by Kate McFarland | Dec 29, 2016 | News
Economist Joseph Stiglitz was awarded a Nobel Prize in 2001 for his work on information asymmetries in the market. He was Chair of the Council of Economic Advisers under President Bill Clinton and Chief Economist of the World Bank from 1997 to 2000. And he is a supporter of universal basic income (UBI).
On October 25, 2016, Stiglitz was the featured guest on Vox editor Ezra Klein’s podcast, The Ezra Klein Show. Although the question was not a focal point of the 70 minute interview, Klein did ask Stiglitz whether he favors a UBI in the United States.
The famed economist replied that he thinks UBI is a “good idea”, although he has not made up his mind about one question: if a society has limited resources, is it better to target those resources on the poor–those who need assistance the most–rather than giving an unconditional cash transfer to everyone? As Stiglitz goes on to describe, however, those who are in most need of support often cannot afford to wait weeks or months to receive it; under the current system, however, many are forced to undergo such a waiting period–given the paperwork they must complete and the bureaucracy they must navigate. Stiglitz claims that an unconditional basic income would avoid this problem.
Stiglitz seems disposed to support a UBI in a country that is rich enough to afford unconditional payments to the rich and poor alike. (He mentions the US, Switzerland, and Norway as examples of sufficiently wealthy countries.) At the same time, though, he is quick to rule out a UBI in the US as politically infeasible.
The full episode can be heard here. The question about UBI begins at 55:25 and Stiglitz’s reply lasts until about 58 minutes.
This is not the first time Stiglitz has been asked to comment on UBI. In February 2015, he was asked about technological unemployment at the World Summit on Technological Unemployment, and replied that he agreed UBI would be part of the solution–although he went on to discuss the fact that a UBI alone is not the whole solution.
Joseph Stiglitz at Asia Society New York CC BY-NC-ND 2.0 Asia Society
by Kate McFarland | Dec 19, 2016 | News
On December 1, 2016, the Volkswagen Foundation (VolkswagenStiftung) hosted a panel discussion on unconditional basic income in Hanover, Germany.
Not to be confused with the Volkswagen Group (the unaffiliated auto manufacturer), VolkswagenStiftung is a non-profit organization dedicated to research and education. The foundation is Germany’s largest private funder of research in the humanities, social sciences, and science and technology.
As part of its mission, VolkswagenStiftung hosts public events to keep the public informed of developments in a variety of fields. One of its recent events was on the topic of unconditional basic income (“bedingungsloses Grundeinkommen”):
Its advocates demand for each citizen an income independent of work and personal need. In Germany it should be between 800 and 1500 euros. The arguments of the advocates: the stigmatization of the unemployed can be eliminated, freedom for self-realization can be strengthened, and social bureaucracy can be dismantled. The opponents predict, however, that the future of the welfare state is endangered if income is no longer linked to personal performance. The principle of mutual assistance based on the principle of reciprocity would be undermined.
VolkswagenStiftung’s basic income event began with talks from two professors — Michael Opielka (Institute for Social Ecology and the Department of Social Affairs at Ernst Abbe Jena University) and Stephan Lessenich (Department of Sociology at the University of Munich) — both of whom are members of the Scientific Advisory Board of BIEN’s German affiliate, Netzwerk Grundeinkommen.
Following their opening lectures, Opielka and Lessenich joined a panel discussion and debate with two critics of basic income: Jutta Allmendinger (President of the WZB Berlin Social Science Center) and Michael Sommer (former National Chairman of the German Trade Union Federation, DGB). An article on the event from Netzwerk Grundeinkommen points out that Allmendinger has opposed UBI in previous discussions, including an exchange with the billionaire entrepreneur and UBI proponent Götz Werner. Allmendinger worried that a UBI would either be too small to be impactful or too large to be financed and to continue to incentivize work. Sommer has attacked UBI for discounting the value of work.
Audio recordings of VolkswagenStiftung’s events are available on its website.
Reviewed by Genevieve Shanahan
Photo: Herrenhäuser Gärten, CC BY-SA 3.0 John D.
by Tyler Prochazka | Dec 16, 2016 | Bios & background Info
Biography
Tyler Prochazka was born in Kansas. In high school, he got involved in competitive policy debate, which spiked his interest in government policy. In 2010, Western Kentucky University’s speech and debate team recruited him to compete on the team. Prochazka received degrees with honors in Economics, International Affairs and Asian Religions and Cultures. His honors’ thesis was a comparative analysis of Chinese and American youth political perceptions. While at WKU, he also learned Mandarin and studied abroad in China three times.
Prochazka has participated in research fellowships and internships at the American Enterprise Institute, National Center for Policy Analysis and Rand Paul’s (R-Kentucky) Bowling Green Senate office. Currently, Prochazka is completing a Master’s degree in Asia Pacific Studies at National Chengchi University in Taiwan through the Fulbright scholarship.
Advocacy
Prochazka’s interest in the basic income began while attending WKU, where he started reading about the libertarian case for a basic income in Reason magazine. In the summer of 2015, Prochazka started volunteering for the Basic Income Earth Network after watching a documentary featuring Guy Standing.
Since 2016, Prochazka has been the features editor for BI News. He has concentrated much of his research on the feasibility and implications of implementing a basic income in Asia Pacific countries. For his WKU economics thesis, Prochazka conducted an economic analysis of the minimum income guarantee in China (dibao) and the prospects of replacing the dibao with a universal basic income.
While studying in Taiwan, Prochazka is working with the Taiwanese basic income organization to plan events and promote the concept in the Asia Pacific. Prochazka also helps run the Facebook page Libertarians for Basic Income.
Capitalism and Basic Income
One of the appeals of basic income, Prochazka argues, is the positive economic impact it would have, especially as a replacement to the current welfare state. It would dramatically lower bureaucracy costs and lower effective tax rates for low-income individuals, allowing these individuals to work more if they choose.
A basic income has the potential to open the market place for everyone, making finding suitable jobs and starting businesses easier. Prochazka believes that if libertarians are serious about expanding and sustaining the free market, a basic income is a necessary step.
Media references
Article cited in Libertarian ticket could spoil Clinton party, CNN, 2016
Interviewed at New Taipei City Festival, Taiwan, 2016
Referenced in WKU sees record success in national scholarships, WBKO ABC News, 2016
Featured in WKU debaters visit Plano Elementary, BG Daily, 2013
Non-BIEN Publications
Would the Lee-Rubio Tax Plan Help Lower-Income Households?, National Center for Policy Analysis, 2015
The World in Transition: A Comparative Analysis of Youth Perceptions in China and America, WKU Honors Thesis, 2015
When you click Accept: concerns over new IT policy spark debate, WKU Herald, 2013
by Dave Clegg | Nov 16, 2016 | Opinion
The London-based Apolitical website’s article on basic income (BI) opens with “Money for nothing – it sounds like a utopia” and then looks at some examples of BI concepts that have already been applied around the world.
This phrase, “money for nothing” represents a commonly held bias that, when there is no commodity returned for the money, whether that commodity is a thing or someone’s labour, then there is no tangible value returned for the monies. This bias is widely held and promoted by many adherents of modern-day economic theories – a bias which too often dismisses, or simply ignores, the numerous personal and societal benefits that others have evaluated and documented as attributable to BI models.
The article does a fairly good job of maintaining its organizational claim of being “apolitical” in that it does not overtly favour any particular side in the issue. Yet that does not mean it has escaped the narrow-minded focus that so many politicians, their handlers, and media commentators alike have grudgingly adopted regarding the BI. In fact, the Apolitical article offers a wonderful example of the very limited ways in which the BI idea is being appraised, namely as simply a response to job automation and/or carrot-and-stick welfare programmes.
Apolitical does, occasionally make mention of the fundamental roots of a BI, roots that run far deeper than simply jobs and poverty. Yet to emphasize that a BI is simply about addressing poverty or unemployment is to overlook the very foundation of a BI – namely that such a policy is meant to be an expansion upon, and commitment to, something that should never be commodified, namely personal freedom. All other aspects of a BI flow from this fundamental premise. That is, if a nation and its people are sincerely committed to the idea of freedom itself.
The five points made by Apolitical in the above article are all legitimate and commonly discussed around the world. Yet the shallowness of these points is intricately tied to the same old penny-pinching issues that surround welfare, as well as the easy access to cheap human labour that employers have enjoyed for far too long.
Yes, a BI can help eliminate the stigma and overbearing bureaucracy associated with welfare programmes. It would also force employers to be truly competitive regarding employee wages and hours. However, the most valuable asset each and every person possesses is our time in this life. We should be the stewards of that time – not employers and not bureaucrats. It is the personal freedom provided by a BI that is truly important to everyone, not just the workforce and welfare recipients.
A BI would allow individuals to tend to family and personal concerns without the anxiety of how to survive without a “job” income during these times of personal need. For example, if a family member severely injured as the result of a car accident. The family of this person may be too young for jobs, or on very low income as they had been relying upon the injured family member for income and cannot afford a carer to help in these times. In this case, a BI would help tremendously. Some might say that they can seek a uber accident attorney Glendale or a personal injury lawyer in order to seek compensation and financial security. Indeed these cases can bring great compensation, but court cases can take time, what will the family do in the meantime? Again, a BI would allow individuals to tend to family and personal concerns should anything happen. There may be no greater freedom than to have the time and economic stability necessary to order our lives as we, ourselves, see fit, rather than as employers demand, as is becoming far too common these days.
Politicians are slowly coming to accept that individuals are the best stewards of their monies, not bean-counting governments who tend to value the beans over the people the beans are intended for.
Let us examine each of Apolitical’s five points to see how personal freedom is addressed here.
1. Governments are not thinking the same as tech optimists
Apolitical is right about this and politicians are notoriously slow to respond to social changes of any kind, never mind one of this magnitude. Yes, the tech optimists foresee an evolutionary step in human time management when robotics and automation take over the monotony and the drudgery of the repetitive and injury-prone tasks found in so many labour-intensive “jobs”. Of course, these robotic inventions will not come soon enough to stop so many of our hardworking population from getting injured. In the meantime, if you’ve been injured at work, you will likely be entitled to personal injury compensation. Hopefully, the workforce of tomorrow will mean fewer people will have to take legal action in the future. If at all an employee needs to take some legal action but do not know where to head out for the same, check for firms similar to Douglas Beam, P.A. We should create a new workforce that is far more reliable (never taking time off), disposable (without regrets or complaints), and economically more efficient than human beings.
From the technologist’s viewpoint, a BI becomes an essential aspect of employment and personal advancement because of the accelerating pace of technological advancement. Every new innovation requires that the humans who will be utilizing those innovations undergo time-consuming training and up-skilling. These advances can even lead to whole new careers for which a BI would be the springboard to pursue those educational and up-skilling goals. To tech experts, this is not “money for nothing” but instead an investment in the future of the nation, its economic infrastructure, its people and its economy.
But there is also a very real need to understand how a BI frees workers – especially those who only have labour, rather than any marketable skills or training, to sell – from the spectre of destitution and homelessness if they are unable to find work, or simply to feed and/or shelter themselves on the meager, subsistence wages offered today to unskilled labourers.
Of course, time management in this case refers only to the workplace. What is overlooked here is the personal freedom that a BI introduces into the optimist’s time management scheme. A BI would provide an individual with the economic freedom to then choose to acquire more skills or education, or to spend more time with family, or to take a much-needed break. This freedom is of great value to the individual, as well as their future prospects, but has little or no meaning to many economists.
Apolitical, however, does make a very good point about welfare reform. It is true that eradicating the expensive and needlessly patronizing welfare bureaucracies would entail huge cash savings for governments at national, provincial/state and municipal levels everywhere – savings that could be utilized far more efficiently and effectively when incorporated into a BI.
2. People already get money for nothing
Actually people get money from their government because they are deemed, by their government, to be in need and it is a government’s principal responsibility to succor to its citizens in times of need. While Apolitical talks about how “money for nothing already exists in the state pension” system, it ignores a number of other social safety net programmes such as health care, welfare, student loans, disability, make-work projects, employee subsidies, food banks, and shelters, to name a just a few of the most common.
Social safety net programmes always incur infrastructure and staffing costs associated with the policing and distribution of these monies. A BI removes the stigma associated with so many of these programmes via its universality but it cannot ignore the special needs associated with people such as the disabled, seniors, and the unemployed. Their special circumstances can easily entail more than simply a “free money” infusion involving things such as in home support, accessibility of public buildings, mobility aids, wheelchair-friendly streets and curbs, and emotional and mental supports to deal with chronic and acute complications, to name just a few.
Apolitical also mentions the Alaska Fund, a decades old statewide “free money” programme that, today, is surrounded by much controversy, with some demanding the money be used, instead, to fund state social programmes while others are happy for the money to be put directly into the hands of the people themselves.
This is a very good example of how the assets of a community – its resources, both natural and human – are the heart and soul of its economy. However, the Alaska Fund’s greatest feature is that it offers good, sound support for the premise that some of the wealth flowing from a community’s resources should be returned to the people that comprise the community.
The debate here is not whether “free money” should be distributed to the citizenry, but rather how much and in what manner.
3. The schemes in the developing world aren’t really analogous
Apolitical is absolutely right to point out that the drastically modified BI programmes implemented in Namibia, India, and Brazil cannot be directly applied in more developed areas. These programmes are largely a response to severe destitution and poverty in those countries, while here in North America the BI is framed as a response to automation and welfare inequities.
However, Apolitical does recognize that there is a self-empowerment and entrepreneurial spirit that blossoms within the poorest individuals in the above-mentioned countries once they have been freed to make their own choices of how best to utilize their time and abilities to address their own needs and interests.
These observations correlate well with Canada’s own Dauphin Manitoba Mincome BI programme, which ran for five years. Mincome was well monitored and documented at a variety of levels and interests. Documentation that highlighted the many personal advantages derived from a BI. These advantages included the reduction of both individual and family stress levels, greater ability to cope with family issues and, most importantly, noticeable improvements in children’s health and growth due to better nutrition which lead to higher learning evaluations. While some people did indeed leave the workforce, they did so to upgrade their education and skills, to attend to personal and family issues, or simply to take a much needed break.
All of these findings amount to huge social and personal savings that invariably strengthen and improve communities, yet, once again, they are not benefits that economists are able to quantify or put a monetary value on and are too often deemed to be without value.
4. It actually all comes down to incentives
Here Apolitical addresses the commonly held fear that a BI would act as a disincentive to “working,” as if “paid employment” should be every person’s preoccupation rather than the management of their lives. However, Apolitical cites Hugh Segal, a Canadian senator who has been a long-time advocate for BI programmes and who laments the very real disincentives to improving one’s life that have been built into Canada’s social programmes. This is why Senator Segal has long applauded the personal empowerment that a BI could provide to all Canadians.
It is here that Apolitical acknowledges Sam Altman of Y Combinator – a US private investment firm – who sees a BI as the seed money necessary to provide the personal freedom allowing individuals to be economically empowered to address the rapidly changing education and training demands of a technologically driven economy. Of course, Altman seems far more interested in employing a BI to address the demands of technology and its impact upon production and the workforce than in actually addressing personal freedom per se.
Apolitical is absolutely right to acknowledge that BI differs from existing, welfare-style social programmes and highlights the divide as between those who insist upon “incentives” used coercively to promote job seeking and those who support the “freedom to choose” as incentive enough for anyone.
5. It’s not utopia or bust
Apolitical wisely concludes that, if supporters of a BI succeed, “…they will establish the principle that you can simply give people money and trust them to use it in a way beneficial to themselves and, indirectly, to society.” This is a sentiment long-shared by those who advocate for BI and wonderfully demonstrates that this sentiment is central to personal freedom and the creation of an empowered population. For Apolitical and the rest of us only time will tell.
by Kate McFarland | Nov 6, 2016 | News
In the last week of September 2016, the website Ideas for India published a symposium on universal basic income, featuring essays by six well-known Indian economists.
The e-symposium was conducted by Parikshit Ghosh, Professor at the Delhi School of Economics. Contributions are as follows:
• Pranab Bardhan (University of California, Berkeley) “Basic income in a poor country“
In his contribution, Bardhan allows that a universal basic income might be unaffordable in rich countries like the US and UK. But he argues that, nevertheless, a UBI is both feasible and desirable in India. Specifically, he considers a basic income set at about 75 percent of the poverty line, which would replace some but not all welfare programs. (Bardhan mentions public education, healthcare, childhood nutrition programs, and public works employment guarantee programs as ones that are important to retain.)
In addition to countering the argument that basic income would not be affordable, Bardhan responds to the objections that the policy would undermine the value of work and that poor individuals would squander their money. He admits, however, that gaining political support poses a struggle.
Bardhan’s article is an updated and extended version of a piece written for Project Syndicate in June.
• Abhijit Banerjee (Massachusetts Institute of Technology and GiveDirectly) “Universal basic income: The best way to welfare“
Banerjee’s essay is a reprint of a piece initially published on the Indian Express in June, framed in the context of the defeat of the Swiss referendum on basic income. Banerjee argues that, despite the failure of the Swiss referendum, the debate on basic income is not over–and, specifically, India should consider UBI as a way to reduce bureaucracy and make the welfare system more efficient.
• Maitreesh Ghatak (London School of Economics) “Is India ready for a universal basic income scheme?“
In his article, originally published on NDTV, Ghatak argues that India can afford a basic income–specifically, one sufficient to bring every Indian above the poverty line–by cutting subsidies, reducing wasteful spending, and reforming the tax code. He maintains, additionally, that a basic income is not a silver bullet to eliminate poverty, and would need to be introduced in addition to (rather than in place of) other anti-poverty programs and strategies.
• Debraj Ray (New York University) “The universal basic share“
Ray develops a proposal for what he calls a universal basic share in India: a policy in which a fixed percentage of the country’s GDP is set aside to distribute to residents in the form of individual cash transfers. He admits that he has “no clue whether we have the political will to pull something like this off” but is hopeful that the ability to start with small shares might make the policy more tractable politically.
• Kalle Moene (University of Oslo) with Debraj Ray “The universal basic share and social incentives“
In a jointly authored piece with Moene, Ray expands upon the projected benefits of a universal basic share (UBS)–for social cohesion, economic growth, and even possibly sustainable development. They argue, moreover, that UBS can accomplish some of these goals more effectively than UBI.
• T.N. Srinivasan (Yale University) “Minimum standard of living for all Indians“
Srinivasan revisits a minimum income policy that was debated in India during the 1960s.
Reviewed by Robert Gordon
Photo CC BY-NC 2.0 Rishi Bandopadhay
