by Guest Contributor | Aug 8, 2016 | News
Article originally appeared on the Libertarian Republic by Brett Linley
At the FreedomFest convention in Las Vegas, Nevada, Gary Johnson took a stance puzzling to many libertarians. Per the Basic Income Earth Network, Johnson conveyed that he would be “open” to the idea of Universal Basic Income.
To many fiscal conservatives, UBI seems like a blanket handout to engorge the welfare state. However, Governor Johnson claims a libertarian justification for the system. “Like many libertarians, Johnson said he liked the idea of the UBI because of its potential to save money in bureaucratic costs, freeing up more money to give people directly.”
In fact, Johnson is not the lone free market defender of UBI. Other prominent libertarian voices have spoken up to defend the idea in the past.
Milton Friedman advocated for the Negative Income Tax, acknowledged as a close cousin to UBI. Libertarianism.org published a piece by Matt Zwolinski in 2013 about the concept’s libertarian merits.
Some will automatically deride Universal Basic Income as socialism, and dismiss it immediately. However, when structured correctly, UBI could actually become a positive force for liberty. All libertarians should give an honest look at the policy before passing judgment.
How Universal Basic Income Promotes Liberty
Most libertarians can agree that the welfare state, as it stands, is a mess. With that in mind, the issue becomes what we can do to make it less convoluted. UBI provides a unique opportunity to tackle this issue.
The only way that such a system would be workable, or even desirable, is if we scrap all existing welfare programs. The government would have to phase out programs such as Social Security, Medicare, and food stamps with everything else. In their place, we’d receive a streamlined process that would provide new, efficient economic incentives.
It is also no small consideration that the federal bureaucracy would substantially recede. All of the complex agencies tasked with administering various programs would become one. It is certainly easier to imagine monitoring potential waste and abuse in one program than a dozen.
At first glance, it may be hard to believe that handing out checks provides efficient incentives. The important economic question to keep in mind, however, is “compared to what?”
As much as libertarians would like to see all welfare programs abolished and replaced with nothing, politicians and voters will never support leaving so many objectively worse off. While current welfare programs actively encourage people not to work, UBI would remove these disincentives.
How Universal Basic Income Gets People to Work
Under our current welfare system, people can be booted off welfare once they reach a certain income level. Upon losing their welfare checks, people can actually end up as net losers. The system in place incentivizes people to stay unemployed so they can maintain their current standard of living.
Under UBI, people would be able to pursue employment without fear of becoming worse off. As American Enterprise Institute scholar Charles Murray advocated in the Wall Street Journal, the benefits would decrease slowly as income rises in an ideal system. However, a certain immovable standard would be necessary in face of Social Security’s abolition. People still will need that source of retirement income.
Certainly, some people will abuse UBI and use it to live off the fat of the government. What’s important to recognize is that people already do this under the current system. Many people value their welfare wages plus their free time over the wages made from working. In the latter case, as aforementioned, working can make them net losers who no longer have any free time.
When it comes to considering whether UBI will make this problem worse, it appears unlikely. While some may dropout of the workforce, others may join. This can be an opportunity to help the most economically disadvantaged and bring about a respectable society.
Johnson’s Advocacy of Universal Basic Income is Good for America
People often deride libertarians for failing to take interest in the less fortunate. While the market truly is the tide that lifts all ships, some boats have holes through no fault of their own. Given the governmental structure we find ourselves in, instead of the one we wish we had, few options are available.
No monarchs exist to lay down libertarian law, and certain political realities must be accepted to fix the broken welfare state. Johnson realizes that even if he becomes president, he will not be able to throw millions of welfare recipients into the economy Obama has created without a life raft.
What Johnson can do is propose a system that can attract bipartisan support while making America more free. Not many such proposals exist, but UBI is one of them.
Maintaining and strengthening the protections for America’s most vulnerable satisfies Democrats. Cutting down bureaucracy and getting people to work can draw Republicans. Johnson understands that when applied correctly, UBI can improve lives. With the proper consideration, that’s something libertarians should support.
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by Tyler Prochazka | Nov 29, 2015 | News
“Tom Woods by Gage Skidmore 3” by Gage Skidmore. Licensed under CC BY-SA 3.0 via Commons – https://commons.wikimedia.org/wiki/File:Tom_Woods_by_Gage_Skidmore_3.jpg#/media/File:Tom_Woods_by_Gage_Skidmore_3.jpg
Libertarians are known for their general skepticism toward government programs. However, some libertarians have still flirted with the idea of a Basic Income Guarantee (BIG) as an alternative to the current welfare state. Tom Woods, a noted advocate of libertarianism, recently debated BIG advocate Matt Zwolinski on his podcast.
Zwolinski argued that a BIG can be defended from the standpoint of pragmatic politics from the standpoint of justice. He suggested a plan in the vein of that recommended by libertarian economist Charles Murray: an annual $10,000 cash payment to every American adult.
Woods challenged Zwolinski on the basis that a BIG would violate an individual’s right to the fruits of their labor.
Zwolinski responded that many libertarians hold “idealized” accounts of how individuals accumulated property in the past, ignoring the injustices created as property was and is distributed. A BIG could alleviate some of the inequality caused by these injustices, Zwolinski argued.
Taking on a Georgist position, Zwolinski said that property cannot be fully owned. Ignoring the unjust way property came about and failing to rectify it through a policy like a BIG is a “rationalization of privilege,” he said.
For the full YouTube video of the podcast, click here.
by Guest Contributor | Oct 12, 2015 | Opinion
by George Spilkov
Outline of a framework for Basic Income at the core of an economic model based on free ma
rket economy
Adam Smith predicated his vision for a free market economy on the understanding that some constraints must be set in place to ensure all members of the society are self-sufficient and also, that they exchange only the surplus produce of their labour. He even went as far as to insist on division of labour being “designed” depending on the size of the market.
“When the market is very small, no person can have any encouragement to dedicate himself entirely to one employment, for want of the power to exchange all the surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he has occasion for” – Adam Smith, “The Wealth of Nations”, Ch.3
But then Karl Marx (“The Capital”) convincingly explained that the condition for self-sufficiency cannot be satisfied, because workers have lost the means of production and are no longer self-sufficient. They depend for their survival on specialized division of labour that is imposed on them.
Is that the end of Adam Smith’s free-market or could such ideas be saved by the introduction of Basic Income? I believe the answer is “Yes, Basic Income can be the solution” and for the rest of this text I’ll try to explain why and how.
What is a human being to a business? For many businesses a human being is perceived as ‘a consumer’ at the output end of the businesses and as ‘a worker’ at the input end of the businesses. Therefore, it is in the best interest of the businesses to charge the humans as much as possible when they are consumers while paying them as little as possible when they are workers. The end result of such duality is, the humans suffer, businesses make profit; wealth concentrates, the people lose completely their self-sufficiency. Even now, we are making great strides in Intelligent Automation that, thankfully, is still managing to make good use of human talent, but for how long can this go on?
The matter can get much worse for the humans. Let’s just imagine a near future world (say about 50 generations from now) where automation has advanced to levels that resemble human-like Artificial General Intelligence (AGI). In such world, workers will no longer exist in any meaningful sense, because nearly all work will be done by a super intelligent automation. The businesses will perceive most human beings only as consumers. In such future, most humans will be jobless and, majority of us will have no means of production that can make us self-sufficient.
In our current society, humans without jobs (or income) become consumers without money. Consumers without money are useless to the businesses thus can be “discarded” (it means, literally wiped out of existence). How are we going to survive then? Perhaps, some of us could survive by reverting to violent redistribution of wealth (like war for example). Such approach creates too much suffering. The correct answer is we survive together, as one species, by introducing Basic Income. It must be sufficient to ensure the existence of a wide base of consumers who, in turn, will ensure the prosperity of the businesses and the society.
Do we need to wait for a future that has a human-like AGI before we consider Basic Income? Can we introduce it today and achieve great prosperity now? I believe the answers is, “Yes, we can have Basic income today” and we can have it in a way that is independent of political or technological circumstances i.e. a way applicable to any historical period. Let’s see how it can be done.
Who decides what a ‘dignified’ living is? Perhaps, a bunch of people, called a government, makes the decision while driven by their own ideas about what is ‘basic’ and ‘dignified’? Governments change, therefore, if the amount of Basic Income is determined by some political process (e.g. government’s budget justified by some ideology) then it is likely that Basic Income will turn into another tool to exert control over the people by applying control over the amount of BI.
Much more powerful approach is to implement Basic Income by using the free market as a base for estimating BI. Let’s call it Market Driven Basic Income (MDBI). The meaning of ‘Market Driven’ is that Basic Income will be an opposing market force to the leverage businesses (and other man-made constructs) obtain over the people due to their natural tendency to treat human beings with double standards (e.g. as ‘workers’ and as ‘consumers’).
MDBI can be defined as, the ‘most common’ outgoing spending amongst human individuals when seen as consumers and taxpayers. MDBI has to be derived from metrics that ‘capture’ only transactions from a person to a business, from a person to a government and from a person to any other ‘man-made societal construct’ (i.e. those metrics should reflect only the personal outgoing spending of the human beings, not metrics like gross output or GDI, or CPI, etc.). MDBI is a figure indicated, in part, by the free consumer markets showing what most individuals purchased the most and ,in part, by any other outgoing spending the individuals have (including taxes, fees, etc.).
With MDBI in place they (the businesses, the government, etc.) may even ask payments from us for the air that we breathe, it will make no difference to any of us as long as most of us have to make such payments, because such payments will become ‘common’ therefore “highlighted” to influence the MDBI.
Think about it, the more they (various political and economic man-made constructs in the human society) charge us (the human beings), for the goods and services they try to sell us or impose on us, the more they’ll have to pay us as Basic Income. The less they charge us the less they’ll have to pay us.
Finally, to transform MDBI into Basic Income (BI) some adjustment may need to be made using the formula,
BI=MDBI+DI,
where, DI is a certain amount of Disposable Income. It drives the direction of the economy and determines its minimum speed.
The free market ideas of Libertarianism (laissez faire capitalism) imply that three components must be in place in a free market; a free transaction, a free producer and a free consumer. We must ensure the existence of free consumers before we can talk about true laissez faire free market for human consumers. BI, defined by using MDBI, ensures the existence of free-consumers. On the free market, the freedom of the consumer can truly be measured only by the amount of Disposable Income (DI) a consumer has. The consumer freedom is the disposable income a human being can afford to waste on (or invest in) whatever they like without affecting their normal life (think of DI as gambling money of sort that drive the economy).
Also, the DI adjustment to BI is necessary because the businesses will begin to create a gap between prices of products affecting the MDBI and the next-up version of the same products. Therefore, the amount of DI adjustment should be set to breach about 80% of that gap. If the gap is allowed to exist the economy will stagnate without the DI adjustment.
What is the meaning of the ‘most common’ in the definition of MDBI? I am sure statisticians may have a very good answer to that question. My guess would be, first, apply some good clustering algorithm to determine the categories of people’s outgoing spending and then find out which of these categories are common for, let say, 80% of the people.
Why would people want to work if BI is defined as previously described?
Well, the incentive to work will come from linking the Minimum Wage (MW) to the Basic Income using the following formula,
MW= K * MDBI,
Where, MW = is the minimum wage;
K = is a multiplier to represent the incentive for people to get a job. (For optimal results I recommend K=2)
That makes the total minimum income for a working person equal to =BI+MW =BI+2*MDBI or expressed otherwise = (1+K)*MDBI+DI.
The presented model will outperform in simulations any other model. It will create a vibrant and agile economy generating optimal wealth while allowing dignified existence (defined by the free market) of all members of the society and will encourage people to seek employment. It will provide sufficient income(capital) to the lower end of the wealth ladder that will stimulate attempts for new small enterprises and business ideas.
The proposed model protects the human beings from any economic or political man-made constructs (systems of rules) regardless of the historical period or the technological development.
Market driven Basic Income could be implemented within 1-2 years, because much of the data necessary to determine the MDBI is already available in some form. It is just a matter of interpreting the data for the purposes of BI and also making small adjustments to the existing laws.
In a long term, perhaps, people can declare their outgoing spending by using a ‘spending card’ of sort which logs all outgoing payments (something like ‘electronic receipts and costs logger’).
For the remaining of this text, let’s try to predict some of the expected effects of introducing MDBI and the model’s sensitivity to influences.
What will be the reaction of the government and businesses to the market driven approach to BI?
MDBI avoids government involvement in determining its amount thus making BI independent of political or moral ideologies. It will make the government feel less oppressive to the people.
It is in the government’s best interest to keep the MDBI as low as possible. That means the government will seek to apply high taxes to a small groups of people and entities (i.e the rich) instead of smaller taxes to a wider groups of people (i.e. the poor).
MDBI may incentivize the government to extend the free social services (like free educations, medical care, etc.) in the hope that it will reduce the outgoing spending of the people thus reducing MDBI while allowing the government to be in control and work for the people.
The government will have to adjust its budget policies not to some ideological dogma about what people should or should not do. Its budget policies will have to be directed towards ensuring the funds for Basic Income Guarantee defined by the market preferences of the people and the economic and technological realities of the current, or any other, historical period.
Introducing Minimum wage (MW) linked to the BI will cause the businesses to respond by providing cheap goods that will cover the common needs (so they will pay lower wages), and then there will be a version of the same goods but at a higher price. Such response does not matter to the people, because if the people choose to use their DI for the more expensive goods then those goods will eventually become ‘common’ and therefore will affect the MDBI.
Some businesses will have to restructure their capital into new types of businesses. Those businesses that cannot remain competitive will have to close. Jobs will be lost. However with the newly found spending power many people may decide to start their own businesses. Other businesses will flourish because people will be able to purchase more of their products. That will create jobs.
Many companies, for example, like McDonald’s , will flourish under the new MW and BI. They will have higher labour costs which they will transform into cost per burger. However, the new relative cost per burger will be less compared to the new purchasing power of their customers. People will purchase more burgers and the profit for McDonald’s as absolute value will not change much. Also, their client base may increase if the product they sell is desirable and competitive.
After the introduction of BI the Supply and Demand principle will continue to work but without the leverage the businesses currently have over the human beings.
Finally, let’s look at a hypothetical worst case scenario involving MDBI where businesses actively act, hypothetically, against the idea of linking BI to MW. Let say most businesses decide to close in order to protect their wealth, resources and the means of production that they own and control. That will create massive unemployment and shortage of resources. Most unemployed people may rely only on BI for their survival. If most businesses close it will cause artificially created demand resulting in empty shops and insane prices. Consumers will stop purchasing thus driving BI down. However, people need at least, food, water and shelter. They will be willing to spend their entire BI to cover those needs. If no business is willing to provide those in sufficient quintiles then the government must temporary revoke the sanctity of ownership for the very wealthy. That means, moving wealth down the wealth-ladder to those who are willing to provide products on the market to cover at least the basic human needs for sustenance and shelter. That will restart the economy.
Such hypothetical scenario is the only time when the government must interfere with the private wealth generated by the free market.
In all other cases the government does not have to do a thing (apart from figuring out ways of collecting relevant amount of taxes to cover the BI as indicated by the free market).
Since the model does not discriminate against human age and circumstances it will allow for healthy young adults to accumulate somewhat more capital (disposable income) over the early years of their lives which they may chose to invest in projects/businesses or specialized education when they become more mature and experienced.
For people with addictive habits the government will continue to provide advice, help and control (if necessary) related to the use of their BI.
Given enough time the proposed market based model for BI and MW will reduce the wealth gap and will redistribute wealth to resemble a Gaussian curve of distribution (i.e. most wealth in the hands of most people a.k.a. it will create a strong middle class). Also, it will create agile economy that fully utilizes the human potential. It will make it more difficult for businesses and governments to exert economic, political and behavioural control over the human beings thus making the society more democratic. It will create diversity thus strength in the face of adversity.
In a world where “Space is the final frontier” we should try to create economic and political constructs that rise above simplistic views about our human nature, constructs that see our species as one sentient organism capable of reaching the stars and making the Universe our playground.
by Vito Laterza | Jul 29, 2015 | Opinion, Research
Give a Man a Fish: Reflections on the New Politics of Distribution, by James Ferguson (Duke University Press Books, 2015).
James Ferguson’s latest book focuses on the rise of social welfare programs in southern Africa, in the form of grants to low income and vulnerable groups, primarily the elderly, women and their children, and the disabled. Post-apartheid South Africa has led the way. It has an extensive system which administers grants to 30 percent of the population. Other countries like Botswana, Namibia, Lesotho, Swaziland, and Mozambique have also implemented nationwide programs, while pilot programs are being tried elsewhere in the region.
Ferguson’s goal is not to provide an extensive ethnographic treatment of these developments, but rather to analyze their implications and the field of political possibilities they might open up. Half comparative ethnography, half political pamphlet, Ferguson’s impressive narrative is a tour de force questioning, deconstructing and reconstructing classic and contemporary notions of poverty, development and the welfare state in the region and beyond. Through a focus on direct cash transfers, the author brings together the anthropology of southern Africa, with the latest debates in development practice and anti-poverty activism.
Written in a highly readable style, the book is structured around a series of self-contained chapters, originally given as the Lewis Henry Morgan lectures in 2009 at the University of Rochester. One can easily read the chapters independently or as part of a larger whole.
Ferguson’s starting point is the contradiction between dominant narratives on the relentless expansion of the neoliberal state, and the substantial extension of state social provisions through grants. The modest size of these social payments sets them apart from more comprehensive welfare measures in Nordic countries, yet the author believes that this phenomenon marks the rise of what can be legitimately called “welfare states” in southern Africa. While their impact might be limited in the present form, the systems in place lay the foundations for more radical possibilities.
Breaking away from conventional welfare and poverty interventions, grants are not delivered with the final goal of reproducing a healthy and productive workforce in the cities, or creating a class of productive farmers in the rural areas. The eligibility criteria are simple – mostly age for pensions and child care grants – and do not include conditions like searching for employment or investing in productive activities.
This hints at economic structures that affect the vast majority of southern Africans: the rural areas are witnessing a constant decline in agricultural production, while the formal sector in urban areas, even when experiencing high growth, simply fails to absorb most people who are in need of employment. Far from being a temporary situation that can be rectified through economic policies, this is a chronic feature of contemporary capitalism in southern Africa and increasingly in other parts of the world, including Northern economies like the US and Europe.
The author points out that production remains the dominant paradigm in economic anthropology, development discourse and practice, and radical left thinking. He calls for a radical shift away from “productionist” tenets towards distribution. His wide-ranging critique builds on a re-elaboration of key themes in classic and contemporary southern African ethnography, from kinship-based reciprocity across the rural-urban spectrum to a mix of moral and economic concerns at play in sex, love and intimacy in times of precarious livelihoods.
The “distributive political economy” mapped by Ferguson is characterized by a myriad of acts of wealth distribution, entangled in multiple and complex relations of dependence influenced by configurations of gender, kinship, labor, community, ethnicity, society and the state. Rather than producing more wealth, this “distributive labor” is primarily directed at dividing sources of wealth into “smaller and smaller slivers as they work their way across social relations of kinship, clientage, allegiance, and solidarity” (p.97). It is this kind of activity that sustains and reproduces society, more than engagement in production as defined by macro-economic frameworks centered on the labor of able-bodied men in the formal sector and the reproductive work of women as wives and mothers. One powerful example of this reversal in South Africa is the shift from dependence of women, children and rural relatives on remittances from men working in the mines in the heyday of the apartheid economy, to the central distributive role played today by women and elderly people. The latter are the main beneficiaries of state grants, and disenfranchised men at the margin of the productive economy have increasingly come to rely on them.
Establishing and maintaining dependence on others who have access to wealth becomes a full-time job for those who are excluded from the benefits of middle class life. Dependence, in Ferguson’s treatment, has more to do with sharing than either gift or market exchange. Sharing and dependence cannot be easily subsumed under the conventional opposition between equality and inequality. These relations hint at a “new politics of distribution” beyond these two poles.
Within this framework, Ferguson convincingly reinterprets varied political movements calling for redistribution in the region, from the populist socialism of new radical movements in South Africa to the region-wide basic income grant campaign, and debates around land reform and resource nationalism. Calls for redistribution go beyond narrow views of African patrimonialism. People demand what Ferguson labels their “rightful share” in wealth that is owned collectively. Legitimate participation in this process can be framed along citizenship lines at the state level, but there are other levels of belonging too when local communities and traditional leaders are involved. These claims are not exercised from a position of inferiority or supplication. People own collectively all the resources of their community of belonging, hence they have a claim to a share of the wealth produced from these resources.
By inserting the normative and political dimensions of these movements into a long history of local idioms and practices, Ferguson provides a different angle on activist discussions around radical measures like the basic income grant (BIG). BIG is argued from a variety of perspectives, ranging from radical Marxism to left-leaning libertarianism and technocratic social democracy. The distinctive feature of a basic income is that it should not be tied to any condition and everybody should be entitled to it. The ideal world imagined by BIG activists is one where all human beings receive a basic income that would afford them a decent livelihood, with no compulsion to work for a wage or generate income through other activities. This is a radical break from existing welfare measures that tie unemployment benefits to the reintegration of beneficiaries in the labor market. In line with other activist scholars, Ferguson notes that these emerging state systems of cash distribution provide an essential infrastructure for the possible establishment of BIG. At the same time, his anthropological analysis develops moral and political arguments in favor of BIG that are grounded in local discourses and aspirations, a dimension often missed by global activist groups and regional campaigners.
Ferguson joins a growing number of anthropologists who subvert the conventional boundaries between analysis and engagement. With his creative and flexible analysis, he provokes thinking for action beyond narrow ideological boundaries. One could imagine enthusiastic endorsements of his work by Marxist campaigners, World Bank technocrats and traditional leaders alike. This highly original book is likely to leave a lasting mark not only on contemporary anthropological debates around poverty and development, but also policy and activist thinking in southern Africa and beyond.
This review was originally published in Anthropology Book Forum.
by Karl Widerquist | Aug 22, 2014 | Research
John Danaher, NUI Galway
John Danaher, a lecturer at the National University of Ireland, Galway and a regular blogger at Philosophical Disquisitions, has written a series of blogs about basic income. The series contains nine articles so far, post from December 23, 2013 to July 18, 2014. According to the author’s summary, “I’ve written a number of posts about the ethics and justice of the basic income grant. I thought it might be useful to provide an index to all of them in this post. Most of these posts look at whether an unconditional basic income grant can be justified from a particular theoretical perspective, e.g. feminism, libertarianism, liberal egalitarianism, and republicanism. One of them asks whether there should be a right not to work.” Items in the series include:
From Philosophical Disquisitions
John Danaher holds a PhD from University College Cork (Ireland) and is currently a lecturer in law at the National University of Ireland, Galway. His research interests range broadly from philosophy of religion to legal theory, with particular interests in human enhancement and neuroethics.
John Danaher, “Blog series: Philosophy and the Basic Income.” Philosophical Disquisitions, July 18, 2014 [December 23, 2013 – July 17, 2014]
