that (again, for the most part) people are pretty good at looking after their own interests. When politicians talk about creating jobs, no one retorts, “that won’t help, because the people who get the jobs will spend all the money on booze”. But when you talk about anti-poverty programs, suddenly everyone worries about that.
I should also say that when I was writing the article on basic income that I recently publish on Medium, a lot of the specifics were driven by looking at the current state of the social safety net in the United States specifically, and how it sometimes goes wrong. Basic income is a great idea no matter where you are, but I expect the implementation details will be somewhat country-specific.
DH: Given that poverty is typically considered a bi-partisan issue, how feasible would it be to implement a small-scale basic income pilot in California, given the state’s current budget concerns and overall political climate?
TB: You might be able to do it, but it would be tricky. Thanks to proposition 13 (an anti-tax ballot initiative passed when California was a much more conservative state), you’d probably need a ballot initiative to fund it. Also, because most current anti-poverty spending comes from the federal government, and the federal budget as a whole is just bigger (even in terms of percentage of GDP), I think you could shoot for a much bigger basic income right off the bat, working at the federal level.
DH: In your essay ”The case for a basic income guarantee”, you write:
“Being poor means politicians will try to micromanage your life. Politicians like to say they support helping the poor, but only the deserving, and only for things they really need. Whatever you think of that in theory, in practice, the government is bad at telling who’s deserving. It’s also bad at telling what people really need. All that happens is that we make the lives of people we’re trying to help worse, with nothing to show for it.”
Given that you recognize the desire for self-determination and autonomy among individuals living in poverty, do you feel that the government’s role is simply providing a monthly or yearly payment, or do you feel that some recipients would benefit from further education and/or government assistance in order to budget their money wisely?
TB: With education, if we’re talking about adults, people have the option of spending their basic income on education for themselves. A free $8,000 per year, for example, would make college much more affordable. The question of to what extent the government should be subsidizing college education, I think, comes down to somewhat technical issues of how much of the benefit of a college education is captured by college graduates, versus being a positive externality. I don’t actually know the answer to that question.
With K-12 education, there are some additional complications. In the United States, there are states where homeschooling is totally unregulated, and the result is some parents end up educationally neglecting their children. That’s not a win for personal autonomy—those kids didn’t make an informed choice to go without a decent education in their early years; their parents decided that for them. And basic reading and math are important skills no matter what you do with your life, so I’m pretty comfortable with the government insisting children learn them.
Which is not to say our current K-12 is perfect by any means. But when I think about things I’d hope to see fixed in the near future, I think about evening out the disparities in school funding so we don’t have supposedly public schools that are de facto private because you can only go to them if your parents can afford the absurd housing prices in the district. What the right thing to do would be, in an ideal world, if we were designing the system from scratch—I don’t know.
As for helping people with budgeting, I think most people who find themselves financially strained become pretty good at budgeting in a hurry because they have to be. You can add various caveats to this—supported decision making can be very helpful for people with intellectual disabilities, for example—but the idea that what poor people really need is help budgeting, at least the way it’s often meant, is a myth.
DH: Even though libertarians, greens and independents do not make up the lion’s share of registered voters in California, libertarians in particular might find certain aspects of your campaign platform appealing and consider voting for you. However, your stance on basic income might turn them off because of its distribution model – specifically that it puts more power in the hands of the federal government. How would you respond to this type of concern from voters who do not want the government running large-scale social welfare programs?
TB: I’d dispute the premise that it puts more power in the hands of the federal government. If it looks that way, it’s because the federal policies I’d like to replace (in part or in whole) are often designed to look smaller than they actually are. I really try to avoid that, because I think it leads to bad policy, even if it would be politically convenient.
For example, the federal government spends over a trillion dollars a year on so-called “tax expenditures”, where the tax code is written a certain way not because it’s the most sensible way to raise money for things the government wants to do, but in the service of some social policy or other.
Tax expenditures are popular because they let politicians say, “it’s not a spending increase, it’s a tax cut!” But they can have perverse effects relative to more straightforward approaches to the same issues. I’m not always sure these consequences are unintended. Because tax expenditures are confusing, they also make it easier to sell one policy to voters and another policy to donors.
Another example is means testing of government programs. It sounds like common sense—government programs should help only those who really need it. And it’s politically convenient, since it can make a program look much cheaper on paper. But means testing is functionally equivalent to combining a much larger program with a large income tax—the tax is just hidden. And because it’s hidden, it’s more likely to be designed in a stupid way where some people wind up with a 95% effective marginal tax rate, and have little reason to, say, try to get a promotion or take on more hours.
So I try, as much as possible, to avoid these policy mistakes—even if it means more work explaining a proposal to people.
DH: Many activists within the basic income community posit that our current economic system (capitalism) is inefficient and unsustainable, and that eventually we must transition out of it. Do you see basic income as a type of incremental step toward this transition – a kind of temporary “band aid”?
TB: That’s a big question! It depends both on what you mean by “capitalism” and what happens with future technological development. The former we can argue about endlessly, and the latter I don’t think anybody knows for certain. I will say this, though—I think most people underestimate how many features of our current economic system are not the natural order of things, or even “what happens under capitalism unless someone reigns the corporations in”, but are the feature of specific government policies, which are often not well-thought-out, or which are designed to benefit the powerful rather than the average person.
Take prescription drugs, for example. I recently heard someone put this very succinctly: if prescription drugs were a free market, you’d be able to order them from Canada. High prescription drug prices are sometimes justified on the grounds that they’re necessary to fund drug research, but I think it’s pretty obvious we could find better ways to fund drug R&D than what we currently have.
And there are lots of things that are like that. So I think we could have a better, fairer economic system that would look quite a bit different than what we have right now, whether you’d end up classifying it as a variety of capitalism or not.
If you would like to learn more about Topher Brennan, you can visit his web site: www.topherbrennan.com
or
Follow him on social media:
@TopherTBrennan
facebook.com/topher.t.brennan
by Guest Contributor | Jul 17, 2017 | Opinion
Written by: Frank Kamanga
INTRODUCTION
This article is inspired by the article titled “Helicopter money and basic income: Friends or foes” authored by Stanislas Jourdan (2017). He made a very important attempt to clear up confusion between two similar and conflicting yet important terms in the global economy at this moment. Hıs article has opened doors for another attempt to compare basic income scheme and cash transfer schemes. This article will explain the definitions of cash transfers (CTs) and universal basic income (UBI), as well as institutional frameworks under which the programmes are implemented. It will also address financing arrangements for the programmes, and linkages between UBI, CT and Sustainable Development Goals, in an attempt to explain the justification of UBIs in the current state of the global economy. Policy issues related to both CTs and UBIs will also be highlighted.
Basic income and cash transfers are not novel ideas for poverty alleviation. A basic income scheme was initiated in North America in the 1970’s and 1980’s with support from prominent economists of that time. Following the successful implementation of such programmes, governments and the World Bank began implementing cash transfers in emerging and developing countries. With the rising discontent toward the neoliberal economic system and austerity measures, poverty alleviation measures such as Universal Basic Income (UBI) have been resuscitated back to life in developed economies. Gradually, governments in emerging and developing countries are carrying out pilot projects to assess the efficacy of basic income projects.
Emerging and developing countries like India and South Africa, which are implementing cash transfers, are also contemplating introducing basic income projects. This demonstrates that there are differences between these two concepts. Indeed, these two programs are similar regarding their purpose of alleviating poverty and their nature of implementation. However, the analysis below will show why UBI stands out as a different programme from cash transfers, and why our current economic circumstances means a basic income scheme should be implemented globally even in developing and emerging economies.
DEFINITION OF BASIC INCOME AND CASH TRANSFERS
CASH TRANSFERS
Cash Transfer Programmes are founded on social inclusion theory in the context of economic development. The social inclusion theory posits that governments should integrate the poor into the general economy by supporting them with a basic amount of cash. Cash transfer programmes fall into two categories: conditional cash transfers and unconditional cash transfers. Under conditional cash transfers, recipients receive cash only if they can demonstrate that their behavior meets certain stated requirements. Under unconditional cash transfer programmes, the payout does not depend on individual behaviour (Forget E.L et al., 2013).
Conditional Cash Transfers (CCT) are used to encourage the behaviour of utilizing public services such as education and health services which lead to a reduction of poverty in the long run. For instance, in Mexico the conditional cash transfer programme provided cash to households on the condition that their children regularly attend schools and also access health services at clinics[1]. Proponents of conditional cash transfers argue that the scheme leads to better investments in human capital through access to social services that improve people’s knowledge and skills. The World Bank is a major supporter of the conditional cash transfer programme.
Meanwhile, advocates of the Unconditional Cash Transfer (UCT) programme look at the situation from a different perspective. They argue that poverty is cyclic and hard to break out of when there are conditions imposed on your spending. For instance, with restrictions on peoples’ spending, some basic needs are left out of the spending equation. To meet these basic needs, people may engage in other risky income generating activities such as sex work. When people are in poverty and desperate for money, we should not condition help on changing their behavior. Therefore, advocates of UCT argue cash should not be given according to certain behaviors. Rather, these resources should be made available to poor families so that they can make spending decisions consistent with their socio-economic priorities regardless of the work or job they are engaged in. UCT programmes are supported by human rights advocates and are consistent with a human rights based approach to development.
Unconditional cash transfers are not only premised on certain behavioural requirements, they also have lower administrative costs than conditional transfers (Capriati 2016). In addition, in countries like Malawi unconditional cash transfers have also been merged with other social services like agricultural farm cooperatives and access to health services, hence improving their effectiveness. In this case, UCTs are more consistent with meeting a broader aspect of sustainable development goals.
This notwithstanding, with regards to impact, lessons from CCT and UCT programmes in Zomba city in Malawi have shown that both programmes have had positive results in terms of reducing child marriages, improving educational attendance, and avoiding early pregnancies. However, it has shown that UCT is relatively more effective in solving several challenges met by the families. This is because based on tastes, preferences, and priorities, families could decide how to spend money without constraints so that intended objectives can be met (Forget E.L et al., 2013).
BASIC INCOME
The concept of basic income is a relatively new phenomenon in the developing world as opposed to the developed world. In Canada, a basic income experiment called MINCOME was carried out as a means-tested negative income tax[2] in the 1970s. Meanwhile, a notable experiment was conducted in Namibia and currently two countries are carrying out pilot projects – Kenya and Uganda. Basic income guarantee or Unconditional Basic Income (UBI) is considered as a UCT income large enough to guarantee everyone in an economy or in the world a minimum level of financial resources on an individual basis without imposed conditions.
Basic Income mainly works on the principles of unconditionality and universality. Proponents of basic income also argue that the programme is based on the intrinsic value of human beings in an economy. This value is generated from their contribution to the creation of the general wealth of the society and also from the inherited value of our ancestors who created the wealth we are enjoying today (Jourdan S. 2017). Just like cash transfers, basic income plays quite an array of roles from poverty alleviation, school attendance promotion, work emancipation, gender balance incentivization, social protection, modernization and early child marriage prevention.
INSTITUTIONAL FRAMEWORK FOR BASIC INCOME AND CASH TRANSFER PROGRAMME
The institutional framework of these programmes can be analyzed in terms of implementation, sources of funding, policies and financial infrastructure. Firstly, given the diverse nature of objectives of both cash transfer and basic income projects, different non-governmental organizations and line ministries of central government can implement these projects. The government normally implements both basic income and cash transfer projects in the context of fiscal policies.
Financial sector tools such as mobile payment technology and policies also play a huge role in implementation of both basic income and cash transfer projects. GiveDirectly, a US based NGO, is able to implement a basic income project in Kenya and Uganda due to robust mobile technology payment systems established in these two economies.
FINANCING OF BASIC INCOME AND CASH TRANSFER PROGRAMME
Cash transfer programmes and UBI programmes share some differences in terms of how resources are to be mobilized. There is readily available information in terms of how cash transfer programmes are being implemented and funded in developing countries like Malawi. As for UBI, the information is scant but constantly flowing, as different suggestions on how the scheme should be financed are being put forward by proponents.
From an experience of cash transfer schemes in Malawi, these Conditional Cash Transfers are mainly funded by the World Bank and implemented by the government of Malawi. Meanwhile, Unconditional Cash Transfer schemes are implemented by Unicef, Oxfam, Government of Malawi and several non-governmental organizations. These programmes are financed by various donors including the Government of Germany, EU, World Bank, Irish Aid and the Government of Malawi. At the same time, the government of Netherlands is funding the design of a linkage and referral system of the Social Cash transfer programme.
As for the financing of the UBI programme, the topic is currently being addressed in different circles at policy and academic levels. Some of the topics being discussed include how the resources should be mobilized, what kind of tools should be used and who should fund the programme. Understanding this aspect of the UBI programme can assist in providing information on how to strategize campaigning and advocacy programmes for UBI in different countries.
It is claimed that there are currently no established, in-country funding mechanism for UBI in developing nations, except for external funds, as in the cases of Uganda and Kenya. However, in selected developed countries that are piloting the schemes, governments are implementing the projects through their fiscal space. Given the need for longevity of the schemes, some authors such as Young (2017), Stern (2017) and Santens (2017) have suggested sustainable ways for mobilizing resources for UBI in the United Kingdom and United States of America. Some of the methods may apply to both developing and developed countries, while others are restricted to developed countries. Here we will dwell on Young’s proposal for financing UBI and this can be can be categorized into three main groups: 1. Recalibrating existing tax and benefit systems 2. Replacing CCT 3. Communalizing common assets 4. Direct grants from the private sector can also be utilized.
Advocates for proposal one argue that for UBI to be politically feasible, it must be achieved using the existing infrastructure of taxation and spending. The idea is that UBI is currently at a conceptual stage. To materialize this scheme, governments must begin with existing resources (on a trial basis) and there is neither a need for radical and rapid changes to the system nor additional taxes. In this approach, the UBI scheme can be small in scale, targeting the most vulnerable people across the board. As in the case of developed nations such as the UK, resources can be mobilized through restructuring the existing, inefficient and unfair benefit systems. Under this proposition, UBI can be used as a subsistence or sub-subsistence level of income to be supplemented by earnings from employment and/or disability, housing, or child benefits.
One of the ways in which savings for UBI can be generated is through restructuring existing benefits, as explained by Malcom Torry of the Citizen’s Income Trust. He states that the administrative savings from dismantling the means-tested benefits system are in the range of £8-10 billion. In other words, it is very expensive to decipher who is and isn’t deserving of government support, especially when recipients must prove their worthiness. Restructuring the benefits to look more like a UBI scheme can not only help save money but would also be fairer.
The second proposal for financing UBI is simply replacing the CCT scheme with a UBI scheme in developing and emerging economies. India is already on the way to do this. UBI is more closely related to a UCT scheme, hence all the benefits of a UCT scheme over CCT also accrue to UBI.
The third proposition involves communalizing common assets. Some proponents state this UBI financing mechanism takes a more radical and systematic overhaul approach. These proponents look at financing UBI in its universality context and hence propose financing solutions that span across geographical boundaries of both developed and developing countries. These proponents argue for the abolishment of private ownership of resources – be it physical, cultural, biological, or economic. They argue that resources such as the biosphere, atmospheric carbon, fisheries and forests, and unearned income of technological change should be respected as the common property for all, rather than be the source of exploitative disparities from unequal access and power. The implementation of such a systematic and transformative change requires establishment of new policies, institutions and a new economic paradigm at a global level.
There are several prominent advocates who have come up with several ideas on how resources can be mobilized under the proposal of communalizing common assets. First, Barnes Boyce and James Boyce put forward that charges should be put in place by governments on access and use of ‘communally inherited assets’ and that revenues must be redistributed. They argue that charges could be placed, for example, on polluting the scarce resource that is the carrying capacity of our atmosphere, or on trades of stocks, bonds, and derivatives (the latter of which could raise $300 billion per year). Barnes and Boyce claim that charges on a portfolio of universal assets could grant a US citizen a UBI of $200 a month.
A wealth tax could also provide an alternative for resources for UBI ın some countries. Researchers such as Thomas Piketty suggest measures such as progressive capital taxation. Martin Faley suggests the Georgist land value tax (LVT) in the context of the UK. Faley claims that land taxes coupled with common licenses could fund a £4,500 annual UBI. A globalization fund could also strike a deal. Globalization has had some negative consequences as we can see from recent increased in nationalism and unemployment in developed and emerging economies. Multinational companies exploiting labor and cheap natural resources in developing countries whilst making billions of US dollars should be charged a globalization tax to be fed into the globalization fund. This fund can be used to support a global UBI dividend or grant.
The fourth industrial revolution is mainly characterized by automation of jobs and technological unemployment. Some economists and futurists have found leeway to press for resource mobilization to finance UBI. For instance, Economist Yannis Varoufakis and futurist Kartik Gada have each suggested that the labor savings from automation could (and should) pay for UBI. According to Varoufakis, the proposal is that one-part should be wealth tax and one-part should be ownership restructuring. That is, a small tax is levied on shares from every initial public offering put into a commons capital depository that in effect grants citizens property rights over new technologies that yield financial returns. The Commons Capital Depository would then pay out a UBI to all citizens.
The last proposal that is also being applied already is the financing of UBI activities with funds from the private sector. eBay is financing pilot projects in both Kenya and Uganda. More and more private companies can come in to support such projects in developing countries.
LINKAGES BETWEEN CASH TRANSFER AND UNIVERSAL BASIC INCOME AND SUSTAINABLE DEVELOPMENT GOALS
Cash transfer and basic income share the same theories of how they change people’s behavior or improve living conditions of people in the context of Sustainable Development Goals.
- CT programmes reduce poverty and increase income. As income increases, people spend money to solve diverse needs of their families and they also spend on luxury goods. SDG 1, 2, 3, 4, 5 and 9
- CTs and Basic income reduce risk. A CT or a Basic income is a form of social insurance that increases the planning horizon and allows one to take calculated risks. SDG 2,3,4
- CTs and Basic income reduce income inequality. SDG 10
- CTs and Basic income enhance social values of dignity and integrity, hence build communities through interaction. SDG 11, 16, 17
WHY UNIVERSAL BASIC INCOME NOW
There are quite a number of reasons to justify the policy shift in favour of basic income in both developing and developed countries. The first reason is that the basic income is guaranteed over a long period, thereby enabling people to make plans for major life decisions ahead of time. The longevity of UBI can also stimulate demand in the global economy, hence leading to increased production and employment in the production sector.
Additionally, just as with unconditional cash transfers, basic income schemes could be cheaper than providing in-kind transfers and conditional cash transfers. In-kind transfers take the form of goods and services like cattle, books, schools, and hospitals. It is claimed that projects involving the provision of such projects have huge administrative, implementation and logistics costs. Besides this, they constrain people on their freedom to spend money on the goods and services of their choice. However, thanks to mobile technologies, basic income programmes are implemented with ease and offer economic freedom on expenditure of the money.
Basic income is also conventionally universal and is regarded as a human right. Basic income programmes target people across the board in an economy. The cash is provided irrespective of your employment status, gender, region, physical ability. Rather, it is based on one’s inability to meet basic needs in a society. Therefore, beneficiaries in a basic income project are diverse and the impact on poverty reduction as well as the multiplier effect on the economy are likely to be huge.
Finally, just as with conditional cash transfers, basic income offers an opportunity for long term investment in human capital. From the recent evaluation survey of GiveDirectly’s basic income project in Kenya, 20 percent of respondents said that they were using the money for payments of school fees for either themselves or their children. As the project is expected to last for some years, recipients of the cash can make long term and secured plans to finance their studies, hence building human capital in the economy.
POLICY ISSUES FOR CTs AND UBI
- Basic Income is more closely related to UCT. Therefore, in terms of cost structure, the cost per unit of outcome will be lower with a UCT and UBI scheme compared to conditional cash transfer scheme.
- UBI has a greater potential for political advocacy and long-term stability despite its perceived greater cost, due to its universality.
- Financial Modelling of UBI in Malawi must be conducted to assess the possibility of carrying UBI and UCT concurrently.
Frank Kamanga is a former Economist of the Central Bank of Malawi. He is a co-founder of Global Hope Mobilization and Centre for Child Development of Research, two local NGOs in Malawi. He is member of the Basic Income Earth Network Outreach Committee and also Global Unification International UBI Africa Committee.
BIBLIOGRAPHY
Capriati M. (2016) https://www.givingwhatwecan.org/post/2016/07/whats-so-special-about-give-directlys-basic-income-pilot/ Accessed in April 2017
Forget, E.L, Peden A.D., and Strobel, S.B (2013). Cash Transfers, Basic Income and Community Building. Social Inclusion, 1(2), 84-91.
Jourdan S. (2017) helicopter money and basic income: friends or foes?
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[1]https://web.worldbank.org/archive/website00819C/WEB/PDF/CASE_-62.PDF
[2]A negative income tax is a progressive income tax system where people earning below a certain amount receive supplemental pay from the government instead of paying taxes to the government.
