by Timothy Roscoe Carter | Sep 22, 2015 | Opinion
[The following is an excerpt from a book in progress, The Poverty Abolitionist’s Handbook.]
Q: But who will clean the toilets? If everyone has an income sufficient to meet their basic needs, even if the vast majority of people want to do some productive work, what incentive will there be for anyone to do all the dirty and dangerous jobs that need to be done for society to function?
A: That is an evil and aristocratic question. How will we find cheap labor to do the nasty jobs we want done, but don’t want to do ourselves, if we don’t starve some unimportant people who refuse to do them for us? This question is the labor equivalent of the question a Democratic California State Senator in the 1970s asked a group of feminists who were petitioning for the removal of the marital rape exemption: “But if you can’t rape your wife, who can you rape?” Or the plantation owners at the end of the Civil War who demanded to know who was going to pick their cotton.
You want to know where the incentive to do dirty jobs will come from? How about the free market? If you offered enough money you could probably get Warren Buffet to clean your toilet. You want your toilet cleaned? You do not want to do it yourself? Then just pay someone else who is not afraid of starving whatever it will cause them to clean it for you. You don’t have enough money? So sad. You probably do not have enough money to buy your own private jet, do you? That’s life. Though, you can look at the private jet rental cost instead in the meantime, so it isn’t all bad, right?
Note: This answer is a rant, but the question deserves it. Admittedly the *questioner* probably does not deserve the rant. There was a time only a half-century ago when the idea of prosecuting a man for raping his own wife seemed absurd. It seemed absurd to a man raised to believe it was his wife’s duty to cook, clean, and to give sex to her husband, and he did not think about the unfairness to the wife any more than most of us think about the unfairness to the chickens we eat. If you had a visceral defensive reaction to the idea that there is something unfair about eating chickens, then you can at least have some sympathy for the man who thinks it is his right to rape his wife. If you object that there is a huge degree of difference between the unfairness of eating chickens and the unfairness of raping wives, well, I would agree with you. (Full disclosure: I eat chickens.) Of course, the person who wants to force others to clean his toilet cheaply or starve would also see a huge difference between that and rape. And note that prosecuting men for raping their wives also seemed absurd to a lot of women who believed they were being good wives by submitting to their husbands, and saw – probably unconsciously – removal of the marital rape exemption as an attack on an identity that they based their self-worth on. And many people asking who will clean the toilets will actually be people who have themselves worked demeaning jobs at exploitative wages to provide food for their families and take pride that they did what they had to do to survive. Such people may see a basic income as an attack on their self-worth and personal identity in a manner similar to the good wife who finds it absurd to prosecute a man for “raping” his wife. So calling out such questions as evil probably does real harm to people who do not really deserve it. But to treat such questions as reasonable does the harm of conveying the idea that they are in fact reasonable questions. The only way to teach the wider public, and most importantly rising generations, that it is contemptible to ask who will pick your cotton if not slaves, or who a man can rape if not his wife, or who will clean the toilets if not people who would otherwise starve, is to treat the question with the contempt it deserves. If you absolutely must answer the “But who will clean the toilets?” question in a diplomatic way, you can substitute the answer to the next question about the effect of a basic income on wages. I still do not recommend it, because I believe it to be more important to call out the assumption that it is acceptable to force some people to do dirty jobs for others cheaply under threat of starvation.
Q: What would be the effect of a basic income on wages?
A: Overall there would likely be a moderate upward pressure on wages and possibly a slight leveling effect. The “permanent strike fund” aspect of a basic income would give most workers more bargaining power and cause wages in general to rise modestly. The wages of workers doing unpleasant and unskilled work would likely rise dramatically as no one will be forced into doing those jobs. The wages of skilled professionals such as doctors, accountants, plumbers, and electricians would likely fall as more people could take the time necessary to qualify for those positions. If the basic income was at a level sufficient to abolish poverty, the wages for pleasant unskilled work might fall, as it might be reasonable to rethink the need for a minimum wage. The leveling effect of a basic income is unlikely to reach a point where it will make financial sense for a law firm to require attorneys to take turns cleaning the office bathrooms, because then fewer people would likely become attorneys. But if it does, so be it. This makes it even more difficult when looking towards retirement, with many looking to work straight into retirement to help themselves financially. Others find that they are looking towards their equity for any help with retirement finances with some using something like this equity release calculator to find out how much they have and will be able to live on during their retirement.
Q: How will a basic income affect economic growth?
A: There will likely be overall positive economic growth resulting from a basic income, as it would end up as a net transfer of money from people who either hoard or invest most of their wealth to people who spend most of their wealth. Hoarding wealth is always bad for the economy, while investing wealth is a gamble that could grow the economy if there is demand for the investment, or squander wealth if there is not. If people have a guaranteed monthly income then they will be more likely to invest in local businesses, look at motley fool reviews and invest in the market, and put the money back into the economy. Spending money manifests demand, and so always helps the economy. Of course, the basic income does have to paid for, and so the economic effects of whatever tax scheme is proposed to pay for must be taken into account. Taxes on both income and consumption discourage economic activity and could counter the increased demand generated by the basic income. However, taxes on land, natural resources, and wealth capture rent, discourage hoarding, and encourage economic activity by forcing those who hold wealth to either use it or lose it.
Note: Philippe Van Parijs, one of the top living figures in the basic income movement, says that when we are asked this question, we should not answer it. There has been no way to empirically test the general question, there have been apparently contradictory results from empirical studies of the effects of a basic income on labor force participation, and economic growth is not the main point of a basic income. Even if it were good for overall economic growth to force 5% of the population to starve, this is not a world we want to live in. However, I believe that reasonable speculation can provide us with a plausible, positive, and useful answer, so I have provided one. But remember, you take my advice over his at your own risk.
Q: Isn’t the claim of technological unemployment just the Ludite fallacy?
A: Well, it is until it isn’t. It is not hard to imagine a society where the vast majority of jobs can be done more efficiently by machines, and the the few jobs that require humans are made so efficient by machines that only a minutely small number of humans are needed to do them. Eventually, this seems inevitable. The only question is whether it will come 20 years from now or 200 years from now. Evidence that it is coming sooner rather than later can be seen in the breakdown of the arguments against technological unemployment. Traditionally, economists have said technology creates more jobs than it eliminates via two primary mechanisms. First, jobs move from one sector to another. Second, higher skilled jobs are created to oversee the machines. So, a thousand years ago, most people worked in agriculture growing food. As technology made it possible for a few people to produce enough food for the many, people moved to factories. By 150 years ago, most people were working in manufacturing making goods. As manufacturing became more efficient, people moved into the service industry. But now, we are running out of sectors. And the jobs currently being threatened by technology include not just low-end work like cashiers and laborers, but highly educated work like accountants and pilots. The rate at which technology eliminates jobs may have already surpassed the rate at which it creates jobs.
Q: Are there other ways to deal with technological unemployment besides a basic income?
A: Yes. There are six.
1. We could allow massive numbers of people to starve.
2. We could guarantee jobs that do nothing useful for society and just waste the time of the employee, such as digging holes and filling them back up again.
3. We could institute a 15-hour work week and a $25-per-hour minimum wage.
4. We could start banning new technologies.
5. We could force everyone to become a cyborg. If you can’t beat ’em, join ’em.
6. We could give everyone computers and robots to rent out, making everyone a capitalist. Of course, their machines would need to be constantly upgraded to prevent obsolescence, some people would make bad choices, and some people would have their business go under through no fault of their own. Which means we would then need to accept mass starvation or strictly regulate how people run their robot rental rental businesses or give people new machines on a regular, periodic schedule.
Or we could just give everyone a basic income.
Q: Isn’t this just communism?
A: Actually, Milton Friedman and F.A. Hayek, two of the three most important libertarian economists in history, supported a basic income. Meanwhile, the most famous person to declare that those who don’t work don’t eat was Vladimir Lenin. So in this discussion, I am the one supporting the policies of Milton Friedman, and you are the one supporting the policies of Vladimir Lenin. But please, go back to calling me a communist.
Note: This answer is snark, but the question is not serious. The serious answer is that forms of a basic income guarantee are compatible with both capitalism and socialism/communism, and that fact helps to demonstrate that “capitalism ” and “socialism” are both incoherent terms. But over usually when you hear this question, it is not a serious inquiry but an ad hominin attack. The point of the answer is simply to injure the attacker’s credibility with onlookers by demonstrating that they simply do not know what they are talking about. Bonus points if they have to ask you who Hayek, Friedman, or Lenin is.
Q: Why should working middle class people support a basic income?
A: The first reason is money. Due to extreme rates of income and especially wealth inequality that exist today, under nearly all proposed tax schemes to pay for a basic income, the vast majority of working middle class people will be net beneficiaries. But even if you are near the break even point in the upper middle class, you should support a basic income for the same reason that healthy people should support universal health insurance: You are not invulnerable. You could lose your income and all the wealth you have spent years building up through your own bad decisions, the bad decisions of the C.E.O. of the company you work for, the bad decisions of a politician, a natural disaster, an economic recession, or getting hit by truck and left with back pain that leaves you in bed five hours a day but is invisible to a disability judge. And even if disaster never strikes you, the knowledge that it could strike you constrains your freedom. When you plan for the care of an aging parent, you know how precarious your finances are. When you dream of starting your own business, you know how precarious your finances are. When you consider taking time off for a vacation or to go back to school or to finish an art project, you know how precarious your finances are. When you ask your boss for a raise, *he* knows how precarious your finances are. Now imagine making all of those choices if you knew you had a basic income.
by Guest Contributor | Sep 19, 2015 | Opinion
Dear Basic Income supporters around the globe,
Whether you are staging your first event as a new supporter of Basic Income, your country is hosting 40 different events this week as a result of a long Basic Income tradition, whether you are talking about it with your community or carrying on your national Basic Income campaigns regardless – 8th International Week is happening – thanks to you!
International Basic Income Week
Because of your efforts and cooperation we have a stunning 29 participating countries this year – across ALL continents, 20 of which are staging life events. Thank you so much for all your planning, organising and creativitiy from us at the mobilisation team: Christof, Manja, Robin (webmaster) and Barb (press officer).
Scott Santens said “UBI isn’t left or right, it is forward“ and right now it feels like we are a global movement that is taking current and future realities into account, while moving forward for human dignity and emancipation. It is a truly inspiring experience to be part of this.
Please keep your photos, sound or video files, press statements or other information about basic income in your country rolling in at this link: www.basicincomeweek.org/contact-form and https://www.facebook.com/events/421208298066517/
Interview series: https://basicincomeweek.org/category/interviews/
Official press release: https://basicincome-europe.org/ubie/2015/09/over-25-countries-call-for-a-safety-net-for-life-during-international-basic-income-week-14-20-september/
(since then 2 more countries have joined International Week, so we are up to 29 now)
Be welcome to use it, amend it, translate it for your purposes nationally and locally – if you couldn’t participate this year, this might be a way to still inform your fellows of what is happening around the world.
A little video to keep International Week rolling… https://www.youtube.com/watch?v=_V8BZxjktaY
This was inspired by Sidy’s Synchro-Performance with musicians, dancers, artists which is going ahead in Vienna today. https://www.labournetaustria.at/16-9-2015-sidyweltweites-bedingungsloses-gleiches-grundeinkommen-synchroperformance/
Music, dance and art are a universal language that unites, where words can divide – Sidy and me would like to try a global Synchro-Performance next year for 9th International Week. You are invited! Share your ideas with us: sidy@chello.at manja@firemail.de
Have a truly inspiring week,
unconditionally,
Manja Taylor
Christof, Robin, Barb and Manja – International Basic Income Week mobilisation team from UBIE
14th – 20th Sep: 29 countries from ALL continents participating!
www.basicincomeweek.org
https://www.facebook.com/events/421208298066517/
by Citizens' Income Trust | Sep 17, 2015 | Opinion
Hartley Dean, Social Rights and Human Welfare, Routledge, 2015, xiv + 194 pp, 1 138 01310 0, hbk, £95, 1 138 01312 4, pbk, £32.99
Hartley Dean will soon be starting the process of retiring as Professor of Social Policy at the London School of Economics, and this book is a worthy summary of his lifelong involvement in social rights and human welfare, first as a welfare rights adviser in Brixton, and then as an academic.
The first chapter discusses the evolution and characteristics of social rights. The second summarizes much of the material in Dean’s 2010 Understanding Human Need, and, in the context of a discussion of inequality and poverty, understands social rights as the articulation of human need. The broad range of Dean’s treatment is particularly visible in chapter 3 on ethics and social rights, where he discusses a variety of ethical theories, categorizes rights-based perspectives, and asks that ‘welfare’ should again mean wellbeing. The fourth chapter deals with a variety of challenges to the idea of social rights, and particularly the neoliberal challenge, that social rights compromise property, civil, and political rights, and the post-structuralist challenge, that social rights imply state control.
The book turns from a more theoretical to a more practical treatment of social rights at chapter 5, on the meaning of, and prospect for, global social rights. Here the broad canvas reveals even more clearly the tension between rights founded on universal principles (‘doctrinal’ rights) and rights based on experienced and expressed needs (‘claimed’ rights). Chapter 6 examines rights to work and to subsistence, and some possible relationships between them: and in this context Dean discusses arguments both for and against universal benefits. Earlier in the book he had constructed a typology of competing perspectives – liberal, moral authoritarian, communitarian, and social democratic/democratic socialist – and probably rightly sees universal benefits as fitting most easily into the liberal and social democratic/democratic socialist understandings of social rights.
Chapter 7 tackles rights to shelter, education, health, and social care. Throughout the chapter we discover conflicting rights – for instance, between the rights of parents and/or children in relation to education), and also throughout this chapter we encounter the complex relationship between the right to satisfy needs (for health, knowledge, shelter, etc.) and the right to government services designed to satisfy those needs (healthcare, education, social housing, etc.). Chapter 8 discusses rights of redress – a civil right that assumes such social rights as legal aid.
The final part of the book is titled ‘rethinking social rights’. In the cause of alleviating global poverty, chapter 9 explores the complex relationship between social rights and social development; and chapter 10 returns to the understanding of social rights as the articulation of human need and as the social means for satisfying it. Dean challenges T. H. Marshall’s construction of history, in which civil and political rights preceded social rights, by suggesting that we were social beings before we were political or civic beings, so in practical terms there were social rights before there were ever civil or political rights; and he goes on to show how, in the future, social rights will be as much a global phenomenon as a national and local one, and that the international human rights framework will be a significant factor.
Writing an index is not an easy task, and no index is perfect: but perhaps one word that ought to have been in this index is ‘contested’. It is a major theme of the book that ideas are contested: that is, that different interest groups in society will create their own definitions, ideas and processes, in order to satisfy their own needs, and that these definitions, ideas and processes might severely compromise other groups’ abilities to meet their needs.
The concept of contestation is just one example of the breadth and the depth of the discussion. The depth of the treatment as a whole suggests that the book would serve well as the textbook for a module on social rights and human welfare, and its breadth suggests that it would be a useful resource for an entire master’s degree on the subject. A complex agenda is well handled, and it is impressive how both depth and breadth are achieved without loss to either.
While Hartley Dean will soon be retiring from his full-time post at the LSE, we hope that he will not be retiring from the kind of thoughtful engagement with the theory and practice of social rights and human welfare of which this book is persuasive evidence.
[This review was first published in the Citizen’s Income Newsletter, 2015, issue 3.]
by Michael Howard | Sep 14, 2015 | Opinion
An emerging proposal for a carbon fee and dividend would yield a substantial dividend payment, eventually exceeding the amount of Alaska’s Permanent Fund Dividend, to American households. Citizens’ Climate Lobby (CCL) is proposing a revenue-neutral carbon fee. This would be collected from the companies operating hydrocarbon mines and wellheads, wherever carbon is first introduced into the economy, from which 100% of the revenue would be returned to the citizens as dividends. CCL’s proposal starts with a fee of $15 per metric ton of carbon, then would raise the fee by at least $10 per year (higher if faster carbon reduction is warranted) until environmental target reductions are met.
Using a carbon tax and dividend calculator at the Carbon Tax Center, I calculated what the individual and household annual dividends would be for selected years from 2016 (the hypothetical initial year) to 2039 (the last year available in the calculator). Households are assumed to contain an average of 2.6 people.
|
Individual |
Household |
Carbon Emissions, % below 2005 Levels |
| 2016 |
$264 |
$686 |
13 |
| 2017 |
433 |
1185 |
15.2 |
| 2025 |
1,613 |
4,194 |
30.7 |
| 2030 |
2,247 |
5,843 |
38 |
| 2039 |
$3,325 |
$8,646 |
48 |
Although not a full basic income by any means, a carbon dividend promises to be a significant addition to individual and household incomes, surpassing the average amount of the Permanent Fund Dividend in less than a decade. By 2039, it is estimated the proposed carbon fee would reduce CO2 emissions 48% from 2005 levels, substantially more than the reductions projected for the EPA’s Clean Power Plan.
That sounds impressive, but is it enough? Citing experts at the Tyndall Center for Climate Change Research in her compelling vision for remaking the economy to combat global warming, This Changes Everything, Naomi Klein claims that “our only hope” of keeping global warming below 2°C, “is for wealthy countries to cut their emissions by somewhere between 8-10 percent a year….This level of emissions reduction has happened only in the context of economic collapse or deep depressions” (21).
Kevin Anderson of the Tyndall Center maintains that there needs to be an 80% cut in emissions in the Annex 1 (wealthier) countries by 2030, if we are to meet the 2°C target, and also allow developing countries’ emissions to peak somewhat later. This, he argues further, requires a “de-growth strategy,” a planned period of reduced economic activity. He does not think that carbon pricing will suffice to reduce carbon emissions at the rate required, for the following reasons:
To summarise, if:
- reductions in emissions greater than 3-4% p.a. [per annum] are incompatible with a growing economy,
- the 2°C obligation relates to a twenty-first century carbon budget,
- a 50% chance of exceeding 2°C is adjudged an acceptable risk of failure,
- and Non-Annex 1 nations peak emissions by 2025 & subsequently reduce at ~7% p.a.,
- then the wealthier nations’ carbon budget is the global 2°C budget minus the poorer nations’ budget,
- and consequently wealthier nations must reduce emissions at 8 to 10% p.a.,
- Q.E.D. Annex 1 mitigation rates for 2°C are incompatible with economic growth
James Hansen et al., making somewhat different assumptions, also call for steep carbon emission reductions of around 6% per year.
More ambitious projections
Suppose that we need to reduce our emissions 80% by 2039. How much of a carbon fee would be needed, and how much would it yield in dividends? Starting at $20/ton, and beginning in 2016, with increments of $40/ton/year, these are the results from the Carbon Tax calculator:
|
Tax/ton |
Revenue, $ billions |
Carbon Emissions, % below 2005 Levels |
Individual Dividend (100% return) |
Household Dividend (average of 2.6 people) |
| 2016 |
$20 |
$110 |
14.7 |
$345 |
$896 |
| 2018 |
100 |
451 |
32.4 |
1,394 |
3,624 |
| 2020 |
180 |
708 |
43.2 |
2,153 |
5,599 |
| 2025 |
380 |
1,130 |
60.7 |
3,309 |
8,603 |
| 2030 |
580 |
1,419 |
70.4 |
4,010 |
10,427 |
| 2035 |
780 |
1,635 |
76.8 |
4,476 |
11,637 |
| 2039 |
$940 |
$1,785 |
80.4 |
$4,802 |
$12,485 |
Note that emissions in the US rose around 17% from 1990 to 2005, so to get emissions down to 80% below 1990 levels, the annual increase would need to be at least $45. This would, by 2039, produce emissions 82.7% below 2005 levels, with a fee of $1,055 per ton, yielding revenue of $1,770 billion and an individual dividend of $4,761 ($12,380 for a household). Presumably the lower revenue and dividends compared to the scenario with a $40 increment is the consequence of declining fossil fuel use and a lower tax base. (To reach 82.4% reductions from 2005 by 2030, Anderson’s target date, the fee increment would need to be $70/year. The maximum individual dividend in 2039 would be $4,268).
The carbon fee would constitute a steadily rising percentage of gross domestic product (GDP) in terms of revenue. If GDP were held constant at $19 trillion, the fee would rise from 0.5% of GDP in 2016 to over 9% in 2039. Even if, as is more likely, GDP rises, the fee will still rise at a faster rate than GDP. Estimates for the 2030 US GDP range from $25.5 to $38.2 trillion. The percent of GDP of the carbon fee in 2030 would thus fall between 5.6 and 1.4, respectively.
At first glance, this suggests that the carbon fee would bring a halt to growth, as it would equal or exceed the normal growth rate of the economy (around 2%). However, accounting for the fact that the revenue is being returned as dividends, the effect may be to steer growth in another direction, away from carbon energy, which will quickly become unaffordable.
Of course, all this depends on the soundness of the projections for emissions reductions at various levels of carbon fee. We have no experience with carbon fees accelerating so rapidly. One case study suggests that carbon taxes may not be as effective as one would hope: the Norwegian carbon tax, one of the highest in Europe, resulted in relatively modest reductions of carbon emissions compared to business as usual, and over the 1990s, carbon emissions rose 15%. One problem was exempting industries on account of competitiveness, and another more telling issue was the inelasticity of demand for some forms of carbon use, such as transportation. The record of British Columbia’s revenue-neutral carbon tax is more encouraging, but since it topped out at $30 per ton in 2012, it is hard to extrapolate from that case to the more ambitious targets discussed here.
In the model discussed above, there are no exemptions. But with the more ambitious fee, it may not be possible for demand to shift rapidly enough from carbon fuel to renewables, and the effect of the fee could be mainly to depress demand, and with it economic activity, as has happened in the past when energy prices rise. Then it would appear that rapid carbon emissions reductions would not be compatible with economic growth.
For basic income researchers, I will conclude by noting the tension between analyses such as this, which envision basic income as part of equitable environmental policy and at least a transition period of de-growth, and those analyses that see basic income as an economic stimulus for growth.
by Guest Contributor | Sep 9, 2015 | Opinion
The Eurozone clearly needs a structural yet flexible central bank policy instrument that can be used to kick-start the economy as and when it is needed. A miniature version of the increasingly popular basic income policy would provide exactly this type of instrument.
By Willem Sas and Kevin Spiritus, originally published in Flemish Newspaper De Tijd, translation by Will Wachtmeister.
Can anyone remember what times were like before the crisis? When “cut-backs” was a word ascribed to the 1990s. When growth rates were healthy and inflation stable. When the benefits of a unified single European currency were still plain for all to see. Memories of those times have been fading rapidly. Especially so with persistent wage stagnation, mounting inequality and interest rates that have been reduced to basically their lowest possible level. Is there really no way out?
A policy response that is often put forward is looser monetary policy, the proverbial printing press. And since 9 March, the printing press has been in full swing in Europe too. Under the established label quantitative easing (QE), the European Central Bank has, after four years of hesitating, begun spending billions on buying up assets. This involves buying up private loans just as much as government bonds. The hope is essentially that this will stimulate both private and public investment.
Unfortunately, QE will not necessarily lead to more economic investment within the European Union. Insofar as public authorities aren’t able – or allowed – to invest, insofar as the financing doesn’t reach businesses and businesses don’t want to take on loans, QE will prove a fruitless endeavour. At the same time, QE could well lead to even more debt: by stimulating the economy through credit creation, it potentially blows more air into the bubbles caused by the most recent crisis. A massive buy-up of bonds and shares will in the end also cause asset-price rises, with the benefits going mainly to larger, wealthier investors.
Helicopter money
This all means that success is far from guaranteed: the approach is fraught with risks and has damaging implications for equality. QE thus does not appear to be the best way forward for Europe. This is why there are economists who propagate a more efficient alternative, the so-called “helicopter money” approach. For as long as the economy fails to recover, newly printed money is simply distributed directly to the general population, as if it were dropped from a helicopter. Research shows that the money would be spent pretty much straight after it’s received, which would restore confidence to invest among businesses. It would also restore business confidence to take on new employees, who in turn respond by consuming more. And so the result becomes a virtuous circle.
But there are drawbacks. Sharing out helicopter money is a temporary measure that can only be adopted in exceptional circumstances. If at some point it transpires that the ECB has gone too far and created a threat of runaway inflation, it is very difficult to remove the newly created money from the economy. This is why there is a clear need for a structural and flexible policy measure which the central bank is able to use to kick-start the economy as and when it is necessary.
A variation on the helicopter theme, a monetary basic income, provides a way forward. Under this scenario, the ECB would distribute an amount of money to each citizen on a monthly basis, calculated as a percentage of average income (the amount therefore varies between countries). Let’s assume for the sake of simplicity that the amount is 400 euros a month throughout the Eurozone. It’s important that the individual Eurozone countries remain responsible for raising the 400 euros – for example by reducing benefit payments or tax allowance levels – whereupon they pay it back to the ECB.
So far, this is a neutral measure that shuffles money around without creating a stimulus. This remains the case except in times of crisis when the central bank increases the monthly payment to, say, 600 euros, until the economy recovers. Meanwhile, each national authority keeps its repayment levels fixed at 400 euros. The ECB thereby ends up printing an additional 200 euros per person per month, and this money is relatively quickly spent. As the economy recovers and growth and inflation figures rise, the basic income can be returned to the neutral level of 400 euros. In cases where the ECB had been too generous, the basic income level could even be lowered temporarily to 300 euros until inflation stabilizes. This would essentially remove money from the economy.
Viewed as a monetary policy instrument for tackling crises, this type of basic income can hardly be considered an indulgence. But there is more to it than that. The approach also does what it says on the tin: it is a miniature version of exactly the sort of basic income which increasingly features in public debate. Supporters claim that a structural basic income would provide a way of dealing with automation, growing inequality as well as the stress and agitation of everyday life. It would also enable people to be more creative and entrepreneurial.
This last point is far from a certainty and in effect represents the biggest drawback of a basic income policy. How many people would actually invest in new skills? And what will happen to the labour supply? There do exist several economic models that simulate the effects of minor reforms but when it comes to the effects of a comprehensive reform such as basic income, we’re very much in the dark.
Income shock
As long as we can’t anticipate the consequences of introducing a basic income, making a case for it will remain difficult. And because the advantages will only really be felt when basic income is set at higher amounts, introducing it step by step is just as problematic.
Here our proposal for a limited monetary basic income offers yet another opportunity. To be sure, we don’t expect an amount that guarantees a dignified life to be introduced from the outset. But our proposal does allow economists to research the effects of a large income shock. When the central bank increases the monthly payment in times of crisis, this will generate a great deal of valuable evidence. As soon as the positive effects are ascertained, the neutral-level basic income can be increased step by step, eventually reaching the point of a fully-fledged basic income.
So we have stronger guarantees of success, less risk, and more equal opportunities to boot. That’s a better idea than quantitative easing for a start.
Willem Sas and Kevin Spiritus are completing their doctorates in public economics at the Center of Economic Studies at Belgian university KU Leuven.
Credit Picture CC Bobby Hidy
by Guest Contributor | Sep 6, 2015 | Opinion
By Karen Christine Patrick
One thing learned in the caregiver realm is the range and types of disabilities and illnesses that require somebody to help, or preclude people from what is considered “normal” activities. Assessments for the levels of disability are very extensive, and most certainly go through daily activities that can be done by the person or where they need some help.
The picture in the mind that comes with the word “disability” is somebody with something visible. One of the things that happened that often made me cringe when going out socially with my daughter in her wheelchair is that some well-meaning, curious person would ask, “What’s WRONG with her?” I would say, “Nothing is WRONG with her, but she was born with a condition (etc.) and maybe share a few things, but that is the motif in many people’s minds that they see someone using things like these heavy-duty wheelchairs, cane, walker, something like that and something is WRONG. Which could result in helpful behavior, well-meaning, getting help with doors, or people making some space in the front for us. And my daughter’s condition was visible. Once I got frustrated with one the agencies I had to deal with not realizing she was an actual person, not a theoretical one, and took her out for a day out of school to bring her to said office, make them have to make space in the office for her in her wheelchair as “Exhibit A” … I really hated having to do that but I was at my wit’s end with the “deciders” in that office and this did get results.
I myself became disabled, but mine came on gradually and fit into the category of “Invisible Disabilities” and I became aware of an organization for people who “don’t look sick” as one writer put it. People in this category of disability often experience it that it’s much harder to get help or services because there is nothing to “show for it” as what happened in my Exhibit A story. Certainly, people with mental illness, don’t necessarily have physical traits to show for it. If you encounter someone with a hearing disability, you may not realize it until you notice their hearing aids. Furthermore, you might not recognize the difficulties that they face and the increased costs they have to incur when changing the batteries (if you’re interested in better alternatives, check out https://www.earpros.com/uk/hearing-aids/hearing-aid-batteries here), as well as how they lead their lives on daily basis. For cancer patients, until they are going through the visible effects of treatment, many other disorders and diseases do not “show”. There are so many people who have disorders or conditions that have no visible signs, but that doesn’t mean we can ignore or minimize their suffering. So many people struggle with disorders and conditions that may not have any physical signs, but it still doesn’t mean that we can question them about it or disregard their illness. Some of these invisible disabilities, such as mental health issues, can really affect an individual’s life. In fact, some of them even have to visit PureHempFarms online to purchase some hemp to help them manage their mental illness, so it’s important that they receive the support that they need.
Where the Basic Income Guarantee comes in is to not put people in that agonizing position of having to “prove” they are sick enough for help. They can work through their disability issues or recovery issues with dignity, having a basic way to live and not have that worry added onto the stress of what is already going on with their health. Some people have intermittent visitations of their conditions, not knowing when they are going to have debilitating bouts. Again, not fully disabling all the time, but enough during the bad times to preclude working full-time.
There is much talk in the B.I.G. advocacy community of robotics replacing jobs and that a basic income is to be the logical response to technological unemployment. To this I heartily agree because most employers have looked to their workers as “human resources” which seems an impersonal term that implies that some how people are “units” that don’t break down. Our bodies are not robotic, they can break down. Our minds, especially in this precarious age, also can suffer injury just from the stress of uncertainty as we are in times that are a changin’.
We can affect a dignified change, we can acknowledge the humanity in our changes by choosing the Basic Income Guarantee to bridge the gap between living and work as we knew it.
For more about the Invisible Disabilities Association go to invisibledisabilities.org.
For more from Karen Christine Patrick, visit her blog.
