by Francisco Nobrega | Jun 12, 2015 | Opinion
The debate and protests over the importance of an unconditional basic income policy for our time have been spreading worldwide and gathering momentum. Here in Brazil we keep an open ear due to the success of conditional transfer policies (The Bolsa Família program) and also because we have a moot 2004 law that says that such universal and unconditional money transfer is to be inaugurated in Brazil, “in steps”. Most view Bolsa Família as one such “step”. I have been following the idea for over five years together with other activists, trying to implement a basic income pilot program here, in a small city. This is a distilled reflection of my current view about how to make utopia turn into a “protopia”, a term proposed by Kevin Kelly as a “gradual improvement in humanity” or a viable utopia.
The camp of supporters in the world is diverse and we can see two distinct and extreme interpretations of the idea:
One group sees basic income as a way to increase government through social welfare and “eliminate” work that they see as exploitative and envision complete maintenance of social services and centralized decisions, besides the monthly unconditional grant, independent from work.
Another group embrace basic income as a tool to drastically reduce government, replacing the social programs with the monthly grant independent of work.
These polarized views also disclose an important characteristic of the idea: it attracts people from the entire political spectrum, something that certainly will help future implementation. There is another surprising coincidence in all basic income visions reported in writing and video: the unanimous presentation of what I will call the “classical model”: the monthly grant will be bestowed upon all: rich, middle-class, poor and unemployed. I seldom met anyone who dared to challenge the idea of rewarding people with economic means and a job. To me this is in contrast with was in fact a strategy to eliminate poverty and the attached main evil of social welfare programs: the “poverty trap”. This is a phenomenon in which you punish economic success by removing the benefit as soon as someone is employed or becomes an entrepreneur. The poverty trap creates an incentive to stay put and avoid the risk of relinquishing the subsidy and face the competitive world outside.
A basic income payment is a right for everyone without a decent earning, whatever the reason. The logical justification is that society as a whole has been unable to provide opportunities for everyone either as an entrepreneur or an employee with the government or the private sector. Additionally the increasing efficiency in production, and the great advances in microelectronics, artificial intelligence and robotics are on the way to eliminating jobs on a massive scale. Brynjolfsson and McFee1 have shown that notwithstanding a continuous rise in productivity, the last two decades exhibit a marked reduction in job opportunities. Frey and Osborne2 released a very interesting study of 702 occupations, identifying many that are on the road to extinction due to the modern trends mentioned. In the US the authors estimate that 47% of jobs are at risk of being automated within a decade or two. This will add to the jobs already lost by “off-shoring” manufactories. Also a fundamental psychological barrier exists and resides in the deeply engrained notion that income has to be linked to work. People will have to overcome this notion just as we had to overcome certain prejudices in the recent past related to slavery, torture and the rights of women and minorities, finally embracing solidarity in the economic realm.
It is our duty as a civilized society to provide a monthly grant that will allow those without means to provide for their basic needs. But the classical model of basic income is unjust in handing over cash to those who are well off. This practice could be acceptable if we suppose that a given population was living within the same level of their means. Then the grant would be a benefit equal to all. In all countries we have a centuries-old history of inequality. In Switzerland just about one citizen in 13 is poor and needs help from the state. In Brazil about one-quarter of the population is poor and are presently helped by the Bolsa Família program. The cost of benefiting everyone will be a formidable barrier to implement the idea besides being unjust. The classical model was probably born out of our prejudice against people receiving money without pay. Apparently to appease the well off, the most indignant against giving “money for doing nothing”, the classical model wants to “buy” them as beneficiaries of the idea. But we have to give cash “for doing nothing” because the affluent societies of today have to be responsible for the lack of job opportunities. Giving cash to the needy and letting them choose what to do with it has been shown to be not only just but also cost effective. Among other pilot experiments like the one in India3 it is noteworthy to remember the success of giving cash to homeless people in London4 or home for the homeless in Utah5. The excellent results cost less than the usual city expenses for caring for the homeless in both cases. The winning GiveDirectly initiative in Kenia and Uganda also reinforces the idea of addressing the poor. Many other experiments exist with excellent results.
The social services network present in all countries should be used. The first measure I propose, considering Brazil, is to remove all conditionalities linked to Bolsa Família or to unemployment benefits. The bureaucracy should analyze requests from the needy, families or individuals without income. After entering the monthly grant system the newcomer would have a generous time interval (years) before the grant expires. This longer interval will remove the “poverty trap” long enough for progress out of the grant system. In case a lack of income remains, the person/family will apply, near the end of the allotted time, to stay in the system. So whoever is in need will be helped and whoever falls into economic need will be supported. The amount paid should be enough for the basic needs of the person/family. Recipients who want to advance economically will pursue whatever full or part-time jobs are available or even start a business. The basic monthly cash should be followed with provisions of communal facilities for support and education for the beneficiaries whenever appropriate. In parallel, some of the suggestions exposed6 in the “Get America Working!” study could be implemented to reduce the cost of having workers by means of a tax rearrangement that would drastically shorten the current payroll expenses and many more jobs could be created.
Reducing economic uncertainty will have multiple benefits for society: the mental health value of reducing the anxiety and stress linked to insecurity, the social environment will be safer, and most importantly, the poverty trap will be neutralized, unleashing the creative potential of men and women.
Francisco G. Nóbrega
MD, PhD, is President of the Municipal Council for the Citizen’s Basic Income in the city of Santo Antonio do Pinhal, SP, Brazil. francisco.nobrega@gmail.com
The opinions expressed here are solely those of the author. I thank Jim Hesson for improving the English and suggestions by him and Marina P. Nobrega.
1- Race Against the Machine – how the digital revolution is accelerating innovation, driving productivity, and irreversibly transforming employment and the economy. Erik Brynjolfsson and Andrew McFee, 2011, Digital Frontier Press, Mass, USA
2- The future of employment: how susceptible are jobs to computerization? Carl Benedikt Frey and Michael A. Osborne, 2013, https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf
3- Basic Income: A Transformative Policy for India. Sarath Davala, Renana Jhabvala, Soumya Kapoor Mehta, and Guy Standing. New Delhi: Bloomsbury Publishing India, December 2014.
4- The London experiment: https://www.washingtonpost.com/opinions/free-money-might-be-the-best-way-to-end-poverty/2013/12/29/679c8344-5ec8-11e3-95c2-13623eb2b0e1_story.html
5- The Utah experiment: https://www.newyorker.com/magazine/2014/09/22/home-free
6- Get America Working! site: https://www.getamericaworking.org
by Toru Yamamori | May 16, 2015 | Research
Geoff Crocker proposes ‘a basic income funded by QE in proportion to output GDP and not counted as deficit’ as ‘the only ultimate solution’. This prescription is based on his diagnosis that ‘the delinkage of productivity and real wages is the underlying cause of the 2007 economic crisis.’
Geoff Crocker, “The Economic Necessity of Basic Income,” Munich Personal RePEc Archive, Paper No. 62941, posted 18 March 2015.
by Scott Santens | May 4, 2015 | Opinion
In a recent opinion piece published here on May 2nd, Jurgen De Wispelaere made a case for the need to change Basic Income Day to a date other than May 1st. As the organizer of the Reddit Basic Income community’s involvement in promoting Basic Income Day for the past two years, I’ve been invited to respond to his criticism. This is my response and I will start with a question.
Why does the labor movement exist?
Think about that question for a moment. What is the ultimate goal and purpose of the entire labor movement? From whence did it arise? Where is it now? Where will it be in 50 years? And how do we best respect the history of the movement as time goes on?
In a recent piece titled “Ours to Master”, Peter Frase writing for Jacobin magazine makes the case for what he refers to as “enlightened Luddism,” where there should no longer exist in the logic of labor a short-sighted push against innovative new technologies. Advancing technology should be embraced for all it is capable of achieving. If a machine can do someone’s work, better and cheaper, it should. The problem is not technology’s elimination of jobs. The problem is in not properly distributing the resulting gains. So how should labor best go about doing that? Well, according to Frase…
“Winning a share of the fruits of automation for the rest of us requires victory at the level of the state rather than the individual workplace. This could be done through a universal basic income, a minimum payment guaranteed to all citizens completely independent of work. If pushed by progressive forces, the UBI would be a non-reformist reform that would also quicken automation by making machines more competitive against workers better positioned to reject low wages. It would also facilitate labor organization by acting as a kind of strike fund and cushion against the threat of joblessness. A universal basic income could defend workers and realize the potential of a highly developed, post-scarcity economy; it could break the false choice between well-paid workers or labor-saving machines, strong unions or technological advancement.”
A few very important ideas need to be understood here. In the 21st century, the labor movement will require winning basic income as a key victory, so as to not only win the gains of technology away from only continuing to fall into the hands of owners of capital, but to actually further empower the labor movement itself through enabling a massive general strike potential the likes of which has never before existed in all of history. Additionally, by achieving the ability for all workers to say “No” to unsatisfactory wages and conditions, the bargaining power of every single worker will be increased.
In other words, basic income is not the enemy of the labor movement. It’s its best friend.
It’s for this reasoning that a day such as Labour Day in the years ahead should galvanize labor around the idea of making technology work for workers – all workers – including those involved in all forms of unpaid labor involving care work like parenting (you know, that kind of work that makes new workers). And it should do so through a 21st century fight for universal basic income.
Basic Income Day is not antagonistic to Labour Day. It is synergistic. Its purpose is not to step on the accomplishments of labor in previous centuries, but to honor them and to propel the movement into a future of even greater accomplishments. Yes, people have died for the labor movement. People died on May 1st, 1929 fighting for the rights of workers too. And they were there for the same reason a group of coal miners went on strike on May 1st, 1926. They were there for the same reason the 1st International Workers Day was organized on May 1st, 1889. They were there for the same reason workers in the US called for a general strike for an 8-hour workday on May 1st, 1886, days prior to the bombing in Chicago on May 4th. And they were essentially there for the same reason the American Equal Rights Association was formed on May 1st, 1866.
What is that reason? The ultimate reason is the answer to the question I posed at the beginning: “Why does the labor movement exist?”
The labor movement exists because it is its right to exist, because humans have a right to exist. The labor movement exists because work should not only benefit the individual worker, but all workers in solidarity and even all of humanity in ultimate solidarity, not just the owners of capital. And the labor movement will cease to exist, if it does not rally around the idea of a basic income guarantee for all. The owners of technology will see to that, and so the labor movement must come to see it as well. This is a matter of equal economic rights, and these rights must be fought for and won.
Without fighting for and winning a basic income for all, unions will continue losing power through a continuing shift in the way we all work from what was once secure full-time jobs in manufacturing that complemented a labor movement, to what is increasingly insecure part-time jobs and globalized freelance labor involving zero-hour contracts and continually varying schedules. What work is shifting to makes it extremely difficult to gain leverage over capital.
The labor movement needs basic income if it is to not only survive but flourish. Workers need the ability to choose to work for themselves and to decline working for others, and that is only possible through basic income. Workers also should be able to benefit from technological gains, through either increased incomes or decreased work hours or greater benefits or even ownership. Working for others should be a choice, and that choice needs to be won by workers for all workers, whether traditionally seen as work or not.
That is universal solidarity and that is Basic Income Day.
I also personally see Basic Income Day as far more respectful to all that workers have fought for over the years – and some even died for – than to watch the modern labor movement continue fighting to work instead of for the freedom from work, or to let the labor movement fade away entirely as human labor gets replaced by machine labor.
What is the purpose of a labor union, anyway? I mean, when we get down to the core aim. Well, what is the purpose of a car company? The CEO who believes a car company’s purpose is to make cars is actually both incorrect and short-sighted. The real purpose of a car company is to enable the transportation of its customers in a way that always improves. Getting stuck on an existing means of providing transport, such as a car, is an obstacle to progress. A company should always seek ways to improve quality for its consumers. Cars are not the endpoint of the how to get a consumer from point A to point B problem, and the company that fails to see this will fail as a company because another company will innovate a new and better way.
It’s for the same reasoning that unions should stop to consider their own purpose. Is the purpose of labor unions to perpetuate themselves in current form? Is their purpose to increase wages and decrease hours through greater bargaining power for only those who are members? What will happen to labor unions in a world that no longer requires human labor? Is there a desire to celebrate May 1st, 2050 looking back at how people used to be able to live good lives, back when labor unions still existed?
The labor movement needs to recognize what year it is, just as all the rest of us do. Technology and globalization exist and we must recognize the effects these are already having on all of us. Basic income is the real “fight of the century”, and labor must not only join the fight, but lead it. If a truly universal basic income is to be won, in a way that grows over time to be more than basic, it must come from the left. The right, although also supportive of basic income, seems more likely to support a version that favors capital over labor. To be won in progressive form as a growing share of continually increasing national productivity will be a fight for the left to win.
Winning this fight for a universal basic income will begin at step one and that is realizing basic income is what the labor movement has actually been fighting for all along, without even knowing it – the right of a human being to the fruits of one’s own labor and to life itself.
We all have the right to greater bargaining power. We all have the right to never again need to worry about our next meal or about a roof over our heads. We all have the right for our labor to be replaced by machines and to benefit from this replacement. And so we all have the right to a basic income.
That’s the message of Basic Income Day, and it’s a message for all workers, past and present, to convey every Labour Day, and International Workers’ Day, and May Day from now until the day we come together to remember how we all once were compelled to labor for others in order to live.
by Roland Duchatelet | Apr 27, 2015 | Opinion
Introduction.
This budget assumes public finance all levels combined, and no change in overall tax income, which is currently 4131 billion $.
Today, no more than 8% of the population is required to produce all agricultural products, industrial products and buildings required. That is why the state needs to distribute purchasing power to 100% of the population. Jobs in the service sector will be triggered by the purchasing power (the current doctrine is that we should create jobs to generate purchasing power, but that is an instable system).
This increased efficiency has created a societal system with can create welfare and therefore has a huge common, “social”, capital. Every citizen should get a dividend from that capital. We call it the social dividend or “Basic Income Grant”; an income which we don’t need to work for, just like rich people live from their heritage. All citizens get this social dividend. Some part in cash, some part in kind. The amount in cash depends on their age (see table in the budget).
The amount in kind is given in education vouchers, healthcare vouchers and “coaching” vouchers. Citizens choose their education, healthcare and coaching service provider who gets money from the “social dividend in kind” fund, provided by the state budget.
Both education and healthcare will see drastic changes in the coming years, due to the advent of the Internet. With the number of internet service providers like Spectrum (check out Spectrum internet pricing here), Xfinity, and similar others providing affordable internet plans, users can have access to information of any kind at their fingertips. The country will witness an unprecedented increase in education and healthcare – entrepreneurs.
Every citizen will have the right to be “coached”, which will help all citizens to address problems and opportunities in their lives. This coaching system will hugely reduce criminality and improve productivity.
Since working people will get a social dividend of 500 $ per month, somebody earning 1500 $ net now would have the same total income if he/she gets a net salary of 1000 $ net. In practice, the pay check will mention BIG: 500 $ and Work income: 1000 $ instead of 1500 $ work income now. That is why the in the budget figures, the cost for public servants, but also workers in education and healthcare seems low: a part of their salary is paid, so to speak, by the BIG.
|
BIG |
BIG |
|
|
|
|
|
|
|
| Age |
cash |
vouchers |
total |
number |
cash dividend |
coaching |
|
|
|
|
$ pp pm |
$ pp pm |
$ pp pm |
million |
billion $ p year |
billion $ p y |
billion $ |
|
|
| 0-17 |
150 |
300 |
450 |
75 |
135.0 |
270.0 |
|
|
|
| 18-25 |
250 |
300 |
550 |
41 |
123.0 |
147.6 |
|
|
|
| 26-67 |
500 |
300 |
800 |
169 |
1014.0 |
608.4 |
|
|
|
| 67 + |
1000 |
300 |
1300 |
35 |
420.0 |
126.0 |
|
|
|
|
|
|
|
320 |
1692.0 |
1152.0 |
2844.0 |
17.8% |
GDP |
Other public expenses:
| public service employees |
|
|
|
|
|
| Net |
$ per month |
$ cash |
total |
total |
employed |
billion $/y |
|
|
extra salary |
social |
cash |
compen- |
million |
budget |
|
|
|
dividend |
salary |
sation |
|
|
|
| national administration |
2450 |
500 |
2950 |
3450 |
2.5 |
74 |
|
| local admin |
2150 |
500 |
2650 |
3150 |
5 |
129 |
|
| Army |
1650 |
500 |
2150 |
2650 |
0.6 |
12 |
|
| police + |
1750 |
500 |
2250 |
2300 |
3 |
63 |
|
| Justice |
1950 |
500 |
2450 |
2950 |
0.3 |
7 |
|
|
|
|
|
|
11.4 |
284.4 |
284.4 |
| military excluding personnel |
|
|
|
|
275 |
| Interest payments |
|
|
|
|
|
230 |
| Public investments and current purchases |
|
|
|
500 |
| Total public expenditure except loan repayments |
|
|
|
4133.4 |
Within the BIG, a value of 1152 billion $ is paid in kind, in the form of vouchers. These vouchers go to service providers who get cash for it from the government budget. The service providers use this money to pay the extra salary over the BIG to nearly 25 million people employed by those service providers in education, health care and coaching. The demand side of these services is completely subsidised. The offer side is market driven while the government needs to define the rules.
|
|
|
total |
total net |
employed |
billion $ p y |
|
|
|
cash |
compensation |
million |
budget |
| education |
2200 |
500 |
2700 |
3200 |
8 |
211 |
| healthcare |
2200 |
500 |
2700 |
3200 |
13 |
343 |
| coaching |
2200 |
500 |
2700 |
3200 |
3.7 |
98 |
|
|
|
|
|
24.7 |
652.08 |
| products and services relating to healthcare, education and coaching |
500 |
| cost to be covered by BIG vouchers |
|
|
|
1152.08 |
by Roland Duchatelet | Apr 6, 2015 | Opinion
Introduction.
This budget does not take into account the debt problem. The author thinks that the only realistic way out of the crisis is to give a debt moratorium of 5 years and discuss that topic 3 years from now.
The depth of the Greek crisis is an opportunity to depart from the classical views regarding the organisation of a state, dating back to the 1950’s, to implement a system taking into account the two recent and biggest revolutions in mankind:
- the human brain aid (computers, pda ..) replacing in part the brain power of humans, like motors did replace the muscles of Man and horses 200 years ago.
- The word wide free and fast communication network.
Today, only 8% of the population is needed to produce everything: food, industrial products and buildings. The model of the fifties is “job-centric”. The model presented here is the model of 2015: it is based on distribution of purchasing power. Jobs will follow the purchasing power (the current doctrine is that we should create jobs to generate purchasing power), for those who are still thinking in terms of jobs.
Greece, like many other countries, has a long history leading to 2015, the age were machines largely replace man to produce goods. Any citizen has the right to benefit from the heritage of his country, which is now capable to produce all goods we need with just 8% of the population.
We have created a huge social capital. Every citizen should get a dividend from that capital. We call it the social dividend or “basic income”, an income where we don’t need to work for, just like rich people live from their heritage. All citizens get this social dividend. Some part in cash, some part in kind. The amount in cash depends on their age (see table in the budget).
The amount in kind is given in education checks, healthcare checks and “coaching” checks. Citizens choose their education, healthcare and coaching service provider who gets money from this “social dividend in kind” fund within the state budget.
Both education and healthcare will see drastic changes the coming years, due to aforementioned massive global revolutions. The country will witness an unprecedented increase in education and healthcare – entrepreneurs.
Those services may even attract customers from abroad.
Every citizen will have the right to be “coached”, which will help all citizens to address problems and opportunities in their lives. This coaching system will hugely reduce criminality and improve productivity.
Since working people will get a social dividend of 350 € per month, somebody earning 1100 € net now would have the same total income if he/she gets a net salary of 750 €. The basic income system makes labour less expensive for the employer, the employer being public or private.
That is why the in the budget figures, the cost for public servants, but also for education and healthcare looks so low: a part of their salary is paid, so to speak, by the social dividend.
| social security |
social dividend : basic income |
|
|
| age |
cash |
cheques |
total |
number |
cash dividend |
coaching |
|
|
€ pp pm |
€ pp pm |
€ pp pm |
|
billion €/year |
billion €/y |
billion €/y |
| 0-17 |
75 |
50 |
125 |
2270000 |
2.0 |
1.4 |
|
| 18-25 |
250 |
50 |
300 |
1180000 |
3.5 |
0.7 |
|
| 26-60 |
350 |
50 |
400 |
5130000 |
21.5 |
3.1 |
|
| 61-67 |
400 |
50 |
450 |
1020000 |
4.9 |
0.6 |
|
| 68 + |
500 |
50 |
550 |
1400000 |
8.4 |
0.8 |
|
|
|
|
|
11000000 |
40.4 |
6.6 |
47.0 |
|
|
|
|
|
|
|
sum |
|
|
|
|
|
|
|
|
| public service employees |
(remuneration on top of social dividend) |
|
| net |
€ pp pm |
|
|
|
billion €/y |
|
|
|
salary |
soc divid. |
total |
|
budget |
|
|
| national |
1050 |
350 |
1400 |
100000 |
1.260 |
|
|
| local |
800 |
350 |
1150 |
100000 |
0.960 |
|
|
| army |
1050 |
350 |
1400 |
1000 |
0.013 |
|
|
| police + |
900 |
350 |
1250 |
100000 |
1.080 |
|
|
| justice |
1050 |
350 |
1400 |
10000 |
0.126 |
|
3.4 |
|
|
|
|
311000 |
|
|
|
| Public investments and current purchases |
|
|
16 |
| Total public expenditure except loan repayments |
|
66.5 |
Obviously, some assumptions have been made regarding numbers of people kept in public service and the reorganisation of public services relating to security (police, army, ..) which could be looked at in a different way. Education, healthcare and coaching are paid by the government through the social dividend in kind. The demand side remains “public” and fully subsidised. The “offer”–side becomes, to some extent, market driven. The cost is only 6.6 billion because a significant part of the cost of these salaries is paid through the basic income grant to the people working in those branches.
| subsidised by social security cheques |
|
|
|
|
| education |
800 |
500 |
1300 |
240000 |
2.304 |
|
|
| healthcare |
800 |
500 |
1300 |
240000 |
2.304 |
|
|
| coaching |
800 |
500 |
1300 |
200000 |
1.920 |
|
6.5 |
On the public income side, VAT is increased to 30% and collected better to move it from 14 to 24 billion €. Other consumption tax is increased from 10.7 to 15 billion € mainly by increasing prices for fuel and a new consumer tax on electricity of 10 eurocent per kwh should bring 4 billion €. Social security contributions are abolished. Payroll tax will be levied only above a net income -including basic income- of 1150 € per month . It is expected that the majority of the employees will not pay payroll taxes anymore. However, anything earned above that threshold will be taxed at 50%. We expect this tax to generate 14.4 billion €. Corporate income tax is replaced by corporate eco-tax. This is a tax on energy consumption mainly, but not exclusively. Taxes on property should generate more and a tax on financial transactions should bring another 1.5 billion €
| TAXES |
|
PLAN |
NOW |
| Consumption |
|
billion €/y |
|
| VAT |
|
23 |
14 |
| Other |
|
15 |
10.7 |
| tax on electricity |
|
4 |
|
| Labor |
|
|
|
| sociial security levy |
|
0 |
22 |
| personal income |
|
14.4 |
13.5 |
| Corporate/Wealth |
|
|
|
| Corporate income |
|
0 |
2.2 |
| Corporate ecotax |
|
4 |
|
| Property |
|
5 |
3.7 |
| Financial transaction taxes |
|
1.5 |
|
| Total |
|
66.9 |
66.1 |
