Scott Santens: “Is the solution to extreme wealth inequality really – Alaska?”

Scott Santens: “Is the solution to extreme wealth inequality really – Alaska?”

Scott Santens. Credit to: Singularity Bros.

 

Scott Santens, writer and long time UBI advocate, speaking at the Davos World Economic Forum 2017, views the Alaska Permanent Fund as a foundational aspect for the funding for a Universal Basic Income – a UBI.  Santens, and a growing number of people all over this planet are coming to the conclusion that something like a UBI is required in order to provide an effective counterbalance to the inequality of wealth distribution that currently plagues the world’s populations and the human ramifications of automation, robotization of the workplace.

Santens points out that, in a democracy, all citizens are deemed equal under the law and the Alaskan fund offers an excellent example of how the wealth being extracted from a communities resources must first and foremost benefit the people that comprise that community. The Alaskan fund extracts a percentage of the wealth being extracted from its resources and that money is then used to fund Alaska’s social programs as well as annually depositing as much as a thousand dollars or more into the pockets of every Alaskan citizen. A sort of pay to dig policy. That Alaskan Fund is now worth some fifty billion dollars. Conversely, in a similar but more aggressive manner, some years ago Finland was adamant that its offshore oil resources must benefit all of the Finnish people.  Finland took money off the top of the oil profits and put it into what is now a trillion dollar fund that is currently benefiting everyone in Finland.

But for Santens, resource funding is only one of a nation’s assets from which a UBI can produce a revenue flow that can both enrich and empower the populations it will serve.

Santens points out that a related resource, land itself, needs to be re-evaluated.  Land is not just where we build our homes, grow our crops and where our businesses and factories operate from.  Land is where wealth is invested and from which wealth is extracted. People can hide their money and their wealth, but they can’t hide their land.  Therefore a Land-Value Tax  would provide “… an extremely progressive tax on both corporations and individuals because land is so unequally distributed towards the top.”  Instead of the value of the land being decided by the owner, the land would be valued for the wealth it represents. A vacant downtown lot would then be as valued as the next door highrise and further motivate the owner to develop the land.

Secondly, for Santens a strong, social motivator for a UBI is the ever shrinking workplace where employees are increasingly being undervalued and then victimized by the threat of automation and robotization these days. Santens provides graphic representations of how the decline of collective bargaining, worker’s rights and our wages – which not too long ago had almost balanced out income distribution – have been declining proportionate to the increase in income inequality for years now. Santens understands that a UBI is not just an income supplement whereby workers canweather technological changes in the workplace, but a means whereby we finally achieve the freedom to refuse to take work that is unsafe or underpaid and, instead, achieve an equality of empowerment when bargaining with prospective employers. An equality of needs as it were.

Thirdly, Santens offers that a “annually rising intellectual property fee could be added to any intellectual property wishing to be monopolistically excluded from the public domain, with the revenue returned to citizens universally for their co-ownership of the government granting such protection.” Santens uses the example of data miners like Google and Facebook that extract information from their hundreds of millions of users for free, and then they sell that information to third party profiteers, as the reason why that information must come with a price to the data miners. When you profit from us you pay us for the privilege.

Then there is the creation of money itself. Not that long ago only the state could create new money but corporate and financial lobbyists were able to convince many governments that the commercial banks could be trusted with this responsibility. Santens wants governments to take back this responsibility and thereby put themselves back in charge of first determining the value of the money and secondly setting the value of the money significantly above the cost of producing it so as to ensure adequate funding for that nation’s UBI.

For Santens these three pillars, resource and land value funding, worker empowered bargaining and intellectual property/data mining are all keys to diminishing and, hopefully, continuing to bring greater balance to the economic inequality we see today. But Santens cautions that none of these changes will ever occur, or if they do they will not survive the reactive response of the wealthy set. For without real, effective democratic reform none of these progressive ideas will survive for long. Santens points out that “barriers to voting must be torn down, and the franchise must be expanded” if we wish to implement such radical but much needed changes to the inequality that is plaguing this planet’s populations.

Japan: National TV will show a short program about UBI on 27th July

Japan: National TV will show a short program about UBI on 27th July

NHK, Japan’s largest broadcasting organization, is going to air a short program on UBI. The program will be broadcasted around 7.20 am during their morning news program called ‘Ohayo Nippon (Good morning Japan)’.

The program is based on a director’s recent visit to Finland and his interview of professor Toru Yamamori, a member of BIEN.

 

TV Asahi, another national TV network, also had a short program on UBI on 13th July. In a program that focused on economic policies alternative to the current governmental economic policy called ‘Abenomics’, Toru Tamakawa, an anchor of the program, visited two economics professors. Professor Eisaku Ide proposed a Swedish style social and economic policy, while professor Toru Yamamori introduced an idea of UBI.

Reviewed by Kate McFarland

HISTORY of UBI: From Hunter-Gatherers to the 21st Century

HISTORY of UBI: From Hunter-Gatherers to the 21st Century

Investopedia published an article in May this year, “The Long, Weird History of Basic Income – And Why It’s Back

In this article, written by David Floyd, the history of support of UBI is described from the period of hunter-gatherer societies and how the networks in those societies took care of people who could not provide themselves with a basic standard of living. The article then describes how agriculture and urbanization made an end to such networks and how problems were not handled well by the institutions that took the place of the original networks, referring to Charles Eastman who described this problem in 1915.

Thomas Paine was one of the famous people who noticed the creation of poverty, caused by cultivation, which did not exist before. He was the first to propose a UBI (Paine called it a “groundrent”) in the late 18th century, as a compensation for the dispossession of the majority of inhabitants of their natural inheritance. Cole first used the term Basic Income in 1953.

From Paine, via Henry George, Huey Long, G.D.H. Cole, Martin Luther King, Mc Govern and Nixon, the current boost of support for UBI in the 21st century is explained as a reaction to poverty and inequality, predominantly used as an argument by proponents on the left political spectrum, and inefficiency of the welfare state, used as an argument on the right wing.

In addition to the political perspective, a distinction between “reformers” and “futurists”, which cross-cuts left and right, is described in further depth.

The group of “reformers” is described as a group of basic income supporters who is mostly concerned with addressing problems in society as it is now, mostly caused by the broken welfare system, such as:

  • “Employment traps” (where people are kept form leaving their job out of fear and bad employers are supported as a result of that)
  • “Unemployment traps” (“earn a dollar from work, lose a dollar in benefits”)
  • “Welfare cliffs” (where the effect tax on additional income even exceeds 100%)
  • Stigma associated with public benefits
  • Bureaucratic inefficiency

The group of “futurists” is described as supporters who see technological unemployment as a main threat in the future and offer basic income as a solution or who see a basic income as a cornerstone of an eventual utopia.

The two main criticisms of a universal basic income are its cost and the expectation that it would reduce or eliminate incentives to work.

This discussion is described with calculations of “The Economist” and views of Bill Gates, Karl Widerquist, Guy Standing, Philippe van Parijs and others. Brief attention is given to Alaska’s “Permanent Fund Dividend” and the outcome of experiments, such as Manitoba and India. Furthermore, the definition of ‘work’ is discussed, the effects of UBI on poverty and even the experiments in Finland, Oakland and Ontario get attention.

Floyd summarizes his article with a question: “Could doing away with poverty, sweeping away patronizing bureaucracy, neutralizing the threat of mass unemployment and increasing the value society places on worthwhile, but unprofitable, pursuits really be as simple as handing everyone cash?” He then uses Confusius’ quote to guide us towards the answer:

“The way out is through the door.”

 

Info and links

Full article at investopedia.com

Photo: Money! by Hans Splinter, CC-BY-SA 2.0

Special thanks to Dave Clegg for reviewing this article

 

AT Kearney: “Best Things in Life Are Free?”

AT Kearney: “Best Things in Life Are Free?”

Credit to: AT Kearney.

 

Courtney McCaffrey and others from AT Kearney published an article on the debate around Universal Basic Income (UBI) in markets throughout the world. Politicians, in both Europe and North America, are winning on campaign trails with talk about returning control to the common people from the economic system in the globe.

But one of the big worker displacers is automation and new technologies. Oxford University reported 47% of US jobs will be taken over by automation in the next two decades. A UBI is being offered as an economic buffer for such workplace and technology transitions.

Such a UBI would be universal and unconditional in the application. Past UBI experiments such as Mincome in Canada, projects in Seattle and Denver (USA), and Namibia produced real, positive results empowering those politicians. McCaffrey and her collegues also mention recent major endorsements for UBI, for instance from such luminaries as Elon Musk, Tim O’Reilly, and Marc Andreessen.

Two books are recommended: 1) Utopia for Realists by Rutger Bregman, and 2) Basic Income: A Radical Proposal for a Free Society and a Sane Economy by Philippe Van Parijs and Yannick Vanderborght. Other notable cases reported on were Finland, India, and Ontario.

The article discusses pros and cons of UBI, in a general sense. It was noted that citizens with a UBI will spend more time on family and school. The sources of funding for the UBI could be revenues from natural resources and/or more taxes. Some views of critics are following their own political lines, but the major concern revolves around people’s availability to work when they get a UBI covering their basic needs.

Finally, the article summarizes views agains UBI on the political Right and Left. On the Right, the main argument is cost. On the political Left, detractors view UBI as “regressive” because it could dismantle current welfare systems, and that it may not capture different living costs in different areas.

 

More information at:

McCaffrey, C.R., Toland, T. & Peterson, E.R., “The Best Things in Life Are Free?“, AT Kearney, March 2017

GERMANY: Schleswig-Holstein coalition shows interest in exploring basic income (but no pilot yet)

GERMANY: Schleswig-Holstein coalition shows interest in exploring basic income (but no pilot yet)

The end of June saw the proliferation of rumors that a basic income experiment would be launched in the German state of Schleswig-Holstein. While such rumors were inaccurate, a political coalition in the state has called to further research basic income.

The June 25th edition of the newspaper Flensburger Tageblatt, the daily newspaper of the city of Flensburg in Schleswig-Holstein, heralded the purported plans of the state government to introduce an experiment of basic income. The paper quoted Robert Habeck, Green Party leader and future minister of environment, as saying that “we want to test a basic income from the government side and propose Schleswig-Holstein as a model region.” It further claimed that a coalition of the Christian Democratic Union (CDU), Free Democratic Party (FDP), and Green Party backed the demand for a test of a basic income.  

The article fueled rumors, widely disseminated through basic income social media channels, that Schleswig-Holstein is preparing to launch a basic income experiment.  

This announcement, however, was premature. Despite Habeck’s support, a basic income experiment Schleswig-Holstein remains at best a remote future possibility. In fact, the coalition agreement signed in between the CDU, FDP, and Greens does not call for an experiment or pilot study of basic income. Instead, calls only for the establishment of a “laboratory for the future” (“Zukunftslabor”) to research and assess new forms of social protection, a basic income being one.

Arguably, the coalition agreement’s proposed “laboratory for the future” does signal progress toward the investigation of a basic income in Schleswig-Holstein. However, the reality is far more modest than originally rumored.

 

No German UBI Experiments So Far..

Shortly prior to the first rumors of a basic income pilot in Schleswig-Holstein, the State Legislature of Hawai’i passed a bill that created a working group to study a universal basic income among other possible policies to provide the state’s residents with economic security. This generated a spate of media attention for basic income — but, as usual, not all reports were entirely accurate. Some news reports on the legislation, identified Germany (in addition to Finland and, soon, Canada) as a country that is already “testing” a basic income.

The claim may have originated in an article published in Business Insider and Futurism, which cites an article about the startup Mein Grundeinkommen as its source. This is misleading: Mein Grundeinkommen is a private effort, not a governmental one, and it merely awards year-long “basic incomes” of €1000 per month to individuals chosen by lottery. The startup’s work benefits randomly selected individuals while increasing awareness of basic income — and, in these aims, the project been highly successful. Mein Grundeinkommen has distributed year-long “basic incomes” to 94 individuals (and counting), and each drawing continues to generate media publicity. However, although anecdotes from individuals are sometimes presented as evidence regarding the effects of a basic income, the project should not be confused for an experiment.

Currently, no basic income experiment is being conducted in Germany — and, so far, no developments in Schleswig-Holstein have changed this fact.

 

More information on the alleged Schleswig-Holstein pilot:

Lea Hampel, “Jamaika-Koalition flirtet mit dem Grundeinkommen,” Süddeutsche Zeitung, June 27, 2017 (in German).

North German state weighs up introducing unconditional basic income,” The Local, June 27, 2017.

Ronald Heinrich, “Grundeinkommen in Schleswig-Holstein? – Reality Check,” Huffpost, June 30, 2017 (in German).


Photo (Kiel, Schleswig-Holstein) CC BY-SA 2.0 Rüdiger Stehn