by Karl Widerquist | Jun 27, 2017 | Opinion, The Indepentarian
This article was originally published by OpenDemocracy, where it received more than 43,000 views as of July 20, 2017. It has also be republished by Moon Magazine. It is based on–but greatly extended from–an earlier article published by BIEN in May 2010 at basicincome.org.
I have a private basic income – a small, regular cash income without means test or work requirement. It’s probably large enough to meet my basic needs. And I got it thanks to privilege, nepotism, and two big lucky breaks.
My first big lucky break happened in 2009 when Georgetown University hired me as a philosophy professor on their campus in Qatar. Georgetown-Qatar, which is funded entirely by the Qatar government, has to pay an enormous premium to get faculty to agree to live and work in Qatar. If I had a home I might have considered comparing all available equity release plans to pay that premium but that wasn’t for me. I get paid three times as much as my wife. I teach half as many classes. She’s a full professor. I’m only an associate.
Qatar can pay more than US universities because of their own series of lucky breaks that put them in control of enormously valuable resources. Their position today comes largely from decisions made about a century ago, as the Ottoman Empire was breaking up. Britain and France arbitrarily drew lines on the map to create what became the states of the Middle East. They had no idea those lines would eventually give some of those states enormous amounts of oil and gas and leave others desperately poor.
The joy of options
I ‘earn’ my salary by doing a job few others are both willing and able to do. To some extent wages compensate for other disadvantages of the job. But this equalisation is only partial and more importantly, it only occurs among people with similar options.
fedee P/Flickr. CC (by-nc-nd)
I had better options than most people in the world. My white, American upper-middle class privilege gave me the opportunity to get the qualifications and the flexibility to take this job. For every highly paid professional ‘expat’ in Qatar like me there are maybe eight or ten extra-low paid ‘migrant labourers’, some of whom make as little as $200 a month. They live in dorms for years at a time, separated from their families. They are unfree to quit or to change employers. They are unfree to leave the country without their employers’ permission.
There is no combination of hard work and grit that could have put any one of these workers in my position from their starting point in life.
I see these workers often. They clean the toilets at my university. They bring me tea if I want it. They are, on average, several inches shorter than me thanks to childhood malnutrition, because human resource companies in Qatar have scoured the earth looking for the most vulnerable, cheapest labour. There is no combination of hard work and grit that could have put any one of these workers in my position from their starting point in life – nor is there a combination of bad choices that could conceivably put me in their position from my starting point. I’m paid partly because I’m willing to see unfree labourers up close rather than to stay home and consume the products of billions of workers like them without seeing them.
I do not ‘earn’ my salary in the sense of doing more useful work. I’m a competent professor, but I’m not outstanding. My work is no more valuable than the work other academics do – perhaps less because most of my students are already so wealthy they need education much less than the average person around the world.
I receive a high salary because I was lucky enough to be in the position to serve the whims of rentiers – that is, people who own resources and the stuff we make out of them. There are exceptions but on the whole, the highest paid people are those advantageously placed to serve the whims of wealthy people. Doctors who perform cosmetic surgery for rentiers make far more than doctors who treat malnourished children.
And the power of ownership
The real money isn’t in doing stuff for the people who own stuff. It’s in being one of the people who owns stuff. My chance to do that was my second big lucky break.
A few years before I left for Qatar, my brother returned to the Midwestern United States with a significant amount of money he’d saved while teaching English. With that money, he’d bought a couple houses, fixed them up, and rented them out. Although he made a very good rate of return, he had no more money to invest. He had less money because he was now teaching underprivileged children in a public school in South Bend, Indiana instead of teaching relatively wealthy people in Tokyo.
We were a perfect match. I had the money but not the time or skills. He had the time and skills but not the money. And as brothers we had a bond of trust. No one is going to give tens of thousands of dollars every year to some guy who owned a couple of houses and said he knew how to manage more, but I’d give it to my brother. Nepotism made my business possible.
South Bend is a fabulous place for small investors to get into real estate. Thanks to overbuilding 50 years ago, houses there are extremely cheap to buy, but not as cheap to rent. So, we needed less money to buy in and made a higher return than most real estate investors in most US cities.
There are no doubts about it, investing in real estate is a fantastic way to boost your income. Whether you want to sell your Palmdale house fast for cash or whether you are a first-time buyer, the real estate industry is booming, and now is the time to get involved in property investments. However, that being said, managing multiple properties at one time can be overwhelming, and adding inherited property can raise further points for consideration. With this in mind, if you are considering investing in real estate, it might be worthwhile researching a few different property management companies in your area. Above all, a property management company can take care of everything from finding tenants to advertising your property on social media. Accordingly, you can learn more about the benefits of working with a property management company by doing some research online.
I also benefited because the US tax structure is extremely favourable to business owners in general and landlords in particular. Capital gains are taxed far less than income, and people who don’t need their income are taxed less than people who do. My brother needs to live off of the salary our business pays him, and so he pays income tax on it. My wife and I don’t need the money we make from owning most of the business. We live off the salaries of our jobs, and reinvest virtually our entire share of the business. These reinvestments count as “losses,” and so officially we have never made any income or paid income taxes on our share of the business.
The business pays property taxes, but they average about $15 per house, per month – minuscule compared to the rent we make. Our business needs to maintain the houses, but the cost of maintenance is far less than we receive in rent. Eventually, I’ll take money out and pay income taxes on it, but that amount will probably always be a small portion of the returns to my share of the business. As long as my wife and I (or our heirs) keep reinvesting most of our profits, the vast majority of it will never be subject to income tax.
Making private basic incomes universal
My wife and I don’t have enough property income to put us in the one percent, and at our age, it probably won’t get there while we’re alive. But we could quit right now and be safely out of poverty with probably as much as the most generous basic income proposals on the table right now.
We have a basic income – a permanently growing basic income – not just for life, but forever. Because we own stuff we don’t need, our society rewards us with more and more stuff every year. We don’t have to do anything to get more every year. Our money works for us, so we don’t have to.
Because we own stuff we don’t need, our society rewards us with more and more stuff every year.
We don’t quit because employers have offered us jobs with good working conditions and pay that makes us significantly better off than living on our basic income alone. Most people in a similar position would do the same. If some people don’t work when a basic income becomes available, we should consider the possibility that employers aren’t paying high enough wages. My wife and I are not better humans than most of the world’s poor. Our lucky breaks make us different from the poor. And those same lucky breaks make us similar to most other people with money.
Just because I benefit from the unfairness of our economic system doesn’t make its rules any fairer. Those rules are not some natural feature of the universe. People made them. People can change them.
Why don’t we?
Obviously people who own stuff have a great deal of political power, but there’s more to it than that. Most people and policymakers do not understand the difference between rewarding people who do stuff and rewarding people who own stuff. Spending rewards production, but rewarding production is not the same as rewarding people who do things that make production happen. Everything humans produce is made from a combination of human effort and resources. Some spending rewards human efforts, but the biggest rewards go to the owners of resources and of the things we’ve made out of them in the past.
People like to think that owners are ‘entrepreneurs’ and ‘job creators’. To some extent this is true. Entrepreneurs are owners who put forth effort to increase the value of what they own, and often what they do is valuable. But there are three reasons entrepreneurship can’t justify the enormous inequalities in the world today.
1. For owners, work is optional. For everyone else, it’s mandatory. Owners do not have to be entrepreneurs. They don’t even have to be competent. They can hire competent people to manage their money for them. The amount of ‘entrepreneurship’ in my story was miniscule. It amounts to this. I lucked into money. My brother knew what to do with it. I gave it to him. For nothing more than that, I never need to work again. Neither will my successors. And unless they’re spendthrifts or exceedingly incompetent investors, they’ll have more than me, and their successors will have more than them.
2. Most owners aren’t really entrepreneurs. Economists have a saying, “the entrepreneur tends to become a rentier”. The reason is simple. The more money you make, the more it makes for you, and that part of your income will eventually outstrip the part from the things you actually do. As a human, you will eventually stop working, and so, you’ll stop getting money for doing stuff, but your stuff will keep on making money forever.
3. We can get entrepreneurship without the enormous rewards to ownership we have today. Rewards were smaller a half century ago, but there was just as much entrepreneurship. What can I possibly have done in the seven years that I’ve been accumulating stuff to justify rewarding me and my successors with a perpetually growing stream of work-free income? In short, nothing. I do not exaggerate. I’ve studied the market as an economist and as a political theorist. I’ve lived it as a wage earner and as a business owner. It’s not just me and my wife. It’s how the economy works.
Some people who read this story will probably accuse me of hypocrisy, saying something like, “If you’re an egalitarian, why are you rich?” If I wrote a similar description of the economy when I was poor, they’d accuse me of jealously, saying something like, “if you’re so smart, why aren’t you rich?” That’s the catch-22 for people who complain about the rules of our economic system. You’re either hypocritical or jealous. No one has the right amount of property to complain about the distribution of property.
I plan someday to use most of my money to do something good for others instead of just for myself. But it’s the system that needs to change. Individual owners giving away things at their whim will not fix the unfairness of the system. We need to change the rules.
We don’t need to eliminate the market economy or property rights. We just need to realise that a lot of the income in the world today goes to the people who own resources and the stuff we’ve made out of them. Tax that unearned income and share it with everyone – a universal and unconditional basic income. The most common objection to basic income is that it’s supposedly wrong to give things to people who don’t work for it, when actually, the economy already gives billions of dollars of unearned income to people who are already wealthy. The problem is we don’t share it.
This article was originally published by OpenDemocracy, and it is based on an earlier version published by BIEN in May 2010 at basicincome.org.
by Juliana Bidadanure | Jun 24, 2017 | Opinion
On Wednesday, April 12th, Philippe Van Parijs, co-founder of the Basic Income Earth Network, Emeritus Professor at the University of Louvain and former Director of the Hoover Chair in Economics and Social Ethics, presented his latest book on Basic Income at Stanford University.
He offered a powerful defense of UBI as an instrument of freedom and argued that it can be economically sustained and politically achieved—especially if political communities consider starting with a small UBI. Basic income should be designed, he argues, to go alongside publically funded services, such as quality healthcare and education, and should be given to all fiscal residents of a country.
A video of the event can be found here.
“I’ve listened to criticisms and questions about basic income in five continents and seven languages,” Van Parijs told an audience of more than a hundred students, teachers and members of the broader community. He remains convinced that the policy has no fatal flaws.
Co-written with Yannick Vanderborght, and with the heroic title Basic Income: A Radical Proposal for a Free Society and a Sane Economy, the book is an absolute must read for basic income enthusiasts and critics, advanced and beginners alike. As the idea of UBI spreads faster than ever throughout the world, it can be hard to keep track of all the major developments in the academic and political worlds. Their book is a seamless solution to this problem.
Over eight insightful chapters, the authors offer the most comprehensive survey ever produced of the scholarship surrounding the recent and less recent revivals of the old idea. Van Parijs and Vanderborght trace back the roots of the policy proposal in the history of public assistance and social insurance, as well as in utopian thinking from Thomas Paine to Charles Fourier, and Martin Luther King. As a scholar, writing and teaching on basic income, I cherish the more than 100 pages of notes and references at the end, which prove to be inexhaustible sources of knowledge.
We learned from Philippe’s talk more about the long journey that led Philippe where he is now. From his first (disappointing) encounter with Rawls over breakfast to his (equally disappointing) encounter with Dworkin in a taxi. On those occasions, both political philosophers challenged the view that liberal egalitarian justice requires a universal cash payment. He recounted for us how he nonetheless ended up convinced that basic income was the instrument of freedom.
In the book, the authors argue that UBI enables a fairer distribution of the most important good of all – the real freedom to lead one’s life as wished, through work and outside work. They make the case that UBI is ethically justifiable by taking on the most pervasive objection of all – that unconditional cash would allow an unfair freeriding of some on others.
Vanderborgth and Van Parijs also offer answers to the many other questions and objections to UBI that come up again and again in political debates. For a start, how would people who believe that work is a moral duty and see the welfare state as a moral hazard ever agree to a system where we don’t even require recipients to demonstrate a willingness to work? And even if we could get them to agree, how could we afford it? And how could such system be sustained? Presumably, if people get money for doing nothing, they will stop working, which will in turn make it impossible to afford a generous UBI. Should we give it to migrants? Won’t it create a dangerous pull effect? And, what about the global poor anyway? Each time, they dissect the objections and scrutinize the questions with the rigor of philosophers, the wise perspective of historians, the rationality of economists and the pragmatic outlook of political advocates.
We also learned more from the talk about how UBI can help build a sane economy. Automation and globalization are important threats to employment and workers’ rights. Van Parijs argued that UBI could be a possible solution to support displaced workers – allowing them to retrain, and giving them access to the means to lead a decent life. He also shared his vision of a form of work-sharing that could help prevent two opposite problems – the fact that so many work too much and burnout, and the fact that so many are depressed for being out of work. A ‘sane economy’, then, is one that works for the many and does not make so many of us stressed and unhealthy.
I remain convinced that one of the most exciting promises of basic income is that it can help us see a way out of the current dominant regressive mindset on public assistance. Existing benefits systems often condone an obsession with screening out a supposedly undeserving underclass: the “welfare queens” and benefits scroungers. At worst, politicians take advantage of this paradigm to get elected, promising to screen out the free riders. At best, they address the problem in a shortsighted way, making benefits even more conditional to show that they are preventing scroungers from abusing the system. In doing so, they strengthen the myth that benefit claimants are indeed undeserving of assistance. Van Parijs and Vanderborgth’s book proposes to try out the opposite strategy to help rebuild the welfare state: doing away with conditionality to avoid benefits traps while also rejecting means testing, so that more workers also benefit from public assistance.
The authors would prefer if everyone had access to the highest sustainable basic income, but they fear basic income will only work with a great deal of realism and pragmatism. The challenge is to strike the right balance between the ideal and the feasible – without compromising the vision and without wishful-thinking on what is achievable. For basic income to work, Van Parijs said at the end of his talk, the world needs visionaries, enraged activists, and opportunistic thinkers to work together. But don’t worry, he added, “I am sure that all three kinds can be found in this room”.
*** All Pictures are a courtesy of Christine Baker-Parrish
*** A longer review of the book by Juliana Bidadanure can be found on the Stanford Social innovation Review website here.
*** For more on the event, please read Sara Button’s review here.
by Kate McFarland | Jun 19, 2017 | Opinion
It is better to have enough financial security to work for no pay than to receive payment directly for the same work — or, at least, this has been my own experience as a volunteer in the basic income community.
If my first year of active involvement in this community has done one thing to bolster my own support for a basic income, it has been this.
I began my work for Basic Income News as a “pure volunteer,” later dabbled in crowdfunding, and eventually received a grant for my work. Through it all, I have come to believe that there is good reason that voluntary work should remain voluntary, as long as it is financially feasible for volunteers to remain such (if, for example, volunteers had access to a work-unconditional guaranteed income).
Of course, no bold conclusions can be drawn from my experience alone. I am but one datum, a voluntary (no pun intended) sample of n = 1. The anecdotes that follow are meant only to be suggestive, to inspire critical reflection on ways in which the monetization of labor might compromise our attitudes as workers and, in turn, the quality (and quantity) of our output.
1. Background: Becoming a “Paid Volunteer”
When I began working for Basic Income News in early 2016, I did not seek financial compensation for my labor, nor did I have any expectation ever to do so. BIEN has been entirely volunteer-based since its inception and had no hiring plans for the foreseeable future. At that time, the praise and acceptance that I received as a result of my contributions — the satisfaction of providing something of quality and utility to people whom I respected — was all the motivation I needed. I also, at that time, had the means to support myself temporarily (a self-funded basic income, if you will). Thus, in mid-2016, I chose to treat this work for BIEN as if it were my “full-time job” while I self-financed my living.
Kate drinking fancy beer while supporting basic income
As my work began to gain attention, however, my situation changed. First, colleagues encouraged me to raise money for myself on Patreon, à la basic income writer and advocate Scott Santens. Allured by the prospect of a longer “career” as a freelance basic income reporter and writer, I did indeed create my own Patreon account, and reached a peak monthly “salary” of over $300 within only a few months.
However, crowdfunding — and the associated attempts to “brand myself” as a public figure — proved to be a considerable drain on my morale, and, as discussed below, it created perverse incentives that very nearly undermined my sense of solidarity with the BIEN and Basic Income News community. Thus, although I kept my account open, I ceased to devote time and energy to personal crowdfunding.
At the end of the year, though, the impulse to monetize my volunteer labor returned through a different vehicle: in December 2016, the Economic Security Project (ESP) launched in the United States, with the bold proclamation that it would be distributing $10 million in cash grants to projects related to researching or promoting basic income. With the support of my colleagues, I applied for, and received, a grant amounting to $2,000 per month to support my work for Basic Income News for one year. It felt like a dream come true to me — the highlight and capstone of an unexpectedly exciting and successful year.
In the ensuing months, however, I noticed that — despite its unquestionable benefits to my personal finances — even the receipt of the ESP grant began to impact my attitude and morale, my relationships with colleagues, and the quality of my work in ways that were not altogether salubrious.
Given the present political reality, my personal circumstances — being paid to volunteer, if you will — are about as good as they can be. But I believe that, if reality could be otherwise, I might have been a much more effective contributor to the good of Basic Income News and BIEN, and perhaps the basic income community at large, if I simply had the wherewithal to continue to support myself while engaging in true volunteer work.
2. From Collaborator to Competitor
In my experience, the single most salient adverse effect of monetizing volunteer work — whether through crowdfunding or through grant-seeking — has been its tendency to induce a change in mindset that transforms allies and collaborators into rivals.
Whether I was raising money to support myself on Patreon or pursuing an individual grant, I was pursuing money to support myself as an individual. I was forced to market myself, to promote myself, to present myself as individually (and uniquely among BIEN volunteers) deserving of funds — even though the job to which I had agreed, and the job that I initially loved, was to work for BIEN. During my first months with the organization, when I thought nothing about monetization, I tended to select my tasks for any given day based upon what I perceived as BIEN’s most pressing needs and demands, in conjunction with my own abilities, interests, and inclinations. But when I found myself faced with the tasks of earning and retaining funders, new questions emerged at the forefront: How can I make it appear that, out of all volunteers in the basic income movement, I am worthy of money? How can I stand out from the crowd?
Unsurprisingly, the drive to “stand out” as individually worthy of support can have deleterious effects on work in a collaborative environment like BIEN and Basic Income News. For example, the news service requires much “behind the scenes” work to remain functional. Most would-be funders, however, are not privy to our backstage activities — and would-be fundees like me know this. Meanwhile, Basic Income News posts are generally published under the names of their authors; thus, as actors on the front stage, news authors do sometimes gain the attention of those outside of the news team itself. As a consequence, the pursuit of outside funding tends to incentivize writing as much as possible under one’s own name, while minimizing administrative tasks, proofreading, editing, volunteer training, general website updates and maintenance, and any other such “invisible” work, despite the indubitable importance of the latter for BIEN.
Thus, for one, the pursuit of outside funds can create incentives that may lead the “fundee” to act contrary to their better judgement of how they could most effectively use their time and talents to further the good of their organization or cause. However, there can be even darker effects of the competitive, individualistic mindset engendered by personal profit-seeking.
Here are two examples from my experience — which, I must admit, fill me with shame and disgust even to relate. The first concerns a change in attitude towards proofreading and editing. I joined Basic Income News as a copyeditor and style editor, and I initially continued this work on an as-needed basis even after I also began to write articles under my own name. When I started crowdfunding, however, I nearly abandoned these proofreading and editing tasks — or, for that matter, providing any type of assistance to other volunteers — and I became much less thoughtful and meticulous when I did provide any type of editorial feedback. In part, this was motivated by the factor mentioned above: a newly acquired distaste for anything that distracted from the more “visible” work of self-authored posts. In part, though, it was driven by still more nefarious thoughts: “I have many ideas about how to make this draft into a better piece; thus, if I simply let it be published in its current state, my own work should then look better by comparison…”
Another tendency I noticed, after I began crowdfunding, was an avaricious urge to seize each and every good news lead for myself — neither asking nor caring whether any other volunteers might enjoy writing the story or might be better positioned than myself to write on its particular topic or region. When other writers claimed major news lead, I wasn’t happy to see that they were contributing, nor was I happy even to have less work for myself; instead, I felt a twinge of envy.
It’s a gross understatement to say that I’m not proud of these thoughts and never was; the feeling that I was required to outdo my own peers and allies was anything but fun or exciting.
It should additionally be noted that I encountered this perverse effect — the felt demand to treat collaborators as if they were competitors — despite the fact that no other Basic Income News volunteers were raising money for themselves. This is because, I think, I faced a special mental burden as the sole volunteer seeking monetary contributions: the burden of rationalizing to myself why I sought funding while my collaborators did not (or why, given that they were not receiving their own donations, I did not donate a portion of my own proceeds to them). When I observed my own money-seeking behavior, I saw that this behavior implied that I saw my own work and contributions as “more deserving” than those of my collaborators. Trying to “outdo” other volunteers, then, was in part a mechanism to relieve cognitive dissonance: if I could prove to myself that I was “the best” of the Basic Income News volunteers, I could rationalize my behavior of seeking donations for myself and myself alone.
In the end, I found one way to overcome these counterproductive attitudes and urges: I ignored the prospect of future money in basic income news writing, and accepted the assumption that I would not bring in additional money on Patreon, would not secure an additional year of grant funding, etc. That is, I retrained myself not to think of my work as a money-making venture.
3. The Threat of “Selling Out”
It probably requires little imagination to understand why seeking money from donors could threaten to compromise journalistic integrity. One should hope, at least, that news reporting would answer to the facts rather than the preferences and predilections of any monied interest.
Even when writing opinion pieces, such as this one, I consider myself to be bound by ethical and epistemic duties that the pursuit of donors might threaten to comprise. Roughly, I believe that I have a responsibility to write in support of positions that I believe Basic Income News followers should see supported, and to criticize positions that I believe Basic Income News followers should see criticized. Sometimes acting in accordance with this responsibility amounts to defending unpopular positions — such as, say, emphasizing some of the limitations of basic income or even questioning its feasibility — knowing that many readers are unlikely otherwise to seek out articles that challenge their pre-existing views. Indeed, even writing a full-fledged defense of basic income is likely to alienate some readers, given that there are many incompatible versions of basic income and that many incompatible reasons have been adduced to support them. I know, for example, that many basic income supporters would prefer to de-emphasize or outright reject approaches that turn on degrowth or post-work utopias.
When I supported myself financially, I was free to write whatever I believed needed to be written. Money seeking, however, introduces new questions. Should I try to remain as neutral and inoffensive as possible, even when writing opinion pieces, in order not to alienate potential funders? Should I avoid writing neutral and objective summaries of reports and articles that oppose basic income — knowing that most of my actual and potential funders would prefer to read a rebuttal? Should I try as much as possible to pander to the interests and positions of those basic income supporters with the most disposable cash (say, perhaps, those among the tech elite)? And, just to be safe, should I rule out ever writing a critical piece on the motives behind Silicon Valley’s interest in basic income? Should I assume that some rich potential supporters are likely to be pro-growth, and so stay away from ever writing in favor of a degrowth perspective — even though the latter is much closer to what I support? Should I avoid any sort of criticisms of the basic income movements that apply to my own funders? Should I stay quiet if I notice that one of my donors has begun spreading inaccurate or misleading claims about the status of one of the basic income experiments? And so on.
Fortunately, I was never tempted to compromise on my values as a journalist or writer in order to try to obtain donations, although it was distressingly easy to see that matters could have been different had I been in more dire need of funds, especially when attempting to crowdsource money through Patreon. I have occasionally, however, felt some pull after the fact to avoid criticizing those who have contributed to my funding — out of a sense of loyalty or respect to those who have shown generosity. Although superficially more virtuous, perhaps, the latter impulse — the desire not to offend those who have been charitable — can be just as problematic insofar as it becomes a threat to journalistic integrity.
4. From Social Norms to Market Norms
So far, I have focused on problems that arise when one fixates on the goal of securing or retaining funding. But adverse monetization-related effects on attitude and motivation can persist even within a secure funding arrangement — as I have experienced as a grantee.
Let’s look back to late 2016, prior to my receipt of the ESP grant. I have never tracked my hours, but I would guess that, at this time, I would sometimes willingly devote 50 or 60 hours per week to work for BIEN and Basic Income News. Since I did so for no pay, and without the expectation of future pay, the effort was clearly my choice; it was something I elected to do because of the appreciation it received from others and the sense of fulfillment it offered to me.
After I was offered $2,000 per month to complete the same work, my attitude began to shift. While there were surely many confounding factors, I feel certain that monetization played a distinct demotivational role at this point in my “career.” In fact, I felt a bit like an embodiment of research by behavioral economists like Dan Ariely on the tendency of monetary compensation to “crowd out” intrinsic and altruistic motivation to perform tasks. I grew disinclined to put in long hours of work, and sometimes even felt resentful when I imagined that others were expecting me to continue to work as much as I had been working at the end of 2016.
The fact that I was receiving only $2,000 per month played a role in this motivational change that was sometimes cognitively explicit. To be sure, this was the amount I had requested — the maximum amount, in fact — and I had requested this particular amount under the assumption that I would use it to cover basic expenses while continuing to work full-time (or more) each week. Prior actually to receiving the grant, I never thought about the fact that I was probably working at least 40 hours per week, and that, in the US, it would typically be seen as exceedingly cheap to hire a PhD-holder to perform a full-time job for a pre-tax salary of $2,000 per month without health insurance or other benefits.
After receiving the grant, however, I conceptualized my work much different: as Ariely might put it, I began to conceptualize my work in terms of economic norms instead of social norms. I was no longer working for the good of BIEN, for the basic income movement, or for any pleasure I intrinsically received from the work; I was instead working for $2,000 per month (with no benefits) — which seemed to merit no more than part-time work and effort. If I were to put in a 50 or 60 hour week, it no longer felt to me like I was voluntarily breaking my back for a good cause, as it did when I was doing the same amount of work for no compensation whatsoever. Instead, when I worked such long hours for a relatively small salary, I just felt underpaid relative to my efforts.
5. Epilogue
Eventually, I was able to work with ESP to resolve specific conditions on my grant funding, and I am happy to say that they are extremely reasonable (and, of course, they carry no expectation that I must work time-and-half!). It remains true, however, that the effect of financial compensation has not been to increase my effort or enthusiasm in my work for Basic Income News. On the contrary, I am now working much less for the news service than I was prior to being paid.
In the end, I believe, all of the effects of the grant have turned out well for me — even if not precisely (or at all!) in the way that might have been expected: given my tendencies toward workaholism, I am indeed rather grateful for any financially-induced loss of motivation. I am now much more inclined to moderate the time and effort that I dedicate to Basic Income News and, as as consequence, less stressed. It’s likely that, had it not been for monetization, I would have soon been a victim of burnout (yes, burnout at volunteer work).
Meanwhile, I have avoided other potentially adverse effects of monetization — such as the sense of competition against my peers — simply by adopting the acceptance that I will not continue to be funded in 2018 (and by assuring myself that this is okay, that I’ll find a way to make do, long enough, until I find something else). This mindset allows me to revert attention from the question “How can I secure money for myself?” back to questions like “What needs to be done?” and “What do I want to do?” The latter questions, I find, are much more conducive to the production of quality work and, certainly, healthier and happier attitudes.
So, while I have found an effective strategy, it depends, essentially, on having a personal financial safety net on which I can fall if I do not immediately secure additional paid labor.
It would irresponsible to assert that my experience can be generalized to others, in other circumstances of voluntary work. To the extent that it does generalize, however, it seems that voluntary work is best supported and encouraged not by the monetization of that work, but by the provision of financial support entirely independent of that work — the type of financial support that would be provided, for instance, by an unconditional basic income.
Reviewed by Tyler Prochazka
Cover Photo: “Payment” CC BY-NC-ND 2.0 Richard Walker
by Roland Duchatelet | Jun 12, 2017 | Opinion
The following is a step by step instruction for implementing a basic income in the United States.
Step 1: The government introduces a basic income of $40 per month for all citizens. 300 million of the 325 million inhabitants are US citizens.
The required funds are $40 x 12 x 300 million citizens = $144,000 million, $144 billion.
This is financed by a levy of 10 cents per kwh of electricity consumed by households, which is 1,440 billion kwh per year. So the levy amounts to 1,440 billion kwh x $ 0.1 = $144 billion.
Since all people who get the basic income consume electricity, in a way, they pay this basic income to themselves. However, big users of electricity will contribute more than those who consume less. Think about it. Electricity allows you to have a smartphone, a PC, a fridge, and even drive long distances with an electric car at a ridiculous cost. Yes, you will need to get surge protection (like that saltle.com/electrical-services-austin-tx/whole-home-surge-protection/ offer) to help keep those things safe, but the benefits outweigh the cost for most. Besides, the current price of electricity is much lower than its value.
Step 2: We increase the basic income with another $60 per month for everybody to reach $100 in total. The required funds are $60 x 12 x 300 million citizens = $216,000 million or $ 216 billion.
Financing
Most “productive” jobs are now done by machines which have replaced many of the workers in our factories. Stop dreaming of deriving social security contributions and income taxes from new jobs: 80 % of the GDP of the US are services, many of which have added value too low to contribute taxes. We should get taxes from the machines/robots which replaced the workers. However taxing robots would make them move to other countries where there are no taxes on robots. Therefore, we should not tax the robots themselves, but the products made by machines/robots, like cars, bikes, shoes, phones, PC’s, games, toys, furniture, carpets, fridges, and so on. That way, it doesn’t matter if the robots are in the US or China. Consumers will pay more for those products, but on the other hand they also will get an additional (basic) income to pay for such products. Those who spend more than others will contribute relatively more taxes. That is the beauty of taxes on consumption: you decide yourself how much taxes you pay, depending on how much you purchase. In the US, current sales of products which are typically and mainly produced by machines/robots are approximately $1440 billion. We introduce a “social” sales tax of 15% (on top of exiting sales taxes) on those products which will generate the required $216 billion.
You could argue, what is the point to give a total of $100 per month basic income to all citizens, if, on average, they spend it in increased prices of electricity and some goods? The point is that people who buy a lot contribute much more than the ones with a low income. Thus, it comes down to a (more or less voluntary) redistribution of purchasing power.
Step 3: The government will pay an extra basic income of $100 per month for all citizens of working age, 18 to 70, paid by employers. This will cost $100 x 12 months x 185 million citizens in this age group = $222 billion.
We finance it by a levy of 10 cents ($ 0.1) per kwh on non-household electricity consumption. So essentially, the electricity consumed by enterprises or other entities which typically employ workers. This comes down to $ .1 x 2,380 billion kwh = $238 billion paid by the employers since they pay the levy of 10 cents per kwh of electricity consumed by them (including residential, industry and transportation).
At the same time, the employers compensate this extra tax by reducing the wages of their employees with the same amount. For a worker who previously was paid $1700 net per month, his new wage bill will read: basic income grant $100 paid via the government (thanks to an extra tax paid by enterprises) + $1,600 net salary = total income $1,700. So, the total net income of the workers remains the same, the total cost for employers remains the same too. Electricity gets more expensive, wage cost less expensive.
Step 4: We increase the basic income with $200 per month for all citizens of working age, 18 to 70, paid for by employers, while at the same time the employers can reduce the wage bill with the same amount (as in step 3).
The cost is $200 x 12 months x 185 million citizens in this age group = $444 billion.
This is financed by a levy of 3 cents per kwh on gas and coal sold to industry, transportation, commercial and residential. This does not apply to such fuels sold to generate electricity, otherwise electricity would be taxed twice. Given the energy consumption of fuel, gas and coal for these sectors, this generates $ .03 x 16,617 billion kwh = $498 billion. The margin between $498 billion and $444 billion will be necessary because consumption will decrease given the increase in cost. CO2 emissions will improve, by the way. For fuel, the additional tax amounts to +/- $1.05 per gallon. Think about it. With one gallon of gasoline you can drive 40 miles. Imagine you need to walk or ride a horse or use a bike in bad weather. The cost of fuel, including for air travel, is indeed ridiculously low.
Step 5: We increase the basic income with $1,000 per month for all citizens over age 70.
The required funds are $1000 x 12 months x 28 million people = $336,000 million, $ 336 billion.
This is financed by a decrease of military spending of the same amount over a period of 10 years, 30 billion per year, such that, in the end, for each military dollar spent we also give one dollar to the elderly.
Indeed, is it ethically acceptable to spend money on defence and not spend the same amount to support our elderly people? A fair deal is that for each dollar spent on military matters, another dollar should be distributed to them. Of course we cannot decrease military spending in one go. Therefore, this step counts as 10 sub-steps in which we decrease military spending by $36 billion per year over 10 years, moving the yearly military spending from $672 billion to $336 billion, which is still five times more than the current Russian military spending. Because military veterans will get basic income like other citizens, it will become a part of their compensation. The expense to the military budget would be reduced with the same amount.
Elderly people can be seen as being pushed aside in society as they age, so it is important that their care is constantly looked at to see that they are getting the best care for their age and their disabilities/illnesses, otherwise, they could be overlooked causing terrible outcomes. This type of care also comes with a lot of additional needs that have to be used by carers, for instance, the use of NDIS software solutions is important for keeping on top of billing, timesheets, etc. so that everything is regimented. This, as well as other elderly care services, is an important factor and must not be overlooked by those within this industry. This goes to show how important it is to have financial backing within these areas.
Step 6: We increase the basic income with $200 per month for the age groups 0 until 17 and $400 for over 64. This relates to 70 million citizens of under 18 and 46 million over 64.
The required funds are $200 x 12 months x 70 million + 400 x 12 months x 46 million = $389,000 million, $389 billion.
The basic income per age category per month in total then becomes:
0 to 17: $300 (steps 1, 2 and 6)
18 to 64: $ 400 (steps 1, 2, 3 and 4)
65 to 70: $ 800 (steps 1, 2, 3, 4 and 6)
70 and older: $ 1500 (steps 1, 2, 5 and 6)
This step is financed by using most of the budgets for welfare since the basic income system gives a higher purchasing power to them. In 2016, welfare spending was $430 billion. Only an average of 25% of the funds went to cash assistance. The problem with the means tested welfare system is that the administration necessary to do the testing takes up a huge part of the budget. Wyoming currently gives the highest benefit to TANF families (a single parent with two children): $657 per month. Worst case, it compares with $300 x 2 +$ 400 = $1000 from the proposed basic income scheme above. The basic income system advantageously replaces the welfare system in any of the 79 existing systems. The food stamp system for example emerged in 1939, when the cost of food was still very high in household budgets, especially for poor households with many children. Food is now very cheap compared to then.
Step 7 When looking at further opportunities to fund basic income, we should look at inefficient parts of the US economy.
By far, the most inefficient part is health care. Not only because medical doctors have a nice income, generally speaking, but because the US health consumer not only pays for the health care itself,he pays also for the insurance people as well as lawyers and other legal people involved in disputes. No wonder the cost of health care per inhabitant in the US is twice as high in comparison to European countries. In France for example, there are no legal and insurance parasites draining the standard health care system, which is directly organised by the state. And even that system is not efficient, because there is a lot of overconsumption in France. The current cost of health care in the US is $3,300 billion including the $ 1,520 billion paid for by government.
Education is an outdated economic sector. The recent IT and internet revolution did not induce many institutions to review their business model. The “productivity” of the learning process would be less than 10% if measured by standards used in industry. Currently, until age 16, schools serve two purposes: education and babysitting. Lots of things in education should be re-engineered. If education were to be invented today, would we build schools? Would we have classes of pupils all the same age yet with different knowledge and skills? What about virtual classes, at least part-time? The cost of education funded by the US tax payer is $960 billion.
The US has the highest cost per student world-wide, after Luxembourg. Just recently, in an address in May 2017 at Harvard, Mark Zuckerberg, the founder of Facebook, said we should introduce basic income. He also said that the time has come to introduce lifelong personal education, which we can refer to as “coaching”. Now think about it. Health depends a lot on education, not the least our mental health. While health care should evolve from curative to preventive care, there is a huge synergy between education and the future of health care, to the extent that they should be regarded as one and the same venture. Therefore, the government should move the budgets for health care and education to private “care organisations” or “coaching organisations”, which should offer lifelong health care and education to their “members” while government pays the member fees. We can do that by using the current government budgets for health care ($1,520 billion), education ($960 billion) and pensions ($1,380 billion). Mind that the basic income for > 70 will be $1,500 which is higher than the current OASDI benefits) and therefore replaces OASDI to a very large extent. Possible residual differences in income need to be covered by the coaching organisation. The budget of $3,860 billion dollar amounts to $1,070 per citizen per month. When comparing with costs of education and health care in well managed countries, this looks like a good business opportunity for enterprises which want to become active in the social economy. Obviously, the cash obtained by these coaching companies from the government may differ depending on some characteristics of the members, like age. Citizens who want to change from a coaching service provider should face some penalty since continuity is important to provide a good service.
A possibility to launch such a system would be for the government to organise a tender offer followed by the granting of licences to big system companies willing to apply. There are several such companies well positioned to tap this new market. Think of IBM, Microsoft, Oracle, GE, Intel, Google or Facebook. They could design new health care/education products and bring those services to the market while using subcontractors, which they would manage. A special US problem has to be dealt with to make that possible. Legal proceedings and the “insurance” logic are not part of such a model. Those who want to keep the ability to sue teachers and nurses in court should continue to use the current private health care/education system.
Conclusion: Basic income can become the core of the social security system in the US. This is just an example of how it could be done. The guiding principles in this proposal are:
-Basic income is linked to citizenship combined with residency in these calculations. Other options imply other numbers.
– Money is not falling out of the sky. The sources of funds to finance each step are identified and realistic.
– Information sources for energy: https://www.eia.gov/energyexplained and https://en.wikipedia.org/wiki/Energy_in_the_United_States
– A step by step approach may lead to the recognition of the viability of a significant number of steps.
– A basic income is a “social dividend”. Just as the shareholders of enterprises get a dividend because they own shares, all citizens derive a right to get a social dividend because their parents and grandparents have put a society in place which is able to produce a large surplus of food and goods, such that we can pay a dividend from this surplus to all citizens.
– The basic income replaces, to a very large extent, the current social security and other benefits. For those who have a job, and the companies employing significant numbers of workers, the net effect of the introduction of a basic income system should be, more or less, neutral. When employees get a basic income from the state which replaces a part of their salary, the cost to the employer will be lower with the same amount (at the moment of the transition). However, the employers will be faced with an increase in other costs due to new taxes which will be levied to pay for the basic income.
– The basic income is distributed electronically, for example via an automatically charged debit card. It could actually be a smart phone if properly protected. Government can organize a bid process for organisations willing to distribute the money one way or another. It is highly likely technology businesses or communication operators would apply to distribute the basic income. However, it could be banks as well, or big retailers. It is likely that the cost of the distribution of the basic income to the government would be around zero. It could even turn out to be a small revenue for the government, when interest rates move up again.
– After a while the basic income should be disconnected from a precise mechanism of funding.
– The basic income should evolve with the cost of living. It would make sense however, to use it as a tool to influence the economic cycle – increase the basic income to increase demand; wait to increase it if the economy gets overheated.
by Sandro Gobetti | Jun 12, 2017 | News
On the 15th of June, 2017, there will be a presentation and debate of the new publication of the Italian Basic Income Network (BIN Italia) “Guaranteed income and technological innovation”, published with Asterios Editore.
The initiative will be held on Thursday, the 15th of June, from 7 pm to 9 pm at Millepiani Via Nicolò Odero 13, in Rome.
Speakers:
Giuseppe Bronzini
Sandro Gobetti
Giuseppe Allegri
Roberto Ciccarelli
Franco Berardi Bifo
Luigi Corvo
Pino Nicolisi
More information at:
[in Italian]
Sandro Gobetti, “Roma 15 giugno: Reddito garantito e innovazione tecnologica“, Basic Income Network Italia, 6th June 2017
