by Andre Coelho | Sep 10, 2015 | News, Research
After the resounding commercial and critical success of Thomas Piketty’s book “Capital in the twenty-first century”, the author himself responded, in the form of an article in the latest release of Basic Income Studies, to critics and to proponents of Basic Income (BI). As Michael Howard puts it in the introductory paper of the referred edition of Basic Income Studies, “he is wary (…) of treating a cash transfer as a ’magic bullet’.”. However, Thomas Piketty has been a defender of progressive taxation and some forms of BI ever since 1997, particularly the negative income tax (NIT). Although he remains consistent with his prior views on the role of the welfare state, he supports “universal cash transfers for dependent children” and “basic income for all adults with insufficient market income.” Nevertheless despite disagreements, he views basic income as a valid subject of discussion.
In the same Basic Income Studies volume, other authors discuss Piketty’s book from various perspectives. For instance George Grantham evaluates whether Piketty’s view can be reconciled with mainstream economics, while acknowledging that capitalism is surely compatible with a modest basic income. Also Louise Haagh in her article underscores, like Piketty, that BI is not a magic bullet, but indeed an important component for a progressive agenda which promotes social equality and development. In turn, Karl Widerquist stresses that not only entrepreneurs have a tendency to become rentiers but also that inequality depends both on the difference between the rate of return of capital and growth rate of the economy (the famous “r > g” inequality) but also on how much capitalists actually spend in the economy. He adds that, besides progressive taxation, resource taxes should also be imposed, coupled with some form of resource dividend or basic income.
All these authors, among some others that also shared their views on “Capital in the twenty-first century” in the latest issue of Basic Income Studies (Ruben Lo Vuolo, Geoff Crocker and Harry Dahms), essentially agree that social problems are caused by inequality and that new forms of redistribution (or reinforcement of present forms) are essential to restore social balance, or at least reduce inequality for the time being. In the background, remaining to be addressed is the dark cloud of political control, at the moment very much tilted towards the wealthiest members in our society.
Basic Income Studies (cover)
More information at:
Thomas Piketty, “Le Capital au XXIe siècle [Capital in the twenty-first century]“, Catalogue Sciences Humaines et Documents SEUIL.com, September 2013
Ed. by Haagh, Anne-Louise / Howard, Michael, “Basic Income Studies“, De Gruyter, 2015
Credit picture CC Universitat Pompeu Fabra
by Josh Martin | Aug 11, 2015 | News
Dowd discusses the negative income tax experiments in Canada and the U.S. in the context of recent discussions on basic income in Canada.
Emma Dowd, “Canadian ‘Mincome’ Program Aims to Reduce Poverty”, The Borgen Project, 14 July 2015.
by Stanislas Jourdan | Jul 8, 2015 | News
Following growing interest in the idea of a basic income in the Netherlands over the past year, the feasibility of local pilot projects to investigate basic income is being considered in more than 30 Dutch municipalities.
The City of Utrecht, the fourth most populated City of the Netherlands, has attracted a lot of attention recently – including at an international level – with the early announcement of their launch of a pilot project later this year.
Although the program is far from being ready and its specifics are far less radical than they sound, the good news is: Utrecht might just be the tip of the iceberg of a massive wave of local experiments in the Netherlands.
Currently there are 30 Dutch municipalities interested in running basic income pilot projects. Among them, the cities of Utrecht, Tilburg, Wageningen and Groningen are the most advanced.
These developments are the fruit of many people’s efforts. They are also the outcome of an unprecedented wave of awareness about basic income in the Netherlands, following the broadcast of two Dutch documentaries about basic income.
Sjir Hoeijmakers
Sjir Hoeijmakers, a young econometrician, helps stakeholders interested in experimenting with the idea of a basic income at a local level. He follows up with all interested cities, advises them, and tries to create synergies between them. Hoeijmakers crowdfunded his own ‘basic income’ a few month ago, so he could afford to dedicate himself into the coordination of pilot projects ideas in the Netherlands.
“Most of the people starting these initiatives are looking for an alternative to the current social security system, which is perceived as being based too much on distrust in and control over welfare recipients.” explains Sjir Hoeijmakers. According to him, most of the initiative for local pilots comes from people working inside the municipal administrations, but some also come from academics or are citizens’ initiatives. “What is most interesting and a very good sign is that the initiatives come from people with all kinds of political backgrounds, and are often depoliticized.” .
But what are those experiments about exactly? Despite the media enthusiasm about Utrecht becoming soon “the first city without poverty in Europe”, the reality is of course slightly less utopian.
“Experiments will focus on people already receiving benefits”
The experiments will mostly focus on people who are already welfare claimants in the Netherlands, and particularly beneficiaries of the national minimum income system, which is means-tested and conditional. It is also not paid on an individual basis, but assessed by household.
In fact, those experiments mainly have two major differences with the current system: they aim at making social assistance less conditional regarding work requirements, and will aim at removing the poverty trap by allowing people to earn extra money on top of their social allowance.
However the schemes being considered so far remain household-based, means-tested and therefore non-universal. In fact, these schemes are similar to the concept of negative income tax which in the 1970s, was the basis of experiments in the United States.
“These experiments are not exactly basic income, but they go in that direction” insists Sjir Hoeijmakers. Basic Income Network in the Netherlands agrees too, and regards these initiatives as possible milestones on the path towards a fully unconditional basic income.
This approach has a fundamental advantage: since the target groups are already receiving welfare money, not much extra funding is needed from the existing budget to run these experiments. This would be a different story if all of the city’s residents were included.
“Utrecht is making big plans, but they are not ready yet”
International media outlets such as The Independent and many others have extensively reported on the case of Utrecht, reporting that the experiment could start as early as September. Sjir Hoeijmakers admits to being surprised by how much coverage the city of Utrecht is getting right now.
“The City is making big plans, especially thanks to Alderman Victor Everhardt. The program, however, is just one of many experimental initiatives, and still needs to be authorized by the National Secretary of Social Security” says Sjir Hoeijmakers. According to him, the program will most likely not start before January 2016: ”To be realistic, it could be far later than that, depending on the politics of it.”
Despite the media excitement, the numbers of people and the amounts to be given aren’t fixed yet: there are only approximate numbers up till now, and they don’t necessarily give a good picture of what will be done.
The Utrecht experiment as currently planned, would work with 5 groups, only of which one would get something close to a basic income (no withdrawal if there is extra earned income, no further conditions). A sixth group who stay living under the current welfare system will act as a control group. Each group will have a minimum of 50 people, and the 900 and 1300 euros aren’t exact figures but indications of how much might be paid.
“The city of Utrecht is using the rhetoric of the basic income, which may have contributed to it getting so much attention.” he says. “In some other cases the term Trust Experiment is being used, to avoid confusion with the concept of a full unconditional basic income.”
Several political parties openly support the experiments, including the green-left, the liberal-democrats, and some among the labor and the socialist parties.
by Stanislas Jourdan | Jun 29, 2015 | Opinion
The new centre-right government coalition in Finland committed to run a basic income pilot project. It is however unlikely that a pure unconditional basic income has any chance to be experimented, says BIEN Finland‘s chairman Otto Lehto in this interview.
The Basic income community worldwide is getting excited about the Finnish government’s commitment to launch a basic income experiment. Are you enthusiastic too?
We have certainly reached a historical point. For the first time, in the general elections of April 2015, the majority of the MP’s in the Finnish Parliament have expressed their support, ranging from mild to strong, for basic income. This data derives from the answers given by candidates during the last election. The majority of the Finnish public has also expressed its support for the idea. This is the result of many years of active public debate and discussion, including our much-publicized but ultimately unsuccessful citizen’s initiative campaign (2013).
Otto Lehto
The new government, led by Prime Minister Juha Sipilä from the Centre Party, has committed itself to setting up a pilot project for basic income. However, premature enthusiasm should be dampened by realism. For one, it is not entirely clear whether people understand the term in the same way. Many MP’s support a BIG that is conditional, means-tested and non-universal.
Secondly, there are elements in the government, including powerful ministers, who oppose UBI and will undoubtedly do their best to abort, or at least water down, the pilot experiment.
So there are reasons to be optimistic but also reasons to worry about the outcome.
How will this pilot project be conducted?
The government hasn’t announced the details yet. The public announcements have been sparse. The government should roll out more details in the coming months. In the past, Prime Minister Sipilä has expressed his support for a regional study conducted under the advice of experts.
Has the Centre Party of Finland been a strong basic income supporter in the past?
The party has traditionally been in support of a basic income or a negative income tax, at least since the 1990’s. However, unlike the Greens and the Left Alliance, who have quite detailed calculations, the Centre Party has never specified what kind of a basic income model it supports. In addition, the party has been quiet on the issue for a long time. The youth wing of the party, however, has been working together with BIEN Finland to advocate for a proper Basic Income.
Support for the basic income renewed itself in the party since september 2014, after the new party leader Prime Minister Sipilä, expressed his support for setting up a pilot project in Finland. At the same time, the influential think tank Sitra funded a report by Tänk (November 2014), which provided a roadmap for setting up a pilot project for BIG.
These developments have led to this point. However, the leaders of the party are still divided on whether this should be a proper BIG or a means-tested, conditional form of BIG.
How about the other parties involved in the current governing coalition ?
The other government coalition parties (the True Finns and the National Coalition Party) are equally divided on the issue, so it is unclear on whether a “pure” Unconditional Basic Income has any chance of even being tried. The current leadership of those parties is unfortunately quite opposed to the idea, or at least suspicious of it, even though there are many supporters in the rank and file members of the two parties.
So, although the Centre Party has managed to include the basic income pilot project into the government’s agenda, it is not very high on the list of priorities for the other coalition parties.
And, to complicate matters, the new government has expressed its intention to increasing the work requirement of social security in order to reduce the costs of the welfare system, while at the same time pushing for a basic income experiment! The same ambivalence is reflected in their statements released to the media. The schizophrenic push and pull between these mutually incompatible goals — piloting an unconditional basic income and simultaneously increasing the conditionality of social security benefits – makes predicting the future difficult.
In this context, how will BIEN Finland stand?
The BIEN Finland network has strong existing connections to many of the opposition parties (including the Green Party and the Left Alliance, which are both strong supporters of basic income). Due to accidents of history, we have weaker connections to the government coalition parties, with the exception of a handful of MP’s, think tanks and the youth wing of the Center Party, so we have had little influence on the planning of the basic income pilot project.
Nonetheless, we will continue to proactively offer our expertise to the government. We will follow the developments as they happen, and inform the European network as soon as we know more about the upcoming pilot program.
Thank you Otto!
Credit picture: CC Aaronigma
by Will Wachtmeister | Jun 24, 2015 | News
From https://www.patreon.com/scottsantens?ty=h
Scott Santens responds to a widely publicized claim originally made in The Economist that basic income would entail a 60% rise in income tax and is therefore unaffordable. Santens lays out a step-by-step calculation which arrives at the conclusion that poverty-alleviating basic income would generate negative income taxes – i.e. tax rebates – for the overwhelming majority of US households.
Scott Santens “The Basic Affordability of Basic Income.” Huffington Post, 27 May 2015
