by Guest Contributor | Dec 17, 2015 | Opinion
By Jim Pugh
“I like the idea, but it’ll never happen.”
I hear this response a lot when talking to people about establishing a universal basic income in the United States. Once you get past the explanation of what a basic income is and how offering it could eliminate poverty, support entrepreneurship, and prepare us for a future where most jobs have been displaced by automation, people are generally quite supportive”Š-“Šbut they don’t believe that it could ever be implemented here.
And their skepticism is entirely reasonable. In today’s political climate, it’s hard to imagine how a program as radical as basic income could be enacted. When simply passing a budget to keep the federal government operational starts to seem like a big accomplishment, what chance do we have for major reform?
But in spite of the perceived impasse, there is a viable path to implementing universal basic income in the United States. Here’s how it can work.
Step 1: Spread Awareness
If you were to stop a random person on the street and ask them what they think about basic income, you’d most likely get a confused stare. While more people have become interested in the idea in recent years, basic income is still unknown to the population at large. What’s more, when you first tell people that the solution to some of our biggest economic challenges is just giving everyone money, a lot think the idea sounds crazy.
For that reason, the first step on the path to an American basic income is raising awareness and support across the country. For radical reform to become possible, there needs to be a solid majority of Americans behind the idea.
There isn’t any secret formula for accomplishing this”Š-“Šit’s up to those of us who support the idea to make it happen. We can talk to our friends and family and convince them of the importance of basic income. We can produce compelling media that explains the idea and why it will work. We can organize events to capture the attention of the press and general public.
In 1933, a man name Francis Townsend wrote a letter to the editor of his local newspaper, proposing a plan to provide money every month to the elderly across the United States. Within a year, millions of people had organized into grassroots groups around the country, distributing pamphlets to their community and advocating for passage of the Townsend Plan. And just one year after that, Franklin Roosevelt proposed and passed the Social Security Act, providing the first-ever federal assistance to American retirees.
More and more, people are starting to realize the system we have right now is no longer working. If we let them know there’s a better alternative out there, we can build a movement in support of universal basic income in the United States.
Step 2: Test It Out
Providing a full basic income to all Americans would be a huge leap forward. Before we can make that leap, we need to try it out in a more limited capacity.
The second step on the path to an American basic income is to enact smaller-scale prototypes of the program and see how they go. By observing actual implementations of basic income-like programs in the United States, we can gain insight into how a full program would work and allay the concerns of skeptics. And the cost could be considerably lower, making prototypes much more achievable in the short term.
There are a couple of different models for how basic income prototype programs could work:
Dividends from Shared Resources
One type of basic income prototype actually exists in the US already: the Alaska Permanent Fund. Since 1976, the state of Alaska has managed a fund which is financed by oil revenue in the state. The fund pays out dividends each year, split equally amongst all Alaska residents. Over the last 25 years, the dividend payment has varied between $800 and $3,200 per person.
While the amount awarded isn’t sufficient to be considered a true basic income, the Alaska Permanent Fund is an example of an unconditional, universal income. In his book With Liberty and Dividends for All, Peter Barnes argues that this program could pave the way for adoption of similar plans by other states and could be expanded to provide increased universal income down the road.
Credit: 3D Printing Industry.
In fact, an analogous program is currently being considered in Oregon. Under the Carbon Fee and Dividend plan, polluters in the state would need to pay for the carbon they emitted, and this money would then be distributed equally to all Oregon residents. While the Alaska Permanent Fund model only makes sense for states with large oil industries, Carbon Fee and Dividend could be expanded to every state in the country.
Randomized Trials
Another potential prototype model is to provide a full basic income, but only to a small number of people. Randomized trials could be set up and run, where certain families in a given region would receive a basic income, and the program impact could be assessed by comparing to non-participating families.
In fact, an experiment similar to this was previously run in the US in the 60s and 70s”Š-“Šin various locations across the country (New Jersey cities; rural Iowa and North Carolina; Gary, Indiana; and Seattle and Denver), randomly-selected families were provided with a “negative income tax,” which gave substantial direct monetary support to those with low incomes.
The study showed some initial promising results, with increased school attendance rates and only a modest reduction in labor rates. Randomized trials are now being set up abroad in Finland to evaluate the effect of a universal basic income there. If more experiments were conducted in the United States, it could provide a much clearer picture of the full impact of enacting basic income here.
Although labeled as the second step on the path, implementing prototypes could actually happen in parallel to raising awareness amongst the public. These efforts could even be complementary”Š-“Šthe success of prototype programs would increase visibility and support for basic income. And in turn, greater support would make additional prototypes easier to enact. We need some very concrete examples of how basic income can work, though, before we’ll be ready for final step.
Step 3: Wait for Lightning to Strike
Let’s say we’ve reached a point where most people know about and support basic income, and there are prototype programs showing it working. Even then, given the current level of dysfunction in Washington, DC, it would still be extremely difficult to enact a federal version. That’s why the third step to implement an American basic income is to wait for the right moment.
In her book The Shock Doctrine, Naomi Klein describes how in times of crisis, people may be willing to accept big changes that normally would seem far too radical. While Klein’s focus is on the enactment of exploitative corporate policies, the same principle can apply to positive changes.
If automation continues to displace jobs as predicted in the coming years, there will be moments of extreme disruption to our economy. Grocery stores will lay off big parts of their workforce as cheap, automated stocking and checkout services become available. More automated restaurants like Eatsa will appear, which employ fewer service staff. Millions of jobs will be lost in the transportation industry to self-driving vehicles.
There are no doubts about it, the transportation industry, in particular, has already undergone some significant changes over the past few years. For example, thanks to developments in technology such as Titanwinds trucking dispatch software, it is now possible for fleet managers to plan routes in real-time to ship goods and control their fleets in the most efficient way. With this in mind, it is certainly intriguing to consider what else might be in store for the future of the trucking sector for instance.
As the magnitude of these disruptions becomes apparent, people will be knocked out of their normal routine and be willing to embrace a big change. At that moment, if we have public awareness and support, and if we’ve demonstrated the program’s effectiveness, people across the country can rally behind a clarion call to push past the gridlock in Washington”Š-“Šand we will have a real chance to enact an American basic income.
What’s Next?
The steps laid out above are not theoretical”Š-“Šmany of us are already working to achieve them.
Discussion groups and panels are being convened around the country in places like New York, Palo Alto, Washington, DC, and San Francisco. A new nonprofit organization, Basic Income Action, is pushing presidential candidates to engage on the issue.
People are crowdfunding their own basic income and using the money to support themselves as they write about the idea. An Oregon nonprofit is working to push for the enactment of Carbon Fee and Dividend there.
And on the weekend of November 13, the first-ever Basic Income Create-A-Thon was held in San 
Francisco, where writers, artists, videographers, developers, musicians, and others came together to create content and media around the theme of basic income. More Create-A-Thons are now being planned across the country.
An American basic income is possible”Š-“Šand it’s up to us to make it happen.
Jim Pugh is the CEO of ShareProgress, a politically-progressive tech company offering tools for social sharing. He is the former CTO for Rebuild the Dream, and Director of Analytics for @BarackObama. He holds a PhD in Robotics from the Swiss Federal Institute of Technology in Lausanne.
by Tyler Prochazka | Dec 16, 2015 | News
With supporters such as Charles Murray and Friedrich Hayek, the Basic Income has been a rare example of a welfare policy that transcends ideological boundaries. Sam Bowman recently reiterated his support for the basic income in a short article on the Adam Smith Institute blog.
“I’ve long made the case for a basic income (aka a Negative Income Tax) on the basis that it would simplify the welfare system and make sure people always have an incentive to work,” Bowman says.
In addition to noting the economic impact of a basic income, Bowman points to Charles Murray’s argument that a basic income could jump-start civil society. According to Murray, a basic income would help civic organizations become “much more vital, helpful and responsive” to the needs of the community. Bowman concludes that, if Murray is correct, a basic income could be a solution to both “primary poverty” and “secondary poverty”.
Sam Bowman, “Would a basic income reinvigorate civil society?”, Adam Smith Institute, December 8, 2015.
by Tyler Prochazka | Dec 13, 2015 | News
Amid the many dramatic headlines about Finland’s Basic Income, Dylan Matthews breaks down the history and elements of the plan, which he describes as “the most methodologically rigorous and comprehensive test of basic income to date,” in a recent Vox article.
After taking office last May, Finland’s center-right Prime Minister Juha Sipilä began pushing for a basic income trial. The currently planned experiment, which will be conducted by a team off experts from think tanks, universities and other research centers, will begin in 2017 and end two years later.
According Olli Kangas, director of research at Kela, the Finnish Social Insurance Institution, which is tasked by the government with presenting proposals for testing the basic income, Finland has several potential models for testing a basic income: a full basic income, a partial basic income, and a progressive negative income tax, in addition to miscellaneous other approaches, such as monetary incentives for desirable behavior. For the full context of these proposals click here.
It is possible that the trial will include both a nationwide random sample, with participants selected in a lottery, and the selection of districts in which all households will receive a basic income. The former approach will allow researchers to observe effects across demographics, while the latter will provide evidence of the effect of a basic income on an entire community.
Dylan Matthews, “Finland’s hugely exciting experiment in basic income, explained”, Vox, December 8, 2015.
by Guest Contributor | Dec 11, 2015 | Opinion
By Otto Lehto
People have different ideas on what society should look like, but they can still agree that a Basic Income Guarantee (BIG) is a good idea. The struggle for BIG should be the struggle for a specific policy measure, not for a utopian ideal. We are trying to make BIG a reality. That’s it. We are engaged in an ambitious project with limited boundaries. We are not trying to find a panacea for world hunger, domestic abuse or global warming. All we need is for a critical mass of people, and a few shrewd politicians, to do the right thing and vote for BIG.
In Finland, nearly 70% of the population supports basic income. For the first time ever, more than half of members of parliament do too. Historically, BIG has been advocated in Finland by the Green Party, the Left Alliance and the Center Party, joined recently by the Pirate Party. Advocates are found in all political parties and across all sectors of society. The Finnish National Union of University Students has officially endorsed a universal basic income, and so have many academics and think tanks. Post and neo-Keynesians are calling for it, as are leftist intellectuals. Even the banker Björn Wahlroos repeatedly endorsed BIG on newspapers and TV shows. He is one of the richest men in the country and a free market enthusiast.
We need a broad consensus if we want basic income to become reality. As recently reported in mainstream news across the world, a basic income experiment is about to be implemented, under the new center-right government headed by Prime Minister Juha Sipilä from the Center Party. The experiment is set to begin in 2017. Hopefully, this is just the prelude to a nation-wide implementation of a universal basic income.
There is nothing wrong in being utopian and in favor of radical solutions. But utopianism is not a necessary condition for engaging in the struggle for BIG. Sometimes it can be a hindrance. As basic income supporters, we may disagree on how high a basic income should be. We may have different views on whether to use the tax system, as in the case of a negative income tax, or social welfare instruments, as with most other forms of BIG. We may see basic income as a socialist principle or a free market mechanism. But we all acknowledge the need for a universal, unconditional and simple solution. We do not have to agree on anything else. We believe that BIG is important, because it does three things:
1) it eradicates absolute poverty;
2) it reduces bureaucracy;
3) it lays the foundation for a new, sustainable relationship between states and markets.
In order to achieve this, we need to build alliances between utopians and realists of different persuasions. At BIEN-Finland, our national branch, we are confronted every day with the various political leanings and aspirations of our members. Our diversity is something we celebrate, even if sometimes it causes friction and animosity. A one-sided approach to basic income would seriously hurt the prospects of BIG becoming a reality.
We should learn from popular struggles that have rallied mass support, such as the campaign for extending the right to vote to women in the late 19th and early 20th century. Universal suffrage was advocated by various classes and social groups. Driven by the same goal, farmers and workers marched together. Women were joined by their husbands. Newspapers representing different interests endorsed the idea. After some time, opposition to it was frowned upon. It was not the exclusive battle of Marxists, or trade unionists, or social liberals, or enlightened aristocrats. It was a struggle owned by the whole population. From a marginal idea, universal suffrage became common sense. The opposition did not disappear overnight. But it gradually lost steam, until it became a remnant of the past, deprived of any real power. BIG will succeed when it will achieve the same broad consensus. Our goal is to make opposition to BIG unfashionable and a little reprehensible.
The danger is not that the “wrong people” like the idea. Rather, the problem is that some people want to appropriate the name to implement different policies. If a proposed basic income is not high enough to cover basic human necessities, like food, shelter and clothing, then it cannot be called basic income. BIG should also not be confused with means-tested grants or workfare schemes. We need to be clear about this. In Finland, the government’s position oscillates between a real basic income and austerity or workfare policies, but public pressure and intellectual debate are creating a space for a BIG experiment.
A universal basic income should gain the support of Marxists, trade unionists, neoliberals, businessmen, teachers, farmers, feminists, tech nerds, American billionaires and Nigerian chicken farmers. The alliance must be broad and deep, and focus on common human needs. The emerging domain of populist politics, increased media attention and the growing intellectual debate around BIG, provide an unprecedented opportunity to further our cause.
Of course, we should not kid ourselves that humanity would finally overcome its differences under the guise of a BIG campaign, nor that left-wing and right-wing interpretations would lead to the same result. BIG organizations should be democratic forums for people from different backgrounds. Some of them are naturally inspired by a variety of utopian visions. Broad-based BIG has the potential to act as a true meeting ground for popular struggle, in which conflicting visions of the good society can strategically talk to each other and put forward a shared, simple solution. People should be able to set aside their differences – at least for a short while.
We may not like all our friends in the movement. Some of our allies are horrible people. (By the way, they probably think the same about you.) But we still have to live together in the same house. If people can, for the time being, agree on basic income, then we have already won. Bickering partisans can still keep on fighting over other issues. Trust me, there will always be something to fight about.
So bite your nails and be wise about strategy. Smile to your enemies. Shake hands with the most awful people. The smiling basic income activist is a silent, deadly assassin. If we want to think BIG, we need to act stealthily. We do not have the luxury to choose our political allies.
Otto Lehto is a philosopher and a political activist. He is the chairman of BIEN Finland.
by Vito Laterza | Dec 9, 2015 | News
In the last week, the basic income experiment in Finland has gone viral, making headlines around the world, from UK-based Telegraph to Russia Today. Not all the reports however were correct. Here is what we know.
Update March 2016: KELA has published its recommendations – see a summary here.
Some articles mistakenly gave the impression that the Finnish government has already made plans to introduce a nation-wide basic income. As we reported before here and here, for now the government has committed to implement a basic income experiment. KELA, the Finnish government agency in charge of welfare benefits, rectified the misperception on Tuesday.
In a previous statement released on November 19, KELA provided additional information about the experiment. It highlighted four objectives behind the program. It aims to find feasible options for an overhaul of the social security system in response to labor market changes. Some of these trends include the growth of temporary contracts and freelance work that is not covered by the current work-based benefits structure. The experiment will also explore how to make the system more effective in terms of providing incentives for work, and avoiding the poverty trap – benefit recipients are discouraged from taking up employment, if the additional income received from a job is only marginally higher than means-tested benefits. Another goal is to reduce bureaucracy and simplify complex and costly procedures for administering benefits.
The experiment will be carried out in a context marked by three years of economic downturn, which has led to rising unemployment and pressures on public spending. The current center-right government took office after general elections in April this year, and is carrying out a wide-ranging program of cuts that will affect education, health and welfare provisions.
A working group has been created with the task of providing a preliminary study that will lead to the actual experiment. The study will identify a model for basic income to be tested. The experiment will evaluate the effects of giving a basic income to members of different population groups, and produce an overall cost estimate.
The preliminary study is a collaboration between Kela’s Research Department, the Universities of Helsinki, Tampere, Turku and Eastern Finland, the Sitra Innovation Fund, the think tank Tänk, and the VATT Institute for Economic Research. Kela’s research director Professor Olli Kangas is the project’s head. The study is already under way. A decision by government on the details of the basic income experiment is expected in the second half of next year. The experiment is scheduled to start in 2017.
The American news website Vox published a PowerPoint presentation by Kangas that highlights some of the issues currently under discussion in the working group. BIEN-Finland President Otto Lehto stresses that this should be read as a general indication, rather than an official position of government or the working group.
The government has set aside 20 million euros for two years for the experiment. There are several options that the working group will consider. The first is a full basic income, where the amount paid to participants would be high enough to replace “almost all insurance-based benefits”, hence a significant monthly sum. As in other European welfare states, Finland has an insurance system where workers receive their unemployment and pension benefits from sector-specific funds. These are usually higher than the basic benefits administered to welfare beneficiaries regardless of their occupational status. The figure of 800 euros per month circulated by many news outlets is to be read as a possibility under this option, rather than anything set in stone.
The second option is a partial basic income that would replace basic benefits, but leave intact almost all existing insurance-based benefits. The presentation notes that, in this case, the monthly sum should not be lower than the existing level of basic benefits, which is around 550 euros per month. The same figure was reported in several media without the appropriate context.
A third option is that of a negative income tax, where income transfers are made through the taxation system. Other models might also be considered, including the option of a participation income given to unemployed people as an incentive to seek additional income – this alternative is discussed by Kangas himself and Jan Otto Andersson in a 2002 paper.
The size of the sample and the geographical areas covered are other key topics to be addressed. According to Kela, the next step will be the delivery of a review of available evidence from universal basic income models tested in other countries, which will be presented to government in spring 2016. In a recent survey carried out by Kela, nearly 70% of respondents support the idea of a universal basic income, and most of them think it should be set at around 1000 euros per month.
Here is a list of relevant sources for more information:
Kela, “Universal basic income options to be weighed,” November 19, 2015.
Kela, “Contrary to reports, basic income study still at preliminary stage,” December 8, 2015.
Kela, “Experimental study on a universal basic income.”
Olli Kangas, “Experimenting basic income in Finland,” presentation, December 8, 2015.
Liam Upton, “Finland: New government commits to a basic income experiment,” Basic Income News, June 16, 2015.
Stanislas Jourdan, “Finland: Government forms research team to design basic income pilots,” Basic Income News, October 15, 2015.
“Kela to prepare basic income proposal,” Yle, October 31, 2015.
Ben Schiller, “How Finland’s exciting basic income experiment will work – and what we can learn from it,” Fast Company, December 7, 2015.
Dylan Matthews, “Finland’s hugely exciting experiment in basic income, explained,” Vox, December 8, 2015.
Jan Otto Andersson and Olli Kangas, “Popular support for basic income in Sweden and Finland,” Conference paper presented at the 9th BIEN Congress, 2002.
Francisco, where writers, artists, videographers, developers, musicians, and others came together to create content and media around the theme of basic income. More Create-A-Thons are now being planned across the country.
