by Michael Lytton | Jul 26, 2016 | Opinion
The editorial below is a response to Pranab Bardhan’s “Could a Basic Income Help Poor Countries?”
Pranab Bardhan is a professor of economics at the University of California, Berkeley. Writing on the Project Syndicate website, he is skeptical about a universal basic income in rich countries, but asks if it isn’t both fiscally feasible and socially desirable in poor countries.
Comparing applicability of a Universal Basic Income (UBI) between advanced and low-or middle-income countries, Bardhan argues that there is a better fit where “the poverty threshold is low and existing social safety nets are both threadbare and expensive to administer.” His response to his own question is still cautious. “In India,” he says, “the answer could be yes.”
Unfortunately, his argument is muddled. He correctly diagnoses the administrative chaos that is India, and identifies sources of funding for a UBI in subsidies and tax exemptions that could be ended. At the same time, he warns that existing key social welfare programs cannot all be eliminated, nor should the government get out of the business of public education, health care, preschool nutrition or employment guarantees in public works. In effect, a UBI would supplement existing programs and thereby loses its rationale as a reducer of bureaucracy.
Bardhan also paints a contradictory picture of the results, describing it as both a “reasonable basic income”, yet “severely limited,” which is why other social welfare programs can’t be discontinued. And ignoring the ample evidence to the contrary from cash transfer experiments in India, he says there is “no way to ensure that individuals would allocate enough of it to achieve socially desirable education, health or nutrition levels.”
Apparently agreeing with “prominent advanced-country economists” who warn that a UBI is “blatantly unaffordable,” Bardhan uses the United States as an example. He writes that an annual payment of $10,000 per adult would “exhaust almost all federal tax revenue, under the current system,”, and suggests that this sort of arithmetic explains the failure of the Swiss UBI referendum last month.
Invoking the specter of affordability to end debate on UBI is reminiscent of earlier and now discredited arguments that it is too expensive to do anything about climate change, which is tantamount to saying our world is short of wealth, so “Say goodnight, Gracie.”
The Global Commission on Economy and Climate makes the evidence-based argument that climate-smart cities can spur economic growth and a better quality of life—at the same time as cutting carbon pollution. Recent research (from economists, no less) has found that investing in compact, connected, and efficient cities will substantially reduce greenhouse gas emissions and generate global energy savings with a current value of US $17 trillion by 2050 (Gouldson et al., 2015).
To these savings can be added reduced pollution impacts and costs. In 2013, the World Bank conducted its first-ever economic assessment of environmental degradation in India and reported the amount to be 5.7% of the country’s GDP (World Bank, 2013). And in another first-of-its-kind study conducted in 2015, the Organisation for Economic Co-operation and Development (OECD) found that air pollution-related illnesses and mortalities cost $1.7 trillion annually in OECD countries, $1.4 trillion in China, and $0.5 trillion in India (WHO Regional Office for Europe, OECD, 2015).
And then there is inequality. The global inequality crisis is reaching new depths, with the richest 1% now having more wealth than the rest of the world combined. The wealth of the richest 62 people on the planet rose by 45% in the five years since 2010 to $1.76 trillion, while the wealth of the bottom half fell by just over a trillion dollars in the same period—a drop of 38% (Oxfam et al., 2016). Meanwhile the tiny elite at the top is using its power and privilege to manipulate the economic system to further concentrate returns to capital.
Paying taxes is not high on the agenda of the absurdly wealthy, and the use of tax havens and other tax-dodging practices afflicts countries of all income levels, even the poorest. It is estimated that tax dodging by multinational corporations costs developing countries some $100 billion annually, and a global network of tax havens enables the richest individuals globally to hide $7.6 trillion. As taxes go unpaid due to widespread avoidance (with political approval and support), government budgets shrink and vital public services and social programs are diminished. Levying higher taxes on less wealthy segments of society just hurts the poor and makes inequality worse.
Despite Professor Bardhan’s quick dismissal, the United States would seem to be a good test case for UBI. For a number of reasons, the country has been characterized as an outlier among developed nations. It is one of the richest in the world, but among wealthy nations it has the highest income inequality. It has high private but low public social spending, with vast differences within the country as a result of states’ rights under federalism. Public expenditures have tended to shift toward the disabled and elderly, and away from those with the lowest incomes—consistent with a widespread belief that people are poor because of laziness or lack of incentive. Tony Judt’s rejoinder is, “Anyone who thinks that the poor like living on a pittance should try it.”
There is bipartisan aversion to taxes, especially among the rich — it is difficult to imagine how much worse income inequality might be had the United States spent even less on reducing poverty. Progressive taxation that would redistribute wealth from the rich to the poor is political anathema, and taxation is increasingly regressive—the poor pay higher effective tax rates than the rich. Enforcing tax avoidance and tax evasion is correspondingly weak.
It is one of the richest nations in the world, and yet among the 35 wealthiest countries it has the second highest child poverty rate (Adamson, UNICEF, and Innocenti Research Centre, 2012). More than one in five children is food insecure, and nearly one-third of U.S. children are in a household where neither parent holds full-time, year-round employment. The cost of child poverty in economic and educational outcomes has been recently estimated to be half a trillion dollars a year, or the equivalent of nearly 4 percent of the Gross Domestic Product (Coley, J. and Baker, 2013).
Reducing child poverty seems sufficient in itself to justify a UBI experiment. Not only would public social assistance costs fall, but families with more income are better able to purchase nutritious meals and better housing, and support child development with higher quality family relationships and parental interactions. Some observers warn that current poverty levels combined with the growing wealth gap threaten to destabilize the US democracy and curtail the social and economic mobility of children for generations to come (Coley, J. and Baker, 2013).
Professor Bardhan would also have found money for UBI just by crossing the Berkeley campus. His colleagues at the Institute for Research on Labor and Employment (IRLE) published a research brief in 2015, titled The High Public Cost of Low Wages: Poverty-Level Wages Cost U.S. Taxpayers $152.8 Billion Each Year in Public Support for Working Families.
Over the past three decades the share of income going to labor has been declining in most countries around the world, while the capital share has been rising. Unemployment is part of the problem. The International Labour Organization (ILO) estimates that over 201 million people were unemployed around the world in 2014, an increase of over 31 million since the start of the global financial crisis. The ILO reports that this trend is common in all regions of the world, despite an overall trend of improved educational attainment. At the same time, wages are not keeping up with the productivity of workers. In the US between 1973 and 2014, net productivity grew by 72.2 percent, yet inflation-adjusted hourly pay for the median worker rose by just 8.7 percent. (Oxfam et al., 2016).
As the authors of the IRLE research brief point out, when jobs don’t pay enough workers turn to public assistance to meet their basic needs. These programs provide vital support to millions of working families in the United States whose employers pay less than a living wage. The researchers found that between 2009 and 2011, more than half of the combined state and federal spending on public assistance went to working families—a total of $152.8 billion per year. “Overall, higher wages and employer provided health care would lower both state and federal public assistance costs, and allow all levels of government to better target how their tax dollars are used” (Jacobs, Perry, and MacGillvary, 2015).
Next stop for UBI, the United States.
Sources:
Adamson, Peter, UNICEF, and Innocenti Research Centre. 2012. Measuring Child Poverty New League Tables of Child Poverty in the World’s Rich Countries. Florence, Italy: UNICEF Innocenti Research Centre.
Coley, J., Richard, and Bruce Baker. 2013. Poverty and Education: Finding the Way Forward. Princeton, NJ: Educational Testing Service, Center for Research on Human Capital and Education.
Gouldson, A. P., S. Colenbrander, A. Sudmant, N. Godfrey, J. Millward-Hopkins, W. Fang, and X. Zhao. 2015. “Accelerating Low Carbon Development in the World’s Cities.”
Jacobs, Ken, Ian Perry, and Jenifer MacGillvary. 2015. “The High Public Cost of Low Wages: Poverty-Level Wages Cost U.S. Taxpayers $152.8 Billion Each Year in Public Support for Working Families.” Institute for Research on Labor and Employment, UC Berkeley Center for Labor Research and Education.
Oxfam, Deborah Hardoon, Sophia Ayele, and Ricardo Fuentes Nieva. 2016. An Economy for the 1%: How Privilege and Power in the Economy Drive Extreme Inequality and How This Can Be Stopped. Briefing Paper 210. Oxford, UK: Oxfam GB for Oxfam International.
WHO Regional Office for Europe, OECD. 2015. “Economic Cost of the Health Impact Air Pollution in Europe: Clean Air, Health and Wealth.” WHO Regional Office for Europe, Copenhagen.
World Bank. 2013. “India-Diagnostic Assessment of Select Environmental Challenges: An Analysis of Physical and Monetary Losses of Environmental Health and Natural Resources.” World Bank.
by Citizens' Income Trust | Jul 15, 2016 | Opinion
Author: Frances Hutchinson
The simple question, alluded to in the title of this article, is: ‘How do we end the wages system?’ That raises further questions – ‘Why end the wage system? What is wrong with it?’ or the fundamental question: ‘What is the wages system?’ It is my contention that all social and environmental reforms which ignore the role of money in directing human activity are doomed at best to be palliative, addressing individual causes for concern whilst ignoring the root causes from which the individual problems stem. As Marx and Veblen were well aware, the wages system lies at the heart of social injustice and ecological unsustainability. So long as absentee owners direct the work of waged or salaried employees (whether in private or state corporations), the motivation for reform will be constantly frustrated. Where money is the master motivation, all other values fade into subsidiary considerations. The major debates currently raging about war, famine, agribusiness, debt, environmental/ecological degradation, GM, world trade and poverty all stem from one central cause. People are held into doing what they are doing because they seek to profit financially from their cooperation with others. Whether the ‘profit’ is from speculative sale or sale of labour time becomes immaterial. Both are beholden to the same phenomenon: money is the first consideration in determining a course of action. The money economy is dividing people not only from their work and its product, but also from the land that ultimately sustains all forms of human society. If one cannot live on bread alone, one certainly cannot live on money at all. It is absolutely essential that material goods and services exist, and that the resources necessary for the production of those resources are cultivated and conserved. The money economy has come to obscure the practicalities of everyday life.
The money economy
With industrialisation, we were liberated economically from traditional social ties, only to become enslaved by a money system operating beyond everyday comprehension. Rights and responsibilities associated with respect for the ‘commons’ and social justice are swept aside in favour of economic pressures. Money is enthroned in a place of identifiable individuals whose ability to hold sway over others could be monitored by a system of checks and balances which, however imperfect, nevertheless made the oppressor ultimately accountable. When it comes to money management and distribution, some people struggle to meet ends. Although, it should be noted that the availability of home loans and auction finance do people grapple with the tight market. The present system of income distribution has come to seem as natural – even if as unpredictable – as the weather. Incomes are the reward for participating in the formal economy, regardless of whether the work is constructive or destructive of welfare.
As we have observed (Hutchinson et al., 2002, pp.42- 43), oikonomia, the material economy where tangible and useful wealth is created, is now dominated by chrematistics, the money economy that is parasitical upon oikonomia. The ‘real’ economy is the one that ‘earth has given and human hands have made’. The money economy takes from the God-given earth, and from human society, destroying and not replenishing. In short, we have an insane system of economics that counts waste, devastation, pollution, war and social devastation as ‘wealth’.
Take just a few examples. Perhaps car accidents and legal issues surrounding them. Or even environmental disaster adds to GNP (the over-all measure of total national wealth) because of the increase in economic activity – such as fire services, car replacement, ambulance, medical, insurance, and of course the legal costs for a car accident attorney springfield has to offer, and so on that it causes. With more than 11 million car accidents in the United States itself, there are many that lose their lives in the unfortunate occurrence. A lot of their economic activities, get halted if the deceased was the only earning member of the family. For this reason, they would need a personal injury lawyer to represent them in court to receive compensation, as deemed fit by the judicial system.
Furthermore, in the formal economy, food is manufactured, not by God, but by the ‘food industry’: in 1971 a food industry study found that total food expenditure in 1971 need only have been £1,800 million to provide a varied and healthy menu. It was actually £6,636 million – i.e. the food industry added four and a half thousand million pounds – in processing, preserving, packaging, and so on, with all the attendant waste and pollution. In chrematistic terms, we were all ‘better off’. Today, international rulings force small farmers in poor countries to abandon sustainable and reliable practices for mono-cultural cash crops for export. Across the world, ‘financial services’ and dealings far outweigh trade in actual goods and services, which form a mere 5 per cent of the total. The money economy continues to sweep across the world, devouring land and cheap labour sources, leaving social and ecological devastation in its wake. In Hong Kong firms no longer manufacture goods: they merely trade in goods produced in the cheap labour factories, spreading across China. Already, a decade ago, 85 per cent of China’s rivers were dead. The key players: corporations, academics, and politicians – are mesmerised by the money system. In purely chrematistic terms, we are all ‘better off’ if we work for money, regardless of the social and ecological impacts of that work.
Citizen’s Income and the National Dividend
Citizen’s Income seeks to alleviate poverty, particularly family poverty, under capitalism. Arguments for it flow from the observed shortcomings of the welfare system instituted by Beveridge in the aftermath of World War II. The arguments are often accepting of the terms and premises of the capitalist financial system, and sometimes – but not always – assume that full employment and a growing economy are needed to provide the means to pay for Citizen’s Incomes.
The Social Credit movement emerged from a very different stable. Just over one hundred years ago, Europe was plunged into a senseless war. In a brief moment of sanity, young soldiers on the front lines joined hands in singing Christmas carols. People then and since have asked why war is necessary. The Social Credit movement became a worldwide political force working to end war, environmental degradation and economic growth based upon war and built-in obsolescence. Its message was plain and clear. There is enough for everyone’s need, though not for everyone’s greed.
Clifford Hugh Douglas, author of the original Social Credit texts (See Hutchinson and Burkitt, 1997) considered the expenditure of human life and resources in the Great War something to be learned from, rather than something to be repeated for the sake of creating a strong, financially sound, economy. Social Credit was part of a much wider social movement in the so-called ‘inter-war years’ of the twentieth century. Progressive thinkers from all classes and all walks of life questioned the wisdom of basing the formal, finance-driven economy on production for war, waste and consumerism.
Douglas brought his shrewd, common-sense, analytical mind to bear upon the practicalities of the workings of the money economy. As the 1914-18 War raged across the world, factories were working at full capacity. Vast quantities of armaments, uniforms, tanks, machinery, ships and other forms of transport were churned out on all sides. Farmers on the land prospered, supplying food to the armies of military and civilian workers. But the apparent prosperity was ephemeral because it was dependent upon the workings of an unsound financial system. As the war ended, Douglas was an obscure engineer accounting the finances at Farnborough aircraft factory. He predicted the inter-war depression and explained how it would happen and why. He detailed how the finance to run the war was conjured up by the Government as debt, when it could just as easily have been created as credit, in which case the prosperity would continue after the War.
In the immediate aftermath of the War (1918-20) Douglas wrote a series of articles on finance and income distribution. These were closely studied amongst trade unionists, politicians, economists (including Keynes), and a wide spectrum of intellectuals. A vast literature on Social Credit, including weekly newspapers, books, pamphlets, and journal articles, circulated throughout the UK, the Commonwealth, the US, Scandinavia, and Tokyo in multiple editions. Douglas’s predictions were correct, and his work has never been faulted. What is physically possible is always financially possible, because finance is a man-made system of accounting, and can be adjusted to meet the will of the people.
At the heart of Social Credit theorising is the justification for paying a National Dividend to all citizens regardless of work status on grounds of the common cultural inheritance. Douglas argued that labour – paid work – does not create wealth: ‘The simple fact is that production is 95 per cent a matter of tools and process, which tools and process form the cultural inheritance of the community as a whole’, being the result of work done over generations by an army of technologists, the vast majority of whom are now dead (Douglas, 1919, p. 95). Thus claims to a share of the common cultural inheritance, which rightly belongs to the community as a whole, can be justified not by work, and not by private ownership of land and property, but by common right of citizenship. Over a period of three decades Douglas argued consistently that finance is purely a matter of accounting: what is practical and desirable on social grounds is financially possible, because finance is a man-made system. The key to economic democracy is the political will to bring about legal change.
Women and Social Credit
Proposals for a non-means-tested National Dividend, payable by right of citizenship, were of particular interest to women. Although Social Credit was not specifically a women’s movement, women who studied the economics of the social credit movement in the interwar years campaigned on the basis of its potential for improving the socio-economic status of women. Their arguments are echoed in current studies of mothering and home-making:
Mothers in the United Kingdom today are in an impossible situation. Our very title has been erased from Government policy on families [Guidance for Government Departments October 2014] and general political discussion in a pernicious Orwellian language trend. Women who are mothers are expected to engage in the workforce in a liberalist and capitalist tradition of individual interest where market forces reign supreme – there is no room for love and care, let alone awareness of interdependency common to all our lives. There seems to be no place for maternal care. No place for improved, supported services investing in family life.
So writes Vanessa Olorenshaw in her groundbreaking pamphlet, The Politics of Mothering.
Women activists of the 1930s argued that Social Credit offers every woman and man a birth-right income based on the productive capacity of the community. It would:
… ensure economic independence and freedom, for it will release her from being tied to the home when she wishes to live her own life or bound to some man who ill-treats her. Nor would she be driven to work-wage slavery in competition with men in order to stay alive when she has caring responsibilities within the household. Women would get equal pay for equal work because ‘a Social Credit Government will naturally stand for fair play for all citizens without distinction’. Each individual woman will be able to say ‘If I do this job as well as a man could do it, I shall want the same pay as a man.’ And if the employer says, ‘No’, she will be able to say: ‘Very well, I refuse the job. After all, I can live on my National Dividend.’ This places every woman in a very powerful position. (It will apply equally, of course, to badly-paid male workers.) (Quoted in Hutchinson and Burkitt 1997)
Women were politically active in support of the proposals throughout the UK, Canada, Australia, New Zealand and the United States over the middle decades of the twentieth century.
From master to servant
Central to the Social Credit debate are the core issues of farming, finance, and the household. To date, mainstream economic theory has failed to accommodate itself to the realities of economic life. These include the futility and waste of war, which is officially accounted as a plus, and the need for income security so that good work may be undertaken in the home, in the community, in local businesses, and on the land. Today, concerned individuals and groups are bringing forward the identical issues as those surrounding the massive international debate based upon the writings of C.H. Douglas less than a century ago. Douglas asked the fundamental question – why should it be ‘absolutely necessary’ for the workers to produce weapons of mass destruction in order to put food onto the household table? His question remains as valid today as when he first posed it a hundred years ago.
Frances Hutchinson is the author of Understanding the Financial System: Social Credit Revisited (2010) and of The Economics of Love, forthcoming.
References
Douglas, Clifford Hugh (1919) Economic Democracy
Hutchinson, Frances (2005) If citizen’s income is the answer, what is the question?, European Business Review, Vol. 17, No.2. pp193-200. www.emeraldinsight.com/charter
Hutchinson, Frances and Brian Burkitt (1997) The Political Economy of Social Credit and Guild Socialism, Routledge (Jon Carpenter 2005 reprint).
Hutchinson, Frances, Mary Mellor and Wendy Olsen (2002) The Politics of Money: Towards Sustainability and Economic Democracy, Pluto Press.
Olorenshaw, Vanessa (2015) The Politics of Mothering, available from www.facebook.com/Politics of Mothering.
by Guest Contributor | Jul 7, 2016 | Opinion
Introduction: the minimum income
In Italy, the debate on basic income has lasted for almost 20 years. Back in August 1997, the ECN.org website published my pamphlet titled “Ten thesis on citizenship income”. This text, which saw a successful circulation, especially underground, was re-edited in the book “Tute Bianche” [1], presented an overview of the Italian debate regarding the introduction of a basic income, a proposal that had begun to circulate in the neo-worker environments in the previous 2 years [2].
Twenty years later, it should be acknowledged that the definition of “citizenship income” has created more negative effect than positive. At that time, the phenomenon of migration had not yet assumed today’s proportions, although it had started to see an uptick. So, guiltily, the term “citizenship” was used without thinking that the concept of “citizenship” is terribly ambiguous. In fact, it can be used in an ethical and philosophical framework for designating that every human being is born as a “world citizen”, regardless of his or her nationality of origin. But today, the concept of citizenship is increasingly tied to the legal-national sphere within a grid of limited rights ius soli, not be extended to all those who were born elsewhere. From this point of view, the idea of a “citizen’s income” can only be misunderstood as a limited proposal to whomever has that specific nationality, in contradiction with what is our idea of an individual “right to income”. The term “basic income” appears therefore more appropriate and inclusive.
There are now numerous proposed pieces of legislation in Italy and abroad, as well as policy initiatives and declarations in favour of the introduction in Italy of some form of income support independent of employment status.
There are also numerous different interpretations of such a measure. In the cultural political debate promoted by Bin-Italy [3], which for years has promoted a cultural and socio-political campaign aimed to introduce a guaranteed minimum income (basic income), it is necessary to define certain parameters, to reduce the interpretive confusion that has now reached a critical level, making it unclear what a “citizen’s income”, “minimum income” or “a dignity income” actually is (to use the most common names).
To actually talk about “basic minimum income” (we use this term in a broad and provisional sense), we believe that at least 5 criteria have to be verified:
- Individuality criterion: the minimum income must be paid at the individual level and not filtered through family members. From this we can discuss if children under 18 years enjoy this right or not.
- Criterion of residence: the minimum wage must be paid to all individuals who, residing in a given territory, live, rejoice, suffer and participate in the production and social cooperation regardless of their marital status, gender, ethnicity, religious belief, etc.
- Criterion of the maximum extension of unconditionality: the minimum income must be provided by minimizing any form of compensation and/or obligation, maximizing free individual choice.
- Access criteria: the minimum wage is paid in its initial phase of experimentation to all individuals who have an income below a certain threshold. This threshold may, however, be greater than the relative poverty line and converge toward the median level of the personal distribution of existing income. Moreover, this level of income must be expressed in relative terms, not absolutely, so that increasing the minimum threshold (as a result of the initial introduction of the measure) the range of beneficiaries will increase continuously until it reaches universality.
- Criteria for funding and transparency: the modalities of financing of minimum income must always be set out on the basis of economic viability studies, detailing where resources are obtained based on an estimate of the necessary costs. These resources have to fall on general taxation and not on other assets of origin (such as, for example, social security contributions, sale of public assets, privatization proceeds, etc.)
The criteria 1, 2, 5 should not be amendable, while criteria 3 and 4, are expressed in relative terms, may be subject to additional definitions depending on the context of reference, but within the principle directives we have just outlined.
The basic income as a primary income and therefore unconditional
The basic income today is a good and just idea. The reasons for this claim are inspired by the forms of the social composition of labor and the modalities of accumulation and exploitation which are today dominant.
In this regard, it is necessary to propose a cultural leap before we take the political leap and affirm that Basic Income is a primary distribution variable: the basic income must intervene, in fact, directly in the income distribution of productive factors, such as salary (which remunerates certified work hours), profit (which rewards the business entity), or rent (which derives from a property right). Primary distribution variable means that it is not a re-distributive variable: it directly occurs at the level of the balance of power and social relations within a certain process of accumulation. Despite it, a redistribution of income, which occurs at a later stage, is the outcome of a second level of indirect distribution, an extra market level, thanks to appropriate discretionary economic policies.
If basic income is remuneration, the question is what is the level of pay. To answer this it is necessary first to analyze what the main sources of exploitation are in contemporary capitalism. More and more studies confirm that today life itself, in every daily event, is the productive factor par excellence [4]. If we take into account the acts of daily life that characterize our existence, they can be categorized into four types: labor, work, leisure, entertainment/games. Today it is not only labor that is the basis of added value, but also the time of creation (opus/work), the otium/leisure time, entertainment time. These are all included in a growing and continuous enhancement mechanism.
The classic dichotomy of the Fordist paradigm between labor and non-labor time, between production and consumption, between production and reproduction are now partially obsolete. It is the result of a historic process of structural changes in manufacturing processes and labor organization, which marked the transition from a material Fordist capitalism to a bio-cognitive and financialized capitalism. Today, wealth production derives, at the same time, from absolute surplus value and relative surplus value extraction, where for absolute surplus value we intend the existence of a sort of primitive accumulation in capitalist organization based on capital employment and on private property. The result is the change of the relationship between productive and unproductive labor. What in the material Fordist capitalism was considered unproductive (i.e. no production of surplus value and therefore not remunerable), has now become productive, while the remuneration remained anchored to the one of the Fordist era (the salarization crisis). As a result, we are facing new ways of valorization such as “dispossesion” (Harvey [5]) and “extraction”, to whom no remuneration is applied, according to the dominant rules (legal, industrial relations, uses and so on).
It is no coincidence that unpaid labor is sharply increasing from those sectors in which more has been invested by the transformations of the enhancement methods and the adoption of the new linguistic-communicative technological paradigm (cognitve-relational activities).
Against this background, one proposal that could be advanced to counter this phenomenon of unpaid labour (i.e., basically “slavery” with another name, even though for most it is not perceived as such) is to proceed with its salarization. But we ask yourselves: is it possible? If the answer is yes, then the basic income should be not necessary
The vagueness of labor time
This question opens up a second theoretical problem – both political and methodological. When technological and organizational transformations favor the spread of increasingly intangible productions with a high degree of non-measurability, when value is created by a whole range of life activities, from learning processes, to social reproduction [6] and networks of relationships, then arises the problem of “measure.”
The theme of the measure is linked to the calculation/quantification of labor productivity. Unlike in the past, where this calculation was possible because employee labor activity could be measured in hours and by an equally measurable amount of production on an individual basis, productivity today has changed shape: it depends on the increasing use of new forms of scale economies: learning and network economies. These are scale economies no longer static but dynamic, because it is the flow (continuously) of time to allow for growth and learning of social skills as well as social reproduction and thus increase productivity, whose effects can be seen no more on individual basis but on social one. Both learning and networking, in fact, need a social context and a social cooperation. The productivity in bio-cognitive capitalism is therefore primarily social productivity or, with reference to the role of knowledge, general intellect.
Learning economies are based on the generation and dissemination of knowledge. Knowledge is not a scarce resource, such as material goods, but abundant: the more you swap, the more it spreads, the more it grows, with a highly productive cumulative mechanism: cumulativeness requires relationships and social networks. Learning and network are two sides of the same coin: if knowledge is not spread through relational over individual processes, it is not economically productive. Only if you develop social cooperation and general intellect does it become productive.
We are not talking in the traditional sense of the term co-operation, that is, “join forces” but co-operation, namely the interaction of individual operations that only achieve synergy in the common processes of accumulation and thus of surplus value creation. These relational activities often hide forms of hierarchy and exploitation, whose value is difficult to measure, not only on individual basis but collectively as well. If traditional factory productivity was based on precise technical mechanisms that allow you to measure individual productivity in the labor places today, then the productivity of social cooperation cannot be measured in terms of individual productivity.
Not just individual productivity but also the same product of social cooperation is not measurable. When you are producing symbols, languages, ideas, forms of communication, social control, what kind of measurement can we take? Every relationship between output value, its production time (measured in hours) and its remuneration (measured in wages) becomes almost impossible or very difficult and subjective.
The crisis of the labor theory of value derives from the fact that the individual contribution today is not measurable and the output tends to escape a unit of measurement, as production tends to become immaterial. And this takes place in a context in which the measure of value is no longer constrained by a scarcity factor. As was pointed out earlier, learning (knowledge) and network (space) are abundant inputs, theoretically unlimited (especially if we consider the virtual space), as the human nature. A theory of value based on the principle of scarcity, such as the one implicit in the theory of free market founded on the law of supply and demand, no longer has any economic and social relevance. It is only artificially perpetuated in market dynamics which have continuously defined power relationships. Paradoxically, the only theory of value that appears adequate to contemporary bio-cognitive capitalism, the labor theory of value, is not able to provide one measure.
How to give a measure to social cooperation and general intellect?
It is a question that can only surmise some answers. One possible aspect to consider has to do with the sphere of financialization. The pervasive and central role of financial markets, such as investment financing tools, privatization of social welfare and the form of partial compensation of the high content of knowledge labor, has affected not only the sphere of realization but also that of production. In capital gains, the speculative activity partially derives from the value produced by the cognitive-relational living labor. It is in financial markets that we can roughly see the implementation of the process of expropriation of social cooperation and of general intellect.
This process is not immediate and direct. It is often handled by the dominant bio-power management and the hierarchical relationships that continually redefine the property structure and market structure.
From this point of view, basic income, as a primary income, becomes even more a tool of direct re-appropriation of the wealth that is generated by the common life time put to labor.
The inadequacy of wages form at the time of the body-mind
The order of discourse leads us to say that the traditional salary structure is no longer adequate, it does not fully capture the transformations in the valorization process. The classic wage structure can still be useful in those parts of the overall production cycle in which there is a measure of the value of labor in term of time. But it cannot be generalized. From a theoretical point of view, this issue leads to the need to review, rethink and redefine the Marxian labor theory of value.
The inadequacy of the wage form as remuneration of all the productive life, leads us to say that we need another way of remuneration (in addition to the wage forms where these are measurable). From this point of view, basic income is something structurally different from salary (though potentially, in the future, convergent); it cannot simply be understood as an extension of the wage form, because it is necessary to take into account the quantitative and qualitative change that new technologies have generated.
In particular, I would like to stress the relationship between human and machine.
In the sixties, the relationship between human beings (with his body, his nerves, his muscles, his brain, his heart, his eros) and the machine was a relationship between separate domains: on the one hand, the human being, living labor, on the other hand, the machine, the dead labor. The relationship between life and death was clear, physically traceable. From the point of view of human inner, the machine was something external and tangible, separate from himself.
From the nineties to the present, such a separation is no longer as clear. The machine becomes mechanic and loses some of its materiality: the old Tayloristic machine becomes increasingly linguistic and relational. In presence of linguistic-communication technologies (ICT), only the support is material (hardware) but the core depends more and more on cognitive-relational human faculties processes. The use of language as the main tool of the mechanic operation changes the relationship of interdependence between human and machine typical of Taylorist technologies. In digital technologies, the despotism of the machine is less prevalent.
But is this hybrid between man and machine that takes direction? And is it the machine that is humanized or rather the human becoming mechanical? That is the challenge of bio-robotic.
Consider the web 2.0 and the recent spread of social media. “The profit of advertising agencies, just like the profit of all firms in web 2.0, depend almost entirely on the ability to develop control technologies. Social control is then presented as the only way to innovate and develop in the future. But what is checked, exactly, today? Our identities and how they change. “The profiling algorithms of digital technologies feed on human biodiversity that it is itself channelled and integrated “in a Panopticon space, completely transparent, where we are called to act publicly”. See Google Pagerank, for instance.
Control of the body-mind becomes today (in agreement with the unpaid labor) the new enhancement border. Even if such activities were salarized or simply paid otherwise (which is not), our freedom of choice would be conditioned.
An unconditional basic income is a tool not only to recognize that our life is an active part (though often not aware) of contemporary exploitation but also able to exercise the right to choice, that is towards an individual and social self-determination: the right to choose our destiny as far as social participation is concerned, and also the right to refuse bad and indecent labor conditions. And this cannot be allowed, otherwise there is the risk to break the fragile balance between social control and the supine condition of subordination. From this point of view an unconditional income is subversive and that is the political struggle.
Author: Andrea Fumagalli (Università di Pavia – BIN Italia)
Andrea Fumagalli note for the conference: “Future of Work” Zurich 4 May 2016
[1] A. Fumagalli, M. Lazzarato (eds), Tute Bianche, Derive-Approdi, Roma, 1999
[2] M. Bascetta, G. Bronzini (eds), La democrazia del reddito universale, Manifestolibri, 1997. Il tema di un reddito sganciato dal lavoro, etichettato con il termine salario sociale era già stato patrimonio del dibattito degli anni Settanta a parte dalla formulazione del rifiuto del lavoro (salariato).
[3] See www.bin-italy.org
[4] A. Fumagalli, C. Morini, “Life put to work: towards a theory of life-value”, in Ephemera, vol. 10, 2011, p. 234-252
[5] D. Harvey, “The new imperialism. The accumulation by dispossession”, in Socialist Register, 2004
[6] C. Morini, “Riproduzione sociale” in C. Morini, P. Vignola (eds), Piccola Enciclopedia Precaria, Milano X, Milano, 2015
by Sandro Gobetti | Jul 3, 2016 | Research
Article by Luca Santini and Sandro Gobetti (BIN Italia), published on Cadmus journal Vol. 2 Issue 6 may 2016.
Abstract
A feeling of uncertainty about the future as well as the perception that the past classical securities are gone are widely spread among people. Criticism or disaffection affects the majority of the traditional political forces of the European continent. It is not possible to talk about the European crisis without referring to the crisis of wage-based society. All political options of the past century have de facto put labour at the centre of society.
The post-classical era got its start in the ’80s when, for the first time since World War II, the phenomenon of mass unemployment affected Europe. The crisis of wage labour cannot be regarded as a temporary economic conjuncture of an otherwise unlimited growth; all consequences of the phase must be contemplated in order to design at once a society based on new principles.
For years, after the end of the Fordist system, nothing has been done to cope with the conditions of precarious workers. The issue of a guaranteed income is, therefore, crucial and inescapable in order to exit this long-term European crisis. The European Union should take a stand on the protection of human dignity and on the “right to exist”. Could basic income at the continental level be the basis for a social Europe? We are looking forward to it.
Click here to read the article in pdf.
Click here to download Cadmus Journal Vol. 2 issue 6 May 2016.
by Kate McFarland | Jul 1, 2016 | News
Varun Gandhi, Member of Parliament of the Bharatiya Janata Party (BJP), has endorsed basic income in an article published in The Hindu on June 30, 2016. The BJP, the ruling party in India, is the largest political party in not only India but (as of March 2015) the world, with 88 million registered members.
In his article, Gandhi calls for more basic income studies to be conducted in India, and delineates an impressive list of benefits that he expects from the policy:
A regular unconditional basic income, scaled up through pilots, and rolled out slowly and carefully, seems ideal for India. It can help improve living conditions including sanitation in our villages, providing them with access to better drinking water, while improving children’s nutrition. Regular basic income payments can help institute rational responses to illness or hunger, enabling households to fund their health expenses instead of encountering a vicious cycle of debt. It can help reduce child labour, while facilitating an increase in school spending. It can transform villages, enabling the growth of productive work, leading to a sustained increase in income. It could cut inequality; grow the economy; all while offering the pursuit of happiness.
Varun Gandhi has nearly 270,000 followers on Twitter and over 3 million Facebook fans.
Feroze Varun Gandhi, “Why we need to talk about a basic income,” The Hindu, July 1, 2016.
Image from Varun Gandhi’s life in pics (NDTV)
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