by Citizens' Income Trust | Jan 7, 2013 | Opinion
BIEN now stands for ‘Basic Income Earth Network’. Once every two years BIEN holds a congress, and this year’s showed just how appropriate the name now is and how inappropriate it would be to still call it the ‘Basic Income European Network’. There were participants from South Africa, Namibia, India, Japan, South Korea, the United States, Canada, Latin America, and numerous European countries. Over three hundred in all gathered for forty-eight hours of plenary sessions, workshops and panels: often six different workshops and panels at one time, with three or four speakers each, to enable all of the papers to be delivered and discussed.
The congress was titled ‘Pathways to a Basic Income’. There was a sort of pattern to the timetable. Friday’s sessions were largely on the current state of the debate, Saturday on routes towards implementation of a Citizen’s Income, and Sunday on a Citizen’s Income’s relationships with such vital themes as ecology, rights, justice, and democracy: but nothing is that tidy, and each day contained a wide diversity of presentations and discussions touching on all of those areas.
The high point was a set of presentations by Guy Standing and representatives of India’s Self Employed Workers Association on the Indian Universal Cash Transfers pilot project and on some of the interim results. Of all of the sessions that I attended this one got by far the longest applause. The other high point, though a rather lower key presentation, was the significant story of Iran’s Citizen’s Income told by Hamid Tabatabai during one of the panel sessions.
The Congress was a quite inspiring mixture of the visionary and the realistic, of the broad-brush and the detailed, of the theoretical and the practical, and Germany’s Netzwerk Grundeinkommen (Basic Income Network) is to be congratulated on organising such a highly successful event.
by Karl Widerquist | Jan 2, 2013 | Opinion, The Indepentarian
Book review of Irrweg Grundeinkommen: Die große Umverteilung von unten nach oben muss beendet werden [The Basic Income Aberration: The Great Redistribution from Bottom to Top Must be Ended] by Heiner Flassbeck, Friederike Spiecker, Volker Meinhardt and Dieter Vesper (2012), Frankfurt, Westend
Heiner Flassbeck, Friederike Spiecker, Volker Meinhardt and Dieter Vesper wrote a book with two goals. Firstly, they are against the change of income distribution in the last decades (“the great redistribution from bottom to top”). The authors’ criticism of the increasing inequality is shared by many advocates of an unconditional basic income and opens them for the basic income debate. Nevertheless – and this is the second objective of the book – the authors reject the basic income.
This economic book focuses on the question of income distribution. Quite rightly, the question of distribution is thematicized as a central economic question that cannot be separated from the economic system as a whole. “The way of distributing income is crucial for the functioning of the economy. Distribution questions are deeply political-economic questions and cannot be answered satisfactorily without being set in the context of a promising political-economic idea” (p.9).
On one side, the authors separate themselves from a widespread attitude among mainstream economists. Many economists refuse value judgments on distribution policy since these are outside the economic discipline. However their political advice (with the argument of efficiency) often includes recommendations leading to expansion of inequality that are in no way neutral for distribution policy.
On the other side, basic income advocates are admonished to support their proposals with economic presuppositions and effects on consumer possibilities of broad sectors of the population, on demand and not only on value judgments regarding distribution policy. Personal income distribution (distribution among persons) decides over the amount of consumer spending, not functional income distribution (between labor and capital). A more equal personal income distribution safeguards economic stability, as the authors emphasize, and does not only strengthen social cohesion and social peace.
The book’s proposals on improving work income and containing the low wage sector would help to a more equal distribution. However more equality in personal income distribution can also be gained by improving transfer income. Steps toward an unconditional basic income could play an important part.
- Abolishing the sanction threat against Hartz IV recipients (social benefit for long-term-unemployed connected with a lot of bureaucratic controls and workfare-requirements) strengthens the negotiating power of workers in the low wage sector. The dominant pressure of job centers on the unemployed today forces them to accept low wages. A legal minimum wage can also be neutralized through evasion-strategies (like pseudo-independence or honorary contracts) if the negotiating position of workers is not strengthened. Therefore the pressure applied by the job centers must be reduced.
- Developing the child benefit to a children’s basic income would strengthen the purchasing power of families and improve the education chances of children of financially disadvantaged parents.
- Preventing old age poverty requires tax-financed benefits for seniors that cannot depend on gainful work or legal pensions. The less old age basic security benefits are tied to conditions and bureaucratic examinations, the more they will reach the target group and help in removing hidden poverty.
Every step at preventing poverty is also a step at invigorating consumer demand. Steps toward basic income can achieve that change of distribution demanded in the book. The authors who vehemently reject the basic income do not deliver any real counter-argument.
The main argument in the book against the basic income is the reference to the decline of gainful work incentives with an unconditional income. The real core of this objection is in the possible negative repercussion of a basic income on production that is limiting the amount of a possible basic income. At the same time there are possible positive effects like better protection against economic risks, strengthening and stabilizing demand and extensive improvement of framing conditions for value creation beyond the markets (in family work, honorary posts, unpaid activities in art, culture, politics, science, software development and so forth) which also have positive influence on the gainful working life.
On account of the incalculability of the economic effects, approaching basic income gradually is recommended. Individual steps like those named above can be evaluated to draw further conclusions. Steps toward a basic income can also be understood as a learning process. In its course, the economic possibilities and consequences of a gradually increasing uncoupling of income and benefits become clear. Steps toward a basic income like those cited above are especially recommended because they would contribute concretely to improving the life of those having the hardest time and to stabilizing the economic situation. That is certainly not a wrong way.
This book review was originally published in German in a longer form on November 15, 2012 by the BIEN’s German affiliate, Netzwerk Grundeikcommen at:
https://www.grundeinkommen.de/content/uploads/2012/11/kumpmann_rezension-zu-flassbeck-et-al_15nov2012.pdf. Ingmar Kumpmann is an economist in the Saarland Chamber of Labour and a member of the academic advisory for the Netzwerk Grundeinkommen
RELATED LINKS:
Basic Income Earth Network
https://basicincome.org
Hans Christian Mueller, “Economists Argue over Distribution Question, “ November 4, 2012
https://portland.indymedia.org/en/2012/11/420507.shtml
Karl Widerquist, “Opinion: Independence, Propertylessness, and Basic Income,” November 18, 2012
https://binews.org/2012/11/opinion-independence-propertylessness-and-basic-income/
by Yannick Vanderborght | Dec 17, 2012 | Opinion
Even if the term “emancipation” was devalued by feminism to a purely female topic, its original Latin meaning remains “to discharge a slave or adult child into self-reliance.” Thereby it is not a question of competence, but rather one of having the possibility and right to take responsibility.
Hermann Hesse wrote in his novel “Steppenwolf” (1927):
The citizen is […] by his being a creature with a weak motive for living, frightened, every divulgence of himself worrying, easy to reign. Thus he set instead of power the majority, instead of force the law, instead of responsibility the voting procedure […]
However, many are afraid to be independent because they fear that they will not be able to deal with their own life. A reason for this might be that there is nobody telling them how to do things because there is no “instruction” on how to live. And for a lot of people it is more convenient to have somebody who is guilty in case of their own failure.
It seems to me that this is also the reason for fearing Basic Income: from the viewpoint of a state, there should be somebody who tells people how to live their lives to ensure that the people can live together. However, precisely Basic Income would give people self-reliance and responsibility for themselves and the community they live in. The responsibility of the state fades into the background: the main task of a state is reduced to providing people with a Basic Income.
The trouble is that in a competitive democracy with its majority principle there are apparently a lot of people who prefer to cede their self- and co-responsibility to the state. But by doing so, they force all others to cede responsibility in the same way, or they cede responsibility only to those whom they allow to take responsibility for them.
This leads to the establishment of power relations. But this power is often not based on “natural authority,” meaning that the power holders have the respective knowledge, experience and professional competence. Rather power relations are based on access to instruments of power. And today, one of these instruments is money.
Basic Income would empower those people who want to be self-reliant, but it would also force those people to be self-reliant who think they need leaders. But for such people who wanted to gain and keep power for their own purposes that would be a problem: for them, money became an easy, “humanistic” and convenient way of making people want to participate in the leaders’ goals. With a Basic Income, those leaders would have to find other instruments than money to seduce people into helping them to achieve the leaders’ ends.
Assuming the above is correct, it becomes clear why the introduction of a Basic Income scheme is so difficult – even if it is obvious that everybody needs an income floor for a living. A majority wants to have leaders and leaders do not want to lose one major instrument of their power.
However, mankind is facing enormous challenges: climate change, environmental pollution, peak oil, the dilapidation of a once intact infrastructure, and so on. To solve these problems, I think, creativity is more important than money. But if we waste all our efforts thinking about how to earn the money that contributes to these problems, we are just going to increase the tasks for the future.
Finaly, responsibility and self-reliance provided by a Basic Income could unleash an enormous creative potential, because people, freed from the struggle for subsistence, would start to ask themselves how they would like to live their lives and what they need for them.
by Guest Contributor | Dec 10, 2012 | Opinion
By Gary Flomenhotf
Not everyone follows the actions of central banks, such as the private bank cartel called the US federal reserve (the fed), but you should know what the fed is up to lately: QE3[1] PLUS! See article here. You may know that QE3 is a fed program to purchase $40 Billion in mortgage bonds per month from banks, basically taking crap off their hands and making US citizens pay for it. The latest plan is to add $45 billion in Treasury bonds to that. These are open market operations where the Treasury bonds are bought from banks, thereby increasing the money supply and supposedly lowering interest rates further.
The US Treasury pays interest on Treasury bonds, and the fed supposedly returns most of it to the US government as profit. But the fed only owns a small fraction of the US debt, much of it is owned by foreigners and banks. The government doesn’t get that interest back, and it is the cause of sovereign debt crises, when interest on governments’ debts becomes unpayable.
Just to remind people where the fed’s money comes from, the fed prints it, or nowadays types it into a computer account as a bank balance. Since the US Treasury outsourced the creation of money in 1913, the fed has produced a small part of the money supply directly, and the rest is created through fractional reserves by private banks, about 95%. This is called variously seigniorage, money creation, or monetary supply, which is a sovereign privilege of the state given over to central banks and private commercial banks worldwide. Under 100% reserve requirements, the central bank would create the entire money supply and not commercial banks. The IMF recently published a surprising essay called “The Chicago Plan Revisited” discussing this idea, first promoted by major economists in the 1920’ and 30’s. A trial balloon perhaps?
The Treasury could also issue the entire money supply as interest-free US Notes or bank balances and do away with the central bank entirely. The US Treasury has issued these notes in the past starting with Greenbacks issued by President Lincoln to finance the US Civil War. 100% reserve requirements are essential to end the loss of money creation to banks and the resultant interest paid on every dollar of money in the economy. Banks opposed the Chicago Plan in the 1930’s because it takes away their privilege of collecting interest on money they create from nothing, when they make loans using fractional reserves.
The total of QE3 PLUS is $85 Billion per month. Doesn’t sound like much these days with debts in the trillions, and derivatives in the hundreds of trillions, but let’s figure it out. Take the US population of about 315 million and divide into $85 billion and you get $270 per month or $3240 per year. How would you like that or $12,960 per year for a family of four as a basic income?
The fed is not allowed to finance citizens, states, or municipalities, only banks and the Treasury. And remember that US states are forbidden from issuing “bills of credit” by the Constitution (Article 1, Section 10, Clause 1). For more on this see Vermont currency commons website. Now this reminds me of a joke I heard when Iraq was writing their new constitution after we invaded and instituted “regime change”. “Why don’t they take our constitution, we’re not using it.” Congress is supposed to coin the money supply, not banks, as stated in Article I, Section 8, Clause 5. I see no reason to follow this prohibition since the national government isn’t following the Constitution, but let’s leave it be. States can create public banks, and these banks can issue credit that is not considered an illegal state bill of credit. States could also issue warrants or other IOUs as California has done on two occasions. See currency commons article on California.
The problem in Europe is that countries have given up their sovereign monetary policy when they joined the Eurozone, as US states did when they ratified the Constitution and joined the union in 1789. Even EU countries that haven’t joined the Euro like England, Denmark, and Sweden still let banks issue most of the money with interest, so they are at the mercy of the banksters. I suspect even Iceland, which told the bondholders to take a hike, is still letting banks create all the money with interest. Old habits die hard…
Anyone traveling to the Eastern Caribbean, for example, will find transactions taking place in Eastern Caribbean Dollars, US dollars, and Euros side-by-side without much difficulty. So there is no practical reason for countries to give away their monetary policy to a central authority. It is the interest paid on private money creation that is the problem, not the sovereign monetary authority of individual countries. For more on this see Dr. Margrit Kennedy’s website.
So what would happen if central bank quantitative easing and open market operations were redirected to basic income payments to individuals rather than loans to banks? Let’s not forget that the fed has already issued QE1 and QE2 without much result. QE1 was $1.25 trillion and QE2 was $600 billion for a total of $1.85 trillion. That is $5873 for every person in the US given to banks, in a form of “trickle-down” theory that it will eventually benefit the economy. Don’t you think it would have been more effective to pay directly in a dividend check to citizens amounting to $23,492 for a family of four? A sovereign state or country could issue its own public credit money without interest, and get out of the bankster racket that pays interest on money they create out of thin air. Guernsey did it starting in 1822. Any country or state could do it, and even issue it as an interest-free basic income, trickle-up, not “tinkle-down.”
About the author:
Gary Flomenhoft is an International Post-Graduate (IPRS) and University of Queensland Centennial Scholar and PhD Candidate at Centre for Social Responsibility in Mining. His research area is the economic value of common wealth and governance of Sovereign Wealth Funds.
Prior to enrolling at SMI, Gary was a faculty member for 11 years in Community and International Development and Natural Resources at the University of Vermont (UVM), serving as a Lecturer in Applied Economics, Renewable Energy, International Development, and Public Policy. He conducted many development projects in The Commonwealth of Dominica, St. Lucia, and Belize with students and local partners. He also originated and coordinated the Green Building Design Program at UVM.
He had a secondary appointment as a Research Associate and Fellow at the Gund Institute for Ecological Economics under Director Robert Constanza. His primary research was in public finance for the state of Vermont including green/environmental taxes, common wealth and common assets, subsidy reform, and public banking. His 2013 report on Vermont public banking formed the basis of the “10% for Vermont” legislation passed in 2014, which allocated $35 million of state funds to local investment. He directed the grant funded Green Tax and Common Assets project at the Gund Institute for seven years, where he originated the Vermont Common Assets Trust Fund (VCAT) bill, which was submitted to the legislature twice. His chapter on Vermont Common Assets appeared in the book “Exporting the Alaska Model”, which promotes the Alaska Permanent Fund and Dividend as a model for basic income around the world using Sovereign Wealth Funds.
[1] QE means quantitative easing, a fed policy of purchasing bank securities in order to increase the money supply to encourage additional lending by banks, and lower interest rates
by Karl Widerquist | Nov 19, 2012 | Opinion, The Indepentarian
My new book, Independence, Propertylessness, and Basic Income: A Theory Of Freedom as the Power to Say No, now has a release date of February 28, 2013. Although I have edited or coauthored six other books, this is the first book I’ve written all by myself. It is also the first published book in which I begin to outline—however tentatively—my theory of justice. The basic income guarantee is intimately tied up with this theory of justice, and so I would like to take this opportunity to explain some of the background that led me to write it.
I don’t know exactly when I began thinking about the ideas that made their way into this book. The general philosophical outlook is something that has been bouncing around in my head for a long time. The outlook didn’t appear as a whole at any one point; it gradually developed. My interest in social justice began when I was a kid. My parents were politically interested, liberal Christians (a rarity these days). They, my brother, my sister, and I regularly discussed politics around the dinner table. Growing up in that context in the 1970s, I was optimistic about the progress the United States had made against racism, and I began to believe that the biggest problem remaining in most democratic countries is the horrible way we treat the poor.
The television series “Free to Choose,” by Milton Friedman, first introduced me to the idea of a guaranteed income, which is now more commonly known as the basic income guarantee. He presented it mostly as a way to simplify the welfare system, but having thought about it over the years, I began to see it as the centerpiece of a just society and a serious challenge to the Left: If we really care about other people in society, we should care about them unconditionally. The effort that has so far resulted in this book is a self-exploration of why I think this perspective is so important.
As I see it, from the hanging gardens of Babylon to the modern sweatshop, one social problem occurs over and over again in different ways: advantaged people force disadvantaged people to serve them. Can this be justified? I find the social contract answer extremely dissatisfying: it’s OK to force people to do things as long as you can imagine conditions under which they would have signed a contract subjecting themselves to force.
For some time I thought I was a libertarian, but I eventually came to see the Right-libertarians, who call themselves “libertarians” in the United States, in a similar light as social contract theorists. I find their answer even more dissatisfying: it’s OK for owners to force the propertyless to do things, because someone did something before we were all born to give owners special rights over the Earth and its resources, so that the propertyless have no right to refuse the duty to serve owners. Right-libertarians talk about freedom from force, but they invite everyone to ignore the tremendous amount of freedom-threatening force involved in the establishment and maintenance of property rights to the earth and all its products. Without rectifying this issue, “libertarianism” becomes the defense of privilege at the expense of liberty.
Although these issues were important to me, I didn’t do much direct work on social justice until the mid-1990s, when Michael Lewis, Pam Donovan, and I decided to have weekly breakfasts to talk about the progress we were making on our theses. These discussions usually turned to politics, and one day we found the one thing we could all agree on was an unconditional basic income guarantee. So, Michael Lewis and I wrote a paper on it that was eventually published (about ten years later and in heavily revised form) as “An Efficiency Argument for the Basic Income Guarantee,” in International Journal of Environment, Workplace and Employment.
One paper on the basic income guarantee led to another as well as to involvement with the Basic Income Earth Network and to writing the Newsletter for the U.S. Basic Income Guarantee Network. I read a lot of impressive literature on basic income, but none of it quite seemed to articulate the reasons I thought it was so important. So, I had to explore my ideas further.
In 2001, I held a half-year fellowship at the Chaire Hoover at the Catholic University of Lovain in Belgium. By this time I had realized that my interest in economics was secondary to my interest in social justice, and I decided that the best way to work full-time on social justice was to go back to graduate school and get a doctorate in political theory. Getting a second doctorate still feels like a crazy idea, but in hindsight, it was the right thing for me. I started at Oxford in October 2002, and by April 2006 I completed a doctoral thesis entitled “Property and the Power to Say No: A Freedom-Based Argument for Basic Income,” which is my initial statement of the theory of justice as the pursuit of accord. Many of the ideas in this book appeared first in that thesis—often in a slightly different form.
I have discussed these ideas with so many friends, colleagues, students, and mentors that I can’t possibly name everyone who has influenced this book. If I’ve discussed politics or philosophy with you in my lifetime, you might have influenced this book in some way. So, thanks.
Since leaving Oxford, I have continued to rework and extend the ideas from my thesis on and off while working on other projects. Not long after Laurie Harting of Palgrave Macmillan approached me about becoming series editor for their new book series Exploring the Basic Income Guarantee, I thought about turning my thesis into a book. In the spring of 2012, I set out to do that, but as I revised it, I found that the chapters in the first half were growing and splitting into more chapters.
I finally realized that the book would be an extension of the first half of my thesis—concentrating on an exploration of the theory of freedom I call “effective control self-ownership” or “personal independence” and leaving the development of most of the rest of justice as the pursuit of accord for later works. Effective Control Self-Ownership is a theory of freedom that makes the freedom from directly or indirectly forced service central to an individual’s standing as a free person. The book defines, derives, and defends this theory of freedom in the context of the contemporary literature on freedom and justice. It examines the implications of the theory and argues that a basic income guarantee is an important tool to maintain personal independence in a modern society.
Now that the book is almost ready to be released, I still feel that it is tentative in many ways. I could spend years revising it, but it is best to get it out. Although tentative, it is a sincere expression of my beliefs on the issues discussed at this point. I hope to explore these ideas much more in the future.
-Karl Widerquist, Mojo’s Coffee House, New Orleans, Louisiana, August 2012; revised onboard a flight from Dallas to London, November 2012
by Red Renta Basica | Nov 12, 2012 | Opinion
A Popular Legislative Initiative (PLI) for a Guaranteed Citizenship Income (GCI), already being presented to the network of notaries, and once to the Catalan Parliament, will start to collect signatures for the next 4 months.
Syndicalist and collective entities giving their support to the PLI will have to make an important effort in order to get at least 50,000 signatures.
The reasons of such an Initiative:
This PLI is the fruit of many months of preparation work, to be able to answer to the important crisis situation of the Jobseeker’s Allowance (JSA). Its value is only 412 euros (far under the poverty threshold) that was brought under the Mas government, on summer 2011. It allows a right be subjective and comes to be linked to the budget’s disposition. It did not actualize, depending on Consumer Price Index (CPI), is unable to exceed International Money System (IMS) and was fixed to a maximum period of 5 years to perceive it. It puts aside people with “only” unemployment matters and not showing added social difficulties, having to live at the same place for 1 or 2 years to get it. Finally, the JSA was totally mutilated by Convergence And Union’s (CiU) government from right, and despite protestations from social organisms, the social services, syndicates and other agencies were integrated in the fiscal and financial measures Law approved on the 14th of March 2011 parliamentary session.
Consequences of such a measure:
Far from improving unemployment, poverty, and social exclusion situation of this summer 2011, the poverty rate was estimated at about 25% of the population. Nearly 32% of Catalans’ families have difficulty making ends meet. Tens of thousands persons don’t have means to live. The number of persons living in the streets, under bridges, or close to cash machines increased by 32%, and the median age of homeless people dead in the street last summer was 58 years old.
Effects researched by this Initiative:
These are reasons why the PLI for a GCI is very important in this period. Red Renta Basica [the Spanish Basic Income Network) has been present since the beginning in its elaboration. Without setting any Universal Basic Income, as defended by our association, we believe this PLI is necessary in those moments of important economic depression. The proposition considerably improves the JSA that Catalan’s government has left aside. The GCI is clearly higher than existing JSA in the different Autonomous Communities, first by its ability to get back a subjective right, second by its non-arbitrariness since it is an income with for value the level of a sufficiency income in Catalonia (about 600 euros), and finally by the fact it is given during the whole time while the recipient lacks income.
(translated by Florian Martinon)
