Opinion | BIEN — Basic Income Earth Network

Basic income could help resolve Hong Kong woes

by Tyler Prochazka | Jan 25, 2017 | Opinion

Among the political turmoil experienced by Hong Kongers, there is another crisis that is eroding the societal foundations of the global financial hub: debilitating poverty.

Hailed as one of the freest economies in the world, Hong Kong now has a higher per capita income than its former colonizer Great Britain. However, they also have a high and persistent poverty rate at nearly 20 percent

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It is not just relative poverty compared to the lavish lifestyles of many Hong Kongers. Many locals have become homeless or McRefugees (those who sleep in McDonalds at night) due to the prohibitively high cost of housing across the autonomous region.

One of the main contributors to the dissatisfaction with Hong Kong’s government is the sense of economic unfairness. Hong Kong youth have low social mobility; despite higher levels of education, they are unable to secure the wages their parents did at their age. The more serious factor is the high level of economic inequality, which threatens social stability.

Social welfare is severely lacking in Hong Kong, partly because many slip through the cracks. However, the lack of a comprehensive welfare system makes Hong Kong an ideal location to implement basic income. The large pool of wealthy individuals means a universal system would be feasible. The market-oriented nature and efficiency of basic income is also in line with its free market tradition.

The basic income would begin to address the various economic issues plaguing the youth and low-income individuals in Hong Kong. Youth will be able to search for more suitable jobs and have cash to afford rent. Those in poverty would not have to worry about finding a place to stay or finding their next meal.

Importantly, it would address many of the underlying factors that are causing tensions to undermine social harmony in the “city of protests.

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As of now, it appears the basic income movement does not have a significant presence in Hong Kong. A conversation with Hong Kong’s basic income Facebook page revealed the administrator was unaware of any prominent activists or academics in Hong Kong pushing the idea. Other regional activists were also unaware of individuals pushing for basic income in Hong Kong.

Due to the increasing awareness in interest in the basic income in China and Taiwan, as well as across Europe, it is probably only a matter of time before the idea gains greater traction in Hong Kong. For the sake of the people sleeping on the streets, and the youth worried about their future, let’s hope it is sooner rather than later.

BIEN affiliated organisations and their definitions of Basic Income

by Guest Contributor | Jan 19, 2017 | Opinion

Introduction

By Malcolm Torry, director of the UK’s Citizen’s Income Trust (CIT) and co-secretary of BIEN

There has been much discussion, at congresses and elsewhere, as to what should be included in the definition of Basic Income. In order to inform the ongoing debate, I have studied the definitions to be found on the websites of organisations affiliated to BIEN, and subsequently the BIEN news team has contacted affiliated organisations in order to check and if necessary amend the information.

We can conclude from the survey that all of the definitions of BI employed by BIEN affiliates describe it as unconditional, nonwithdrawable, individual, and a right of citizenship, although not necessarily in those precise words. They either say or assume that the payment will be regular and of a consistent amount, i.e., weekly or monthly, not annually, and not variable. Some state that the BI will be a right of citizenship, or of legal residence, and others might be taken to assume this.

But there are differences when it comes to the levels at which BI will be paid. In the table at the end of this article, if the definition given on the website does not mention the amount of the BI, then the second column in the table is empty. Where a definition on the website does mention the level of BI, only the relevant part or parts of the definition are quoted.

Conclusion:

Definitions of BI are quite diverse in relation to the amount to be paid.

Some do not mention the issue, suggesting that the amount to be paid is not integral to the definition;
Some say that a democratic process will be used to decide the amount;
One mentions a particular amount (Southern Africa);
And some offer a description of the kind of life that the BI will be expected to fund (‘subsistence’, ‘dignity’, ‘participation’, ‘poverty line’) in relation to the national context, but without specifying the relevant level of BI.

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If BIEN is to be the global body to which national organisations will affiliate, then any definition that BIEN offers will need to include all of the national definitions. This means that it will mention unconditionality, non-withdrawability, and a BI’s individual basis; it might wish to say that BI would be a regular and invariable but uprate-able payment; and it might use ‘rights’ language (in relation to legal residence or citizenship).

In relation to the levels at which BIs should be paid, there are two options that would include all of the national definitions: a) the definition should not mention the amount at all; b) the definition should say that in each country the normal democratic process will determine the levels of BIs and their funding mechanisms.

Table: BIEN affiliated organisations’ statements about the BI levels included in their definitions of Basic Income

EUROPE: Unconditional Basic Income Europe (UBI-Europe)

‘UBI is universal, individual, unconditional, and high enough to ensure an existence in dignity and participation in society.’

https://basicincome-europe.org/ubie/unconditional-basic-income/

SOUTHERN AFRICA: 1. Studies in Poverty and Inequality Institute (SPII), and 2. UBI Africa

1. ‘Amount: The grant should be no less than US$15.00 per person per month on introduction, [*which in 2013 was sufficient to meet peoples’ basic needs in the region], and should be inflation indexed.’ https://www.spii.org.za/index.php/sadc-big-principles/

2. ‘A wide variety of Basic Income proposals are circulating today. They differ along many other dimensions, including in the amounts of the Basic Income, the source of funding, the nature and size of reductions in other transfers that might accompany it, and so on.’ https://ubi-africa.blogspot.co.uk/

ARGENTINA: Red Argentina de Ingreso Ciudadano

AUSTRALIA: Basic Income Guarantee Australia (BIGA)

‘A Universal Basic Income (Basic Income Guarantee) is an unconditional cash payment to individuals sufficient to meet basic needs (Universal Basic Income New Zealand, 2003).’ https://www.basicincome.qut.edu.au/about-basic-income/frequently-asked-questions.jsp

AUSTRIA: Netzwerk Grundeinkommen und sozialer Zusammenhalt – B.I.E.N. Austria

‘Existenzsichernd: die zur Verfügung gestellte Summe soll ein bescheidenes, aber dem Standard der Gesellschaft entsprechendes Leben, die Teilhabe an allem, was in dieser Gesellschaft zu einem normalen Leben gehört, ermöglichen.’ https://www.grundeinkommen.at/index.php/grundeinkommen

[Ensuring existence: The sum made available is intended to make possible a life that is modest, but corresponding to the standards of society, and participation in everything that belongs to a normal life in this society.]

BELGIUM: Belgian Network for Basic Income

‘Ce revenu de base vise à permettre à chacun et chacune de mener une vie digne et de participer à la vie en société sous toutes ses formes.’ https://basicincome.be/fr/quest-ce-que-le-revenu-de-base/

[This basic income is intended to enable each and every individual to lead a dignified life and to participate fully in society.]

BRAZIL: Rede Brasileira de Renda Básica de Cidadania

‘A RBC é uma renda suficiente para que uma pessoa possa prover as suas necessidades vitais, como alimentação, saúde, educação e outras, que sera paga pelo governo a toda e qualquer pessoa residente no país, inclusive as estrangeiras residentes há cinco anos ou mais no Brasil, não importa sua origem, raça, sexo, idade, condição civil ou mesmo socioeconômica.’ https://eduardosuplicy.com.br/renda-basica-de-cidadania/

[The Basic Citizenship Income (CBR) is a sufficient income for a person to provide for his or her vital needs, such as food, health, education and other necessities, which will be paid by the government to all persons residing in the country, … regardless of their origin, race, gender, age, civil status or even socioeconomic status.]

CANADA: Basic Income Canada Network / Réseau canadien pour le revenu garanti

‘A basic income guarantee (BIG) ensures everyone an income sufficient to meet basic needs and live with dignity, regardless of work status.’ https://www.basicincomecanada.org/

CANADA: Quebec – Revenue de base Quebec (RBQ)

‘Le revenu de base est un revenu versé par une communauté politique à tous ses membres sur une base individuelle, sans condition ou contrepartie, dont le montant et le financement sont déterminés démocratiquement.

Un revenu de base garantit ainsi un niveau de vie décent à tous et il reste cumulable avec tout revenu perçu par ailleurs.’ https://revenudebase.quebec/

[A Basic income is an income paid by a political community to all of its members on an individual basis, without condition or withdrawal, of which the amount and the funding method are determined democratically.A basic income thus guarantees a decent standard of living for all and to it can be added income from other sources.]

CHINA: BIEN China

Affiliated in July 2016

Cheng Furui: 对基本收入定义，我们的网站和BIEN网站的一样。但是，关于我们所做的研究和推广，会更加注重社会分红，基于中国的实际情况。网站原文如下：“我们关注当前世界范围的“基本收入”运动，但基于中国公有资产占社会总资产的相当比例的国情，我们力促“社会分红/基本收入”的研究与教育活动。”

Regarding basic income, our website and BIEN is the same. But, regarding our research and what we promote, we emphasize the social dividend, considering China’s actual circumstances. The website originally states: “Our attention is on the modern global movement for the Basic Income, but considering the proportion of China’s publicly owned resources, we are pushing for a social dividend/basic income in our research and education activities.

[Translation: Tyler Prochazka]

DENMARK: BIEN Denmark (Borgerlønsbevægelsen)

‚Hvor stor skal basisindkomsten være? I princippet kan den have en hvilken som helst størrelse, som man i et samfund kan blive enige om, men den mest almindelige holdning er, at den skal være på et niveau, som gør det muligt at leve af den, om end på et beskedent niveau. Hvis man har en defineret fattigdomsgrænse i et samfund kan dette være et vejledende niveau for en basisindkomst. Basisindkomsten kan gradueres, så der er lavere satser for børn, for unge osv.‘ https://basisindkomst.dk/hvad-er-basisindkomst/

[How big should the basic income be? In principle, it can have any size, as agreed by a country, but the most common view is that it should be at a level that makes it possible to live on, albeit at a modest level. If you have a defined poverty line in a society then that can be a guide for the level of basic income. Basic Income can be of different amounts, so there would be lower rates for children, young people, etc.]

FINLAND: BIEN Finland – Suomen perustuloverkosto

‘According to the model of BIEN Finland, basic income is paid monthly for every member of society with no strings attached. Basic income would simplify the complex jungle of the current social security system, would facilitate the reconciliation of work and social security, and fill the gaps in the social protection. Income increase by UBI for people with high and middle income would be reclaimed from their earned income taxes. For implementation of basic income, there are several different models.’ * [English translation provided by Jouko Hemmi]

FRANCE: Mouvement Français pour un revenu de base

‘Le revenu de base est un droit inaliénable, inconditionnel, cumulable avec d’autres revenus, distribué par une communauté politique à tous ses membres, de la naissance à la mort, sur base individuelle, sans contrôle des ressources ni exigence de contrepartie, dont le montant et le financement sont ajustés démocratiquement.’ https://www.revenudebase.info/mfrb/

[Basic income is an inalienable, unconditional right, cumulative with other income, distributed by a political community to all its members, from birth to death, on an individual basis, without control of resources or counterpart requirement, of which the amount and funding mechanism are adjusted democratically.]

GERMANY: Netzwerk Grundeinkommen

‚Ein Grundeinkommen ist ein Einkommen, das eine politische Gemeinschaft bedingungslos jedem ihrer Mitglieder gewährt. Es soll die Existenz sichern und gesellschaftliche Teilhabe ermöglichen, …‘ https://www.grundeinkommen.de/die-idee

[A basic income is an income which a political community unconditionally grants to each of its members. It shouldensure subsistence and enable social participation …]

INDIA: India Network for Basic Income (INBI)

‘Basic Income is modest income paid by government unconditionally to all its citizens. It is paid monthly to every individual, irrespective of their social and economic status, i.e., without any means test or work requirement. The basic principle behind this idea is that every citizen is entitled to a basic income, as a matter of right, so as to meet her / his basic material requirements of life.’ https://basicincomeindia.weebly.com/

IRELAND: Basic Income Ireland

‘A basic income is a payment from the state to every resident on an individual basis, without any means test or work requirement.

It would be sufficient to live a frugal but decent lifestyle without supplementary income from paid work.’ https://www.basicincomeireland.com/

ITALY: Bin Italia (Basic Income Network Italy)

[I can’t find a definition]

JAPAN: BIEN Japan

ベーシックインカムとは

ベーシックインカムとは、全ての人が、生活に足るだろう所得への権利を、無条件でもつ、という考え方です。

考え方としては２００年ほどの歴史があります。思想家、哲学者、経済学者たちが議論する一方、土地の共有化を求めたり、分権的な社会主義を求めたり、金融の民主化を求めたり、福祉から性差別をなくすことを求めたり、といった社会運動のなかでも要求されてきました。https://tyamamor.doshisha.ac.jp/bienj/bienj_top.html

Basic income is the idea that everyone has the unconditional right to an income to live on.

MEXICO: Red Mexicana Ingreso Ciudadano Universal

[Website not available]

NETHERLANDS: Vereniging Basisinkomen

‚Het bedrag is hoog genoeg voor een menswaardig bestaan

Hoog genoeg : Het bedrag moet zorgen voor een fatsoenlijke levensstandaard, die aan de sociale en culturele normen voldoet in het betrokken land. Het moet materiële armoede te voorkomen en bieden de mogelijkheid om te participeren in de samenleving en in waardigheid te leven.‘ https://basisinkomen.nl/informatie/de-vier-criteria-voor-een-onvoorwaardelijk-basisinkomen/

[The amount is high enough for a decent life:High enough: The amount should provide a decent standard of living according to social and cultural norms prevailing in the country concerned in order to avoid material poverty and provide the opportunity to participate in society and live in dignity.]

Adriaan Planken, VBi secretaris a.i. adds: ‘UBI is universal, individual, unconditional, and high enough to ensure an existence in dignity and participation in society.’

NEW ZEALAND: Basic Income New Zealand Incorporated (BINZ)

‘A basic income is an individual income paid to all legal residents as of right without means test or work requirement. … the government and the public together decide how much it will be. BINZ does not promote any particular solution. Additional funding can be nothing at all for an income-neutral basic income where each household receives the same total income after tax as it does now. It can be moderately redistributive like the examples shown in the handbook published on the BINZ website that substantially reduce poverty by redistributing about 2% of national income. Or it can be any other greater or lesser amount.’ https://www.basicincomenz.net/faq

NORWAY: Borgerlønn BIEN Norge

‚En universell, individuell og ubetinget inntekt som er høy nok til å gi hver og en av oss et verdig liv, uavhengig av arbeidsstatus.‘ https://www.borgerlonn.no/

[A universal, individual and unconditional income that is high enough to give each of us a dignified life, regardless of employment status.]

PORTUGAL: Rendimento Básico

‘O Rendimento Básico Incondicional é uma prestação atribuída a cada cidadão, independentemente da sua situação financeira, familiar ou profissional, e suficiente para permitir uma vida com dignidade.

Um RBI é:
– Universal – não discrimina ninguém, todos o recebem
– Incondicional – um direito para todos, sem burocracias
– Individual – garante autonomia às pessoas em situação vulnerável
– Suficiente – para viver com dignidade’ https://www.rendimentobasico.pt/

[Unconditional Basic Income is a benefit attributed to each citizen, regardless of their financial situation, family or professional, and sufficient to allow a life with dignity.An RBI is:

– Universal – does not discriminate against anyone, everyone

– Unconditional – a right for all without bureaucracies

– Individual – guarantees autonomy for people in vulnerable situation

– Enough – to live with dignity]

SCOTLAND: Citizen’s Basic Income Network Scotland

‘A basic income is a fixed amount of money paid to citizens which never decreases or disappears no matter the circumstances of that citizen. For example, unemployed, low wage, and rich people of the same age-bracket (i.e. not a child or a pensioner) would all receive the same basic level of state support. Children, adults, and pensioners would be provided with different levels of basic income. The objective of a basic income is to alleviate poverty caused by low wages and the benefits trap.’ https://cbin.scot/what-is-a-basic-income/

SLOVENIA: Sekcija za promocijo UTD v Sloveniji

[I couldn’t find a definition]

SOUTH KOREA: Basic Income Korean Network (BIKN)

따라서 기본소득은 보편적 복지이자 그 이상입니다. 모든 구성원의 적절한 삶을 보장한다는 점에서 보편적 복지이고, 단순한 재분배정책이 아니라 사회적 생태적 전환의 기초가 된다는 점에서 이행전략입니다. 기본소득은 정의상으로는 매우 단순하지만 필요성, 정당성, 지향성의 측면에서는 복합적이고 심층적입니다. www.basicincomekorea.org/all-about-bi_definition/

Therefore, basic income is more than universal welfare. It is a universal welfare in that it guarantees the proper life of all members, and is a transition strategy in that it is the basis of social ecological transformation, not a simple redistribution policy. Basic income is by definition fairly simple, but complex and deep in terms of necessity, legitimacy, and direction.

SPAIN: Red Renta Basica

‘La renta básica puede ser definida de distintas formas. En la web la Red Renta Básica ha utilizado esta definición: la renta básica es un ingreso pagado por el estado, como derecho de ciudadanía, a cada miembro de pleno derecho o residente de la sociedad incluso si no quiere trabajar de forma remunerada, sin tomar en consideración si es rico o pobre o, dicho de otra forma, independientemente de cuáles puedan ser las otras posibles fuentes de renta, y sin importar con quien conviva. En menos palabras: una renta básica es una asignación monetaria pública incondicional a toda la población.’ https://www.redrentabasica.org/rb/que-es-la-rb/

[Basic income can be defined in different ways. On the web the Basic Income Network has used this definition: basic income is an income paid by the state, as a right of citizenship, to each full member or resident of the society even if they do not want to work in a paid way, without taking In consideration whether he is rich or poor or, in other words, regardless of what the other possible sources of income may be, and regardless of who he lives with. In less words: a basic income is an unconditional public monetary allocation to the entire population.]

SWITZERLAND: BIEN Switzerland

‘The unconditional basic income (UBI) is a monthly payment by a public agency, to each individual, of a sum of money high enough to cover basic needs and enable participation in social life, as a monthly, lifelong rent. It is the concretization of a basic human right.’ https://bien.ch/en/story/basic-income/what-unconditionnal-basic-income

TAIWAN: Global Basic Income Social Welfare Promotion Association in Taiwan

UNITED KINGDOM: Citizen’s Income Trust

‘A Citizen’s Income is

‘Unconditional’: A Citizen’s Income would vary with age, but there would be no other conditions: so everyone of the same age would receive the same Citizen’s Income, whatever their gender, employment status, family structure, contribution to society, housing costs, or anything else.

‘Automatic’: Someone’s Citizen’s Income would be paid weekly or monthly, automatically.

‘Nonwithdrawable’: Citizen’s Incomes would not be means-tested. If someone’s earnings or wealth increased, then their Citizen’s Income would not change.

‘Individual’: Citizen’s Incomes would be paid on an individual basis, and not on the basis of a couple or household.

‘As a right of citizenship’: Everybody legally resident in the UK would receive a Citizen’s Income, subject to a minimum period of legal residency in the UK, and continuing residency for most of the year.’ https://citizensincome.org/faqs/

UNITED STATES: U.S. Basic Income Guarantee Network (USBIG)

‘The Basic Income gives every citizen a check for the full basic income every month, and taxes his or her earned income, so that nearly everyone both pays taxes and receives a basic income. … A partial basic income guarantee is any income guarantee set at a level that is less than enough to meet a person’s basic needs.’ https://www.usbig.net/whatisbig.php

[* added following circulation of the original summary to affiliated organisations]

Funding social security after automation

by Roland Duchatelet | Jan 18, 2017 | Opinion

Finding the money to pay for our social security is becoming more difficult, because paid work is being replaced by robots — the financial foundation of the social security system is crumbling. This is true whether we talk about financing basic income or any other social security system. Increasingly, automation is replacing “productive” jobs. There is still room to create jobs in basic services. However, such jobs do not create enough “added value” to “contribute” to the financing of our social security system. We are happy that these new jobs provide an income to those families. But it is too far stretched to believe that prices for such “proximity” services, helping each other, can be inflated by social security contributions.

Because the distribution of purchasing power is essential to fuel our economic system, time has come to search for other sources of funding, other than “social security contributions” from labour.

An obvious tax-free way to help fund social security is to reduce the cost of public administration and public services through productivity gains. Another tax-free way is to use the profits of state owned companies to fund social security. Many countries own companies, in full or in part, such as in transportation, mobility, housing, banks, car manufacturing, electricity, water distribution, telecommunication etc. Some of those companies do well, others do not. In most countries, the sum of the profits (and losses) derived from those state-owned companies is low in comparison to the cost of the social security system. Sovereign wealth funds are a special category of state owned companies. Their goal is to generate profit out of the collective savings by the country to cover future social security expenses, like retirement benefits, but also to conduct economic stimuli programs in periods of economic decline.

This induces a discussion regarding to which part of the social security should be funded by savings and which part should come from “redistribution” (sometimes referred to as “repartition”). There are both public and private schemes to fund retirement benefits out of savings. However, in most countries repartition funds the biggest part of the retirement budget. In most countries, the non-retirement social security benefits like child allowances, unemployment, illness, and health care are almost entirely funded by redistribution. It is largely recommended that no matter what state your country’s economy is in, you should always save money yourself for your retirement too. It is possible that you might become incapacitated and unable to decide how this money is handled due to old age, therefore electing someone to have power of attorney on your behalf is also a crucial part of planning for your future. You can learn more about power of attorney here.

Very little academic work has been done on the ideal mix of social security funding between savings or repartition. Imagine a social security system which would be completely funded by (public and private) savings. That would be a huge challenge for any economic system because the percentage of required savings in the real economy would be extremely high. Moreover, there would be huge asset inflation leading to high volatility in stock markets and perceived personal wealth, this in turn yielding high instability in spending in the real economy. The short answer therefore is that the part of savings in our social security system should be relatively low.

Some defend the idea of money creation to fund basic income. The problem with this proposal is that it supposes an expanding economy while the population in most European countries are starting to shrink.

What would happen if we dig a hole into the ground and we discover tonnes of gold, gold available in massive quantities, just like water? What would be its value? Except for a few industrial applications, gold is useless. The reason it is used in jewels is based on its scarcity rather than its beauty.

However, we found something more useful while digging: oil. It can be used to make plastics and all sorts of other useful materials. Moreover, it can be used to produce heat or electricity. In oil or gas-rich countries the oil industry is massively contributing to the state income: social security is funded, at least in part but often completely, by this “black gold.”

Astonishingly, so far, the benefits of the black gold bonanza were only moderately used in countries which do not have these natural resources. They could have levied far higher import or consumption taxes on oil products than they actually did.

Higher taxes on energy consumption is an obvious way to finance social security in 2017, rather than demanding low income workers to share a big part of their small income to fund their health care and future retirement. Such a tax would surely reduce energy consumption and lower CO2 emissions. What is wrong with that? Either way when it comes to finances and especially retirement in our day in age now, more people are in fear of their own instability, if you’re one of these people you should be looking at ways to increase your retirement pot

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Maybe there are other “good” taxes? In Macau, the gambling tax, which is mainly contributed by visitors, finances a yearly basic income for all inhabitants as well as a fair share of the health care system. While in Sweden, their gambling tax seems to be in order to regulate their gambling market, preventing it from spiraling. You can read more here – https://battrenyheter.se/artikel/spelskatten-taljer-guld-at-svensk-ekonomi/. Different countries require gamblers to file their winnings in different ways, so it’s important for people to check their country’s regulations on gambling income. For anyone who is interested in bringing in some gambling income, it might be worth looking for an online livemobile66 slot game. That will give users the option to play for money, allowing them to start bringing in some gambling money.

Any other taxes?

Taxes should fulfill 3 requirements:

They should be significant enough such that the cost of enforcing and collecting them is small compared to the revenues.
They should be socially desirable. For example, a tax on exchanging services with each other is undesirable. A tax on cigarettes is a very good tax, a tax on alcoholic beverages as well, just like a tax on electricity or oil products.
They should be difficult to avoid or defraud.

Why not a smart tax on robots? For example, a tax on products made by robots, while it doesn’t matter if those products are made in the country or elsewhere. However, even if a smart phone would cost twice the current price, we still would buy it, just like we would buy our PC or fridge at twice the price. The easy way to implement such a tax in practice is to increase the value added tax or the sales tax on such products. The goal is to replace the “social security contributions” on low wage labour, because tax on low paid jobs is a bad tax. The problem is that the political world is not aware of that yet.

The replacement of high added value jobs by robots undermines the current mechanism of redistribution of wealth, such that some political voices emerge which are pleading to reduce social security benefits. We need to find a better way to fund our social security. This is essential to win the battle for basic income.

Basic income’s mutually supportive cousin

by Guest Contributor | Jan 16, 2017 | Opinion

Written by: John Boik

For many good reasons, the concept of a basic national income is enjoying a surge of interest within academia, civil society, and political sectors. I am proposing a program that, in theory, is a mutually supportive cousin of basic income. Unlike typical basic income programs, this system is implemented at the local (e.g., community or city) level by non-governmental entities. Moreover, it can be implemented in parallel with more traditional basic income programs to help achieve expanded goals.

John Boik

Before describing it, I pose a question: What is the purpose of an economic system? As analogy, the purpose of a tractor is to pull or push farm equipment. Tractors are designed to meet user requirements, and the optimality of a particular design can be assessed by how well it does so relative to alternative designs. What are the user-requirements of an economic system? It is an uncommon question, but if we can answer it with clarity we would be in a better position both to assess alternative designs and monitor progress.

In a recent paper I argue that relative optimality of an economic or governance system is a measure of its capacity to help communities solve problems and organize activities to elevate collective wellbeing. Collective wellbeing refers to social and environmental flourishing, both local and global. Problem solving is the proximal aspect of relative optimality, and elevated wellbeing of the distal aspect, or result, of good problem solving.

Viewed this way, existing economic and governance systems are suboptimal relative to need. Indeed, they might be incapable of addressing today’s complex problems (climate change, pollution, and inequality, for example). In the paper, I call on the science and technology sectors, and the academic community, to play a pivotal role in developing and testing new, more effective systems. Further, I suggest that the prudent approach to do so is at the local level. Once simulations and other preliminary work are completed, new designs can undergo scientific field testing via community-based volunteer clubs. This approach will allow testing by relatively small groups, at relatively low cost and risk, in co-existence with existing systems, and without legislative action.

A prototype for this approach — and a cousin to basic income — is the Local Economic Direct Democracy Association (LEDDA) framework, now in early stage development. This bi-currency system uses money (both a local digital currency and national currency) as a bone fide voting tool in a type of direct economic democracy. An interactive model of currency flows in an idealized system is available at the Principled Societies Project website.

A published agent-based model reveals similarities and differences to basic income proposals. Once a LEDDA has matured, participants receive a very high and equal income (the equivalent to about $110,000 per family, the 90th percentile of US family income). Employees receive income in the form of wages, but any member who is not employed or not in the workforce unconditionally receives this income as well, from the novel crowd-based financial system. Members also use the LEDDA financial system to fund the types of jobs that they desire and deem useful.

John Boik, PhD
Founder, Principled Societies Project
@JohnBoik

About the author:

John Boik received a BS in civil engineering from the University of Colorado, Boulder; a master’s degree in acupuncture and Oriental medicine from Oregon College of Oriental Medicine, Portland, Oregon; and a PhD in biomedical sciences from the University of Texas, Health Sciences Center, Houston. He completed postdoctoral work at Stanford University, in the Department of Statistics. He is the author of Economic Direct Democracy and other books and papers, and founder of the Principled Societies Project.

Interactive model shows basic income’s effect

by Guest Contributor | Jan 13, 2017 | Opinion

Imagine entering a website for your country which after answering a few questions would inform you how much money you would receive from a basic income. This is net of any increased taxes from each of the financing models proposed to finance the UBI. This site will also tell you how the country would be affected overall. Each of the variables are listed and are changeable, which gives those interested the ability to measure results from all possible outcomes.

We have this now in a Google Docs spreadsheet form, and it has been forwarded to all the members of the international BIEN outreach group of which I am a member. The original Excel version can be found here.

The outreach group has several objectives. My primary focus in this group is the collaboration, communication, connection, and mutual support of the international groups who are working on modelling, financing and forwarding a universal basic income.

At the congress earlier this year, I presented a paper on a European wide basic income financed by a collective goods and services or value added tax. This was a costed model which indicated that an increase of the European VAT rate of 16 percent to 22 percent would be sufficient to finance a basic income of 150 to 200 Euros for everyone in the European union over the age 18. The expected results for Europe was people had more money to spend, there was increasing employment, no need for austerity measures, big savings in bureaucracy and healthy economies in Europe with the measures they need to cope in a changing world.

While 96 percent of people in Europe would be better off with this UBI, a higher percentage could have been achieved by having a tax-free income allowance as well with a slightly higher GST rate. I was not able to model this, as it impacts individual member budgets while I was seeking a collective UBI agreement keeping with the existing aligned VAT rates across Europe. However, this is the suggestion that I made to the New Zealand government last year.

The Labour party here, along with all the left-leaning parties, have indicated an interest in or directly support UBI. I find that reading other people’s spreadsheets brings on a headache so I have designed an interactive model that hides away the calculations and simply delivers the results of each financial model in a dollar value for your individual circumstance.

I have made this template available to the BIEN international community. They would need to enter their own existing welfare budget, the country tax and VAT incomes. It also asks for the population income and taxation per income band. Doable from web sources in some countries, but needing real work and government assistance in others. It does offer a way to map financial results given different financing models.

While we could disperse this information through our own networks, I have an additional objective in that there are six questions that the website would require you to answer, most of which relate directly to the calculation of your personal UBI net advantage. While the other asks whether you would leave your job if you received a UBI. I will consult with the parties here as to whether they need anything further answered as there were hints of a UBI financed by a capital gains tax which would be interesting to compare.

The four models currently considered are:

Tax free earnings to $100,000 and UBI of a higher amount financed by a raise in GST.
A moderate UBI financed by a raise in GST.
A lower UBI financed by the top tax rate.
A lower UBI financed by increasing the income tax by the same percentage.

My conclusions are as follows:

The bottom earners of less than $16,000 are best off with the model (1) as are the people earning more than $70,000.
The middle earners from $16,000 to $70,000 (the majority) are better off with model (3) however the top tax rate would need to be more than 100 percent and therefore it is not possible.
Model (2) has the second best overall result of $10,187 average extra money per person yearly. Model (1) has the best of $13,376.
Model (4) has a similar overall result to model three of an $8,604 average additional income per person annually.

The spreadsheet also adds the total cash benefit for the entire population, and I hope that if this was put to a vote that this would be given due attention, as the extra cash received by many from the top tax being increased is not much more than from the tax-free GST model. The country total is $47 billion for the GST model compared to $26 billion for the top tax. This gap widens as the variables are changed.

My conclusion is that the tax-free GST model is the best method of financing UBI for New Zealand.

My hope is that someone will first audit these findings and bring about this information being shared on a website. This way, people get a chance to view what a UBI means to them and their country. The questions answered will help developers with the data they need to see what the likely outcomes for their country would be.

A final note – A tax on spending enables people to save with the extra UBI they receive, seek employment without a punishing higher tax rate, get a entry-level job without paying any tax on it and still receive the full UBI.

UPDATE: Added new spreadsheet version.

About the Author:

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is a self-employed accountant in a busy public practice and a part time organically certified olive farmer. A member of the BIEN outreach task-force, one of four members charged with creating a space in the next congress for Bien affiliates and international developers of UBIs to share their progress, discuss common problems and brainstorm common solutions. He is actively involved with the British, European, Indian and New Zealand UBIs.

FILM REVIEW: ‘In the Same Boat’

by Guest Contributor | Jan 11, 2017 | Opinion

On January 9th, Zygmund Bauman passed away at the age of 91. He is considered one of the great philosophers and sociologist of our time, who introduced the concept of “liquid modernity” to describe the postmodern age.

He is the main character in the recently released documentary “In the Same Boat” where he urges to tackle global problems on a global scale, and suggests exploring new roads such as a universal basic income.

Read more in this review: “Man vs machine, or man ahead with machine?”

MACHINE VS MAN, OR MAN AHEAD WITH MACHINE?

Written by: Bart Grugeon Plana

In the modern era, digital technology is substituting human brain power in a similar way as the steam engine did in the eighteenth century, making muscle power inefficient. Would it be possible, however, to harness this digital revolution for the benefit of humans and the planet, to share prosperity? The documentary “In the Same Boat,” which is being released in several countries throughout Europe, has opened up this interesting debate.

We are in the middle of a new industrial revolution and with the advance of Artificial Intelligence, this process is affecting an increasing number of sectors in the economy. Not only is traditional blue-collar work being carried out by machines, but also work that requires specifically human capabilities. In the coming years, for instance, the self-driving car will turn the transportation sector on its head.

This revolution in productivity can be seen as good news, since machines will do our traditional work and we can dedicate our time to education, care, hobbies and services. Also, new technologies and the availability of huge amounts of data allow us to optimise the planet’s scarce resources. However, there is no guarantee that the increase of wealth will be spread over the inhabitants of the planet with any criterion of equity. There is a real risk that the ownership of machines will be reduced to a small number of people and that the great majority of the world’s population will be left without the means to generate an income.

Most countries in the world have seen income inequality rise during the last decade, in part because of the technological revolution. Economic data (Link 1) show that since the year 2000, the western economy has invested more in technology and less in human capital. This strategy has endowed innovative entrepreneurs with more benefits, without creating more jobs or raising average incomes. The generated wealth went to a tiny minority. Wealth accumulation can come if you already have financial capital and know how to invest it, but if you depend on selling your skills in the labour market, it becomes more difficult to make a living.

When looking at the data of the concentration of wealth, there isn’t much margin for many interpretations. There are 62 people in the world that are as wealthy as the poorest half of the global population. In the US, the middle class is endangered; in the period of economic recovery between 2009 and 2013, the top one per cent of the population was assigned 25 times more of the national revenue than the rest (Link 2).

Many people feel that they are being excluded from the labour market, and they are aware that they have little chance to win the race against the machines. The solution is to learn to work ahead with technology and to think about a strategy to create wealth together, says Erik Brynjolfsson, an expert in information economy (Link 3).

“We are in full transformation towards the society of the 21th century, and the outcome is still open: either with shared prosperity, or, at the contrary, with more inequality. This decision depends on our individual choices and on our strategy as a society. The power is in our hands. Technology is merely an instrument,” Brynjolfsson said.

RECONCILIATION OF POWER AND POLITICS

Image still from ‘In the Same Boat’

The dominant political debate today doesn’t pay much attention to the digital revolution we are experiencing, and mainly focuses on creating favourable conditions to stimulate companies to create as many jobs as possible.

This way of thinking conforms to the paradigm of the second half of the 20th century, when we got used to the idea of ‘full employment’, explains sociologist Zygmund Bauman (Link 4). In our social consciousness, the normal situation is to be in employment and a person that is ‘un-employed’ does not fit this normality. However, in the new technological world, the techniques of the past don’t seem to work, and a solution for the structural problem of unemployment hasn’t yet been found. In Europe, 8.5 per cent of the active population has no job, with significant regional and age variation (Link 5). The situation in Greece and Spain is the most alarming.

According to Bauman (Link 6), we don’t know how to regain control over our economic system because it operates on a global scale: “With just one click on a computer, a company can decide to move 100.000 jobs from here to another part of the planet where labour conditions are more interesting,” he asserts, “Capital and finance move without restraints, but labour does not.”

Looking for solutions, citizens turn to the political class who ultimately can’t influence the economic decision-making process. “They have a local sphere of action, mainly at the level of the nation-state, but power is organised on a global scale and escapes from political control. This divorce between power and politics is the essence of the problem of our society in transformation”, says Bauman, who considers it is a task of all citizens to reconcile both (Link 7).

For the first time in human history, all inhabitants of the planet are interconnected and are interdependent. If we want to resist the populist and protectionist wave that is extending over the globe after Brexit and the election of Donald Trump, we must think about different ways to organise work and to distribute wealth. Several experts insist that we should radically rethink the foundations of our society and they propose an open dialogue to come to sensible solutions.

WE ARE ALL IN THE SAME BOAT

The documentary “In the Same Boat” made a momentous effort to open this debate and to project the voices that invoke a new paradigm. Zygmund Bauman, Serge Latouche, Tony Atkinson, Mariana Muzzucato, José Mujica and many others explain why the current labour model has hit a dead end. With a cinematographic style, spectacular photography and a varied musical palette, the film is fresh and inspiring, even whilst dealing with such a weighty subject as the future of humanity.

Zygmund Bauman considers the message of ‘In the Same Boat’ the complete antithesis of Margaret Thatcher’s famous slogan ‘TINA’; claiming that “There Is No Alternative” to the liberalisation of all parts of society as it is the only way to guarantee welfare. On the contrary, the polish sociologist proposes to “change the course of the boat that all inhabitants of the planet are in”. He believes that the new paradigm of the 21st century should cut the ties between income and work. “We should abandon the idea of working to make our living. We cannot condition the right to live to the interests of the company we work for,” he argues (Link

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The documentary proposes a universal basic income as one of the solutions to fair wealth redistribution. It is not considered a charity for the misfortunate, but rather a technological dividend of the past — a common right. Mariana Mazzucato (Link 7), an economist specialized in technological innovation, explains that “innovation largely depends on public financing and on a collective effort. Moreover, innovation today is a heritage of discoveries of the past.” In other words, what makes your smartphone smart (battery, GPS, Internet, mathematical algorithms, touch screen, etc.) are no individual or private inventions, but are the result of the effort of society as a whole with publicly-funded research programs. Why is it then that the benefits of this technological heritage go to just a privileged minority? How can it be justified that the cost and the risk of research is burdened by the public, but the rewards are privatised? If technology allows us to delegate work to machines due to the effort of many generations, wouldn’t the legitimate heir be society as a whole?

The film has arrived at the precise moment to put the current economical and institutional crisis into a wider perspective. Hopefully it can help to spark a global debate about the necessary societal changes.

“In the Same Boat” was released in Spain in November 2016 and will be screened in other countries during 2017. Members of the Basic Income Network that want to organise local screenings can contact the team on the Facebook page www.facebook.com/inthesameb.

Included is the trailer of the documentary and the presentation with Zygmund Bauman, talking about the future of work. Barcelona, February 2016.

About the author:
Bart Grugeon Plana works as an investigative journalist for the Barcelona based newspaper La Directa, and collaborates with other news platforms such as Apache.be and Ouishare Magazine. He has a special interest in common-based peer production, collaborative economy, platform cooperativism and energy transition.

Trailer In the Same Boat