by Karl Widerquist | Sep 17, 2019 | Opinion, The Indepentarian
The Ethics and Economics of the Basic Income Guarantee (2005) edited by Karl Widerquist, Michael Anthony Lewis, and Steven Pressman, published by Publishing is availed in a free version at this link.
This book available because most publishers allow authors and editors to post early version for free on their personal websites. That means it has lots of typos and other problems. But it’s a reasonable approximation of the final version. Please see the published version if you can. It’s available at university libraries.
Summary from 2005
This book is divided into four Parts. They cover the history of BIG, philosophical debates over the vision of society it represents, sociological and economic debates concerning its effects, and finally some practical proposals for a BIG in several countries.
The four chapters in Part One trace the history of the BIG proposal from its beginnings in the late eighteenth century to the present with special emphasis on the guaranteed income movement of the 1960s and 1970s in the United States.
Steven Pressman
In chapter 2, Fred Block and Margaret Somers examine the relationship between the welfare reform passed by the United States Congress in 1996 and Speenhamland, a British town that (in May 1795) decreed the poor were entitled to certain public assistance. As the program spread among English parishes, it generated a great deal of controversy. Critics argued that it provided relief to the able bodied, and thus reduced work effort and increased the local tax rates (to support the poor). Block and Somers revisit the Speenhamland episode. Drawing on four decades of recent scholarship, the authors show that Speenhamland policies could not have had the consequences attributed to them. They then seek to explain how the Speenhamland story became part of the accepted wisdom regarding public assistance to the poor and how it contributed to the 1996 welfare reform legislation in the United States. This argument has important consequences of BIG proposals, since it points out that income guarantees have not had negative consequences in the past and so they should not be rejected for this reason.
In chapter 3, economists John Cunliffe and Guido Erreygers focus on the historical antecedents of contemporary basic income proposals. Specifically, they focus on proposals put forth by the nineteenth century American writers Cornelius Blatchly, Thomas Skidmore, and Orestes Brownson. They argue that these writers may have been influenced by the ideas of Thomas Jefferson and Thomas Paine, American revolutionaries whose ideas about economic policy and distribution bear striking similarities to current basic income proposals.
Robert Harris gives an inside account, in chapter 4, of the politics behind the guaranteed income movement of the 1960s and 1970s. The movement grew out of dissatisfaction with the conditional welfare system that had been in place since the New Deal, which was failing to eliminate poverty either for workers or for people unable to work, and which was causing significant poverty traps. Many people on the left and right began to see the guaranteed income as a simpler and more effective system for both the working poor and those on social assistance. Nixon’s modified guaranteed income was overwhelmingly passed by the House of Representatives, but failed narrowly in the Senate thanks to opposition from both left and right and to lukewarm support from Nixon himself.
One offshoot of the guaranteed income movement was that five NIT experiments were conducted in the United States and Canada during the 1970s. These experiments divided a group of subjects into two groups. One group was part of a negative income tax plan; the other group was a control group that was subject to the regular United States income tax. The experiments were designed to measure the impact of NIT on labor force participation and marital dissolution in a rigorous scientific manner. These experiments were not only important for the basic income guarantee, but they were also the first large scale social experiments and had farreaching influence on policy research in a number of different areas. Some of the original scholars from the negative tax experiments reunite in chapter 5 to discuss their importance after 30 years. The panel members discuss the political reasons for setting up the experiments and their results. Although the results were largely positive, showing small workdisincentive effects and important effects on health, educational attainment, and well being, some politicians and pundits used the experimental findings to help quash the NIT.
Part Two examines the philosophical debate over BIG. The papers in this section of the book discuss various justifications for a BIG and compare the case for a BIG to the case for other types of income support plans.
In chapter 6, political theorist Almaz Zelleke examines political rights and BIG. Her concern is that social thinkers on both the right and left tend to agree that income policies should have work or social contribution requirements attached to them. After discussing and criticizing the arguments of thinkers such as Laurence Mead, Mickey Kaus, Anthony Atkinson and others who hold this view, she puts forth an alternative—the market should be regarded as a sphere of citizenship no less important than the polity. That is, the liberty that we grant to United States citizens is tied to the right to partake in the market as much as it is tied to the right to partake in politics. Thus, we should view income that lets people participate in the market as analogous to voting rights that let people take part in the political process. We grant people the right to vote and, likewise, the basic income should be viewed as a right to “vote” in the marketplace.
Philosopher Michael Howard’s article (chapter 7) is largely a discussion of the liberal neutrality principle associated with the philosopher John Rawls, and its relevance to the basic income debate. The neutrality principle roughly stipulates that an acceptable theory of justice cannot be biased toward any particular substantive conception of the good life. Howard’s thesis, presented with the argumentative and analytic skills philosophers are known for, is that any income policy that requires some contribution to society is biased toward those whose conception of the good life involves such contribution; a basic income isn’t biased in this way, rendering it the more just policy.
Michael A. Lewis
In chapter 8, Karl Widerquist defends basic income against the “exploitation objection,” which asserts that a basic income allows individuals to benefit from social cooperation without contributing to society, thereby exploiting those who do work. He specifically addresses Gijs van Donselaar’s version of this objection, and argues this objection has three critical flaws. First, the conclusion that a basic income is exploitive relies on holding the poor responsible for the level of scarcity in the world. Second, van Donselaar treats work rents differently than other rents. Third, van Donselaar’s definition of exploitation is unworkable in practice, and the connection between it and a case against basic income is weak.
In chapter 9, Michael A. Lewis enters the debate between basic income and the basic stake proposal put forth by Bruce Ackerman and Anne Alstot. This proposal stipulates that a lump some of $80,000 be provided to each high school graduate at age 18 if the recipient plans to attend college or age 21 if she does not plan to do so. Lewis addresses the question of whether basic income or the stake is better at promoting freedom. He suggests that if one makes assumptions associated with rational choice theory it would seem that the stake is more freedom promoting. However, he goes on to argue that there appear to be pervasive patterns in decision making that might result in people allocating their stakes in ways they might later regret, and that a basic income might be more freedom promoting because it would constrain people’s ability to make such decisions.
While Part Two is philosophical in its orientation, Part Three is empirical. The papers in this section address questions concerning the real world impact of a BIG and its alternatives.
Steven Pressman, in chapter 10, addresses one of the key tradeoffs faced in a BIG plan—the lack of incentives to work hard and make more money that are likely to occur as a result of giving people a sum of money with no strings attached. Generating greater equity with a BIG will therefore also reduce economic efficiency. If these efficiency losses are large enough, reduced efficiency would constitute a good case against BIG. Using an international dataset that stretches back over 20 years (the Luxembourg Income Study), Pressman examines the tradeoff between equity and efficiency empirically. He finds negligible efficiency losses due to government redistribution efforts, and concludes that any efficiency-equity tradeoff is likely to be small (as long as redistribution efforts remain in their current range).
In chapter 11, economist James Bryan focuses on poverty reduction as a central goal of any income policy, but also attends to the effect such policies have on work incentives. Bryan looks at the extent to which the mid-1990s welfare reforms reduced poverty by focusing on trends in poverty before the reforms, from
1993–1995, and trends afterwards, from 1995–1996. He arrives at three conclusions: (1) poverty among families with children declined in the post-reform period but the rate of decrease was slower than during the pre-reform period, (2) among poor single-mother families there were reductions in disposable income, and (3) these reductions in disposable income were only partially offset by cash and in-kind programs such as the earned income tax credit (EITC) and food stamps. Bryan argues that a basic income guarantee could decrease poverty to a larger extent while creating smaller work disincentives than the current package of the Temporary Assistance for Needy Families (TANF), workfare, food stamps, and EITC programs. He attributes this to the high benefit reduction rate in current programs compared to the lower reduction rates that would obtain in basic income plans. From an economic point of view Bryan sees two arguments against the basic income. First, the volume of transfers needed to achieve an acceptable minimum income guarantee may be very high compared to more highly targeted programs. Second, to maintain work incentives for beneficiaries, the benefit reduction rate must be low. This would, in turn, create a small net donor population, thus requiring a high marginal tax rate and generating a larger work disincentive for this group.
In chapter 12, Thierry Laurent and Yannick L’Horty examine the work incentive problems of a basic income guarantee. They argue that most previous studies of the work incentive problem take a static approach. People are thought to balance just the income from working now against the income received now from a guaranteed income plan. However, Laurent and L’Horty note that there are also dynamic considerations. People with jobs today are likely to get promotions and higher pay in the future. So the real choice is a dynamic one, where individuals must balance both the short- and long-term benefits of work against the BIG. The authors then model labor force participation in an intertemporal framework, and use data from French labor market surveys to test their model. Their results show that there are differences between short-run back to work incentives and long-term problems. They also show that there is no obvious link between short- and long-run incentive problems. Finally, their results explain why some workers may have an incentive to accept jobs that do not pay, while others do not.
In chapter 13, Stephen Bouquin presents research results on the effects of tax-credit systems in Europe that use “in-work benefits,” which are meant to be combined with the wages of the working poor. He examines the labor market policies of three European countries that have been increasingly relying on inwork benefits, including the United Kingdom (Working Tax Credit, Income Support), France (Tax Credit), and Belgium (several policies). He finds evidence of what he calls the “Speenhamland effect” on wages. That is, in-work benefits can reduce real wages, as employers capture some or all of the benefits (intended for workers) by reducing the wages they pay. Through these effects, expenditures intended to benefit poor workers end up benefiting their employers. The existence of Speenhamland effects raises serious doubt for any policy based on forcing individuals into the paid labor market.
BIG also raises practical questions. How much would a BIG cost? How can it be financed? What is the optimal level of BIG, given tradeoffs between poverty reduction on the one hand, and costs and work disincentives on the other hand? Part Four, the final section of the book, contains chapters that examine the political prospects of BIG and chapters with nuts and bolts proposals for making basic income work in various countries around the world.
In chapter 14, Nicoli Nattrass and Jeremy Seeking discuss the possibility of implementing a BIG in South Africa. South Africa is the only country in the world with a major grassroots movement pushing for BIG, and it has a unique political and economic situation that make BIG politically feasible. The authors argue that BIG has been on the agenda because of the coincidence of four main factors. First, the country already has a system of public welfare that is unusually extensive in its coverage, unusually generous in its benefits and unusually redistributive in its effects. Second, poverty persists due to unemployment and the absence of subsistence agriculture, and there is little prospect of reducing poverty through job creation or land reform in the short- or medium-term. Third, the existence of an extensive system of private welfare, through remittances sent by employed workers to rural kin, means that it is in the interests of the powerful trade union movement to support a BIG. Fourth, the extent of inequality, paradoxically, makes it easier to finance a BIG based on redistribution from the rich to the poor.
Karl Widerquist, credit: Enno Schmidt
In chapter 15, Brazilian Senator Eduardo Suplicy discusses the movement for a BIG in Brazil. Suplicy and others have been pressing for BIG at the federal, state, and municipal level since the late 1980s. The measure was twice approved by the Brazilian Senate but languished until the Workers’ Party (of which both Suplicy and President Lula are members) took control of the presidency. Success was finally achieved in January 2004 when President Lula signed a basic income bill into law. The new law gives the executive wide authority to determine the timing of the phase-in, but it authorizes the gradual introduction of a small basic income guarantee within the next eight years.
In chapter 16, political scientist Yannick Vanderborght discusses recent debates over BIG in Belgium and the Netherlands. Reviewing the various arguments both for and against the basic income, he concludes that the supporters of a basic income have an uphill battle. Vanderborght views the main obstacle to the basic income in these two countries as the widely held belief that able-bodied recipients of income assistance should make some social contribution in return for assistance. He concludes with a discussion of the so-called “participation grant,” a policy that would provide a universal grant to all citizens or residents as long as they engaged in some socially beneficial pursuit. Such a pursuit does not necessarily mean one has to sell her or his labor. Thus, providing uncompensated (by the market) care for children, or for other friends or relatives, and a host of other “outside the market” activities would qualify. Vanderborght argues that such a policy might have a more promising future than the “pure” basic income.
In chapter 17, Derek Hum and Wayne Simpson provide some cost estimates for several possible Canadian BIG programs. Employing two different definitions of poverty, Hum and Simpson estimate that a BIG to eliminate poverty in Canada would cost between $141 billion and $176 billion (or around 15 percent of Canadian GDP). This, they believe, is too costly and would not be politically acceptable in Canada. They also provide estimates of alternative BIG plans that provide income guarantees below the Canadian poverty line. These programs would cost little more than current income transfer programs because they include a negative tax or claw back of the income guarantee. Hum and Simpson find that these programs would do much less to reduce poverty and the income shortfall facing the poor. They conclude by noting that there are many possibilities between these two extremes; these plans would not be very expensive, yet would be relatively effective in reducing poverty in Canada.
In chapter 18, Randall Bartlett, James Davies and Michael Hoy explore how to set up a negative income tax in the United Kingdom. Their goal was to formulate a set of programs with a guaranteed income and a single flat tax rate that collects the same amount of money as the existing United Kingdom progressive tax system. They then test whether their negative income tax is as progressive as the current United Kingdom tax and transfer system. Their findings are that it would be relatively easy to structure a negative income tax for the United Kingdom that is more equitable than the current system and that does not require high marginal tax rates.
The chapters in this book bring the debate over basic incomes into a contemporary and eclectic context. They provide many different perspectives to the BIG proposal in specific and to antipoverty policy in general. And they show that BIG is a feasible policy alternative.
The Ethics and Economics of the Basic Income Guarantee (2005) edited by Karl Widerquist, Michael Anthony Lewis, and Steven Pressman, published by Ashgate
A free version is available at this link.
by Alastair Dunning | Sep 9, 2019 | News
Floyd Marinescu
The Canadian pressure group UBI Works is continuing its mission to demonstrate the benefits of basic income. The latest piece of work it has commissioned will research the benefits of the Canada Child Benefit.
The Canada Child Benefit offers a tax-free payment to eligible families with children under 18 years old, and according to UBI Works: “Over 1.2 million families are currently receiving an average of $680 per month which has already lifted 300,000 children out of poverty.” While the benefit has no strings attached, it could be disputed whether the Child Benefit can fully be considered a basic income given that applicants are assessed according to their income tax and benefit returns.
UBI Works is a coalition of Canadian business leaders, economists, artists, and other engaged Canadian citizens. Back in 2018, spurred by the heavily disputed cancellation of the Ontario Basic Income Pilot, UBI Works assembled 120 Canadian CEOs to declare their support for the Ontario Pilot.
The latest investigation joins three current pieces research commissioned by UBI Works – on the impact of UBI on the Candian economy; an investigation of different costing models for a national basic income, and a definition of a specific basic income policy for Canada.
by Andre Coelho | May 23, 2019 | News
Picture credit to: Bright Horizons
A few low-income families with children, in the United States, are about to receive 20 unconditional checks, and be subject to an overall health analysis, both mothers and their children. The program is called “Baby’s First Years” and is a research initiative from the New York University.
Starting next month, 1000 mothers will be randomly selected from poor households in New York, New Orleans, Minneapolis-St. Paul and Omaha (Nebraska). 400 of these mothers will be given 333 $/month, for 20 months, with no strings attached, while the other 600 study participants will only receive 20 $/month during the same period (this should be the control group). The study will focus on early-stage child development, hence the women in question will be mothers to new-born babies, but living below the federal poverty line, which for a parent in a family of four roughly equates to 1070 $/month (single income in the family). For comparison purposes, the living wage of an adult in a family of four, in New York, has been calculated as 4940 $/month (single income in the family). So, the experiment being rolled-out is testing the effects of a 7% (the percentage varies according to the living wage of the other cited cities) share of the living wage, even though it represents around 33% of the poverty line wage.
Researchers want to determine “whether money has a causal impact on children and families”. This relationship has already been established in other research studies, although less evidence exists on the impact on new-born babies and their mothers. According to Katherine Magnuson, one of the involved researchers and professor at University of Wisconsin, more than allowing these mothers to more easily buy essential products for their children, the point of the study is to know if the money can “help free up some of the mental bandwidth that gets gobbled up by living in poverty”. Again, the relationship between poverty and diminished brain functions has already been demonstrated through research, but not specifically involving mothers and their new-borns development.
The team theorizes that not only the money itself, but the simple regularity of the payments is in itself a stabilization factor, due to its predictability. That can lead to alleviating stress, hence more positive relationships between mothers and their children. In the words of Katherine Magnuson, “If you’re not worried about your bus pass, you’re going to be a lot more able to have a conversation with your 2-year-old”. That extra cash may prove enough to free up what researchers call “cognitive load”, and naturally allowing mothers to focus more on their children and their future, instead of worrying about bills to pay.
Several outcomes will be analysed, such as children’s overall health and brain activity (with EEG scans), as well as behaviour and language monitoring. IQ tests will also be applied, for children older than two-years old. Mothers will also be monitored, specially concerning their health, stress levels and interaction with their children.
Lisa Gennetian, one of the study’s lead researchers summarizes the intent of this work: “What is in the best interest of children is really what our study is designed to answer (…) I think the policy implications are much broader than UBI (universal basic income)”. That view may be a consequence of a too narrow interpretation of a broader UBI definition, but still the “best interest of children” should, in principle, have a positive impact on the adults they will one day become, and the society they will help to create.
Possible similarities may exist with the Magnolia Mother’s Trust, an initiative designed to help young African mothers in the United States, financed by the Economic Security Project.
More information at:
Leslie Albrecht, “Low-income moms in four U.S. cities are being paid $4,000 a year, with no strings attached”, Market Watch, May 12th 2019
Jessica Hagen-Zanker et al., “Understanding the impact of cash transfers: the evidence”, Overseas Development Institute, July 2016
André Coelho, “United States: The Magnolia Mother’s Trust innovates and starts a basic income-like experiment with African American women”, Basic Income News, November 11th 2018
by Guest Contributor | Apr 16, 2019 | News
Basic Income Exhibition and Youth Basic Income to be launched
Gyeonggi province, the most populous region in South Korea, will be hosting an exhibition on basic income on April 29th and 30th to coincide with the launching of its Youth Basic Income program. The program will unconditionally give one million Korean Won ($US900) in local currency per year to 24-year-old residents of Gyeonggi province.
The program was first piloted when the now provincial governor of Gyeonggi, Lee Jaemyung, was the mayor of Seongnam City. Lee Jaemyung made the expansion of his Youth Dividend program part of his winning electoral manifesto in last year’s local election, and the program will be expanded to the whole of Gyeonggi province starting this April.
The Basic Income Exhibition will largely be composed of three parts. First, a provincial fair will be held with 31 cities and counties participating where local specialties could be purchased with the local currency. Second, a promotional platform for basic income will be created, introducing its history, meaning, and experiments that have helped make it a reality. Third, a conference will be held under the subject of ‘Basic Income: A New Paradigm in the Age of Cooperation’. The conference will discuss basic income experiments and policies that are proceeding around the world, and go on to consider how basic income relates to the commonwealth, technological changes, the status of women, democracy, and the very definition of social value.
The keynote speakers of the conference are Annie Miller, co-founder of BIEN and the chair of UK Citizens’ Basic Income Trust, and Kang Namhoon, the chair of Basic Income Korea Network (BIKN), and they will give keynote addresses, respectively titled ‘From Vision to Reality: A New Age of Justice, Peace and Welfare’, and ‘Life in the Future driven by Technology Innovation and Basic Income’.
In addition, Governor Lee Jaemyung will present the outlines of Gyeonggi Province’s Youth Dividend program in a session on discussing the various basic income experiments and pilot programs around the world.
Other guest speakers of the conference include Almaz Zelleke (NYU Shanghai), Tomohiro Inoue (Komazawa University, Japan), Sarath Davala (Vice-chair of BIEN, India), Sam Manning (Y Combinator, USA). Leading members of BIKN, such as Min Geum, Nowan Kwack, Junghee Seo, Seungho Baek, Kyoseong Kim, Sophia Seungyoon Lee, Hyosang Ahn, will also attend as speakers at the conference.
The Youth Basic Income program that became the catalyst for the upcoming exhibition/conference is far from ideal, limited as it is in both the age group and amount involved. But it will be one of the biggest pilot programs of basic income so far in the world, involving some 170,000 people, and an excellent opportunity to observe the community effect of a basic income, with the results being analyzed by the Gyeonggi Research Institute.
One of the controversies surrounding Gyeonggi Province’s Youth Basic Income is that it will be given in local currency, which is only usable within the province rather than in cash, quite far from being an ideal basic income.
Despite its limitations, there are some hopes for the program. Given that the local currency can be only be used in small businesses of the province, it could stimulate the local economy and provide the base for a broader coalition in support of the basic income program, and basic income in general. Moreover, basic income can be regarded as part of a broader reimagining of society, and local currencies are a way to reconstruct social economies and could be part of that reimagining. As Thomas Paine once said, time makes more converts than reason, and while the youth basic income is limited, it can certainly be a step forward for basic income into political reality.
Hyosang Ahn (Executive Director of BIKN)
by Guest Contributor | Apr 9, 2019 | Opinion
Written by: Eduardo Matarazzo Suplicy and Mônica Dallari
This January, we discovered an extraordinary pioneer effort towards poverty eradication in poor rural villages in Kenya: the transfer of Universal Basic Income (UBI). Through the initiative of GiveDirectly, an institution created by four graduates of Harvard University and MIT, Silicon Valley institutions and other organizations contributed to the formation of a US$30 million fund to benefit about 20,000 Kenyans in the most important and thorough study about UBI in history. In the visits to rural villages in the Kisumu and Siaya areas, reports were unanimous in stating that with UBI contributed to a significant improvement in the quality of life of all the beneficiaries.
Lula da Silva on the far left; Eduardo Suplicy on the far right
Upon learning that GiveDirectly was carrying out this experiment in Kenya, we decided to write a letter to them, in which I (Eduardo) introduced myself as the author of the Brazilian Law 10.835 / 2004, which establishes the implementation, in stages, the UBI for all people in Brazil, including foreigners residing here for five years or more. As honorary co-chair of BIEN (Basic Income Earth Network), I said I would like to know about the experiment. This request was accepted by Caroline Teti, GiveDirectly’s external relations director in Nairobi.
Eduardo Suplicy visits Grameen Bank with Muhammad Yunus, in Dhaka Bangladesh. July 2007
How the UBI program works
GiveDirectly´s office in Nairobi. January 2019
As soon as we arrived in Nairobi, we met with her and started a dialogue with the coordinator of a team of 34 people who work in the call center. The call center is responsible for the quarterly contacts with each one of the 21,000 adult beneficiaries of the UBI experiment. In 2016, GiveDirectly started the pilot to provide a UBI payment in Kisumu, Siaya and Bomet counties. More than 630,000 people in these counties live below the poverty line, defined by the Kenyan government as less than US$15 a month per household member, in rural areas, and $28 a month per household member in urban areas.
For the execution of the experiment, 295 villages (14,474 residences) were randomly selected, divided into four groups:
- Control Group: 100 villages that do not receive payments;
- Long-Term UBI: 44 villages in which adults (over 18 years old) receive sufficient income for basic needs, about US$0.75 per day, or $22 per month for 12 years;
- Short Term UBI: 80 villages where adults receive sufficient income for basic needs, about $0.75 per day or $22 per month for 2 years;
- Lump Sum UBI (or UBI Cash Payment): In 71 villages, families receive UBI in the fixed amount of US$1,000 divided into two payments of $500.
The transfers are made through M-Pesa, a mobile money service created in 2007 by Safaricom, a Vodafone telephone company in Kenya. The platform enables financial transactions that are safe, fast and cheap through a cell phone, such as deposits, transfers, and savings. The platform does not need a bank account.
View of the National Park at Nairobi. January 2019
Small retailers in rural villages across the country were trained and became agents of M-Pesa services. Beneficiaries can withdraw money or shop at accredited establishments in all villages in Kenya. Those who did not have cell phones were able to purchase a low-cost GiveDirectly device. Today, 80 percent of the country’s adult population has a cell phone.
From the visits to the beneficiaries of the Kenyan experiment of UBI, we can say that the improvement in the well-being of the people is very significant. This was what we were able to witness in all the residences we visited and in the dialogue with beneficiaries of UBI. Mothers and fathers spoke of the concern to prioritize the education of children and adolescents, ensuring attendance and completion of school. This became possible due to UBI, which even helped in the hiring of auxiliary teachers. In general, our respondents stated that they were better fed and had access to a greater variety of foods.
The benefit of the UBI resulted in people being able to work more intensely and productively, especially because they were able to acquire better working equipment, such as tools, motorcycles to transport people or make deliveries, livestock (goat and cattle) to supply meat and milk, fishing equipment to get more fish in the lake to sell them, land purchasing for vegetable and fruit trees planting. These activities directly increased their income. Some families have invested in systems to better capture rainwater or solar energy collectors in order to have electricity. Households purchased better furniture, such as mattresses, sofas, tables, chairs and small electrical appliances, such as a stereo or radio. Straw roofs have been replaced with steel that contains gutters.
Sunset at Lake Victoria. January 2019
It is important to note that we do not perceive any use of alcohol or other drugs. A study by Innovation Poverty Action1, IPA, corroborates our observation since there was no increase in spending on tobacco, alcohol or gambling. The impression we have goes in the opposite direction; behaviors based on solidarity and cooperation between individuals have been reinforced.
Perhaps most remarkable was the redefinition of gender roles. Because women also receive the benefit, we hear from them how they feel freer in deciding where to spend their money, and we record reports of how couples have come to the table on UBI payday to talk about the household budget. Households frequently organize groups to pool money for a larger purchase or to assume a higher value expenditure. In Kenya, polygamy is allowed. We sometimes see that the UBI contributed to greater solidarity between the wives of one husband, and even between his widows and children.
The agility and speed provided by the digital income transfer system were also fundamental. Each beneficiary is notified by SMS when the transfer is made, being able to make purchases in the M-Pesa accredited establishments, or if she prefers, to exchange the credit for money.
City of Kisumu. January 2019
Another important development was numerous reports demonstrating a noticeable decrease in violence against women and other criminal acts, such as theft in the villages. The direct income transfer done in this way has avoided incorrect procedures and corruption.
M-Pesa Agency. January 2019
For those who want to know more about this Universal Basic Income (UBI) experiment in Kenya and other countries, please access the website. The website provides testimonials from beneficiaries of the UBI collected by the people who work in the call center, available to everyone. You will have confirmed the positive impression of this remarkable pioneering experiment on Universal Basic Income. In addition, you will have the opportunity for this remarkable and important experiment. If you would like more information, write to info@givedirectly.org.
Call Center at the GiveDirectly´s Office. January 2019
Visiting Barack Obama’s Grandmother Sarah Obama
Eduardo Suplicy visits Mama Sarah Obama, in Kogelo. January 2019
On our last day in Kenya, we visited Mama Sarah Obama, Barack Obama’s grandmother, at her farm in Kogelo, another rural village. At first, we would have only three minutes to be with her because of her age, 98 years, but we talked with Mama Sarah and Obama’s aunt, Marsat Oniango, for almost 30 minutes. Enthusiastic about the conversation, they assured me they would send President Obama a letter that I had with me, the same one I had handed to him on October 5, 2017, during a lecture in Sao Paulo.
I spoke of my enthusiasm when I watched on TV the homage Obama paid to South African President Nelson Mandela on his 100th birthday in the packed stadium of Johannesburg. In that speech, the former US president made an important statement, expressing concern about “artificial intelligence that is accelerating. Now we will have automobiles without drivers, more and more automated services, which will mean the need to provide work for all. We will have to be more imaginative because the impact of change will require us to rethink our political and social arrangements to protect the economic security and dignity that comes with work. It’s not just money that a job provides. It provides dignity, structure, a sense of place and purpose. And we will have to consider new ways of thinking about these problems, such as universal income, review of working hours, how to train our young people in this new scenario, how to make each person an entrepreneur of some level.”
I concluded by expressing my certainty that this positive experiment in the Universal Basic Income in the country of Obama’s father and grandfather, whose graves we visited on the grounds of Mama Sarah’s house, will resonate very favorably throughout the world.
Steps after the trip
Eduardo Matarazzo Suplicy
Steel Roof to capture rainwater
The fact of having experienced a real immersion in the subject of Basic Income in such a short space of time and in two very different dimensions, that is, the theoretical academic approach of the conference in Cambridge and the opportunity to make field observations during our visits to Kenya, provoked a series of reflections, which made me desire to act.
The trip was made throughout the month of January 2019, coinciding with the inauguration and first month of the government of Jair Bolsonaro. The campaign of the victorious candidate in the 2018 election, his statements after confirmation of his election and the movements of the transition process between the Temer government and the new occupants of the Planalto indicate that the new government has an economic agenda that is based on intentions to resume growth and development of the country, generate jobs and guarantee some stability in public accounts. Despite the fact that I belong to the party that opposed the Bolsonaro candidacy, I believe that certain principles of equity, income distribution, and assistance to the most excluded are values of democracy that are not exclusive to this or that political aspect. So I decided that it was time to warn President Jair Bolsonaro, Minister of Economy Paulo Guedes and the Special Secretary of the Federal Revenue of Brazil Marcos Cintra Cavalcante de Albuquerque about the pertinence to take the steps towards the Citizenship Basic Income.
Philippe Van Parijs and Eduardo Suplicy at the University of Cambridge. January 14th, 2019
Soon after coming back to Brazil, I wrote a letter to these three government officials who had just taken their first steps and offered two copies of works that I believe are fundamental to understanding the concept of basic income: My book “Citizen’s Income: The Exit is Through the Door,” and “Basic Income – A Radical Proposal for a Free Society and a Sane Economy” by Philippe Van Parijs and Yannick Vanderborght, which contains a foreword by myself.
In my argument, I stress the fact that Law 10.835 / 2004, which establishes the Citizen Basic Income, Universal and Unconditional, was approved by all the parties in both houses of the National Congress, including by the then deputy Jair Bolsonaro. I reminded the President “in case the President of the Republic wishes to comply with Article 3 of the Constitution on the fundamental objectives of the Republic of Brazil, in a manner compatible with what is expressed in its program of government, to guarantee a minimum income for all Brazilian families, as liberal thinkers like Milton Friedman argue, the most effective way to do so will be through the implementation of the Citizenship Basic Income, a concept that Friedman considered another way to apply the Negative Income Tax.”
Beneficiary receives credit by SMS. January 2019
In the letter, I also summarized some up-to-date information on the subject, such as the fact that today “more than 40 countries are debating, conducting experiments and considering the implementation of Unconditional Basic Income.” I briefly reported on the visit I had just made: “The results so far are highly promising, as I found out in person. Brazil would have all the conditions to carry out local experiments, as indeed has been the desire of several municipalities like Santo Antônio do Pinhal, Apiaí and Maricá. In the City Council of São Paulo, a Law Project of Mayor Fernando Haddad is in process, already approved in the Commissions of Constitution and Justice and Public Administration, to establish, in stages, UBI in cooperation with the state and federal governments.” Finally, I suggested that a Working Group, possibly coordinated by IPEA, to study the steps towards the Citizenship Basic Income. I stated that I had already spoken with both the Perseu Abramo Foundation of the Workers Party and the Fernando Henrique Cardoso Foundation, linked to the PSDB, who have already been willing to discuss basic income with the newly elected government.
The letter, as well as the volumes, were delivered to Marcos Cintra Cavalcante de Albuquerque, current Special Secretary of the Federal Revenue of Brazil, with whom I had a hearing on February 1, 2019. At the same time, I delivered a letter to the then president and future president of IPEA, Ernesto Lozardo, and Carlos Von Doellinger, detailing how this Working Group could be constituted and reporting my dialogue with former President Fernando Henrique Cardoso during the electoral process. “Given that a number of Presidential candidates were in agreement with this objective, we could very possibly meet the various economic teams of the various candidates to work on this subject.” Sérgio Fausto, the working coordinator of the FHC Foundation, suggested that this meeting should be held after the elections in the first half of 2019.
On the other hand, Márcio Pochmann, President of the Perseu Abramo Foundation, accepted the proposal to create a Working Group for this purpose, and two meetings of this group have already been held. I believe it will be common sense for IPEA to coordinate the efforts of these various institutions linked to the parties whose candidates have made proposals to do this.
It is up to the Government to take the suggested steps.
