by Citizens' Income Trust | Sep 4, 2015 | Opinion
This book is a study of the language that OECD countries use to describe social policies: language such as ‘welfare state’, ‘social security’, and ‘safety net’. Some of the chapters are about particular countries, and some tackle transnational governance levels (such as the EU and the OECD): some are more focused on language, and some more on the
policy characteristics expressed by the language. All are informative.
As the introduction suggests, language is political and context-specific, and so similar terms sometimes describe different policies, and similar policies sometimes have different names. Such terms as ‘welfare state’ are used in such a wide variety of ways that clarity is difficult to achieve. The authors employ a broad range of disciplines in order to study language within its national contexts, and also to study how it travels – as ‘workfare’ has done from the US to the UK. All of the chapters are interested in how social policy language has changed, and in the reasons for that change.
To take two examples:
Barbier’s chapter on the EU shows how the very notion of ‘social policy’ is problematic at the equally complex ‘EU level’; how the dominance of European English in social policy research has affected social policy debate in the EU; how ‘flexicurity’, ‘activation’, ‘workfare’ and ‘social investment’ have come to flourish as somewhat vague notions; and how social policy as formulated in English by an élite Brussels group cannot hope to capture the complexity of social policy across Europe.
In his chapter, Daniel Wincott charts the history of the ‘welfare state’ concept in the UK from its origins in 1928 in a publication by William Temple to its later use during the 1950s and 60s as a description of a developed set of social policies – but, as Wincott points out, the term was not employed as a description of those policies when they were developed and rolled out during and after the Second World War. His interesting conclusion is that ‘welfare state’ has functioned as a description of a golden age that never existed in order to express dissatisfaction with the ways in which social policy has been changing during the past fifty years.
The editors’ concluding chapter shows how influential the concepts of ‘welfare state’ and ‘social security’ have been; how transnational bodies have diffused such language, along with such modern terms as ‘flexicurity’; how earlier traditions (such as ‘deservingness’) continue to influence language; and how more straitened economic conditions since the 1970s have caused convergence of social policy language around such concepts as social investment and activation.
An interesting pair of words to follow through the book are ‘universal’ and ‘universalism’. In some places they mean an ideal state of affairs to which politicians aspire; in others (e.g., p.222) they represent a plan for genuinely universal provision; and in others (e.g. p.263) they express a service’s universal availability for anyone who possesses the need that the service is designed to satisfy. In this last sense the terms might have appeared in the context of the British National Health Service. Wincott does not discuss the current UK welfare state, but if he had then he might have said that Universal Credit is nothing like universal, and that only a Citizen’s Income would be universal in the way in which that word is normally understood.
This most interesting book has opened up some important social policy questions, and we hope to see them pursued further. Maybe a future edition might ask why so many different terms – Basic Income, Citizen’s Income, Universal Grant, etc. – have been used to describe an unconditional and nonwithdrawable benefit for every individual.
[This review was first published in the Citizen’s Income Newsletter, 2015, issue 3.]
by Citizens' Income Trust | Aug 26, 2015 | Opinion
Anthony B. Atkinson, Inequality: What Can Be Done?, Harvard University Press, 2015, ix + 384 pp, hbk, 0 674 50476 9, £19.95
Politicians of all political parties tell us that inequality is a problem and that they are working to reduce it. Now they have the manual that they need: and what we all now have is a book that builds on Tony Atkinson’s lifetime of careful and relevant research, that offers analysis of the definitions and causes of inequality, that proposes policies to deal with the problem, and that shows that the policies proposed are affordable.
The first part of the book discusses the meaning of ‘inequality’, and then studies how inequality has changed during the last hundred years. A particularly important conclusion is that in the immediate postwar decades, the welfare state was ahead in the race to keep up with widening inequality of market incomes, but since the 1980s it has failed to do so – often as a result of explicit policy decisions to cut back on benefits and on coverage. (pp.67-8)
Then the economics of inequality are discussed, and the final conclusion of the first part is that in order to reduce inequality market income inequality needs to be reduced and governments need to achieve more redistribution through tax and benefits systems. The second part of the book makes detailed proposals for policy change: technological innovation to increase worker employability; a better balance of power between the different stakeholders in the economy; guaranteed public sector employment at the minimum wage; a national pay policy (including a living wage); a guaranteed positive real rate of interest on savings; a capital endowment payable at the age of majority; a sovereign wealth fund; a more progressive Income Tax; a broader tax base; an Earned Income Discount; a progressive lifetime capital receipts tax; a progressive or proportional property tax; increased Child Benefit; increased overseas development aid; and either a participation income or a renewal of social insurance. Each of the proposals is persuasively argued.
In the third part of the book, Atkinson tackles three possible objections to his proposals: that they would reduce economic growth; that globalization would make them difficult to implement; and that we wouldn’t be able to afford them. He shows that the welfare state makes a positive contribution to economic performance; that his proposals would have incentive effects in the employment market; that global competition restricts the scope for redistribution rather less than we might think; and that his proposals could be revenue neutral.
Of particular interest to readers of this Newsletter will be the social security proposals. Atkinson is well aware of the problems relating to means-testing, he regrets that so many families in the UK are so dependent on means-tested benefits, and he studies two alternative possibilities: a Participation Income, and a renewed social insurance system. In relation to Child Benefit, he would like to see the end of the tax penalty for households that include higher rate taxpayers; he would like it to be paid at a higher single rate; he would like it to be taxed; and he would like the European Union to take the initiative in establishing an unconditional income for children throughout Europe.
Atkinson then discusses a Citizen’s Income, and decides that a flat tax to fund a Citizen’s Income high enough to replace existing benefits would be at too high a rate. He has here allowed research that he conducted thirty years ago into the rate at which a flat tax would need to be set to fund a Citizen’s Income to create an inconsistency in his approach. One of the proposals in this book is for a more progressive income tax than we have now: so why expect a Citizen’s Income to be funded by a flat tax? And why not consider paying for a Citizen’s Income by reducing or eliminating the Personal Tax Allowance?
Atkinson’s solution to the dilemma that he has constructed is a Participation Income that would be paid to people making a contribution to society. He recognizes that an administrative process would be required to decide who should receive the Participation Income, but when he begins to outline the kind of casework approach that would be required we can quickly see the size of the bureaucracy and the extent of the complex regulations that would be needed. To create the kind of workable definition of ‘citizenship’ or of ‘legal residence’ that the administration of a Citizen’s Income would require would be a lot easier. Research that the Citizen’s Income Trust undertook when Atkinson first suggested a Participation Income thirty years ago suggested that the list of eligibility criteria that he outlined then would have meant that only about 1% of the population would not have received a Participation Income. This research would now need to be repeated, but the outcome would not be very different. It would surely be both easier and cheaper to pay a Citizen’s Income than to pay a Participation Income.
And then comes a further contradiction: The chapter on costings employs the EUROMOD software managed by the Institute for Social and Economic Research at the University of Essex (Professor Holly Sutherland and her colleagues are well thanked in the book’s acknowledgments). The graph on p.297 that shows the effects of a Participation Income on inequality shows no evidence of any ‘participation’ conditions having been taken into account: and it is difficult to see how a programme such as EUROMOD could take into account such social contributions as voluntary work. What appears to have been modeled is a Citizen’s Income.
An alternative to a Citizen’s Income would be a reinvigorated social insurance system, which, as Atkinson recognizes, would need to be adapted to today’s labour market. He takes as his model the new Single Tier State Pension, and suggests that other National Insurance benefits should be higher in value and should achieve greater coverage – for instance, by lasting longer – and that National Insurance Contributions should be credited for periods during which any kind of contribution is being made to society (echoing the eligibility criterion for a Participation Income). The graph showing the effects on inequality of both a Participation Income and a reinvigorated Social Insurance system suggests that the former would redistribute from rich to poor, and the latter more towards middle income households.
We hope that this well researched and clearly written book will be carefully read by anyone with any connection to the making of social policy; that we shall see implemented as many as possible of the policies for which Atkinson has provided such useful evidence and such persuasive arguments; and that the arguments both for and against a Participation Income will contribute to the increasingly vigorous
and informed debate about a Citizen’s Income.
The book contains a useful glossary and a detailed index. The publisher is to be congratulated on publishing a good quality hardback at such a low price. Other academic publishers might like to follow this example.
[This review was first published in the Citizen’s Income Newsletter, 2015, issue 3.]
by Timothy Roscoe Carter | Aug 23, 2015 | Opinion
Image via FMDam.org.
[The following is an excerpt from a book in progress, The Poverty Abolitionist’s Handbook.]
Someone who offers a question that is really a challenge, like “Why would you believe something like that?”, will likely maintain their attention for about a minute. But someone who asks a more thoughtful question, even in a social situation, will likely maintain their attention a little longer, maybe three to five minutes. Nevertheless, brevity is a virtue, and the shorter the answer, the easier it is to understand and remember. So I have limited the speaking time of all of these answers to two minutes, and most are much shorter than that.
Q: Shouldn’t we lower the cost of a basic income through means testing? How does it make sense for the government to send free money to Bill Gates?
A: The taxes that pay for a basic income are the only sensible means testing, and Bill Gates would pay far more than he received. Means testing is itself a tax on the middle class that traps people in poverty by creating a strong disincentive to work and save for those already at the margins of employment. Means testing a basic income would transform a system of just predistribution into a redistributive welfare program. Means tested welfare programs are a way for the rich to make the middle class pay to stop the poor from revolting.
Q: Can we afford a basic income?
A: The gross domestic income for the United States last year was over $16 trillion and the total population was just under 320 million, giving us a mean average income of more than $50,000 per person. The 1950s and 1960s were known as decades of great economic growth in the United States. For most of the 1950s we had a top marginal income tax rate of 90 percent, and for most of the 1960s we had a top marginal rate of 70 percent. Our current top marginal rate is 39.5 percent. We could fund a basic income of $10,000 per person on top of all our other spending with an across-the-board income tax increase of 20 percent, and our top marginal rate would be 59.5%, still less than during the 1960s. That might not be the entire way we want to fund the basic income, but it does show we can afford it, and the cost would only go down from there as we started to cut now unnecessary welfare programs and began spending less on law enforcement and health care.
Q: What other government programs would we eliminate if we had a basic income?
A: Politics would not end if we had a basic income, and this is a point of contention among basic income advocates. There are socialists who see a basic income as just one of a large number of new government programs they want to implement, and there are libertarians who believe that their arguments for lower taxes, spending, and regulations will be more compelling if there are literally no poor people who need taking care of. But there is a quick and dirty compromise that could be implemented at the initiation of a basic income that would greatly reduce other welfare spending without raising or lowering our current welfare commitments. We could leave all current welfare programs on the books, but declare that the basic income will be treated as “unearned income” for purposes of determining benefits. For a basic income of $10,000 per year, federal SSI spending would cease, and food stamps likely would as well, and subsidies for housing, education, and health care would fall dramatically. Essentially, we would be treating everyone the same as we would now if they all started to receive an annual annuity, because they would.
Q: Wouldn’t giving everyone free money cause severe inflation?
A: It would if we just printed the money and gave it away. But as long as we pay for it through taxes, the money supply would remain stable and it would be no different than if everyone got more money from working. Alaska has a small basic income and there is no evidence that it has affected their inflation rate, nor is there evidence that prices rise when the minimum wage is raised. There is a potential for a basic income to cause a rise in the price of fixed assets such as land, but that is again no different from what would happen if everyone earned more money from wages, and those gains can be recaptured through land taxes.
Potential follow up Q: But if everyone were earning more money from working, wouldn’t the inflationary pressure resulting from greater demand due to higher wages be countered by the deflationary pressure resulting from the increased production due to more work? And wouldn’t giving free money to people who do not work tip that balance?
A: A market economy is not a Field of Dreams: Customers do not come because you build things, rather things get made because customers want them. Most items that would see a surge in demand due to a basic income are food or consumer goods that see reductions in prices from the economics of mass production. The exception would be where a seller has a monopoly, or in the case of fixed assets such as land, which I discussed before. Again, Alaskans do not work for their dividends, and when the minimum wage is raised there is no corresponding rise in production, yet neither of those causes inflation.
Q: Why do you want the government to give able-bodied people the same monetary benefits as the disabled? Shouldn’t people with special needs be entitled to more money to offset their tougher lot in life?
A: No. The communist idea of “to each according to their need” is patronizing in theory and degrading in practice. Currently in the U.S., disability payments are for the survival needs of those who cannot work. They are not intended to compensate for how bad your life is with a disability, and the amount you receive is not determined by what type of disability it is or even how bad it is, as long as it is bad enough that you cannot work. How could it be otherwise? Should a blind person get more or less than a paraplegic? Should a person bedridden from pain six hours per day get twice as much as a person bedridden three hours per day? How do you prove it? Of course, people shouldn’t have to prove their disability. No matter how long for, being bedridden is an awful thing for anyone to go through. It can be extremely difficult for people to remain comfortable, so some people have to get their mattresses changed on their beds more regularly. When doing this, it’s important that carers look for the Best Latex Mattress in Australia, for example, to make sure it will be comfortable and long-lasting. This is so important for anyone who is confined to their bed. They need to be comfortable.
How can you judge who is “disabled enough”, and how do you compare one disability against another? Currently the process of applying for disability is long, arduous, arbitrary, humiliating, and demoralizing. We think we can easily tell who *really* needs our help, when the truth is that many – but certainly not all – people with traditional and obvious disabilities like blindness, deafness, and being confined to a wheelchair lead easier and more fulfilling lives than many people with invisible disabilities like depression, fibromyalgia, or chronic fatigue. Search High Quality Kratom Online – Free Shipping over $100 – Kats Botanicals if you are suffering from ailments like this and are willing to try something a little bit different to treat them. We force people who cannot work to convince skeptical judges about how pitiful their lives are and then we label them as being either lazy frauds or useless burdens. You really cannot know what another person’s life is like. You don’t know what goes on behind closed doors. Not least the silent battles that those closest to you deal with on an almost daily basis. For all you know, your next-door neighbor has been advised to take the best CBD products on the market because their stress and anxiety levels have completely taken over their lives. When it comes down to it, it’s impossible to know how others live their lives. To make someone prove they are disabled is to make them convince themselves they have no hope.
Health insurance should include paying for specific items that are needed for a specific disability, such as a motorized wheelchair for someone with severe neuropathy or para-transit services for people with epileptic seizures that make it dangerous to drive. But for our basic living expenses, we all deserve them equally, and no one should be forced to prove it, especially if it is the difference between whether or not they would be able to access buildings, since some people may require the aid of a portable wheelchair platform lift to come in and out of their homes and places of work. This type of equipment is essential for day to day living.
Q: If we gave everyone an unconditional income, would not some people just waste it, or spend it on stuff that is bad for them?
Confrontational answer: Maybe. It is their money. Do you want everyone telling you what to do with your money?
Likely follow up: But it’s *my* money. It is the money that I pay in taxes that will go to the people who do not work.
Confrontational response: First, probably not. Unless you earn significantly more than median income, you will likely be a net *recipient* of the basic income. Second, the taxes you pay are your fee for the benefits of government, such as infrastructure, protection of your life and property, and use of legal structures such as contracts, corporations, and various forms of property. Your basic income is part of your personal dividend as an equal owner of the government. Do you worry about whether your landlord will misspend what you pay for rent, or whether McDonald’s will misspend what you pay for a Big Mac?
Utilitarian answer: Maybe. But there is no evidence that the government can run people’s lives better than they can run their own. The government can cause people to make better decisions by educating them and providing resources. But when the government imposes regulations, demands paperwork, and takes enforcement action against people, the burden and stress discourages personal improvement. And experiments with direct cash transfers to the poor show they often come up with useful and responsible things to do with the money that the experts never thought of. Finally, the sanction of taking away money is counter productive. Becoming homeless almost never causes addicts to give up drugs, teenagers to study more, or the overweight to buy more nutritious foods.
Q: Wouldn’t a lot of people just stop working if they received free money?
A: Would you? A major goal of the basic income is to eliminate the poverty trap of welfare by paying people whether they work or not. Most lottery winners work. Most trust fund babies work. Basic income trials for families in poverty in the U.S. in the 60s and 70s did show a 14% work reduction. The largest cause of the reduction were teenagers who stopped working and secondary workers who became homemakers; these reductions were likely responsible for the extraordinary gains in education and health outcomes produced by the cash grants. Some primary workers with two jobs quit one, and unemployed workers took longer to find work, perhaps being more picky about finding a job that paid better and suited their skills more. Not a single case was found of a primary worker quitting all jobs and living solely off the basic income. In fact, the primary workers in recipient families still worked more than full time on average. More recent cash transfer experiments in nations with extreme poverty such as Uganda have shown *increases* in work, as people without jobs often use the money to start their own businesses. The pattern seems to be that almost all people want to spend a significant amount of time engaged in productive work, and a significant amount of time in leisure activities, and they will use whatever money they have to achieve that balance.
Q: It seems like you are striving for a BIG at a level to satisfy Maslow’s first two tiers (Physical and Safety needs). If those two are met without effort what is the incentive for a person to be societally productive instead of simply working on fulfilling their higher tier needs?
A: The ideal level of a needs-based basic income would include access to some things that go beyond Maslow’s first two levels in a strict sense, but could be conceived as being included in them in the modern world, such as transportation, communication, and gyms and parks. But roughly, yes, we would be looking at providing the first two tiers on the hierarchy.
The higher level needs are things that the government can not, or should not, provide for people. The only way the government can provide self-esteem to individuals is to give them privileges that elevate them over others. In past times and places, some people have be able to meet their self-esteem needs simply by remembering that they are an aristocrat or a Roman citizen or a Catholic or a man or a white person. But in a legally egalitarian market society, the primary path to self-esteem is financial independence. People working on meeting their self-esteem needs in a market society will want to achieve financial independence far beyond simply having their survival and safety needs met, and they will be the primary candidates for doing all of the jobs needed by society, but only at the fair wages that will not hurt their self-esteem by making them feel exploited, which they would be willing to work at to meet survival and safety needs.
Self-actualization needs are highly idiosyncratic, and whether people working on fulfilling those needs will do other productive work society demands depends on the requirements of their respective projects. If fulfilling your self-actualization needs requires you to write a novel, you can probably live off of your basic income, and you may not be motivated to do other work. If your self-actualization requires you to sail a boat to the Galapogos Islands, you probably will be motivated to go earn some extra cash. For some, their self-actualization involves building a business. These people will be actively seeking out needs of society to fill.
Those who reach transcendence will be devoting most of their time to helping society almost by definition.
by Tyler Prochazka | Aug 16, 2015 | Opinion
Addressing the issue of the universality of the basic income guarantee
by Tyler Prochazka
I recently asked American Enterprise Institute President Arthur Brooks about his thoughts on the Basic Income Guarantee (BIG). He told me that he was against the idea because there are some people in society that cannot be trusted to spend the money wisely.
This is notable since Brooks is one of the leading conservative voices advocating for a social safety net. And the simplicity of the BIG is what typically attracts many conservatives and libertarians to the idea, including Brooks’ colleague Charles Murray.
As many Americans would find objection to the universality of the BIG, it is important to address this issue head-on and either defend universality or at least offer some proposals to mediate this issue.
One of the most common objections to a BIG is that there are some people that will take the income and drop out of the workforce altogether.
Economist Ed Dolan states the evidence is actually to the contrary. He gives the example of Bruce, who lives on a boat and does odd jobs throughout the year. When given a BIG, Bruce may choose to work less so that he can play guitar and watch birds.
Although people like Bruce certainly exist, Dolan provides persuasive research to show that they are outliers; most individuals would respond to a universal BIG by working more, not less. This is because if a BIG replaced the current entitlement system, there would be greater incentive to work more since most entitlements quickly drop off as one earns more income.
However, Bruce is not necessarily the most difficult example. There are certain individuals that have lived in poverty for so long they do not necessarily know how to sustainably manage their finances and may spend BIG funds on destructive habits. Some may have severe drug or alcohol addiction, which is where the help of places like The Ohana Hawaii could be of great assistance to their health. No one wants to continue living like this, so making the most out of the specialists who can help you out could be worth it and keep you on the right path, by double checking that you aren’t taking the drugs you are addicted to (through things like this 12 panel test) and just being there if you need them, is a great help for people who are fighting their addiction!
Others may have mental disorders that could impede their ability to make positive choices.
“Irresponsible usage” of the BIG may pose a challenge to the idea of universal income, both politically and pragmatically.
On the political side, there is a paternalistic streak, for good or ill, that runs through much of the American electorate. This is why welfare reform with work requirements was passed in the 1990s. This is also why food stamps restrict the purchase of alcohol.
Thus, the main feature of the BIG – its simplicity – may also be its political downfall.
On the other hand, there is a legitimate concern about how to assist individuals that engage in what society deems “irresponsible behavior.”
A University of Pennsylvania study showed that 85 percent of homeless individuals that were placed in a home still had a home two years later and were unlikely to fall back into homelessness. In fact, the study suggested that this sort of assistance was cheaper than all of the other funds that are used to manage the homeless, such as emergency room visits and jail.
This is not perfectly parallel because it is a specific assistance–housing, in this case. However, it does illustrate that even the most vulnerable in society, the homeless, will not squander their assistance and end up back on the street.
Image via CreditCards.com.
The 100,000 Housing Campaign targets homeless people that that are most likely to die if they remain on the street. The campaign has been able to keep the vast majority of those served out of homelessness. One lesson from this campaign, though, is that they use regular checkups by social workers to ensure that these individuals are still on track.
This is one possible area where a BIG could be improved. Since most administrative costs of entitlements would be saved under a BIG, a small portion of the program could entail social work to provide free checkups and assistance to vulnerable populations that receive the BIG. The social workers could help individuals set up bank accounts, find jobs, and receive healthcare.
The form that would be used when verifying eligibility for the BIG could include questions that would be used to determine who receives automatic regular checkups by social workers.
In extreme cases where a social worker or a police officer finds individuals using their BIG to pay for debilitating alcohol or drug addictions, the BIG could be contingent on whether the individual undergoes treatment. This does not mean that the BIG recipients should undergo random drug tests, which is a failed policy. Although tests such as ehrlich reagent as well as others may still be in order for heavy users. Rather, this proposes that it may be prudent in limited instances to use the BIG as an incentive to help bring people that have clearly destructive addictions to get treatment.
In instances where an individual may have extreme mental illness or some other issue that prevents them from using their BIG to acquire basic necessities, such as housing and food, then social workers should help this individual find a caretaker of some sort and request that the BIG be administered by the caretaker on their behalf. This type of scheme should be closely monitored to ensure that most of the money is used to assist these individuals and could mandate a low ceiling for compensation of the caretaker.
Nonetheless, individuals that would completely squander the opportunity that a BIG would provide are likely to be rare. Even absent further tinkering of the BIG to prevent “irresponsible behavior,” it is still preferable to the status quo. No government system meant to alleviate poverty will be perfect. However, a BIG is probably the closest we can get.
by Guest Contributor | Aug 10, 2015 | Opinion
Busiso Moyo
[The Southern African Development Community (SADC) member states are characterized by high levels of poverty and some of the highest levels of inequality globally, albeit endowed with high levels of mineral resources. – ed.]
By Busiso Moyo
Despite being endowed with many natural resources, Sub-Sahara Africa (SSA), wherein 13 of the 14 SADC countries are located, ranks amongst the worst regions globally in terms of poverty and socio-economic inequalities. Evidently, for the region, the capitalist ‘trickle down’ effect of wealth to all citizens in the context of a neoliberal global political economy has proven to be a fallacy. As such, now more than ever, it has become imperative for African governments to prioritize social protection namely through the provision of a Basic Income Grant (BIG) for all residents furnished through universal Social Cash Transfers (SCTs).
A cursory look at SADC countries’ socio-economic circumstances clearly reveals the need for upping efforts towards social protection to ensure that the most vulnerable are safe from destitution. South Africa, the economic mecca of Africa, despite being a middle-income country, is the one of the most unequal countries in the world. People with access to wealth experience the country as a developed modern economy, while the poorest still struggle to access even the most basic services. On the other hand, since the late 90s, Zimbabwe’s economy slowed down and grounded to a halt by 2008 due to socio-political challenges that still bedevil the country to this day. Unemployment is estimated at 80% to date thus leaving the majority of people in abject poverty. Furthermore, 5.3 million people or 50% of the Zambian population falls under the poverty line coupled with the fact that 70% of Mozambicans are classified as ‘poor’. Consequently, poverty and socio-economic inequalities have left the majority of people within the SADC-region food-insecure and with many of the region’s children’s educational aspirations frazzled.
Amidst the above, South Africa has borne the brunt of regional poverty and inequalities as the net receiver of socio-political economic refugees from around Africa especially the SADC region, resulting in refugee management headaches for authorities and ills like recurrent xenophobic attacks on non-South Africans. Therefore, a SADC-wide BIG would not only serve as a buffer against poverty but would be utilized as a stabilizing force to stimulate local and regional growth in-turn curbing one-directional mass movement of people to countries like South Africa.
A universal SADC-wide unconditional social cash transfer to all citizens of no less than US$15 per month, would go a long way in curbing destitution. SCTs, as opposed to in-kind gifts, give beneficiaries the freedom to acquire what they need exactly. This freedom to choose in itself constitutes human security.
The fact that poverty is dire in SSA should not simply be left to the sphere of development practitioners with an interest in poverty-alleviation, but as an obstacle to the enjoyment of many human rights ought to be a concern of all change agents within society. For States and capital-interests within the region in particular, the role of SCTs as the best intervention strategy in the fight against poverty cannot be ignored any longer. Granted, some scholars have alluded to the fact that the notion of social cash transfers brings about dependency amongst beneficiaries and removes the impetus for seeking meaningful employment. So what? People deserve to benefit from the region’s natural resources in a non-prejudicial manner, especially in the pervasive absence of formal jobs. Nonetheless, for the half-convinced, its high-time we acknowledge that the poor are in fact good managers who already know how to do best for their families with the little they have. Many sustain the survivalist economy at the bottom of the pyramid with such wise daily financial decisions. For scholars such as Joseph Hanlon, the questioning of the frugality of the poor is tantamount to blaming the poor for their circumstances. Moreover, such feeble arguments show a lack of appreciation for the political history of SSA and its structural make up. Worse still this mindset portrays a blind endorsement of the neoliberal agenda. Remarkably, a study of European history shows that social protection came first, then economic growth. Indeed saving and/or the entrepreneurship-spirit cannot happen when the majority of people have to endure hunger-pains.
Empirical evidence of successes of SCT schemes globally abound. Brazil’s 2003 initiated Bolsa Familia SCT scheme, supporting about 12 million families, has to date decreased inequality by 17% and the poverty rate has fallen from 42.7% to 28.8%. For the South African experience, social safety nets such as the child grant have already shown that SCT schemes are capable of producing positive outcomes. Gharagozloo-Pakkala observes the following, ‘In South Africa, the child grant reduced the poverty gap by 47%; in Kenya unconditional cash transfers saw a 19% increase in primary school enrolment among ‘hard-to-reach’ children; in rural Ghana, for every one Cedi transferred, 1.50 Cedi of income can be generated in the economy”. Malawi’s Mchinji district’s SCT scheme also testifies to a positive turn of SCTs. SCTs are recorded to have “…influence[d] household productive capacity [and]…ownership of agricultural assets increased 16 per cent…”
Having shown the need for a BIG and it’s transformative power, it is necessary to conclude this piece by observing that in a region blessed with natural resources the issue of a BIG roll out to all – SADC residents, refugees, economic migrants, asylum seekers funded by proceeds from extractive industries and other actors, is not ‘alms’ giving or a charitable gesture, but is an act of economic and social justice, and most importantly an investment in the poor’s human capital!
SADC wide BIG
“Make the Change Happen!” – Support the call for a SADC BIG. Visit www.spii.org.za
Busiso Moyo is an Advocacy and Campaigns Officer with the Studies in Poverty and Inequality Institute (SPII).
by Citizens' Income Trust | Aug 2, 2015 | Opinion
Peter Barnes, With Liberty and Dividends for All: How to save our middle class when jobs don’t pay enough, Berret-Koehler Publishers, 2014, 1 62656 214 1, pbk, xii + 174 pp, £13.99
There are not enough well-paid jobs to sustain a large middle class, and Peter Barnes offers as a solution to this problem the idea that co-owned wealth could pay dividends to everyone. The Alaska Permanent Fund is the model, and the inspiration is Thomas Paine’s Agrarian Justice, in which Paine proposes an equal distribution of the income generated by the property which belongs to all of us. This is the ‘co-owned property’ that is at the heart of Barnes’ proposal; and he extends the meaning of the economist’s term ‘rent’ to include payments made to all of us in recognition of the uses that are made of our co-owned wealth.
Drivers of the changed outlook for the United States’ middle class – and the middle classes of all developed nations – are globalization, automation, and deunionization. The effect of all three of these is to reduce the proportion of the proceeds of production going to labour, and to increase the proportion going to the owners of capital ( – the main point made by Thomas Piketty in his book Capital). Economic stimulus, education, and job creation, might ameliorate the situation slightly in the short term, but automation, globalization and deunionization will defeat them in the end, as will the fact that the economic system quickly magnifies small differences in wealth into sizeable inequalities. As Barnes suggests, the system needs to be fixed, not the symptoms. One particular change that is required is that means-tested benefits need to be replaced by universal ones, but the most important change is that the rent that owners extract from assets that belong to all of us (‘extracted rent’) should be distributed to everyone (‘recycled rent’) as a Citizen’s Income
Barnes suggests several types of co-owned wealth that could be made to generate the income to pay for a Citizen’s Income: the money infrastructure, the electromagnetic spectrum, sovereign wealth funds generated by extraction royalties (as in Alaska and Norway), and the atmosphere ( – rather than ‘cap and trade’, Barnes recommends ‘cap and dividend’, in which anyone who pollutes the atmosphere has to pay, and in which what they pay is redistributed as Citizen’s Incomes).
This is a very American book, and the context in view is always the USA. For Barnes, it is the middle class that needs to be cared for, and, by implication, not the rest. The situation looks very different in the UK. Here we have a generally more egalitarian society ( – compare the universal NHS with the United States’ differentiated health systems), and the ways in which a Citizen’s Income would benefit everyone will be higher up the UK’s agenda than would be the protection of the middle class. But having said that, this is an engaging introduction to a Citizen’s Income and to how we might pay for it. Something similar for the UK and for other European countries would be welcome.
