by Guest Contributor | Dec 1, 2016 | Opinion
By Alexander de Roo
The discussion about basic income has changed completely.
Thirty years ago, it was a very principled debate. High unemployment. No future. Thus, give us a basic income, because the system cannot give us paid work. The counter argument was you must do paid work to receive an income. A basic income is morally unacceptable.
How different is the discussion now: when we go out and hand leaflets in the streets, 50 to 90 percent of the population takes our leaflets (50 percent in rich area’s and 90 percent in poor neighborhoods). The most common reaction is: basic income is a good idea, but how do you finance it? Who pays for it?
A very pragmatic discussion no longer principles banging against each another.
The confidence in the present social system in The Netherlands is shaken compared to 30 years ago. Previously you got five years’ unemployment money and one could easily look for another job. Now even middle class people lose their well-paid job and after two years of unemployment money must ‘eat up’ (meaning sell) their own house to get social assistant money…. five million people have a steady, normal contract. That is ten percent less than ten years ago. Two million people have flexible contracts for bull-shit jobs, two million people live from social benefits (in different forms), one million people are independent professionals without access to unemployment money (ZZP or freelancers), the pension age keeps going up (now 67 years), while people above 50 years have zero (or realistically around 1 percent) changes on the labor market.
But the Netherlands is still one the five or ten richest countries in the world!
The two biggest newspapers held polls about basic income! About 40 – 44 percent comes out in favor. A reliable national poll measured 40 percent in favor, 45 percent against and 15 percent do not know. The majority of the electorate of the green and left parties are in favor. With the two right wing parties it is the opposite: their electorate is against: “we are working hard and do not want to pay a basic income for these (lazy) people that just want to have a basic income”.
Most interesting is that the voters for the Freedom party of Mister Wilders (our local Trump) are divided: 37 percent in favor and 46 percent against, 17 percent don’t know. Almost the same as the national average! Politically we must use this.
But the leaders of the green and left wing parties do not take up the issue of a basic income. They stick to repairing /amending the old social system. They think (and hope) the economy is recovering, unemployment will fall and then this basic income discussion will go away like it did around the year 2000.
But they are wrong we have now one year economic recovery: the result 12,000 new steady jobs and 78,000 flexible low-value jobs. The flexibility of the labor market keeps growing. We will turn back the clock on these flex jobs; providing more jobs is the answer of the green and left wing leaders.
Our answer is to increase our support for the basic income alternative in the upcoming national elections March 15, 2017. Around 60,000 people signed a petition for a basic income in 2018. Demonstrating that 800 € for every citizen in the Netherlands is easily affordable and that even 1,100 € is easily financed.
After the elections, we will work with respectable institutions to come up with a transition route from the present situation to a full basic income.
Annotation: A basic income of 800 € requires 10 billion € more per year then the present situation, 1,100 € will cost around 30 billion euro more. The present government (Conservatives + Social democrats) have cut the state expenditure with 30 billion € and raised indirect taxes with 16 billion euro’s: in total 56 billion in the last 4 years.
Alexander de Roo is a founder of BIEN in 1986, former BIEN treasurer (1986-2004), and now Chairman of the Dutch branch of BIEN.
by Andre Coelho | Nov 30, 2016 | News
(Image: Barcelona, “Queen” of the Mediterranean)
In the Spanish region of Catalonia, serious efforts are being made to reduce poverty and to reduce inequalities. Last week, on the 17th of November, the Catalan Economy and Tax Office presented a thorough study on social policies, which includes the contributions of 30 academics and other experts and technicians.
The document points out that current restrictions on the Catalan regional government public policies are stalling necessary changes, such as the implementation of more redistributive measures. This is due, in part, to the fact that the main tax revenue is managed by the Spanish State. The Catalan regional government is making attempts to address poverty and inequality, with the 2017 regional budget considered to be “the most social ever”. Under the new budget, more tax will be collected from both large property transfers and non-productive assets, and put into a budget that surpasses all other previous budgets in terms of social spending (education, health and social affairs). Despite this, Catalan officials recognize that the government should do even more to reduce poverty and tackle inequalities.
Although Catalonia’s poverty rate (19%) is lower than the Spanish average (22,1%), it is still above the European Union’s average poverty rate (17,2%). Catalonia also faces a persistently high unemployment rate (11,2%), despite the economic recovery in recent years.
The document presented by the Economy and Tax Office in Catalonia recommends profound changes to the regional social benefits scheme, which has been inadequate in poverty alleviation and prevention. At one point, it refers to basic income as a possible solution to this structural social problem. The regional basic income would amount to an unconditional allowance of 7471 €/year for every adult citizen, plus a 1494 €/year for every child (under 18 years of age) in Catalonia.
According to the study, replacing all current benefits which are valued below the basic income amount would save around 90 thousand million euros per year, in 2010 numbers. The study also states that basic income would reduce inequalities and allow young people to enjoy a larger degree of freedom and emancipation.
Pere Aragonès, the regional Secretary for Economy in Catalonia, a region with 7,5 million inhabitants, said at the 17 November meeting that his department and the Tax Office and Employment, Social Affairs and Families one are working on the development of a new set of social progress indicators, which can complement the economic variables (such as GDP).
More information at:
Catalan News Agency, “Catalonia not able to fight poverty within the “autonomic framework”, report finds”, 17th November 2016
by Kate McFarland | Nov 24, 2016 | News
British journalist and broadcaster Paul Mason, author of Post-Capitalism: A Guide to Our Future, recently delivered a lecture in Amsterdam in which he points out the need for a universal basic income as a partial solution to changes in the economy due to new technologies. He raises related concerns in an article in The Guardian published shortly thereafter.
On October 25, author Paul Mason delivered a lecture at the De Balie culture center in Amsterdam, the Netherlands, wherein he argues that technological advancement has been not only correlated with but in fact a cause of economic stagnation. He attributes this to several characteristics of new information technologies: the ability to automate more jobs and job tasks, the ability to produce and reproduce goods at very low (even zero) marginal cost, and the ability to combine data through networks to generate new goods not reflected in standard measures of economic growth.
In addressing how the left should respond, Mason says, “Our long-term aim should be to push more and more economic activity [to be] done outside the market and the state.” This requires, in part, that we “end [the] reliance on wages for work.” In this context, he continues: “We need quickly to pursue the experiments with the universal basic income … and aim within 10 years for states to be in a position to roll out the policy itself.”
He goes on to add, however, that UBI alone is insufficient; the state, for instance, should also provide “cheap basic goods” (he mentions housing, healthcare, education, and transportation) and promote open source and non-profit businesses.
The entire lecture, along with the Q&A session, can be viewed below. Mason has also published a text version of his lecture on Medium.
https://vimeo.com/188859000#t=8m42s
In an October 31 article in The Guardian, Mason again broached UBI as a potential solution to technological unemployment — predicting a world in which smart technologies, such as autonomous vehicles, cause paid work to become scarce and sporadic. Here, in passing, Mason also links UBI to the potential fulfillment of Marx’s vision of a society in which people are free to “hunt in the morning, fish in the afternoon, rear cattle in the evening, [and] criticise after dinner” without ever assuming an occupational identity as hunter, fisher, cattle-rearer, or critic.
References
Paul Mason (October 27, 2016) “Postcapitalism [in Amsterdam]” Medium.
Paul Mason (October 31, 2016) “The battle over Uber and driverless cars is really a debate about the future of humanity” The Guardian.
Photo: Paul Mason in 2015, CC-BY-SA-4.0 DTRocks via Wikimedia Commons
by Roland Duchatelet | Nov 23, 2016 | Opinion
About 25 years ago, when internet emerged, I addressed an audience saying: “If newspapers [didn’t already] exist today” there is “no way investors or bankers would support the business-idea to collect news, print it on paper around midnight and dispatch this printed stuff using thousands of vehicles to bring it to shops and individual readers before morning comes”.
In most western countries, social security became significant approximately 70 years ago, when it got an extensive legal basis. It now plays a crucial role in developed countries to give purchasing power to citizens who do not have an income from a job. Moreover, in many countries it provides free health care for everybody.
Just like internet changed the way news is distributed, the fact that computers and robots replace human work is a “game changer” for social security, which was totally based on labour contributions since its inception. More and more jobs are subsidised and therefore do not really “contribute” to the social security system anymore. Just like we continue to get news, even better and faster, we want to keep social security and improve it despite paid labour becoming less important in our economic system. In most West European countries, the amount distributed by the social security system increased constantly as a share of income of households and is now, if you include benefits in kind, more or less equal to the net pay households get from work. There is little political awareness of this fact.
Assuming social security never existed and we decide to create it, how would we organise the cash redistribution part of it? Just like blood in the human body redistributes blood cells to make all parts of our body work, money fulfils a similar role in society: allowing exchange of goods and services amongst individuals.
Like the heart of the human body pushes blood in various parts of our body and collects the blood on the other side, the social security system injects money, purchasing power, into society to fuel exchanges of goods and services.
In the future, the total amount of money distributed should be no less than today, and should gradually increase when automation further decreases the demand for paid labour in our economic system because we need purchasing power to drive economic activity.
The conditional character of the current social security system limits freedom to work, to move in with friends and so on. It is a huge deterrent to work and enjoy life. Assume a Belgian person gets 1200 € unemployment benefit and could get a job paying 1350 € net per month. Because that person loses the 1200 € as soon as she/he starts to work, the marginal reward is 150 € per month. Since there are approximately 150 working hours in a month, it is only worth 1 € per hour. Stupid system, yes indeed.
Therefore, the biggest part of the new social security system’s cash distribution, around 90 percent, should be a straightforward unconditional basic income distributed to everyone, the amount solely depending on the age. In the example above, this unconditional basic income could be 800 € per month for the 26 to 67 age group, lower than the highest “replacement income”, but not much lower than the average unemployment benefit in Belgium today. A second layer to the system should be conditional, based on specific needs or situations like invalidity, requiring administration. By comparison the administration cost of the new social security system would be roughly 90 percent lower than the current one.
There is no need of for additional taxes in the new system (see this Economist graph) if the basic income becomes a part (and does not come in addition) of the current income from work (or current social security benefits). For example if we decide the basic income for adults in the US to be 900 $ per month and a person’s net income from work is presently 1900 $, his pay-check will read: “basic income 900$, income from work 1000 $”. This could be done in two ways. The first way is the employer pays the basic income of his employee. The second way is that the state pays the basic income to the employee but charges a tax equal to the basic income to the employer. Either way, the employee keeps getting the same income, the employer has the same employment cost as before and the state has no extra cost. But to be aware of all these things, the employer might need to take advice about employment law from the advisors of the consultancies like Sentient in Leeds. If you own a company, you can look out for similar firms in your city or state to get an idea of all the laws before any kind of settlement about salary or employment contracts.
Only citizens which have no income at all or less than 900 $ would get more cash from the new system than what they get today. This extra distribution of money can be funded thanks to the lower administration cost of the basic income system in comparison to the present one.
If we could start all anew, we would cherish the local economy, promoting free and uncomplicated exchanges of goods and services between individuals to improve our well-being. For instance, if we have a plumbing issue in our home, instead of calling expert service providers, who have already made a big name for themselves and are doing well, we might want to contact local plumbers (such as royalflushsa.com.au) who do not necessarily have much publicity, but have excellent reviews. With an unconditional basic income-based social security, working for each other would be allowed. It would be even better if there were no labour taxes on services individuals provide to each other in the “proximity economy”.
Would the state lose much of the revenue from the income tax? Not much, since those exchanges of services do not tend to occur now, unless in “black”. But there would be an increase in revenue for people involved in proximity services, like for those who do not perform paid work today. Retired people would also consider earning money on top of their pension if they are sure there is no paperwork hassle at their Social Security office locations in Colorado, or wherever was local to them, and no risk for them to lose part of their retirement benefit.
The extra income would – for example – be spent in restaurants. That spending will yield income taxes and consumption taxes for the state, paid by those restaurants.
The social security system we know is a 70-year-old house to which our governments did not stop adding extensions. Meanwhile, they changed the windows, put in a new kitchen and bathroom, isolated the roof and connected everything by lots of cables.
We can reorganise the redistribution or purchasing power in a much better way: let’s build a new house.
by Kate McFarland | Nov 22, 2016 | News
Former MEP Christian Engström has written a “concrete proposal” for a basic income guarantee in Sweden. Originally published online only in Swedish, Engström’s paper is now available in English.
Christian Engström, a former Member of the European Parliament 2009-2014 for the Swedish Pirate Party, has prepared a detailed proposal for an unconditional guaranteed income of 900 EUR (8333 SEK) per month, tax-free, for every Swedish resident between the ages of 19 and 65.
The basic income would replace Sweden’s current social assistance programs, student aid, and unemployment benefits, but no other government-funded programs. Disability and sickness benefits, child benefits, and the state pension would remain in place.
Engström’s basic income guarantee is designed as a negative income tax rather than as a universal grant, with the amount of the grant tapering off as the recipient earns income. Specifically, Engström proposes a 33% income tax with a reduction of the basic income grant by the same amount. (For example, someone who makes 300 EUR would pay 100 EUR in income taxes, and see their basic income lowered by 100 EUR, but would still net 100 EUR.)
Engström proposes no increase in income taxes, and points out that 33% is Sweden’s current normal marginal tax rate for low- and middle-income earners.
The basic income grant would be financed in part through money saved on the social assistance programs to be replaced. The rest of the funds, according to Engström’s proposal, would come from eliminating certain industry-specific discounts on value-added tax (VAT), such as those enjoyed in the food and restaurant industry.
In presenting his specific plan, Engström is motivated by concerns about political feasibility. He states that, ultimately, he would prefer a higher level for the guaranteed minimum income–and that his “concrete” proposal might be seen as an initial step toward bigger and more refined variants of the basic income:
“I hope that in time we will see a basic income of maybe 1,100€ or more in Sweden. But it is not strictly necessary to start at such a high level. It is enough that the basic income is livable, and not lower than today’s social assistance benefits. Then we can introduce the new system, which is the big and complicated step. Once we have done that, and can see in practice how it works and what it costs, we can continue improving the basic income through the ordinary political process.”
To date, basic income has received little mainstream political support in Sweden — unlike neighboring Finland, where an experiment on the effects of an unconditional basic income will begin next year.
Read the details of Engström’s proposal in the full report, available here:
Christian Engström “Basic Income: A concrete and financed proposal for basic income in Sweden“.
Video of Engström presenting his proposal at Finland’s International Basic Income Seminar in Turku, August 2016.
Reviewed by Genevieve Shanahan
Stockholm photo CC BY-NC-ND 2.0 Stina Stockholm
