by Kate McFarland | Sep 9, 2016 | News
Basic Income was the theme of the Summer 2016 edition of the quarterly Winnipeg-based magazine Canadian Dimension (CD).
Andrea Levy describes the contents of this special edition in an introductory article:
In this CD Focus we have invited several Left scholars and activists to share their perspectives on Basic Income. To lay bare some of the bones of contention, we present a comradely debate between Michal Rozworski, who is emerging as one of English Canada’s leading Left economists, and scholar Nick Srnicek, co-author of a couple of recent books associated with the “left-accelerationist” current that have sparked intense interest in the U.K. and beyond. Kathi Weeks, author of the acclaimed book The Problem with Work (Duke University Press, 2011), offers a socialist-feminist perspective on Basic Income in an interview conducted for CD by Katie Cruz. Journalist and writer Richard Swift (also a CD Editor) has penned a short essay intended to inspire a return to the Left’s too-often neglected critique of the nature of waged work. Community animator Josh Brandon reports on the North American Basic Income Guarantee Congress held this past spring in Winnipeg. Cult Montreal columnist and CD Editor Peter Wheeland contributes a report on the Basic Income policies under consideration by the neo-Liberal “austerian” governments of Kathleen Wynne and Philippe Couillard. Finally, I introduce a French degrowth model of basic income, the Unconditional Autonomy Allowance, conceived as a tool to support a transition beyond the market economy.
Founded in 1963, Canadian Dimension is Canada’s longest-running periodical specializing in left-wing political discussion. It describes itself as “a magazine for people who want to change the world”.
Levy’s introduction to the edition is available on-line, as is the interview with Kathi Weeks:
Andrea Levy, “Introduction: Basic Questions“, Canadian Dimension; August 11, 2016.
Katie Cruz, “A feminist case for Basic Income: An interview with Kathi Weeks“, Canadian Dimension; August 11, 2016.
For the full contents of Canadian Dimension‘s basic income edition, see:
Basic Income; Canadian Dimension Volume 50, Issue 3: Summer 2016.
This Basic Income News made possible in part by Kate’s patrons on Patreon.
by Roland Duchatelet | Aug 31, 2016 | Opinion
About 80 years ago, academics and policymakers in the US wondered if the country’s wealth was improving every year or not. They decided that the “added value” that was created in a country was the appropriate measure for wealth creation.
These policymakers looked at the quantity and price of goods sold by agriculture, deducted the value of goods acquired, like chemicals, tractors and fuel, to define the added value of agriculture in the economy. They did the same for the manufacturing and building industries and for services provided by bankers, hair dressers, restaurants and shops.
True, the wealth provided by a restaurant is short-lived, but industrial products do not last forever either. What you pay for a product or service is probably the best possible practical measure of its value. It all made sense.
Then they wondered what to do with services consumers didn’t pay for, like police and public administration. Those services were added to the “wealth of the country” at cost, since they were definitely contributing to our welfare by avoiding chaos. In 1930, public employment in the US was only seven percent of the total work force. That has most definitely increased, with more and more people entering public administration through universities similar to Norwich University.
The Gross Domestic Product, GDP, became a faith of the “Labour Church”. That it is faith and not reason was illustrated the last years by the huge impact on financial markets by statistically irrelevant changes of China’s growing GDP, like 0.5 percent, while its measuring inaccuracy is around 2.5 percent (see publications of Harry Wu, economics professor at Hitotsubashi University in Tokyo).
Since 1970 machines, robots and computers have massively reduced the work force in agriculture and industry, considerably reducing the “added value” in those sectors.
I will now give examples of why GDP is not a good measure of wealth anymore.
- During the seventies, many European countries tried to solve rising unemployment following productivity gains in industry by creating new jobs in public service. Whether the newly appointed public servant did useful things or not, it supposedly increased the wealth of the country, since its cost, not its value, was counted in the GDP,
- Imagine that parents living in a village of the US have organised themselves to collectively watch their young kids and organise festivities for the community. That sort of work is not a part of the GDP. In Sweden, it is. Towns there enroll parents to take care of kids and organise parties and other events. This way, voluntary work is converted into paid work and thus GDP.
- If a country, for example Greece, drastically increases the number of its public servants and increases their salaries, they boost their GDP and make the IMF, the EU and creditors happy until the deadline comes to pay the loans used to fund the fantasy-growth of their GDP.
The examples show the same root cause of the problem, being the belief that unpaid labour has no value and paid labour has value even if the work is useless.
The approximation to count public services at cost is a design error in the GDP. It induces some countries to implement wrong policies to get a “better” GDP, at least for a short time, the time to get re-elected.
A nation is wealthy if it takes care of its people. For example, Belgium distributes an average of €550 in cash and another €420 pay-in-kind (free education and health care) per month per citizen. Many countries are now distributing a lot of money to the population (see this Economist graph). All of them do that in an incredibly complex way because the system grew over decades without being re-engineered. It is very likely that most wealthy countries will streamline their social security systems to make them more efficient and fair, like Finland is currently doing. No doubt that version 2.0 of our social security systems will contain a “basic income” core.
Shortly, my friends, within a few decades, the purchasing power distributed by a country to its citizens will replace the GDP as the measure of their wealth.
by Tyler Prochazka | Aug 29, 2016 | Opinion
Gary Johnson recently told me he is “open” to the Universal Basic Income (UBI). Based on some of the comments on the story (calling me slanderous and Johnson a statist), you might think he just endorsed a socialist takeover of the government.
Understandably, there is hostility among many libertarians toward the idea of the Universal Basic Income. The UBI is not just a pragmatic step to eliminate government bureaucracy. In fact, it is a desirable policy outcome because it will likely help usher in a new era of free markets and civil society.
Much has been said on the pragmatic libertarian case for replacing the current social safety net with a UBI. Primarily, it eliminates government paternalism and enhances the efficiency of welfare delivery.
Moreover, a Universal Basic Income removes the poverty trap created by the loss of welfare benefits as individuals move out of poverty. This incentivizes recipients to remain in poverty to retain these benefits. A UBI has no such incentive and allows recipients to choose the course of action that actually provides the greatest real benefit.
Through the basic income, recipients are also fully in control with how to spend the money, eliminating welfare’s distortions on the marketplace.
Most libertarian UBI advocates take Milton Friedman’s view of the basic income, approving of it as a substitute given that government welfare already exists (and is unlikely to go away). Instead, libertarians should consider wholeheartedly endorsing the UBI as a way to expand free markets.
The last century has shown us that free markets and free trade have been the greatest source for prosperity and peace the world has ever seen. However, the free market consensus seems to be eroding at a frightening pace, even in the Western world.
Free market’s savior? The basic income.
If libertarians are being honest, free markets are the best source for lowering poverty, but they alone are not sufficient. For example, Hong Kong has the freest economy in the world, but also a good amount of debilitating poverty. While visiting McDonalds throughout Hong Kong, it was hard not to notice the McRefugees (as they are called in local media) that were sleeping at tables.
There is good evidence that conditions outside of one’s control, such as whether one’s parents are wealthy or married, have a substantial influence on one’s success.
Socialism is not the answer to the poor’s woes, as we saw with devastating consequences in the human trials of socialism in the Soviet Union, Mao’s China and still today in North Korea and Venezuela.
Instead, the answer is to open up the free market to everyone through the basic income.
Pilot programs have shown that the basic income increased entrepreneurial and market activity (among other positive social benefits, such as improved health). Individuals previously locked out of the free market can now be active participants. The understandable worry that people would stop working is not only overblown, but the opposite was actually shown to be true in Namibia, as business activity dramatically picked up.
The largest meta-analysis of cash-transfers ever further illustrated that the risk of reduced work is nil and in fact it has the potential to increase work hours and intensity. Some parents reduced work hours to care for their children, but this likely brings a positive long-term outcome to society.
Work brings dignity and the basic income does not eliminate the basic desire to contribute to society. When polled, most Americans say they would still work even with a financial windfall.
Basic income gives recipients free choice, unlocking the market’s full potential. People do remarkable things when given freedom and opportunity.
Additionally, poverty is one of the biggest factors when determining a child’s likelihood to succeed in education. Just giving parents money substantially improved their child’s educational outcomes and behavior. The same was shown under the basic income.
The basic income is not a pragmatic giveaway to socialists. It is precisely the opposite: it is the essential element for sustaining the durability and expansion of free markets.
Beyond opening up the market to new participants, it is likely that a basic income would allow society to reevaluate the necessity of a whole host of government policies.
Human beings are born with a natural inclination to be empathetic toward others. And there are individuals that are also inclined (perhaps hardwired) toward government solutions for society’s ills. No matter how effectively free markets lower poverty, there will always be calls for a government backstop.
As libertarians know, these calls for government “solutions” often do more harm than good and end up impeding the very forces that allow the free market to lift individuals out of poverty (e.g. the minimum wage).
As jobs are increasingly automated, it is especially crucial that libertarians guide political discourse toward a light-touch approach to resolve the disruption robots will cause in the marketplace. There needs to be a permanent method to alleviate the fears of the market place, rather than relying on the eternal vigilance of Congress to do the right thing.
A robust basic income would mute many of the calls for government intervention because it gives employees greater freedom to choose their employment situation, rather than being forced into employment by the threat of poverty.
The fears felt by those inclined toward government intervention would be lowered and libertarians would have a far more persuasive case to make for allowing individuals to shape the market instead of the government. Indeed, it would allow libertarians to push for removing many of the excesses of government intervention.
The Universal Basic Income is not just a pragmatic compromise to lower welfare bureaucracy. It is the essential prerequisite to usher in a new era of free markets. And libertarians would be well suited to be at the forefront of this movement.
by Kate McFarland | Aug 28, 2016 | News
Roosevelt Institute fellow Mike Konczal has written an article about basic income for The Nation, a widely-read American progressive journal.
In the article, Konczal proposal several initial steps that might move the United States closer to a universal basic income. Specifically, he recommends that the country start with three policies: a child allowance (he suggests $2500 per year per child), a higher minimum wage (of at least $12/hour), and mandatory guaranteed paid leave (12 weeks medical leave and 2 weeks annual leave).
Interestingly, although Konczal states that what is needed is a policy “that benefits Americans while destigmatizing the concept of giving people no-strings-attached cash”, he does not actually discuss any policies that would result in “no-strings-attached cash” being giving to all Americans — such as a dividend funded by a carbon tax or land-value tax.(It might be noted that some American organizations, such as the National Campaign for Basic Income, are presently looking at social dividend approaches as part of a basic income “starter kit” — in addition to considering such proposals as children’s allowance.)
Read Konczal’s article — and watch a short animated video based on it — here:
Mike Konczal, “These Policies Could Move America Toward a Universal Basic Income“, The Nation; August 1, 2016.
The Nation, “What if we just gave people enough money to get out of poverty?” YouTube; August 9, 2016.
Photo CC BY 2.0, New America
by Kate McFarland | Aug 27, 2016 | News
On Tuesday, August 23, the California State Senate voted to approve a resolution calling on the United States Congress and President to enact a national carbon tax-and-dividend.
The proposed tax would apply to fossil fuels, and be applied based on the amount of carbon dioxide that the fuel emits when burned. While it specifies no exact tax rate, the resolution suggests that the tax start low and increase steadily through the year 2050. The intent of the policy is to encourage a shift away from carbon-based fuels, with the ultimate goal of reducing emissions to 80 percent below 1990 levels by 2050.
The dividend is not the focus of the resolution; it is merely stated that “all tax revenue should be returned to middle- and low-income Americans to protect them from the impact of rising prices due to the tax.” The resolution further mentions that, according to a study by Regional Economic Models, a family of four would receive an average of $288 per month after 10 years.
The Citizens’ Climate Lobby (CCL), a California-based group that has been advocating strongly for a carbon fee-and-dividend, applauded the resolution — with 35 volunteers traveling to the state capital to voice their support.
In the United States, the carbon tax-and-dividend has been gaining currency as a possible way to introduce a basic income. For basic income advocates, of course, the interest is in the dividend: a universal and unconditional cash payment distributed monthly to individuals or households. Camila Thorndike of the Chesapeake Climate Action Network spoke about the connection between basic income and carbon tax-and-dividend policies on a recent edition of The Basic Income Podcast. The policy is one under consideration by the newly-formed National Campaign for Basic Income, whose founding member Steve May recently wrote an editorial in favor a carbon tax and dividend in Vermont.
For an analysis of one such proposal, see Michael Howard’s article in Basic Income News: “Size of a Citizens’ Dividend from Carbon Fees, Implications for Growth” (September 14, 2015).
The full text of the California Senate resolution is available here.
Reviewed by Robert Gordon
Photo CC BY-NC 2.0 John Watson
This basic income news made possible in part by Kate’s supporters on Patreon
