by Citizens' Income Trust | Jan 25, 2016 | Opinion
Anthony Painter and Chris Thoung, Creative Citizen, Creative State – The principled and pragmatic case for a Universal Basic Income. Report published by the Royal Society of Arts (RSA), December 2015.
This report from the RSA is a most welcome addition to the recent flurry of publications and media interest in Citizen’s Income. It outlines a context – technological change – resulting in
underemployment, unemployment or the need to transition careers with some frequency for many. A Basic Income could provide a foundation to smooth working-life transition; (p. 5)
and an ageing population, requiring more people to spend time on caring for others.
The report notes the growing Citizen’s Income movement; studies a variety of other reform proposals (and particularly a Participation Income and an enhanced contributory system); and argues that polling data that shows that the British public regards ‘making work pay’ as far more important than tackling poverty and inequality provides a powerful argument for Citizen’s Income:
It is Basic Income and Basic Income alone that sends out absolutely clear yet non-coercive signals about the incentive to work. … Basic Income is a foundation for contribution. It incentivizes work but supports other forms of contribution too. In this regard, it is the system of income support that best rewards contribution – albeit contribution defined beyond narrow cash terms. (p. 14-15)
The report describes the UK’s current benefits system, notes that the sanctions regime will increasingly attack the self-employed and the employed once Universal Credit is rolled out, shows how Citizen’s Income would offer the ‘power to create’, and then sets four tests for the idea to pass:
- Does the system accord with a widespread set of moral precepts?
- Is it broadly fiscally achievable within the parameters of existing taxation and expenditure?
- Is it distributionally just when compared to the current system?
- Will greater individual (and civic) freedom and creativity be realized? (p. 18)
The particular scheme that the RSA evaluates in relation to the second and third criteria is based on the scheme published by the Citizen’s Income Trust (CIT) in 2012 but with a few minor variations – you can download the CIT proposal here.
A non-binding contract to encourage contributions to society will run alongside receipt of Citizen’s Income. The fact that it is non-binding, and the recipient’s failure to adhere to an agreed contract would not compromise their receipt of a Citizen’s Income, retains the scheme’s reciprocity – important for its ability to pass the first test – and retains it as one characterized by an initial act of generosity on the part of the state, rather than as one that expects a claimant to prove a contribution before the state reciprocates. There is, though, a danger with such a contract. It would be easy for a future government to make receipt of a Citizen’s Income dependent on adherence to a contract’s conditions, thus turning the Citizen’s Income into a Participation Income, so that it would no longer be a Citizen’s Income and would be loaded with administrative complexity and bureaucratic intrusion in people’s lives – precisely what is not required.
In relation to the levels of Citizen’s Income, the RSA scheme attempts to reduce the losses that poorer families with children might suffer at the point of implementation (which has been recognized as a problem in relation to the Citizen’s Income Trust 2012/13 scheme) by allocating a higher level of Citizen’s Income to the first child in a family, and possibly lower levels to the third and subsequent children. This compromises the definition of a Citizen’s Income, because that requires that every individual of the same age should receive a Citizen’s Income of the same amount: but this is a compromise in theory, and not a new compromise in practice, and so should not overly concern us. This is because in any Citizen’s Income scheme the children’s Citizen’s Income are paid to the main carer: so although in theory every working age adult (or adult over 25 years old, as in the RSA and CIT 2012/13 schemes) receives the same amount, in practice the main carer of children receives their own adult Citizen’s Income and the Citizen’s Incomes of their children. Because allocating different amounts to different children in a family will adjust a total amount paid to an adult that is already variable in relation to the number of the children in the family, no new compromise has in practice been generated. We might hope that if such a Citizen’s Income scheme were to be implemented, then eventually it might prove possible to reduce the compromise by bringing the Citizen’s Income levels allocated to different children nearer to or identical with equality: but as a transitional measure with some useful effects, the RSA’s approach has much to commend it.
A compromise that has nothing to commend it, though, relates to lone parents:
One group that could lose out in the transition to Basic Income in the RSA model are low income, lone parents with children over the age of five. … there may be scope for a transitionary measure whereby lone parents could continue to claim a Child Benefit top-up … introducing an element of household calculation. (p.31)
A lone parent addition would not satisfy the ‘unconditional’ requirement of a Citizen’s Income, and would result in precisely the kind of bureaucratic intrusion into people’s personal relationships that a Citizen’s Income is trying to get away from. If it is felt that lone parents need an additional payment, then an additional and separately administered payment should be made, so that the Citizen’s Income itself is not compromised. We are used to social policies that we can tinker with without destroying them. A Citizen’s Income is different. If we tinker with it, then we destroy it. This lesson has thankfully been learnt in relation to Child Benefit. In 2010 we were told that it would be means-tested. It has not been. Instead, an additional tax charge is imposed on high earning individuals living in households receiving Child Benefit. This is not sensible, because it has resulted in domestic disharmony and in the withdrawal of Child Benefit claims: but at least it does not destroy Child Benefit as a universal benefit. A similar approach could be employed in relation to lone parents in the context of a Citizen’s Income. The Citizen’s Income must never change; but an additional benefit could be established with its own conditionalities and administration.
When the report discusses some alternative Citizen’s Income schemes – such as scheme B in the recent Institute of Social and Economic Research paper, its use of the word ‘modified’ might be somewhat confusing. Scheme B is not a ‘modified’ Citizen’s Income, or a ‘modified’ Citizen’s Income scheme. The Citizen’s Income is a genuine Citizen’s Income. It is simply that scheme B retains more means-tested benefits than some other schemes – it still takes a lot of households off means-tested benefits, or reduces their claims to such low levels that they are likely to come off them. We ought to avoid the use of the word ‘modified’. Either a proposal is for a Citizen’s Income, or it is not; and if it is, then the whole scheme, including changes to means-tested benefits, tax allowances, etc., is a Citizen’s Income scheme. Some schemes, such as scheme B, would be easier to implement than others, such as the RSA scheme. In many ways, the RSA scheme would be preferable to scheme B. So perhaps we ought to regard scheme B as a useful first step, and the RSA scheme as a useful second step.
The RSA report is a long, detailed, well researched, and most useful document, and no short review can do it justice. The minor caveats that I have listed above are precisely that: minor caveats, and areas for continuing research and debate. The RSA is to be highly congratulated on the research project that has led to the report, and on the report itself. There could be no better place to start the next phase of the Citizen’s Income debate than this report.
by Will Wachtmeister | Jan 15, 2016 | Opinion
Malcolm Torry, 101 Reasons for a Citizen’s Income, Policy Press, 2015, xvi + 120pp.
Finding 101 reasons in favour of a Citizen’s Income and then condensing them into a lucid, concise book is probably a lot harder than Malcolm Torry has made it look in this readable and compact collection. 101 Reasons for a Citizen’s Income is a book packed with easy-to-grasp arguments written with clarity from an elegantly simple, practical point of view.
In a way, this is the type of book you would hope for from the director of the UK’s Citizen’s Income Trust, a London-based organisation that promotes debate on the desirability and feasibility of a basic Income, and a BIEN affiliate. Torry keeps it mercifully short – just 120 small pages in total – which is clearly a good way of attracting new, curious readers. Showcasing a complete command of the finer points of the UK’s benefits system, the book’s approach also takes care to appeal to people of diverse political convictions. As a result, this is an excellent introduction for the great number of people who have never even heard of Citizen’s Income, and especially for those newcomers who are already interested in UK social policy.
Torry clearly has the sort of wide repertoire of arguments and skilful presentation that you would expect from someone who is both the current director of the UK Citizen’s Income Trust and an academic at the London School of Economics. Perhaps more tantalizingly for more seasoned Citizen’s Income fans, the author has also experienced the byzantine and counterproductive deadweight of UK social policy from what might have been the best (or worst) seat in the house, the Benefits Office in Brixton in the late seventies.
About this (and other matters) Torry shows a mature restraint, and the book is a far cry from the ranting and raving that this type of professional experience would have induced in other human beings (myself included). It is actually when Torry looks back on his personal experience that he serves up some of the book’s choicest nuggets. At one point he states, as a matter of blunt fact, that whilst working at the Brixton Supplementary Benefit Office “the claimants didn’t understand the regulations, and neither did we.” Deadpan aperçus and reminiscences add a little human interest and colour, and try not being moved – or get mad – by an officer who mutters over his casework “a man leaving, another coming, and then another – and with which of the two is she cohabiting, and who is the lodger?”
Citizen’s Income Trust director Malcolm Torry showcases a complete command of UK social policy (picture: Citizen’s Income Trust)
Otherwise, this is mainly a patient demolition of every defence that could conceivably be mounted of the current UK benefit system. Torry confidently shows that even if the UK system is given the benefit of the doubt at every step, there ultimately can be no justification for a bureaucratic machine that unnecessarily traps – and then horribly stigmatizes – people in poverty and unemployment. He also demonstrates clearly why a Citizen’s Income could solve the overwhelming majority of problems with the current system – especially the perverse work disincentives of means-tested benefits which, contrary to their trumpeted aim, penalise people in many different ways for finding and taking paid work. Presenting Citizen’s Income as the obvious alternative to the UK’s hopelessly unfair and ineffective benefits system is the book’s main point, and Torry makes it with brilliant lucidity and concision.
Elsewhere, Torry also pulls off the feat of invoking Kant’s categorical imperative and Rawls’ veil of ignorance without it seeming forced, weird or pretentious. Personally, I am grateful that the book manages to explain, where others including UK ministers have failed, the UK government’s Universal Credit reform in just a few sentences (spoiler alert: the Universal Credit is “neither universal, nor a credit”). Throughout, British party-political traditions and the sausage factory of Westminster policymaking are very well summarized – despite the book by its nature having little space available for context – as are the ways Citizen’s Income would fit into the wider political picture.
An added bonus is that Torry – bravely but necessarily – at certain points ventures into the uncomfortable tribulations around the resurgence of aggressive European nationalisms and immigration problems. He does so by arguing for the necessity of the social cohesion and the new sense of citizenship that a Citizen’s Income would generate. This is an argument urgently worth debating more extensively, given how much is now at stake in contemporary Europe.
The basic income movement is already a broad church, and a very diverse set of people need to continue to come on board if the policy is to become reality. One of the book’s great strengths is that it is designed to appeal to a wide range of people. From this point of view, it is interesting – and, in my view, somewhat problematic – that the book takes a scattered approach to the topic of innovation; surely, innovation is almost per definition something that everyone finds at least in principle desirable.
Rather than selecting as one of the 101 Reasons something along the lines of “A Citizen’s Income would set free innovation for the common good”, the book mentions innovation in several important but different ways. It offers crucial but somewhat isolated statements like “New software companies have the flexibility to innovate in ways in which the well-established companies cannot”, which is included in the section called “A Citizen’s Income would encourage new enterprise”. It also puts forward an in my view absolutely crucial – but again too isolated – observation that corporations disproportionately reap the rewards of innovation without reinvesting the proceeds: “The gap between wages and the proceeds of productivity is increasing. Less of the proceeds from production is now recycled back into industry via wages and consumption”. Elsewhere, Torry describes the world as having “economies in which innovation and automation are the norms” and being in need of Citizen’s Income to manage the upheaval.
Yet it is in the realm of lack of innovation, in the section called “Basic Income would break a logjam”, that we find what I think is the book’s most memorable passage. Torry describes how the world has today reached one of its periodic crises and is crying out for breakthrough innovation: “technology lying idle, human creativity frustrated, wealth flowing from poor to rich, and finite resources uncontrollably exploited … we are still waiting for the next new key concept. A Citizen’s Income might be just what is required.” In the same section, he describes the “key concept”: the breakthrough that in one fell swoop greatly boosts the well-being of every current and future human being. This is so because a key concept “enable(s) new ideas and new technology to create new kinds of wealth” and history shows how they have “freed the economy from stagnation and have stimulated new creative development, which has then itself stagnated until the next new key concept arrives.”
These are powerful sentences describing something that brings to mind a creative-destruction cycle of innovation in which the cycle is about to be put back into the ascendancy with the key concept of Citizen’s Income. But what is most interesting is that Torry neatly captures the constellations of historical periods in which these new key concepts are launched: “New developments that have set life’s evolution, scientific progress, or the economy free, have usually been prefigured by developments bearing some but not all of their characteristics; they have been symptoms of change as well as its cause; they have created revolutions with immense social implications; and in science and the economy they have had passionate advocates and equally passionate detractors – and, once in place, people have wondered why it all took so long.” In fact, this book already leaves the reader wondering why it’s all taking so long.
by Andre Coelho | Jan 8, 2016 | Opinion
What does the future look like? No one knows and it is folly to argue one does. But we can think, we can even try to make predictions, depending on how much risk we are willing to take. To say, as Jeremy Rifkin suggests, that the future will look like a collaborative commons, based upon zero marginal cost, internet-linked nodal, laterally scalable shared green energized economy is all very well, and I definitely resonate with it, but is it inevitable? How zero cost is it? The price of generating an extra energy unit from a photovoltaic panel may be close to zero, but what about the panel itself? Who pays for it?
Proponents will say that photovoltaic panels are cheaper than they have ever been, huge economies of scale were possible in the last few years and any person these days can purchase photovoltaic panels. But is this true? Panels are cheaper than they were some years ago, no doubt, but a person first needs to eat, have a shelter, access some basic form of transportation and energy for cooking, lighting and such. Only after all that is guaranteed, can someone consider the photovoltaic panels, the electric car, or the 3D printer. The “future”, it seems, will not come until poverty is eliminated. Because poor people – 24.4 % of all European population was at risk of poverty in 2014, or 122 million people – cannot participate in this futuristic vision of the world unless their basic needs are met.
You doubt it? Then think about it. In most places, if you run out of money to pay for electricity, it is unlikely that your neighbors will help out by supplying you with some electricity, and even less likely that you will be given a photovoltaic system to produce your own energy. Where I live, at least, if I stop paying the electricity bill, they will cut me off, without a doubt. No matter how generous, how educated, how creative, how tolerant I might have been in life, the power company is completely indifferent: you do not pay, you will have to go without power. Period.
Things might be different in the future – and they certainly will. But at this moment the amount of money one has is less related to levels of education, generosity, creativity or tolerance, and more to status, power, social networks, dominance and violence. Attributing monetary value to people is a trap. The instant you say “this person is worth 1000 euros”, you automatically create an underclass of unworthy people. Those people might even be subject to discrimination and violence you object to, from deprivation and poverty to constant surveillance. So definitions or layers of worthiness cannot solve a core problem in present-day human species: our difficulty to share. To trust.
This is why I defend basic income. It represents a bold and clear statement: human dignity is not and must not be subject to discussions about worthiness or value. These attempts to quantify human beings are bound to fail, since our “value”, if we must speak of it, is incalculable. You cannot calculate it, so there is no use in trying. Basic income is also a crucial tool for participation. You cannot truly participate and contribute to a better society – let’s say by investing in a photovoltaic system – if you do not have the money to meet your basic needs.
This is why major societal challenges like climate change cannot be solved without addressing poverty. Because while there is poverty, people will simply not “do the right thing” when they cannot afford it. If the costs of living in a more sustainable way are higher than what they can afford, there is little choice but to eat whatever they can, drive the most affordable (and most polluting) vehicles. They buy the cheapest appliances which often break down, and if they can’t get a repair company similar to https:www.adamsapplianceco.com to fix it, the appliance then joins many others just like it in a landfill. All these mentioned are still among the major polluters we are trying to eliminate. But until poverty is tackled they will persevere to pollute our world.
by Vito Laterza | Dec 10, 2015 | News
At the end of November, a coalition of eurozone campaigners, civil society organizations and economists launched the campaign Quantitative Easing for People, calling for the European Central Bank (ECB) to radically change its approach to the current Quantitative Easing (QE) program. At the time of writing, 75 economists have endorsed the campaign.
The initiative brings together groups including Social Justice Ireland, Collectif Roosevelt (France), World Future Council (Germany), FairFin (Belgium), European Alternatives, and Basic Income Europe. The campaign is also supported by organizations from Italy, Greece, Spain, Austria, and the Netherlands; see the full list here.
QE is an unconventional monetary policy used by central banks to stimulate the economy. It usually consists of buying government bonds or other securities in order to lower interest rates and increase the money supply. QE began in the eurozone earlier this year, and the ECB is currently creating 60 billion Euros each month. Matthias Kroll from the World Future Council said: “So far the ECB’s QE program has proven to be ineffective in raising inflation back to its 2% target.”
“Flooding financial markets inflates share and bond prices, which makes the rich richer, but does little to help households and business. In fact, QE is helping fuel a new financial bubble, laying the foundation for another financial crisis. The eurozone needs a more direct and efficient stimulus.”
European stock markets plunged on December 3, when Draghi announced that the current QE program would be extended by six months to March 2017. This is a sign that even large corporations and financial markets do not believe in Draghi’s QE and expect more.
The aim of the QE for People campaign is to push the ECB to spend the money differently, by focusing on public investment, key social services or redistributive mechanisms like a citizens’ dividend – the last idea resonating well with basic income activists.
The proposal was first put forward in a letter signed by 19 economists and published in the Financial Times in March this year:
Rather than being injected into the financial markets, the new money created by eurozone central banks could be used to finance government spending (such as investing in much needed infrastructure projects); alternatively each eurozone citizen could be given €175 per month, for 19 months, which they could use to pay down existing debts or spend as they please.
Cash transfers under QE for People and basic income have common features. Both are directed to all citizens, with no strings attached. The time dimension differs though, as QE measures are by definition temporary, while basic income is a permanent scheme.
The 75 experts who support the campaign include several pioneers of the idea, such as Professor Steve Keen, Professor David Graeber and fund manager Eric Lonergan, as well as other influential economists and financial analysts like Ann Pettifor and Frances Coppola. These experts signed a statement of support that lays out the reasons behind the campaign:
1. Conventional QE does not work
Since it started in March, the eurozone QE program has not helped to rescue the eurozone economies from stagnation.
2. Conventional QE is risky and harmful
Flooding financial markets inflates share and bond prices, which makes the rich richer but does little to help ordinary people and businesses. In fact, QE is helping fuel a new financial bubble, laying the foundation for another financial crisis.
3. A more direct approach is needed
Countries in the eurozone need to stimulate their economies without increasing public and private debt, without increasing inequality, and without creating bubbles.
4. QE for People is possible
Instead of flooding financial markets, money created through QE should be spent into the real economy, on essential public investment such as green infrastructure, affordable housing and/or distributed as a citizens’ dividend to all residents.
5. QE for People is urgently needed
Given the challenges facing the eurozone, we urge economists, civil society organizations, and people from across the eurozone to join us in calling on the ECB to implement QE for People as soon as possible.
The campaign will focus on raising awareness of the failures of the current QE program, building political momentum around alternative monetary policies and fostering further research. “Having more than 70 economists endorsing the idea is a huge milestone, but this is only the beginning. Our goal is to create a much bigger coalition with citizens, academics and civil society organizations,” said Stan Jourdan, campaign coordinator.
If you want to know more about the campaign, visit the campaign website.
You can join the movement QE for People by signing up here.
Economists can endorse the campaign here.
See also: Stanislas Jourdan, “Europe: 19 economists call on the ECB to make ‘QE for the people’ in a letter to the Financial Times,” Basic Income News, March 27, 2015.
by Andre Coelho | Nov 27, 2015 | Research
The material conditions of freedom is an updated version of an earlier book (published in 1999) called El derecho a la existencia (The right to existence). This is a comprehensive volume about Basic Income (BI), dealing in a detailed fashion its definition(s), related theory, discussions about work, welfare, BI financing and typical criticisms of BI. Although dated from 2007, the volume is now accessible online.
Daniel Raventós (trans. Julie Wark), The material conditions of freedom, Pluto Press, 2007
