Mark Drakeford, First Minister of the Government of Wales (center), Beth Winter, Labor MP for Cynon Valley, and Guy Standing, co-president of BIEN, at the Labor Party Conference
There will be a basic income experiment in Wales in 2022. The First Minister in the devolved Welsh government, Mark Drakeford, has announced his full commitment to rolling it out in the Spring. Following an opinion poll showing that 69% of Welsh people wanted their government to conduct a basic income pilot, the Future Generations Commission arranged for a background report to be prepared, and at an event at the Labor Party Conference in the seaside town of Brighton, Mark Drakeford said he intended to devote the remainder of his time in office to advancing basic income in Wales. He was sharing the platform with Guy Standing, co-president of BIEN, who is advising the Government and Commission on the design of the proposed experiment. Coordinating the plans is the Taskforce for Tackling Poverty in the Welsh Government, headed by Sarah King.
At present, the main proposal is to give basic incomes to “care leavers”, that is, young people emerging into adulthood from care homes. If restricted to those, it would not be a proper basic income pilot, which requires everybody within a geographic community to be covered. In effect, it would be a test of an individual, unconditional modest cash transfer. Given the UK government’s rigid adherence to strict conditional means-tested benefits, which is causing widespread deprivation and a regime of sanctions, the proposed pilot could still prove valuable. However, discussions on the design, sampling and duration are still ongoing. Everything depends on resource constraints.
Villagers gathered to celebrate their basic income in the local church building
By: Billy Juma Munda, Evans Ododa, Lena Stark
Kowiti-A is a small village in Kisumu County in Kenya. It is twenty-three kilometres away from Kisumu town and has a population of 782 people of which 415 are adults and 367 are children below 18 years. Most of the people are engaged in farm-related livelihood activities. The village population is distributed among six clans. The nearest town Ahero is about 3 kilometres from the village.
About a year ago, two teachers from this village made a chance acquaintance, through social media, with members of an organisation called Mission Possible 2030 (MP2030). The context was basic income. They had heard about the idea of basic income from a local politician and began exploring it on the internet, only to realise that a global movement for it exists. MP2030 believes that without waiting for nation states to implement a basic income policy, we should start implementing a basic income by mobilising both individual donors and communities. This conversation led to MP2030 launching a project in Kowiti called Equalize in a humble way. From September 2020, the project gave a basic income of about 1100 Kenyan Shillings(KES) (10 US Dollars) per month to 10 people randomly selected through a raffle.
To facilitate money transfers, the teachers formed a local community-based organisation called Rural Action CBO (RACBO) so that it is a community initiative and money transfers happen in a transparent way. MP2030 transferred money to RACBO which in turn transferred to individuals via M-PESA, which is the popular mobile money transfer platform in Kenya.
These ten people received money for about eleven months, when another chance acquaintance gave a big boost to the project. This time the acquaintance took place between MP2030 and impact Market. impactMarket is a decentralized poverty alleviation protocol built by impactLabs, a company based in Portugal. It uses blockchain technology to enable any vulnerable community to implement poverty alleviation mechanisms, such as for instance, an Unconditional Basic Income. The protocol uses Celo Dollars, or cUSD, a stable-coin whose value is pegged to the US Dollar.
Ordinarily, you need an app for it and therefore a smartphone. As most of the villagers have no smartphone in Kowiti-A, collaboration with Fintech partners Refugee Integration Organisation and Kotanipay were needed to make sure the villagers would receive a currency they can actually use for buying goods and services: Kenyan Shillings – KES.
M-pesa outlet in Kowiti-A
Money transfers in Kenya are relatively easy, because of the widespread use of m-pesa, a mobile payment system. After the so-called USSD integration (where the CELO dollars are exchanged for KES in the background), someone with a sim card can receive KES, and withdraw cash at an m-pesa shop in the village. One phone can have two sim cards, so two people can receive per phone line. it is not entirely without intermediaries yet, but less than 6% is lost in the transfer from CELO dollar to cash-KES.
Because of the collaboration with Impact Market and its Fintech partners, the process accelerated very quickly and by mid-August about 240 adults began getting a basic income of 7 USD a week. By end September 2021, all the 415 adults will get the basic income for a period of one year. The total amount allocated to Kowiti project is 166,000 US Dollars, i.e., KES 18.28 million. Each individual will get a total amount of KES 44,000 (USD 400). If this sounds unbelievable, the results that will flow from this initiative will be more so, several times over.
What kind of basic income is it?
It is very interesting and also surprising that this humble project almost fulfils all the five main characteristics of the BIEN’s definition of basic income.
Universal: Basic income is given to the entire adult population. Children are not included more for technical reasons – in the smart contract adopted by ImpactMarket only those who have a mobile phone line can be provided money.
Cash: The recipient encashes the transfer into the national currency at any m-pesa store in the village
Individual: Money is transferred to individuals and not households.
Periodic: Money is transferred once a week.
Unconditional: There are no conditions whatsoever that the recipients need to fulfil after having received the money.
What does this money mean for these villages?
Based on a 2015 household budget survey, Kenya defines its overall poverty line in rural areas as an individual per capita monthly consumption expenditure of less than 3252 KES (USD 30), and extreme poverty as per capita consumption expenditure less than 1954 KES (USD 18).
In this project, the recipients receive a monthly top up of 3000 KES (USD 28) which is a substantial boost to their income levels. In this first month of receiving the money, it was observed that many people who never used to eat a breakfast, have begun to eat breakfast. Food seems to be where the money is visibly going. In the coming months, this project is certainly going to have a big impact on the lives and livelihoods of the people of Kowiti-A. These narratives will be published on the website of Mission Possible 2030 in the coming months.
Billi Juma Munda and Evans Ododa are teachers living in Kowiti-A. Lena Stark is the Chair of Mission Possible 2030. For more information about the project, write to Lena at lena@missionpossible2030.com
New research from World Basic Income finds that more than half of the world’s people live in countries where UBI could reach only $5 to $18 per person per month on average, as a result of global inequality and national income constraints. To support UBI activism in lower income countries and ensure that people everywhere can receive a sufficient UBI, the group proposes topping up this amount with a worldwide basic income of $30.
The briefing uses World Bank data to uncover how much money flows through each country every year, and how much of it could be taxed and redistributed as UBI.
The analysis shows that UBI could reach a maximum of $12 per person per month in India, $3 in Afghanistan and just over $1 in Burundi, if governments tax and redistribute cash at the average rates for each continent. Even if these countries managed to spend as much as France (the highest-spending country) on cash benefits, UBI could reach only $36, $10 and $5 respectively.
Laura Bannister, World Basic Income’s campaign director, explained, “Global inequality is deeply unjust and much more severe than many people think. Gross national income is just $811 per person per year in an average low income country, and in Burundi it is $270. Governments of these countries should still be pushed to implement UBI, but there just isn’t enough money flowing through these economies to enable payments at the level people need and deserve.”
Frank Kamanga, Director of Universal Basic Income Malawi and a member of World Basic Income’s International Advisory Board said, “I was motivated to join the universal basic income global movement because of the inequality that I observed in the world, especially between the Northern and Southern hemispheres. Currently with our resources it isn’t possible to have a universal basic income in Malawi, but with support from development partners we could manage to have such a policy.”
The briefing proposes a new mechanism for such support – a worldwide basic income of $30 per person per month, which would underpin national UBI efforts. It would be funded at the global level through taxes and charges on transnational corporations, and would be paid directly to every person worldwide that registered with the scheme.
“An extra $30 a month for every adult and child would be hugely significant for at least half of the world’s people,” said Laura Bannister. “These people deserve better from the world economy. Today’s extreme inequality between North and South is the result of a shameful history that the UBI movement should be aiming to help redress. UBI has incredible potential to reduce inequality and it’s time to apply that between countries as well as within them.”
Frank Kamanga concluded, “Poverty by its nature is inhumane, it steals away dignity and it denies people opportunities. A radical approach to do away with poverty at the global scale is implementing universal basic income.”
On 29th April 2021 the prestigious Oxford Union Society hosted a panel of students, activists, politicians and scholars to debate the motion ‘This House Would Introduce a Universal Basic Income’.
The debate began with the majority (68%) voting in favour of introducing a Universal Basic Income (UBI) and the remaining 32% voting against it. After hearing a total of 8 panelists’ arguments for and against the motion, the majority shifted in the closing poll to a marginal victory for the opposition, with 54% voting against introducing a UBI and 46% voting for it.
The full debate can be watched on the Oxford Union’s YouTube channel here, with a programme of the speakers and summary of their key arguments provided below.
00:33 – Opening up the case for the proposition, Classical Archaeological and Ancient History student Ambika Sehgal drew on anecdotal evidence from victims of flaws in the DWP’s (Department for Work and Pensions) systems, experiences from the Covid-19 pandemic, and accounts of early forms of UBI in Ancient Greek societies to make three arguments for the motion:
To lift people out of poverty and provide a basic standard of living to everybody “without fear or favour”.
To increase the wealth of the entire population by giving everybody the freedom to upskill, reeducate, take on more prosperous jobs, or start their own business.
To prevent the inevitable economic catastrophe that we are approaching as a result of the automation of skilled industries.
10:52 – Rebutting with the opening case for the opposition, Eliza Dean, first year Classics and French student and Member of the Union’s Secretaries Committee, denounced UBI as the solution to our current economic and political struggles, arguing instead for better funding of existing state welfare systems and a return to greater recognition of the value of labour in society.
20:58 – Professor Guy Standing, Professorial Research Associate at SOAS University of London and founding member of BIEN, outlined the fundamental ethical – as opposed to instrumental – rationale for introducing a UBI, arguing that we have an ethical justification to introduce UBI to resolve the unequal distribution of wealth created by rentier capitalism.
Rounding off his argument for the proposition, Professor Standing drew on his extensive experience working on over 50 pilots to outline some of the key findings of research on UBI:
It improves individual mental and physical health.
It reduces people’s stress.
It leads to better school attendance.
It increases work and its productivity, leading people to be more innovative and altruistic in their work because people feel more able to act in such a way.
It helps to reduce debt.
It leads to a greater sense of social solidarity.
36:34Marco Annunziata, former Chief Economist and Head of Business Innovation Strategy at General Electric, invoked suggestions for the necessary rise in taxes, the case to offer the same amount to the rich and poor, and the disincentives to work as evidence that a UBI is both unaffordable, unjust and riddled with unintended consequences.
48:53 Drawing on simulations run by the RSA (Royal Society for Arts, Manufactures and Commerce) Anthony Painter, Chief Research & Impact Officer, made the economic case for UBI, citing its ability to make up for inadequacies in existing social support systems by offering a hardwired economic platform for all in society.
59:50 Regarding UBI a ‘recurring revenant’ throughout his career, Professor Hilmar Schneider, Director of the Institute of Labour Economics in Bonn, cited the experience of the German pension system and his own research conducting funding and behavioral responses simulation models to argue against the motion. Pointing to the fact that most UBI pilots rely on external funding sources, Professor Schneider argued that the strongest argument against a UBI lies in its unaffordability, as it would ultimately result in more people losing money than gaining money.
01:10:34William Greve, first year Philosophy, Politics and Economics student and Sponsorship Officer at the Oxford Union,consolidated the arguments made by the panelists to round off the underlying economic and liberal arguments for a UBI:
That is the most effective way to counter the wealth inequality and unjust returns to capital observed in the modern economy that leave labour so unjustly rewarded.
That it is reasonable to demand that all individuals in a society be entitled to a share of the total wealth of society a basic level of economic security.
That it would fundamentally change our relationship with employment for the better.
Drawing on Professor Schneider’s earlier remarks on the case against higher income taxes (owing to the fact that the majority of wealth that exists in the modern economy is not received as an income in the traditional sense), William also argued that a wealth tax, not an income tax, is the most just and feasible way to fund UBI.
01:21:30 Rt Hon Jon Cruddas, Labour MP for Dagenham and Rainham and Former Coordinator for the Labour Party, rounded off the case for the opposition by arguing that those advocating for UBI should remain cautious when their political opponents also support the scheme for radically different outcomes. Noting the many cross-spectrum and cross-ideological arguments for and against the motion, he also pointed to the more ‘mundane and practical’ issues with introducing UBI, such as financial feasibility, its efficacy compared to its alternatives, and what accompanying policies are required to ensure desired outcomes.
Concluding the case against UBI, Rt Hon Cruddas hammered home his argument for the dignity of labour and questioned the role that UBI would play in creating decent work. All but entirely dismissing concerns around automation and the future availability of work, he argued that we should instead be organizing for collective rights, strong unions, income guarantees and above all, dignified labour. He argued that there is a strong case against UBI if you consider that the nature of work thesis is flawed, and that the debate around the future of work is an inherently political one. UBI, he suggested, could transform citizens into ‘passengers of capitalism’, robbing them of meaning and dignity, and leaving them more isolated, vulnerable, angry and humiliated, and society itself less fraternal and solidaristic.
AUTHOR’S NOTE: This article is a draft of the first chapter of the book I’m working on: Universal Basic Income: Essential Knowledge. It can also be thought of as a reply to Bitch Bastardly’s guest article from last week. Comments welcome: Karl@widerquist.com.
Every minute of every day, you use something you don’t own to meet your needs without asking anyone’s permission and without paying anyone for the privilege. You do this every time you take a breath. You can’t do that without an atmosphere. You don’t own the atmosphere, but you’ve never had to get a job to earn the money to buy the right to use the atmosphere to keep yourself alive. You simply used it as if the free use of a common resource was the most natural thing in the world.
Karl Widerquist
I bet you’d be pretty angry if the government made a new rule dividing atmosphere into private property without giving you a share large enough to meet your needs. I don’ think it would make you feel better if they gave you the opportunity to get a job to earn the money to buy the right to breathe in your area, and thereby keep yourself alive. I think you’d recognize that if you had that much need for a job, you’d be willing to accept very low wages. I don’t think it would make you feel much better if lifetime subscriptions to breathe were affordable, and if, after working for years, saving your money, investing it wisely, you have the chance to become one of the small portion of people who own piece of the atmosphere before retirement age or the even smaller portion of people who own enough of the atmosphere that other people will pay them to breathe.
If the government tried to privatize the atmosphere, I think you’d say something like this. My ancestors and I have used the atmosphere freely for millions of years. We’re evolved to depend on it. If you take away our independent access to it, you make us dependent on whatever group of people owns it. If there’s some benefit in dividing the atmosphere into private property, either everyone should get a share, or those who don’t get shares should be compensated unconditionally for their loss with an income, and that compensation should be at least large enough to buy a lifetime subscription to the right to breathe.
If you’d be that angry about needing some else’s permission to use the atmosphere to meet your need to breathe, why aren’t you angry that you need some else’s permission to use all the other resources you need to meet all your other needs?
I think you should be. Our ancestors used the land and other resources of the Earth freely for millions of years, just as you and I use the atmosphere now. Every one of us is evolved to depend on it. No group of people “naturally” owns it. A few generations ago, governments took away the independent access our ancestors enjoyed. They created a system in which the resources we all need are owned by a few without giving the rest of us any compensation. By doing that, they made us dependent on the people who own the Earth’s resources.
The vast majority of us who don’t own a large enough share of natural resources or of the stuff we make out of natural resources to keep ourselves alive and thriving. The vast majority of us aren’t allowed to use any resources but air without the permission of an owner. We can’t build a shelter, hunt, gather, fish, farm, start a cooperative, or start our own business. Except for the wealthy few, we get a job to earn the money to buy the right to do use the resources that were here before anyone and that we’re all evolved to depend on. Wages are such that, only the lucky few get to the point where we’re free to do something other than paid labor before we’re too told to work anyway.
The division of the Earth’s resource into private and public property has many benefits, but if some people get a share and others don’t, the private property system has many cruel side effects, among them poverty, homelessness, alienation, fear, and hopelessness. Because most of us have no alternative to paid labor, we are all willing to accept lower wages, longer work hours, and less appealing working conditions than we otherwise would. In some situations, people are forced to accept dangerous jobs, sexual harassment, and other forms of abuse from employers or spouses, because they need the job or a spouse with money to keep them alive. That need is artificial, created by the way our governments chose to divide the Earth’s resources.
Let’s consider a way to divide resources that isn’t so cruel.
Back in 1918, Bertrand Russell’s suggested “that a certain small income, sufficient for necessaries, should be secured to all, whether they work or not, and that a larger income … should be given to those who are willing to engage in some work which the community recognizes as useful. On this basis we may build further.”
Russell’s proposal is very much what we know today as Universal Basic Income (UBI). Later chapters define it in more detail, but his description gives you a very good idea what it is. UBI is not all there is to social justice, but it removes an exceedingly cruel feature built into our economic system. If we’re going to divide the resource of the Earth unequally, those who own more of the wealth we make out of resources have the responsibility to pay those who have to do with less access to resources.
Although there are many reasons to introduce UBI, I started with this one, not only because I think it’s one of the most important, but also because I think it brings up the central decision that people have to make if we’re going to introduce UBI. Should everyone get an income—even the people who could take jobs but chose not to? I think that question already divides most readers into two groups with pretty firm positions: Yes, because no one should live in poverty or homelessness. No, because every nonwealthy person who can work must work.
UBI, on its own, is a mild reform with far-reaching effects. Later chapters show that it isn’t terribly expensive. On its own, UBI creates a market economy where income doesn’t start at zero. People who don’t take jobs, get less than those who take jobs, but no one has to go without the money they need for food, shelter, or clothing in the same way that no one today has to go without the money they need to breathe.
By offering good salaries and good working conditions, we have enormous ability to give people an incentive to engage in work that the community recognizes as useful. And if we’re not willing to pay enough to get people to freely choose do some particular job, maybe that job doesn’t need to be done all. If we do it this way, we end poverty and homelessness. We end the cruel treatment people at the bottom and relieve the fear of the people in the middle. We invite everyone—rather than frighten everyone—into participating in our economic system. That mild and humane reform finds resistance from the belief that everyone—or more realistically, everyone who isn’t wealthy—must work, and so the issue of whether everyone including those who refuse to take jobs should get the income comes up again and again throughout this book.
The idea of UBI has inspired a growing worldwide movement. Although the concept of a UBI goes back at least as far as the 1790s, the movement for it is stronger as I write these words than it has ever been. The movement grows out of frustration with the ineffectiveness and political vulnerability of conventional approaches to poverty and inequality. The market system also needs many other reforms, but millions of people are coming to believe that one of the most important and fundamental reforms we need right now is UBI.
The central goal of this book is to explain the essentials of UBI: what it is, how it works, the most popular arguments for and against it, how much it costs, how it can be financed, its likely effects, its history, and its possible future. But as I’m sure you’ve already guessed, I am a strong supporter of UBI. And so, this book’s secondary goal is to convince readers that UBI is a good, workable idea that should be enacted all around the world, but I will make this argument in a way that explains and addresses both sides of the debate over whether to introduce UBI. Whether you agree with my position on UBI or not, I think you can learn more from a passionate attempt to argue points for it and refute points against it than from a dispassionate list of points on either side.
With this in mind, the book begins with a more thorough explanation of what UBI is.
-Karl Widerquist, begun sometime ago, but completed in Aspen, Colorado, July 29, 2021
