Charles Kenny, “For Fighting Poverty, Cash Is Surprisingly Effective”

[BICN – Jenna van Draanen – June 2013]

Kenny writes an article for Bloomberg Business Week that challenges prevalent attitudes about alleviating poverty with cash transfers. He cites two particular studies that involved grants given to people living in Uganda and also gives examples from the United States.

Kenny discusses the US 1970s negative income tax experiments that guaranteed an income to thousands of low-income recipients and cites outcomes of improved test scores and school attendance for the children of recipients, reduced prevalence of low-birth-weight infants, and increased home ownership.

He argues that many studies of cash transfers in both developed and developing countries have led to a variety of impacts and that these studies have shown that impacts are not correlated with any conditions applied. He also argues for the cost-efficacy of administering such unconditional programs. The author is critical of the argument that poverty is a result of moral failings of the poor and believes this is a justification for taking a paternalistic approach to poverty relief.

Charles Kenny “For Fighting Poverty, Cash Is Surprisingly Effective,” Bloomberg Business Week. June 3, 2013. The original article can be found here: https://www.businessweek.com/articles/2013-06-03/for-fighting-poverty-cash-is-surprisingly-effective#r=rss

Krugman, Paul, “Sympathy for the Luddites”

Nobel Laureate, Paul Krugman endorsed a “minimum income” in his edition of his regular Op-ed column in the New York Times. The column is mostly about technological unemployment, but Krugman concludes that the solution requires, “a strong social safety net, one that guarantees not just health care but a minimum income, too.” The term minimum income is a bit vague and is not spelled out by Krguman, but among economists the term minimum income is usually used to mean some kind of basic income guarantee, usually along the lines of a negative income tax.

Krugman, Paul, “Sympathy for the Luddites,” The New York Times, June 13, 2013

Paul Krugman

Paul Krugman

Basic Income Studies Vol. 7 No. 2, Dec. 2012: special issue, "The Right to Work and Basic Income"

This special issue, guest-edited by Michael Lewis, features a debate on whether it would be better for government to guarantee a job or an income. It features articles by Philip Harvey, Guy Standing, Michael Lewis, Eri Noguchi, and Pavlina Tcherneva (see more information below).

The debate is online at:
https://www.degruyter.com/view/j/bis.2013.7.issue-2/issue-files/bis.2013.7.issue-2.xml

“Introduction to the Special Issue on the? Right to Work and Basic Income”

Lewis, Michael A. Page 1-2
Published Online: 12/31/2012
“As I write these lines, the US economy is about 4 years out of the Great Recession of 2008–2009. Yet, unemployment is estimated to be at a stubbornly high 7.8% and the poverty rate is around 15%. That is, an estimated 12.2 million people are currently unemployed and about 46.2 million are living in poverty. … The two economists whose articles are featured in this special issue take fundamentally different approaches to these problems…”
https://www.degruyter.com/view/j/bis.2013.7.issue-2/bis-2013-0011/bis-2013-0011.xml?format=INT

“More for Less: The Job Guarantee Strategy”
Harvey, Philip. Page 3
Published Online: 12/31/2012
Abstract: The cost and effectiveness of a basic income guarantee and a job guarantee (combined with conventional transfer payments) are compared with respect to their ability to eliminate poverty and unemployment. It is argued that a BI guarantee provided in the form preferred by most advocates of the idea (a universal basic income grant or equivalent negative income tax) would be both more costly and less effective than a job guarantee—if the latter is properly designed to secure the right to work and income security recognized in in the Universal Declaration of Human Right. It is further argued that the job guarantee strategy configured in this way also would do more to promote the real freedom goals of the basic income advocacy movement.
https://www.degruyter.com/view/j/bis.2013.7.issue-2/bis-2013-0006/bis-2013-0006.xml?format=INT

“Why a Basic Income Is Necessary for a Right to Work”
Standing, Guy. Page 19
Published Online: 12/31/2012
Abstract: This article makes the proposition that a right to work can only exist if an individual has a prior right to a basic income. It criticizes the perspective that maximizing the number of jobs is a meaningful way of advancing the right to work, since activity in subordinated labour is scarcely consistent with a freedom-enhancing right to work. In recalling the historical right to practise an occupation, it rejects the notion of a “job guarantee”, as neither feasible nor desirable in a free society or as part of a progressive vision of a Good Society.
https://www.degruyter.com/view/j/bis.2013.7.issue-2/bis-2013-0007/bis-2013-0007.xml?format=INT

“Cost, Compensation, Freedom, and the Basic Income – Guaranteed Jobs Debate”
Lewis, Michael A. Page 41
Published Online: 12/31/2012
Abstract: In this volume Harvey argues that guaranteeing people the right to work would be a better policy approach than guaranteeing people an unconditional basic income. This is because a guaranteed job would provide many of the benefits that a basic income would but at far lower cost. I argue that Harvey’s analysis of the relative cost differences between guaranteeing one a job or an income is misleading if not flat out wrong in some places. I also argue that there is one benefit that BI could promote that his jobs strategy, at least as presented in the paper in this volume, could not – the right of an able-bodied person to lead the kind of life they desire even if they desire not to sell their labor.
https://www.degruyter.com/view/j/bis.2013.7.issue-2/bis-2013-0008/bis-2013-0008.xml?format=INT

“The Cost-Efficiency of a Guaranteed Jobs Program: Really? A Response to Harvey”

Noguchi, Eri. Page 52
Published Online: 12/31/2012
Abstract: Responding to Harvey’s argument that a Guaranteed Jobs program would be more cost-efficient than a Guaranteed Income program, this paper points out several costs related to the latter that are not included in Harvey’s cost comparisons, mostly related to the administrative costs of operating a Guaranteed Jobs Program, which tends to be much more complex and high maintenance. This paper also points out that the unemployment rate would shift in response to the program, and that some unnecessary jobs would most likely need to be created if the program is to guarantee a job for everyone. However, the paper concludes that the public projects imagined as part of a guaranteed jobs program have merit on their own grounds, and should not be dismissed.
https://www.degruyter.com/view/j/bis.2013.7.issue-2/bis-2013-0009/bis-2013-0009.xml?format=INT

“The Job Guarantee: Delivering the Benefits That Basic Income Only Promises – A Response to Guy Standing”
Tcherneva, Pavlina R. Page 66
Published Online: 12/31/2012
Abstract: The present article offers three critiques of the universal basic income guarantee (BIG) proposal discussed by Standing in this volume. First, there is a fundamental tension between the way income in a monetary production economy is generated, the manner in which BIG wishes to redistribute it, and the subsequent negative impact of this redistribution on the process of income generation itself. The BIG policy is dependent for its existence on the very system it wishes to undermine. Second, the macroeconomic effects of BIG on contemporary economies that use modern money are destabilizing. The job guarantee (JG), by contrast, stabilizes both the macro-economy and the currency while helping transform the nature of work itself. Finally, the employment safety-net in Standing’s piece is not an accurate representation of the modern JG proposals – a confusion which this paper aims to remedy.
https://www.degruyter.com/view/j/bis.2013.7.issue-2/bis-2013-0010/bis-2013-0010.xml?format=INT

Link: The Staatsbuergersteuer System

Staatsbuergersteuer is a tax system that incorporates a basic income. Joachim Mitschke and Bernd Starkloff are the coauthors of Staatsbuergersteuer, which released its first publication more than 40 years ago. The system incorporates the concept of Buergergeld, a negative income tax, comparable to Basic Income along with other ideas. Their website (available only in German), is online at:

https://www.staatsbuergersteuer.de.

An English-language abstract of the system is online at: https://www.staatsbuergersteuer.de/abstract.htm
For more information contact: b.starkloff@gmx.de