by Karl Widerquist | May 30, 2018 | Opinion, The Indepentarian
This essay was originally published on Basic Income News in December 2012.
This year Alaskans received a dividend of $878, not bad compared to all the other states, but this dividend is the smallest since 2005, and it is only the second time in more than 20 years that the dividend has been below $900 per person. Alaska’s Permanent Fund Dividend (PFD) needlessly fluctuates widely. This year’s dividend is 25 percent smaller than last year’s dividend of $1,174, and it is 57 percent smaller than the 2008 record-high dividend of $2,069 (not counting the one-time supplement of $1200 that was added to that year’s dividend).
The declining dividend does not mean that the PFD is in trouble. Actually the Alaska Permanent Fund (APF), which financed the PFD, is at near-record high levels. It closed the 2011-2012 fiscal year at 40.3 billion dollars. The dividend was low this year because the state uses a complex formula averaging the returns over a five-year period to determine yearly returns. The five-year average was chosen to smooth out fluctuations in market returns to create a more stable dividend, but—as Alaskans can easily see—a five-year average is not enough to do that job. Markets tend to have stable long-term trends, but they can have occasionally large yearly fluctuations (either up or down) that can dwarf a five-year average. The mid-2000s market boom, and the 2008-2009 market bust were just such fluctuations. Now, several years later with the boom returns falling out of the calculations but the decline still in, the 2008 market bust affects the dividend the more than it did at the time.
There’s a better, more stable way to calculate the dividend. It’s called percentage of market value (POMV). Most financial managers agree that an individual can afford to withdraw up to 4 percent of a well-invested diversified portfolio and still expect it to grow in real terms over time.
If Alaska used this rule to calculate the PFD, this year’s dividend would have been $2,380. It would have been a record-high dividend, because the APF closed the fiscal year at a record-high level. Suppose then there was a major sell-off in the markets and the fund declined by 25% to $30 billion. The dividend would decline by 25% as well, to $1,846. Suppose instead it rose by 25% to $50 billion. The dividend would rise by 25% as well, to $3,076. Because 25% is an unusually large fluctuation, we can expect this to be an unusually large change in the dividend. Most often it would change by less than 10% from year to year, and in most years it would increase.
Perhaps Alaskans should be more conservative. The goal of the fund is not just to payout as much as possible. It is also to save for the future. The more the APFC pays out in dividends now, the slower the APF and the PFD will grow over the long term. So, perhaps a POMV rule of 3% would be better—a little more cautious—than the 4% rule. If so, payouts this year would have been $1860. Payouts after a 25% decline to $30 billion would be $1,395. Payouts after a rise to $50 billion would be $2325, and Alaska could expect to larger reinvestments by the APFC to help the APF get to $50 billion much more quickly.
POMV just makes sense. Nobody likes the big fluctuations. No one wants their dividend to be less than half of what it was a few years ago. POMV stabilizes dividends, making it easier for Alaskans to plan, and it can be part of a conservative payout strategy that will keep the fund growing over time.
-Karl Widerquist, Doha, Qatar, November 2012
by Karl Widerquist | May 16, 2018 | Opinion, The Indepentarian
This essay was originally published on Basic Income News in February 2012.
The resource curse, as I see it, comes in three different forms. Alaska has avoided the first two, but whether it avoids the third remains to be seen. The first-stage resource curse occurs when resource exports drive up the nation’s exchange rate and drive other industries out of business. The phrase “Dutch Disease” was coined to refer to this kind of resource curse. The second-stage resource curse occurs when the influx of cash from resource exports fosters corruption, graft, and sometimes dictatorship, so that all or most of the oil revenue is used against the people rather than for their benefit.
The third stage of the resource curse occurs when the resource windfall creates temporary prosperity for all or most of the people, only to lead to depression and economic deprivation as soon as the resource revenue disappears. A large number of factors can contribute to the third-stage resource curse. It can happen if the resource-exporting community invests in an infrastructure suited only to resource exports and is either too large or the wrong kind of infrastructure for the economy that will need to be in place when the resources are gone. Probably the most important reason for a third-stage resource curse is too much spending on immediate needs and not enough savings.
The first two forms of the resource curse will be apparent during the boom, and clearly Alaska has escaped them. But we cannot know for sure whether it has escaped the third stage until the resource is gone. How well is it doing to avoid the third-stage resource curse?
Three strategies to avoid this third kind of resource curse are savings, investment, and the hope that resource revenue will never end. Although Alaska oil production has been slowly and steadily declining for twenty years, the hope remains that natural gas, newly discovered oil reserves, or some other resource discovery will replace what is being lost. This hope will never die, but it can substitute for cautious preparation.
Alaska has made some good investment spending on schools and infrastructure, and it has managed to save some money. According to Commonwealth North, Alaska has saved $66 billion dollars: about $40 billion in the Alaska Permanent Fund (APF), $10 billion in the Constitutional Budget Reserve (CBR) and the rest in other funds and saving mechanisms. Compared to most other U.S. states, struggling with budget deficits, these saving figures are impressive, but they’re not as impressive compared to other resource exporters. After exporting similar amounts of oil, Norway has amassed a fund of $560 billion dollars.
Instead of saving the bulk of its oil revenue, Alaska has devoted almost all of it to current spending. This decision has put Alaskans at risk of the third kind of resource curse. If the state government had to draw on the interest of its savings to make up for a shortfall in oil revenues, all the funds together could not be counted on to cover even one-fourth of the state’s annual budget, and most of the interest on Alaska’s savings (after inflation-proofing and reinvestment) is already rightly dedicated to paying dividends. If and when oil exports come to an end, Alaskans will need and deserve the returns to their savings more than ever.
The Alaska Permanent Fund (APF) and Dividend are working just as intended. They are Alaska’s best savings plan. They constitute a model that other places should be following. When savings are most needed, the state shouldn’t abandon that model; it should build on it. If the fund was large enough, the interest on it could support both a substantial dividend and some or all of the state’s regular spending. The solution for Alaska is to save more money now, while oil prices are high and production is healthy and to treat more of its resources the way it treats oil. The state can’t save more for the future without making some sacrifices in the present, but I want to show you that a much larger fund is feasible.
First, let’s consider what might have been. When oil revenue started flowing into Alaska, one proposal was to save all of it and spend only the interest. Of course, we can’t change history now, but it is valuable to look back with the benefit of numbers that weren’t available looking forward. According to Gregg Erickson and Cliff Groh’s chapter in Alaska’s Permanent Fund Dividend: Examining Its Suitability as a Model, the state received a total of $103.5 billion in oil revenue by 2010 (adjusted for inflation). It invested $19.1 billion (18.2 percent of its oil revenue) in the APF. Most of the remaining $84.4 billion (81.8 percent) went to the general state budget. Even though the APF has paid 30 years of dividends, the principal has increased by a total of 217 percent to about $40 billion.
Suppose, for the sake of argument, that Alaska had saved all of its oil revenue into the APF, using half of it for regular revenue and half of it for the PFD. If this larger fund did just as well as the actual fund has over the last 35 years, the APF would now be worth about $225 billion. It would have $9 billion available this year. Suppose it used half dividends and half for spending. If all 700,000 Alaskans applied for the PFD, $4.5 billion would finance a dividend of more than $6,000 per person, or more than $24,000 for a family of four. The remaining $4.5 billion dollars would cover about 43 percent of the current state budget of $10.5 billion.
But this is not all that might have been. According to Erickson and Groh, oil produced in Alaska has generated more than $300 billion in total revenue, two-thirds of which has gone to oil companies. Although fees, royalties, and taxes on Alaska oil have recently been increased, they have historically been very low by world standards. Some nations capture as much as 80 percent of oil revenue. Even though the oil was discovered by state geologists on state land, and the oil companies were brought in only as hired help, the state has let the oil companies walk away with most of the profits. Had the state captured two-thirds of oil revenue instead of only one-third, and saved all of that, Alaska could now have an APF of $434.8 billion. It would have $17.4 billion available this year, $8.7 billion for the general budget and $8.7 billion for dividends. The share going to the state budget would cover 83 percent of state expenditure. The state would only need to raise only $1.8 billion in taxes to cover all other current spending. Assuming the population of Alaska remains unchanged at 700,000 (which is admittedly a very big assumption at such a large dividend level), every Alaskan would receive a dividend of more than $12,000 per year. Poverty would no longer exist in Alaska, and everyone, rich or poor, would have a large springboard for opportunity.
The figures could be even higher if the state had treated more resources the way it treats oil, but I think you get my point. Even if the state needed to spend some of that money as it came in on badly need projects, it has much greater capacity to save than it has taken advantage of. It could have waited to get rid of the income tax until was replaced by permanent returns to the state’s savings (rather than temporary oil revenue). It could have driven a harder bargain with the oil companies. And it could have treated more resources the way it treats oil and mining. It would now little to fear from the coming decline in the oil revenue.
We can’t change the past; where can we go from here? Alaska has increased taxes and fees on oil companies in recent years, and it needs to resist oil company pressure to reduce them. Several proposals on the table right now would increase the APF. Senator Johnny Ellis proposes moving $2 billion from the CBR to the APF, and Representative Mike Doogan proposes $10 billion. These proposals are a start, but it is not enough simply to protect some of the savings Alaska has accumulated. Alaska needs to save more — a lot more.
The state government takes in about $9 billion in oil revenue per year. Suppose the state saved $8 billion of that each year for the next 10 years and its investments do as well over those years as the APF has on average in the past. If so, by 2022, that savings alone would accumulate to more than $90 billion. The APF would grow to $50 billion, or $62 billion dollars with Rep. Doogan’s additional $10 billion were moved from the CBR. Combining that savings would make the APF balance $152 billion. It would produce $6 billion dollars of returns ready for use. If all of that revenue were devoted to the PFD, each Alaskan would receive a dividend of more than $8,000. If half of it were devoted to the PFD, it would have $3 billion dollars per year of permanent income to relieve pressure on the state budget, and it would still be able to pay dividends of more than $4,000 per person per year.
Such an ambitious short-term savings plan is probably not politically possible, but it is possible to move in that direction. Continuing to live off temporary revenue will leave the state vulnerable to the third-stage resource curse. Even $1 billion a year in additional savings would be a good start in protecting Alaska’s future.
by Claire Bott | Feb 25, 2018 | News
Alaska’s provision of regular, unconditional income to its inhabitants has had no overall effect on employment, a recent study has found.
The Permanent Fund Dividend (PFD), provided by the Alaskan government to all citizens who apply for it, currently stands at approximately $2000 per person per year. The authors of the study have indicated that, although this seems a small amount, the fact that it is applied regardless of age means that a two-parent family with two children could claim $8000 per year, which is considerably more substantial.
The study was carried out by Associate Professor Damon Jones of the University of Chicago’s Harris School of Public Policy, and Assistant Professor Ioana Marinescu of the University of Pennsylvania School of Social Policy and Practice. Jones is a Faculty Research Fellow at the National Bureau of Economic Research, while Marinescu has had her research published in a number of peer-reviewed journals.
Claims have previously been made that the provision of a universal basic income such as the PFD would tend to discourage participation in the workforce. However, the studies which seemed to support this have been based on situations where the money provided was given only to a small group of people. Jones and Marinescu posited that, in a situation where unconditional funds are provided to a large population, effects on employment could differ.
The study did in fact find that there was no overall decrease either in employment or in overall hours worked. The authors suggest that one reason for this could be that the PFD recipients, in spending their additional funds, are indirectly increasing the need for extra employees to provide goods and services to them.
The only significant change found by the study was a 17% increase in part-time work. Given that a greater percentage of women than men appeared to be taking up part-time work, it is possible that this change may have been, at least in part, the result of women using the extra funds to provide childcare, without which they would have been unable to remain part of the workforce.
The study was reported in a number of news outlets, including the New Yorker.
Alaska’s Permanent Fund originated in the 1970s, with a sudden influx of money due to revenue from newly exploited Alaskan oil reserves. Following concerns that a corresponding increase in government spending could be unsustainable should the amount of oil revenue decrease, the Permanent Fund was established, receiving 25% of “all mineral lease rentals, royalties, royalty sale proceeds, federal mineral revenue sharing payments and bonuses received by the State”, according to the wording of the relevant amendment to the Alaskan constitution.
The Permanent Fund Dividend was first provided in 1982, when it was only a few hundred dollars per person. It has since increased at an approximate rate of $500 per decade.
Edited by: Dawn Howard
by Kate McFarland | Oct 23, 2017 | Opinion
Relaxing Conditions on ‘Basic Income’: A Case Against Definition
From a linguistic standpoint, there is no one “correct” definition of the term ‘basic income’ [1]. Different groups and organizations have adopted different definitions, suitable to their purposes, and these definitions sometimes conflict with one another.
BIEN, at present, coordinates affiliates who use the term differently from one another, organizes conferences to bring together individuals who use the term differently from one another, and issues news reports on varied stories in which the term is used in different ways.
I have come to believe that, in its role as such an umbrella organization, BIEN’s attempt to define ‘basic income’ does not lend clarity. Instead, to avoid equivocation and confusion, it would do better to admit upfront this diversity in definition and shades of meaning.
BIEN’s Definition of ‘Basic Income’: One Among Many
At its 2016 Congress in Seoul, BIEN adopted the following definition: “A basic income is a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.”
When I write for BIEN’s website, I accept this as a stipulative definition of the term, and call attention to potentially confusing differences in usage. For example, when I report on the recently launched “basic income pilot” in Ontario, I note that the program being tested–in which payments to participants are household-based and income-dependent–does not actually satisfy BIEN’s definition of ‘basic income’ (although, as I emphasize below, it does congeal with an established and widespread use of the term within Canada).
My comments in might sometimes seem to treat BIEN’s definition as privileged or authoritative. This, however, is only an artifact of the particular context in which I am writing–BIEN’s website–and my desire to maintain consistency within this context. I do not believe that BIEN’s definition is privileged in any absolute or objective sense, or that it is more “correct” than other uses that have become established within other groups, organizations, and geographical regions.
As I take it, my prevailing duty as a news writer is to prevent readers from believing false things. In this context, clarity and consistency in meaning are of utmost importance, and BIEN’s definition of ‘basic income’ is a burden I must bear, knowing that there will be many situations in which it will be inconsistent with the definitions employed by the parties on whom I report.
Two particularly important cases, in my experience, are the following two types of definitions:
- Definitions that additionally stipulate that the amount of the periodic cash payment must be sufficient to meet basic living expenses.
- Definitions that lack the qualification that the payment must be (a) non-withdrawable (not means-tested) and/or (b) paid on an individual basis.
A. Definitions stipulating that the amount of the periodic cash payment must be sufficient to meet basic living expenses.
Many high-profile groups and organizations have adopted definitions of ‘basic income’ with this additional necessary condition (philosophers may enjoy the opportunity to say that, on these definitions, “the ‘sufficient’ condition is a necessary condition”); for example (emphases added):
- GiveDirectly, the charity organization known in the basic income community for its impending major experiment in Kenya, defines ‘basic income’ as a type of cash transfer that is “unconditional (recipients don’t have to work or do anything else to be eligible), universal, with all members of society receiving, enough to cover basic needs, and guaranteed for the recipients’ lifetimes”.
- International Basic Income Week, an annual initiative that is pursuing partnership with BIEN in 2018, stresses four conditions that must be met to use ‘basic income’ to refer to a cash transfer policy: payments must be (1) universal, (2) individual, (3) unconditional, and (4) high enough.
- Founding members of the Economic Security Project, a major US-based initiative launched in late 2016, have decided to reserve the use of ‘basic income’ for programs in which payments are high enough to meet basic living expenses, and have endorsed the neologism ‘base income’ to refer to programs that provide universal and unconditional payments of lesser amount.
- Multiple affiliates of BIEN–including groups in Australia, Austria, Canada, Germany, the Netherlands, Norway, Portugal, and Switzerland, and perhaps others–have adopted definitions of ‘basic income’ (or its translational equivalent) that include some type of condition specifying that the amount of payment must be “sufficient” or “high enough” to meet some type of minimal needs (see “Affiliate Definitions of ‘Basic Income’”).
The question of whether BIEN itself should include the sufficiency condition as a necessary condition (so to speak) has been the cause of previous terminological controversies within the organization, including the one that eventuated in the vote at the 2016 Congress in Seoul, in which BIEN rejected the proposal to restrict the definition of ‘basic income’ in such a manner. In a paper delivered at the 2017 BIEN Congress (“What’s a Definition? And how should we define ‘Basic Income’?”), Malcolm Torry, General Manager of BIEN and Director of the UK’s Citizen’s Basic Income Trust, defends this decision. According to Torry, the adopted definition does not “conflict with any affiliate’s definition”, “represent[s] the consensus among affiliates”, and “reflect[s] common usage of the term”.
All of these claims seem dubious, however, especially when one considers that BIEN has aspired to provide a definition–that is, a set of necessary and sufficient conditions to use the term ‘basic income’–rather than a non-exclusive list of necessary or paradigmatic features.
First, notice that the different definitions of BIEN and some of its affiliates lead to different assignments of truth and falsity to certain sentences. For example, the sentences ‘Alaska has a basic income’ and ‘Iran once implemented a basic income’ seem to be true on BIEN’s definition [2], but they are false on definitions of ‘basic income’ that include a provision that the amount must be high enough to meet basic living expenses. The definitions disagree on whether certain core cases discussed in the basic income literature are actually cases of basic income–and this, I wager, counts as “conflict” between the definitions if anything does.
Secondly, it would be more accurate to say that BIEN’s definition reflects a–but not the–common usage of ‘basic income’, and that it does not represent consensus, even amongst BIEN’s own affiliates. As reflected by the above list of examples (and further examples could be given), it is unquestionably typical for many speakers and organizations to restrict application of the term to policies that provide livable cash payments.
If one still wonders why a less restrictive definition should prove contentious, it is significant to notice that the act of defining carries evaluative and expressive element: to establish a definition of a term is not merely to clarify and elucidate current usage, nor is it necessarily an attempt to honor as much of present usage as possible while introducing greater clarity and precision; to establish (and insist upon) a specific definition is often also to express what one values. Specifically, speakers sometimes choose to adopt definitions that are narrow or exclusive and reject ones that are more encompassing.
Many conservative Christians, for example, continue to resist the redefinition of ‘marriage’ to allow the term’s application to same-sex partnerships. And many pro-choice Americans were recently outraged that the US Department of Health and Human Services decided to define ‘life’ broadly to the point of conception. Or, in a somewhat lighter vein, consider cocktail purists who scoff at the practice of using ‘martini’ to refer to any mixed drink served in a v-shaped glass. In the eyes of the conservative Christian and the cocktail purist, the more inclusive definitions are simply unacceptable, for they disrespect the sanctity of marriage and martinis (as God and the International Bartenders Association intended them to be). And when the definition in question has legal or political ramifications, the choice bears substantial weight.
Likewise, in my experience in the basic income movement (especially in the US context), I have observed that many left-leaning proponents of basic income insist upon the strict definition–with the “sufficiency” condition–as a way to distance their own proposals from right-wing and libertarian schemes, such as Charles Murray’s proposal to replace all existing programs with a universal flat-rate cash payment of 10,000 USD per year. Often, champions of a narrow definition of ‘basic income’ don’t want Murray-like proposals to be assimilated into the basic income movement, and their preferred definition reflects this.
Such activists might decry definitions like BIEN’s as unacceptable precisely because it aspires to retain neutrality on the level of the payment. If BIEN were simply to reply that the definition should be kept broad in order to accommodate all proposals for regular unconditional cash transfers, including views like Murray’s, then it would quite directly miss their point. It is their prerogative as speakers to fine-tune the meaning of terms in light of their values and interests, and they might have good strategic and political reasons to insist upon these particular definitions.
I believe that BIEN should acknowledge this difference as what it is: disagreement about word meaning–and not at all uncontentious. This disagreement threatens to present readers and newcomers with potentially confusing discrepancies, such as disagreement about the truth of such commonly heard claims like ‘Alaska has a basic income’ and ‘Finland is experimenting with a basic income for its unemployed population’. For the reader of BIEN materials, forewarned is forearmed.
B. Definitions lacking the qualification that the payment must be (a) non-withdrawable (not means-tested) and/or (b) paid on an individual basis.
As mentioned above, this type of definition seems particularly common in Canada, where the idea has enjoyed a long history, where an experiment in Manitoba in the late 1970s became one of the most famous trials of a negative income tax–or what many Canadians politicians, academics, and journalists would call a ‘basic income’.
For example, on a page titled “About Basic Income”, BIEN’s Canadian affiliate, Basic Income Canada Network, defines ‘basic income guarantee’ (which seems to be used synonymously with ‘basic income’) as a program that “ensures everyone an income sufficient to meet basic needs and live with dignity, regardless of work status” [3] [4]. Similarly, the Government of Ontario, which has recently launched a new experiment of what it calls a ‘basic income’, defines the term as “a payment to eligible families or individuals that ensures a minimum income level, regardless of employment status” [5].
Exemplifying this usage, Canadian politician Guy Caron has introduced a proposal for what he calls ‘basic income’, which is a “top-up aimed at helping low-income Canadians to reach the ‘low-income cut-off’”, clearly not a universal and non-withdrawable payment. I submit that this proposal, like Ontario’s pilot, is not inaccurately named: it merely reflects what might be described as dialectical ambiguity with respect to the term ‘basic income’.
Also in his 2017 paper, Torry states, speaking of the Ontario experiment, that the payments “do not constitute a Basic Income, and perhaps BIEN should say that”. I would contend the appropriateness of Torry’s advice depends, in part, on one’s audience. If addressing an audience of basic income activists in UK, for example, then it might indeed be important to clarify that Ontario’s pilot is “not a basic income” (assuming they endorse, and are most familiar with, the definition of ‘basic income’ adopted by BIEN, the Citizen’s Basic Income Trust, and Basic Income UK). But it would be quite presumptuous to make the same assertion to the Government of Ontario itself.
By analogy, suppose a British child were to overhear an American speak of “eating biscuits with dinner before the football game”. It might be important to clarify that the food in question is “not really biscuits” and the game in question is “not really football” in order to prevent the child from forming misconceptions about the American’s selections of baked goods and sports. But it would not be appropriate, presumably, to tell the American himself that he is “not really eating biscuits or watching football” and should stop using his words like that. But Ontarians are not en masse misusing the term ‘basic income’ any more that Americans are en masse misusing the words ‘biscuit’ and ‘football’. The term has merely taken on a different meaning, one with antecedents dating at least to the time of the Mincome experiment in the 1970s.
Given this divergence in meaning, there is again a pronounced threat of equivocation and confusion. Widely used sentences like ‘Ontario is testing basic income’, ‘Manitoba’s Mincome was an experiment of basic income’, and ‘Milton Friedman supported basic income’ might be either true or false depending on the speaker. Indeed, the truth or falsity of such sentences can be determined only after knowing the specific definition of ‘basic income’ adopted by the speaker (or, as a clue, the speaker’s nationality).
Once again, I believe the lesson here is that a wide-scope organization like BIEN must acknowledge this diversity in word use if it wishes to ward against such confusion.
C. “Similarities Overlapping and Criss-Crossing”
In working as a reporter for Basic Income News, I commonly observe speakers–many of them with considerable experience and expertise in the movement–use the term ‘basic income’ in accordance with the two types of definitions described above.
In itself, such ambiguity is benign; it is a common feature of natural language that the meanings of words are shaped and honed in somewhat different fashions within different communities or groups of speakers. When a speaker realizes that a term carries multiple definitions, she knows that she must attend to context in order to resolve the ambiguity, and she knows to be cautious of drawing certain inferences if that ambiguity cannot be resolved.
Complications arise, however, when casual readers falsely assume that ‘basic income’ is well-defined and unambiguous. And, unfortunately, this is all too easy: most articles and websites that purport to introduce “the” concept of basic income do not mention that the term is used differently, and sometimes inconsistently, between different speakers. On the contrary, many authors blithely write as if the term does have a single conventional meaning, offering a gloss on a definition with no mention of the fact that others define the term somewhat differently. Thus, many casual readers might be unaware of the ambiguities that surround the use of the term–raising the specter of unintentional equivocation, confusion, and false belief (e.g. one might unwittingly come to accept falsehoods like “Alaska provides its residents with livable annual income” or “A town in Manitoba was the site of an experiment in which every resident, regardless of income, received a fixed monthly cash payment”).
If an organization like BIEN wishes to be a broad church, facilitating discussion between diverse parties that research or support something they call ‘basic income’, then, I submit, it should cease to posture as if the term has a single definition.
BIEN could state outright that there is no set of conditions that constitutes a unique standard meaning for ‘basic income’. Then, as an alternative to definition, it could provide a list of stereotypical or paradigmatic features of proposals that bear the name. Some of these features–such as being paid in cash and at regular intervals–are more central than others, and might even be said to be necessary features of anything called ‘basic income’. Other features, however, are matters of dispute or discrepancy (such as consisting of a livable amount and being paid in equal amount to all regardless of income).
New problems would likely arise when attempting to decide what to say about frequently cited conditions or features of a basic income. Even the condition of unconditionality, for instance, might not be sacrosanct. Some have spoken about questions such as whether a “participation requirement should be added to the basic income”: is this loose talk, semantic nonsense (akin to asking, perhaps, whether a “marriage requirement should be imposed on bachelorhood”), or evidence that unconditionality is not really a necessary or immutable part of the conceptual core of what speakers call ‘basic income’? If informed and competent speakers’ judgements fail to detect paradox in phrases like ‘a participation requirement on a basic income’, then it is likely the latter.
Yet more new problems would arise when considering the fact that the paradigmatic form of the policy contains further attributes that are often not mentioned explicitly in definitions of the term: the amount is typically assumed to be relatively stable; the program is typically assumed to be created and administered by a government (although, with some activists proposing privately-funded programs, some definitions deliberately reject it); the condition of “universality” is often (although not always) implicitly assumed not necessarily to extend to children. (See Torry’s paper for further discussion of examples of implicitly accepted paradigmatic features.)
Still more points of controversy could be mentioned. Should ‘basic income’ be defined to require payment in conventional currency (to exclude cryptocurrency-based proposals), or should it be sure not to impose this constraint? Should ‘basic income’ be defined as a universal payment to citizens, permanent residents, or some other specification of the relevant population base?
At the beginning of his 2017 Congress paper, Torry mentions Ludwig Wittgenstein’s discussion of the idea of “family resemblance” in his Philosophical Investigations. He does not, however, carry this Wittgenstein reference to its natural conclusion: a case against definition. I suggest that we do.
According to Wittgenstein, terms of natural language typically do not lend themselves to definition in terms of necessary and sufficient conditions. Different uses of a term need not exemplify a common core meaning–and, often, they don’t. Instead, Wittgenstein tells us, different uses of a word are often related by a “complicated network of similarities overlapping and criss-crossing”.
To illustrate, he delivers the example of the word ‘game’:
Consider for example the proceedings that we call “games”. I mean board-games, card-games, ball-games, Olympic games, and so on. What is common to them all?—Don’t say: “There must be something common, or they would not be called ‘games’ “—but look and see whether there is anything common to all. … Look for example at board-games, with their multifarious relationships. Now pass to card-games; here you find many correspondences with the first group, but many common features drop out, and others appear. When we pass next to ballgames, much that is common is retained, but much is lost.—Are they all ‘amusing’? Compare chess with noughts and crosses. Or is there always winning and losing, or competition between players? Think of patience. In ball games there is winning and losing; but when a child throws his ball at the wall and catches it again, this feature has disappeared. Look at the parts played by skill and luck; and at the difference between skill in chess and skill in tennis. Think now of games like ring-a-ring-a-roses; here is the element of amusement, but how many other characteristic features have disappeared! And we can go through the many, many other groups of games in the same way; can see how (§66).
The natural progression of Torry’s Wittgenstein reference would have been to argue that ‘basic income’ is like ‘game’: as we examine the diverse and multifarious uses of ‘basic income’, similarities crop up and disappear, with no single common meaning able to be identified. Although Torry does not take this tack, I believe that it would have been precisely on-point.
Of course, an association of “gamers” is free to stipulate a specific definition of the particular type of game in which it is interested. Likewise, an organization like BIEN could stipulate a specific definition of ‘basic income’ to describe the particular type of policy with which it is concerned. One concern, however, is that BIEN’s other actions don’t seem to accord with this desire for specificity. BIEN, at present, seems unified more by word-shape than word-meaning: it coordinates affiliates who support what they call ‘basic income’ (allowing affiliates to adopt their own definitions thereof), organizes conferences to bring together individuals who are interested in something they call ‘basic income’, and publishes news stories about people who talk about something they call ‘basic income’. If BIEN wishes to unify its activities in this way, then it cannot prescribe a definition of ‘basic income’ but must instead defer to the groups and individuals who use the term and who constitute its membership–and, as seen, their definitions of the term are varied and disparate, with only a thin and insubstantial core of features possessed by all.
But we may leave aside questions of BIEN’s mission and goals, for there is another concern facing the organization’s decision to adopt a particular stipulative definition: as a mere matter of fact, the term is used in varied manners that are not always consistent, media coverage of basic income is not always clear to dissociate these (and is usually not), and BIEN does not hold purchase over media reporting on basic income. Adding yet another organization-specific definition to the mix does not lend clarity to confusion. What is needed is straightforward acknowledgement of the diversity and disparity in uses of the term ‘basic income’.
Notes
[1] In this essay, I use single quotes to notate that I am speaking about a linguistic item (the term ‘basic income’) rather than the thing it refers to (a basic income).
[2] Alaska’s Permanent Fund Dividend and Iran’s oil subsidy reform program possess other non-stereotypical features. Most notably, perhaps, the level of the payments is not only non-livable but also unstable and uncertain. No fixed amount is guaranteed from year to year. (Indeed, as it happens, the future of the PFD is presently uncertain due to ongoing fiscal crisis in Alaska–in an unprecedented decision of the state’s Governor, its amount was halved between 2015 and 2016–and Iran has begun withdrawing higher earners from the subsidy program.)
[3] Note that other groups, such as BIEN’s Australian affiliate, also use ‘basic income guarantee’ and ‘basic income’ interchangeably, but with a definition that includes the qualifications that the payments must be individual and non-withdrawable; thus, the use of the word ‘guarantee’ does not imply that the “Canadian-type” definition of ‘basic income’ is at play.
[4] BIEN’s US affiliate, the US Basic Income Guarantee Network, defines ‘basic income guarantee’ in a manner similar to BIEN’s Canadian affiliate, as “a government ensured guarantee that no one’s income will fall below the level necessary to meet their most basic needs for any reason” (with no condition that the support must be non-withdrawable or paid on an individual basis). However, USBIG does not treat ‘basic income guarantee’ and ‘basic income’ as synonyms, but defines ‘basic income’ in a manner similar to BIEN, as type of basic income guarantee in which “every citizen [is given] a check for the full basic income every month” (leading to peculiarities like the truth of the sentence ‘Ontario is testing a basic income guarantee, but it is not testing a basic income’).
[5] Although common, this is not the only definition in use in Canada. For example, François Blais, a political scientist researching income guarantee programs for Quebec, has defined ‘basic income’ as “an unconditional income that the government awards to every citizen” (see his book Ending Poverty: A Basic Income for All Canadians)–which, as written, could be interpreted as implying an individual and non-withdrawable payment (although not explicitly specified).
Earlier draft reviewed by Tyler Prochazka and Heidi Karow
Cover Photo (Games): CC BY-NC-ND 2.0 B
