by Guest Contributor | May 19, 2017 | Opinion
Written by: Conrad Shaw
There is an idea out there. It is of the transformational variety. It exists in various forms and goes by many names: universal basic income, basic income guarantee, negative income tax, citizen dividend. All of these monikers highlight important aspects of this concept. “Universal” because it applies to everyone with no conditional requirements. “Basic” and “guarantee” to emphasize that, rather than subsidizing luxury or ease, it’s about guaranteeing the right to simply live in dignity and security. “Negative income tax” to illustrate that tax structures can be understood and utilized not only as a way to extract money from the people, but also as a means of fair predistribution to those being underserved by our system. “Citizen” to encourage taking ownership of one’s community and obligations. “Dividend” to emphasize that it is not a form of charity, but a return on an investment, the rightful entitlement every one of us has to our proper share of this country’s resources and opportunities.
“A basic income is a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.”
-Basic Income Earth Network (BIEN)
This idea, if you haven’t heard of it before, is the simple premise that the government (composed of the people) would deliver a regular, guaranteed, and unconditional amount of income to every person in a society. Some argue that only citizens should receive it, some say legal residents, some suggest only adults, and some insist that every breathing human within the borders deserves the payment. There are valid arguments for all of these viewpoints, and I hope that soon enough we will have the good fortune of debating at great length these strategies on the national scale, because it will mean that the very premise has been accepted into our hearts and consciences as both essential and moral moving forward.
For that to happen, the idea must first inspire the support of the people as a whole, and because the United States is a nation of pride and marketing savvy, nothing sells here without a good, cohesive pitch. As a first order of business, we should settle on a name for our American version of this policy, and I have a suggestion:
The American Dividend
“American” because the only requirement is that you, in fact, are a part of this great country, and we will recognize that with your “Dividend,” your carried interest in the investment you and your family have made and continue to make in this country by merit of your participation in it.
On to the details. Perhaps alarm bells are ringing and red flags are waving for you right now. “That sounds like socialism,” you might point out. I freely admit that it is a socialistic policy, and I argue that an appropriate amount of socialism is essential in a successful and just society – even a capitalist one. We seem, in America, to cling to the naive idea that we can or should only have one or the other, socialism or capitalism. That idea has run its course; we must have both. Neither of these simple, broad ideologies is robust enough to run our complex economy alone, because our economy is not only one of markets, but also of human beings. Markets run by the laws of supply and demand, and are greatly motivated and spurred on by capitalism, the great incentivizer. A purely socialized, redistributive society in which all citizens received the same reward regardless of their contributions could squash the immense growth, motivation, and innovation that capitalism fosters. Human beings, though, survive and thrive by the natural laws of inalienable rights, defined and set out by and for ourselves as entitlements to which we are guaranteed by dint of nothing other than our humanity. Socialistic regulations are required to make sure we adhere to these natural laws. Healthcare, for example, must eventually be socialized and untethered from the need for financial means, because no supply and demand curve can fairly measure the value of health. The demand is infinite, because a sick or dying individual will agree to pay any amount for even a chance at survival. This is where capitalism fails. It eventually localizes far too much power in the hands of the few, the owners of property and corporations, and we find ourselves in a situation closer to extortion than free markets.
My argument even leaves aside our very significant problem with automation. As we continually and irretrievably lose massive chunks of our labor market to machines, these pressures toward economic inequality will exponentially intensify. Properly addressed, however, these same technologies could provide abundance to society rather than greater scarcity and insecurity.
The answer to the question of growing complexity in human and economic markets is not to throw away our hard-won structure as a total failure, but rather to keep tweaking the capitalism/socialism balance to calibrate it to the changing needs of the times. In determining what should be socialized, we can tie it all back into life, liberty, and the pursuit of happiness. Written deep within our American values, these freedoms are the inheritance of all people regardless of circumstance, be it race, culture, gender, age, or financial means. Life requires, at the very least, food, shelter, and health. Liberty and the pursuit of happiness require the ability to choose one’s path without fear of harm or retribution from any authority, and without fear of starvation. Our system has never fully guaranteed these things, and so we have not yet managed to fulfill our constitutional mission statement. The American Dividend can be used to ensure those rights. It can guarantee all people the ability to feed and house themselves as well as the power to say NO to any path in life that doesn’t serve their interests, be it a line of employment or an unhealthy relationship.
If we understand that we have always lived in a blended society of both socialism and capitalism, we can let go of our distrust of these words, our reflexive labeling of them as inherently evil or good, and instead see them simply as tools in the constant balancing act of governance.
Let’s address the two main sticking points the American Dividend will encounter: 1) the fear/resentment of subsidizing laziness by paying hard-earned money for others to sit around and do nothing, and 2) the very prudent concern that it might be simply infeasible to fund a program of such broad scope – essentially the fear that we can’t afford to guarantee these rights to all.
Paying for Sloth?
As to subsidizing laziness, this fear is created and nourished by a skewed perspective in the American capitalist culture that money is the driving motivator for work. We place the dollar on a pedestal far above all others, but money does not deserve this worship. The adage that money is the root of all evil is myopic. Insecurity is the root of evil, and money, or more accurately the lack thereof, is merely our means of expressing and comprehending insecurity. Whereas money is nothing but a tool, poverty is a force. It is the lack of freedom. Because we have been inculcated our entire lives with the idea that money represents value and merit, we have fallen into a misunderstanding of our fellow human beings. We have descended into the weary and preoccupied mind’s fallacy of “othering.” This is to say we have allowed ourselves to perceive the other members of our society as opponents, statistics, enemies, leeches, and threats to our own security. When we are in constant competition mode, we forget the other players for the sake of the game.
When we take the time to truly examine and understand our neighbors, compatriots, brothers, and sisters, however, we see that they are merely reflections of ourselves. We all have hopes and dreams; we all want to be special; we all want to contribute. The current system, which clumsily attempts to reward valuable effort but often disincentivizes hard work and ethics, leads people to despair and apparent laziness, sapping their motivation. In its current form, welfare assistance disappears the moment someone gets a job and increases their income, creating welfare traps. Additionally, other societally valuable endeavors like child-rearing, home healthcare, the arts, furthering education, and entrepreneurialism aren’t deemed worthy of any kind of salary in this economy. They can only be done on faith, at a loss, and at risk of harm to oneself. Throughout human history, a great majority of the movers and shakers of the arts, sciences, and business have had the luxury of pursuing their passions without earning an income from an employer because theyither came from means or they gained access to a benefactor. Wouldn’t it be something new and remarkable if those rich in inspiration and motivation but lacking an inheritance or extreme risk tolerance weren’t forced to spend years of their lives struggling to survive, seeking funding, essentially asking permission from corporations and the owner class in order to pursue the realization of their visions? With guaranteed security and the freedom to choose one’s work and define one’s value, people will contribute their best selves, and we can slowly change our national ethic from one of taking and hoarding to one of contribution. Productivity increases, health improves, and crime decreases in a society that chooses not to allow poverty, thereby permitting its members to be more effective versions of themselves. “Survival job” should not be a term, and a gun to the head is not nearly as effective a motivator in the long term as the ability to pursue meaning in life.
But the Cost!
Now comes paying for it all. Let’s do some simple, back-of-the-napkin, ballpark math for the numerically inclined. To immediately raise every American above the poverty line, we could provide a dividend of $12,000 per year to every adult and $4,000 per year to every child. That’s a bit under $3.25 trillion, which is certainly a huge number, but it’s not a direct expense. Think of it this way: the US GDP is approximately $18 trillion. If a simple across-the-board tax increase was levied on every American to raise that full amount for the dividend, a flat tax plopped down on top of our progressive system, that would mean about an extra 18% in taxes we’d each pay. That may sound like a lot, but since every taxpayer would also be receiving an extra $12,000 in income, then everyone making under $66,000 would come out ahead to some degree. At the $66K breakeven point, an individual would be paying $12K in extra taxes to receive the $12K in dividends. You can plug $66K into this US income percentile calculator and see that this represents over 75% of all Americans who would receive more money under this policy than they would give in taxes to pay for it, thereby directly profiting at the same time as we strive to completely abolish extreme forms of poverty and homelessness. That in itself should make the American Dividend a no-brainer.
However, a uniform tax levy like this is far from the only source of funding at our disposal. We could fund a large part of the American Dividend in many other ways. Taxes on the use of resources can chip in quite a bit. Taxes on carbon, pollution, minerals, timber, land value, and other natural resources acknowledge that we all own the land in equal share and would simply require companies profiting from and often damaging our commonly-owned property to repay the costs we bear by permitting them to do so. This would also discourage abuse of resources and incentivize more ecologically sustainable innovation. Very small taxes on financial trades would both reduce harmful speculation currently performed on a massive scale by large institutions with black box algorithms – encouraging long-term investment in its place – and it would acknowledge that we all own the financial system in this country and deserve a return from its continued function. Cutting tax exemptions that benefit the wealthy almost exclusively — scrapping the social security tax cap, raising unearned income tax rates to at least the level that earned income bears, cutting the home mortgage deduction, and a host of other such measures — would fund a significant part of the dividend. These measures are long overdue in any case and would represent a strong step forward against the economic injustice in our current system. Finally, raising the income tax rates on those in the very top brackets would acknowledge the fact that these earners have attained their position not only through intelligence and merit, but also through the good fortune of living within a system that allows for a few to leverage their positions to reap enormous returns — a system of laws, infrastructure, and opportunity that has been built over the course of generations, a system that each of us owns in part and deserves a share of. Factor in these methods, and we could pay for much of the dividend. As an example, if we paid for a third of the dividend this way (an entirely feasible amount according to the economists with whom I’ve spoken), it would bring the necessary tax increase down to around 12% and the break-even point to everyone making under $100K. Plug that into the calculator and see for yourself that more than 88% of the country would directly and immediately profit from the American Dividend under this scenario. Someone out of a job or unable to work would receive the full $12,000. Someone making $50K would come out $6,000 ahead. Someone breaking even at $100K will know that they are part of a stable system that will protect them should their fortunes turn for the worse. So, while it will end extreme poverty as we know it, the American Dividend is clearly not just for the extremely poor. It is for all Americans.
What’s more, we haven’t even factored in the savings yet. When people are secure, healthcare costs fall, crime drops, and entire welfare programs can eventually be phased out. This pushes the break-even point even further upward. This is not yet even accounting for the benefits reaped from fueling innovation and entrepreneurialism. Also, unlike the failed policies of trickle-down economics under which much of the money this country makes lands in wealthy bank accounts and simply sits there, money given to the lower classes is generally spent immediately on necessities and better quality of life, equating to a massive boost in the overall economy as businesses gain new customers across the board. It would be presumptuous to predict the actual magnitude of these windfalls, but I would bet you the American Dividend, in very short order, would begin to pay for much of itself.
Bear in mind this is not a panacea, and we mustn’t perceive or promote it that way. The American Dividend will not immediately usher in a new Utopian Age, and there will still be some that need help, but it has the power to effectively end catastrophic poverty and homelessness. It will grant all Americans a real shot at the American Dream. It will mean a simpler governmental system, a change of social and cultural ethics, and a betterment of individual quality of life across the board. And we have the means to do it. All we need is the political will of the people to stand up and demand it.
Give it to Me Straight
So tell me, if this idea of an American Dividend can: 1) end homelessness and catastrophic poverty, 2) establish and reinforce basic human rights and security across the nation, 3) improve healthcare outcomes and reduce costs, 4) reduce crime, 5) encourage entrepreneurialism, 6) act as an economic stimulus, AND 7) result in an immediate net income gain for the vast majority of the population… tell me how can this idea not sell? How can it not sweep the nation? Tell me it’s not an issue of marketing savvy.
And tell me, now that you’ve seen my arguments about the wider economic implications, what would you do with your Dividend? Take a little time and play out the thought experiment. Now imagine what your brother, mother, sister, father, son, daughter, friend, neighbor, boss, coworker, employee, or passing acquaintance would do with it? What would each be able to contribute? What would your community look like? What would America look like?
It’s time for the American Dividend.
Check out our upcoming film, Bootstraps, at www.bootstrapsfilm.com
by Guest Contributor | Apr 10, 2017 | News
People’s Potato as an example of alternative work organization in the world of Unconditional Basic Income (UBI)
This is the second part of a series proposing a reform of public services to be included in the UBI reform package (first part here). This article presents a model of organizing production based on spontaneous work contribution to the commons so that citizens’ participation is facilitated. Re-organizing work in such a way so that people want to contribute, but without being forced by the necessity to earn a living, should become part of the UBI movement’s agenda.
Certainly, citizens living solely from UBI would need to contribute somehow to sustain support for UBI among working populations that may resent those not working. So far, no viable solutions have been proposed. An “approved” citizen contribution1 or rewarding of such contributions2 implies wasting resources on monitoring, control3 or operating a system of remuneration, which would undermine the entire project and philosophy behind UBI. I propose an alternative to generating such unsatisfying administrative jobs (also known as “Bullshit Jobs” – a term coined by David Graeber) and intruding citizens. The state (“Partner State” – a concept developed by Michel Bauwens) should allocate instead resources and liberate spaces where commons are produced and work is a source of fulfillment.
In this article, I will elaborate on the elements of work organization that would turn making contribution attractive to citizens. A new logic of work organization, which could be generalized for the domain of services of public interest, will be exemplified with the case of a cooking collective, People’s Potato, distributing lunch meals for free at the Concordia University in Montréal. One can define the mode of operation in this collective as a peer production project. Access to the service is not conditional based on involvement as a volunteer. The production is financed by fee levies, but the meals are distributed for free and broadly accessible. One does not need to be a student at the Concordia or have paid the levy to receive a meal. The Annual General Meetings are accessible to the stakeholders and the public.4
In September 2014, I volunteered in the kitchen and interviewed several other volunteers, as well as a coordinator, to learn more about work organization at People’s Potato.
Contributing work without barriers
Members-employees of the worker cooperative that manages People’s Potato coordinate volunteers’ work. Since economic survival does not depend on the volunteers, this removes the pressure typically found in commercial gastronomy or other traditional employment systems. Volunteers join the work process spontaneously and are assigned a task. It is possible to join or leave at any moment. Preparing food is organized in a modular way so that coordinators can easily find something to do for a volunteer. Inclusion is also fostered by the fact that each participant can decide their degree of involvement. For example, one can choose whether to contribute to governance decisions or not.
This very flexible way of organizing work at People’s Potato generates more inclusion in work participation, opening it up to those who might not be able to work as an employee, nor find their place in worker cooperatives. Among volunteers, there are people with physical and mental handicaps. Part of People’s Potato’s anti-oppression policy is to create an environment of tolerance so that everyone can work at one’s own pace. Many volunteers appreciated the flexibility that is possible in the involvement. For example, one volunteer – a busy student – enjoyed the fact that the project can go on without her if she does not show up. She does not need to take on additional responsibility.
Organizational framework for p2p production in the physical world
Coordination is a crucial factor in sustaining spontaneous work. Cooking (and other services of general interest) requires time management, as well as obeying safety and hygiene regulations. In Montréal, past non-professional cooking collectives, which managed to peer produce food, were short-lived (see the article by Silvestro5). However, some chapters of the international movement Food Not Bombs are quite successful. Certainly, these non-professional initiatives help advancing the practice and attitude of non-conditionality, both as a principle for redistribution and as a way to organize work contribution.
A worker cooperative runs people’s Potato. The cooperative takes care of administration, logistics, and financial tasks. Coordinators who are members of a worker cooperative provide a framework for spontaneous work contribution. They decide what meals to prepare and guide the process of food preparation. They are also responsible for volunteers’ training, information events, and celebration parties.
Fulfilling a coordinator’s job at People’s Potato requires a higher level of social skill than in traditional employment settings. One of the most important factors attracting volunteers is the kindness of coordinators and the perception that contributing at People’s Potato is different from traditional employment. This is reflected in the way volunteers are addressed. Staff always asks whether one “feels like doing” a certain task. Volunteer contribution is not taken for granted. However, one of the long-term volunteers that I interviewed said they felt unappreciated, and another one wished for more warmth. The former said that People’s Potato’s staff tends to forget that the volunteers are not paid for their contribution.
Space and work process organization to accommodate volunteers
Because of the flexibility of volunteer involvement, the number of volunteers fluctuates during the day. Just to illustrate with an observation of one Monday: at 11 am there were 8 volunteers in the kitchen, at the noon – 14, at 12:40 – 29, at 13:30 – 13, and at 14 – three volunteers were working. Altogether, the kitchen space can accommodate up to 40 volunteers.
The only perk for volunteers is the opportunity to eat in the kitchen rather than wait in the line outside. Many interviewees complained that there is not much space for the volunteers to eat lunch together. However, some contribute very little and eat in the kitchen. Coordinators must find a balance between disciplining and building an atmosphere that does not feel like a workplace. Too many rules may deter people from volunteering, and too little may frustrate committed volunteers.
Since volunteers associate People’s Potato with having fun and meeting people, some volunteers may forget that it is a space for work. One of the coordinators complained that people were kissing each other in the kitchen. The staff is also worried about too many people coming to the kitchen during lunch distribution. Working as a coordinator has distinct challenges, due to the number and fluctuation of people involved in cooking. They manage stress by rotating tasks between the kitchen and the office.
Anti-Oppression work at People’s Potato
People’s Potato defines itself as a hate-free space to bring people together without judgment or discrimination. For one interviewee who belongs to a racial and gender identification minority, this aspect of People’s Potato was crucial in choosing involvement. This person trusts that coordinators would react in cases of oppressive behavior in the kitchen. This person has experienced harassment in similar jobs as an employee in commercial gastronomy.
As I reported in another article, coordinators have a role to play in sustaining a positive atmosphere:
“The involvement of a high number of volunteers may be a challenge at times. There are situations when staff need to intervene because of an oppressive behavior among volunteers: instances of verbal aggression, offences, discriminatory comments, etc. Some volunteers, when asked to stop oppressive behaviour, may become frustrated or become quiet. Sometimes this results in volunteers getting upset and leaving the kitchen, though there is an attempt to establish the anti-oppressive politics without rejecting community members who don’t understand it fully.”6
Creating spaces for a new paradigm in work organization
Sustaining work organization based on spontaneous contribution requires infrastructure, employment for coordinators, and developing skills for running this kind of project. The example of People’s Potato’s work organization helps us imagine how production of the commons could be organized. My interviewees suggested further measures that would make an involvement in spontaneous work more attractive:
– A board with the list of tasks to be done, so that one can easily find one’s project
– Concerts accompanying work
– A place to relax and lay down close to the working space (suggested by an older person suffering from back pain).
UBI may become a reality in the future, but the goal of creating a new vision of work and using human potential can already be pursued now.
The ideas expressed do not necessarily represent those of Basic Income Earth Network or Basic Income News.
About the author:
Katarzyna Gajewska is an independent scholar and a writer. She has a PhD in Political Science and has published on alternative economy and innovating the work organization since 2013. You can find her non-academic writing on such platforms as Occupy.com, P2P Foundation Blog, Basic Income UK, Bronislaw Magazine and LeftEast. For updates on her publications, you can check her Facebook page or send her an email: k.gajewska_commATzoho.com. If you would like to support her independent writing, please make a donation to the PayPal account at the same address!
More information on People’s Potato
David Bernans on the Founding of The People’s Potato : https://www.youtube.com/watch?v=vZXfTRVdGAU
Jamiey Kelly on The History of The People’s Potato : https://www.youtube.com/watch?v=PXFI2w6LOLA
The People’s Potato and the Concordia Administration : https://www.youtube.com/watch?v=oGO236oiZow
Gajewska, Katarzyna (2014): Peer production and prosummerism as a model for the future organization of general interest services provision in developed countries: examples of food services collectives. World Future Review 6(1): 29-39.
Gajewska, Katarzyna (30 June 2014): There is such a thing as a free lunch: Montréal Students Commoning and Peering food services. P2P Foundation Blog, https://blog.p2pfoundation.net/there-is-such-a-thing-as-a-free-lunch-montreal-students-commoning-and-peering-food-services/2014/06/30
Endnotes
1 Anthony B. Atkinson, “The Case for a Participation Income,” Political Quarterly 27 (1 1996), 67-70; Anthony B. Atkinson, Poverty in Europe (Oxford: Blackwell, 1998); Jeremy Rifkin, The End of Work, (New York: G.P. Putnam’s Sons, 1995).
2 Colin C. Williams and Sara Nadin, “Beyond the market: The case for a citizen’s income,” Re-public: re-imagining democracy, November 23, 2010, URL to article: https://www.re-public.gr/en/?p=3070.
3 Brian Barry, “UBI and the Work Ethic,” in What’s Wrong with a Free Lunch? Ed. Philippe van Parijs (Boston: Beacon Press, 2001). Bill Jordan, The New Politics of Welfare: social justice in a global context (London: Sage, 1998); Bill Jordan, “Efficiency, Justice and the Obligations of Citizenship,” in Social Policy in Transition: Anglo-German Perspectives in the New European Community, (Aldershot, UK: Ashgate, 1994, pp. 109-113); Jurgen DeWispelaere and Lindsay Stirton, “The Public Administration Case Against Participation Income,” Social Service Review 81 (3 2007): 523-549; Jurgen DeWispelaere and Lindsay Stirton, “A Disarmingly Simple Idea? Practical Bottlenecks in Implementing a Universal Basic Income,” International Social Security Review 65 (April-June 2012): 103–121.
4Gajewska, Katarzyna (2014): Peer production and prosummerism as a model for the future organization of general interest services provision in developed countries: examples of food services collectives. World Future Review 6(1): 29-39. Gajewska, Katarzyna (30 June 2014): There is such a thing as a free lunch: Montréal Students Commoning and Peering food services. P2P Foundation Blog, https://blog.p2pfoundation.net/there-is-such-a-thing-as-a-free-lunch-montreal-students-commoning-and-peering-food-services/2014/06/30
5Silvestro, Marco (2007): Politisation du quotidien et récupération alimentaire a l’ère de la bouffe-minute, Possibles 32(1-2).
6Gajewska, Katarzyna (30 June 2014): There is such a thing as a free lunch: Montréal Students Commoning and Peering food services. P2P Foundation Blog, https://blog.p2pfoundation.net/there-is-such-a-thing-as-a-free-lunch-montreal-students-commoning-and-peering-food-services/2014/06/30
by Guest Contributor | Mar 26, 2017 | Opinion
Alaska’s Permanent Fund, Dividend and the central idea that minerals are a shared inheritance have inspired numerous social and political movements across the globe. The Goenchi Mati (“Goan Earth”) Movement in Goa, India, of which I am a part, has drawn from the experiences of Norway and Alaska with their permanent funds.
Our core principles are (a) minerals are owned by the state as a trustee for the people and especially future generations (Public Trust doctrine); (b) minerals are inherited assets and our duty is to ensure that future generations have access to the minerals or their value (Intergenerational Equity principle); (c) mining is essentially a sale of minerals, hence we must ensure zero loss mining – in other words, the full value (the sale value minus all extraction costs and a reasonable profit for the extractor)[1] must be received by the state as trustee; (d) everything received must be saved in the Permanent Fund, which must also be inflation proofed, ensuring the capital is safeguarded; and (e) any real income from the Permanent Fund must only be distributed as a Citizen’s Dividend, a right of ownership over the minerals and the Permanent Fund.
It is not clear if Alaska has received the full value of its oil; whether zero loss mining was achieved. Any loss is a loss to everyone equally. It is simply a per head wealth tax imposed on everyone, with the oil companies making merry. Based on data in India and other parts of the world, we anticipate a majority of the value of the oil has been captured by the oil companies. If this is the case, it is a loss that will be borne by future generations of Alaskans. A close examination is potentially warranted, and additional taxes on oil may be necessary to ensure zero loss mining.
When we sell an inheritance, we must invest everything in a new non-wasting asset of equal value. Traditionally, inheritances are held in precious stones, precious metals or land. These assets retain their value over generations. The Permanent Fund is a recent innovation designed to replicate this function. Inflation proofing is essential in order to ensure that the fund retains the real value of the natural resources in perpetuity. While over 50 such funds exist around the planet, Norway and Alaska are the exemplars.
In contrast, infrastructure is a wasting asset, it depreciates or reduces in value over time. Even investments in health and education perish with the beneficiary. Hence, a diversion of oil money from the Permanent Fund to the budget eventually cheats future generations of their inheritance. Only a fiscal rule of saving 100% of the oil money ensures that the present generation does not cheat their children and all future generations.
Norway, the other exemplar of natural resource management, follows the fiscal rule of saving all money from oil in the Government Pension Fund Global. Norway inflation proofs its fund by regularly estimating the long term after-inflation (real) return on their fund, and capping the distribution below this level based on the 5 year average fund balance.
Imagine taxing everyone equally, rich or poor. It is almost impossible to legislate a per head tax – a tax on existence – in a democracy. It is clearly unfair. Yet, the current proposals in Alaska to divert some of the income of the Permanent Fund to the state budget is equivalent to a per head tax (to the extent of the lost dividend). Put simply, a legislation to tax everyone $1,000 would never pass. Yet, this is exactly equivalent to reducing the dividend by $1,000 and paying that amount to the budget.
Alaska’s current budget troubles stem from a central misconception of the nature of oil money. Government accounting treats it as “windfall revenue”. Yet, it is obviously the sale of the family gold. Jay Hammond’s first experience with natural resources was with salmon runs in Alaska’s Bristol Bay. As long as salmon runs are managed sustainably, the money is revenue, equivalent to the fruit of the natural resource.
Mining is unsustainable. Every barrel of oil extracted is one less in the ground. While Jay Hammond managed to see through the deceptive government accounting, his initial proposal to save 50% of the oil money did not go far enough. Eventually, only 25% of the oil money was saved, and 75% treated as revenue in the Alaska budget.
The impact is obvious. Alaska’s budget soared from $3 bn in 2005 to $8 bn in 2013 on the back of the China boom. Expenditures followed. The crash has thrown the budget into turmoil. However, if Alaska had treated all the oil money as a sale of the family gold and saved it, the ballooning of the budget wouldn’t have occurred.
It is a difficult time to consider saving all the oil money into the Permanent Fund, and only paying out a dividend without any diversion to the budget. Yet, it is the only ethical course of action. Any legislative proposal worth examining must mandate that this comes to pass within a limited time frame. Otherwise, Alaska will continue to suffer from budget volatility due to oil price fluctuations, and this issue will recur.
Alaska’s Permanent Fund Dividend is the largest example of a Citizen’s Dividend as well as Universal Basic Income in the world. A central idea of the Goenchi Mati principles is that the Citizen’s Dividend creates the link, financial and emotional, between the individual, their shared inheritance and their moral obligations to future generations. The expectation is individuals safeguarding their dividend would by extension safeguard the Permanent Fund and the overall mineral value. The current Alaska budget crisis is a second test of this seminal idea of Jay Hammond.
The world watches with bated breath. Will Alaskans come out in large numbers to protect their children and future generations? Will individual interest and morality triumph as Jay Hammond predicted? Or will another beacon of what is fair, just and right in this world succumb?
About the author:
Rahul Basu is a member of the Goenchi Mati Movement, which advocates fair mining in the state of Goa.
[1] This is the Economic Rent
by Michael Lewis | Feb 28, 2017 | Opinion
Written by: Michael A. Lewis
Silberman School of Social Work at Hunter College and the CUNY Graduate Center
When I first became interested in the basic income, I was a graduate student studying welfare reform. For those who aren’t in the know, “welfare” is the more common name used in the U.S. to refer to a program called Temporary Assistance for Needy Families (TANF) and which used to be called Aid to Families with Dependent Children (AFDC). TANF and AFDC aren’t exactly the same programs, but they do have some key things in common: they provide financial support to low income persons, most of those who receive such support are women and children, and, I think it’s fair to say, both programs are somewhat controversial.
The controversy around welfare has to do with the fact that many of those who receive benefits are apparently “able-bodied” persons who’re thought capable of working (“working” in this context means selling one’s labor in return for a wage, instead of, say, taking care of one’s children, something many would regard as work). Yet not enough of those on welfare are working, according to a common belief among many U.S. citizens/residents as well as, apparently, politicians. So in an attempt to socialize welfare beneficiaries into understanding the importance of work, many of them are required to work in return for their benefits, a practice commonly called “workfare.” Many also remain poor, even after receiving benefits, because the financial support they receive is pretty meager.
As a graduate student, I thought workfare, as well as the low level of benefits provided to recipients was a very unjust way of assisting poor persons; I also thought we could do better (in fact, I still think these things). My entry into the world of basic income was because I believed it a more just way of addressing poverty than welfare and related programs.
Once I started studying basic income and meeting others interested in the idea, I heard other justifications for it. It would enhance freedom, it would allow people to engage in care work if they so choose, it would give people an income representing their share of commonly owned natural resources, it would be a way of replacing some or all of the welfare state (which, of course, assumes there is something wrong with the current system), etc. But the argument that seems to have caught on the most, at least in the U.S., is the idea that a basic income will become necessary as robots/machines take our jobs.
I have to admit that part of me has been a bit concerned about the degree to which the automation argument seems to dominate basic income discussions. My worry is that as we spend so much time debating who’s right about whether robots will take most, or perhaps all, of our jobs and, therefore, whether there’ll be a need for a basic income, other arguments for such a policy get “crowded out” of the discussion. Yet as I’ve voiced this concern, mainly to myself, I’ve also wondered why this argument for a basic income seems to have caught on in a way that others haven’t?
I think part of the answer has to do with where I started—U.S. citizens/residents worry a lot about the degree to which healthy people work to take care of themselves (and their families) and are quite skeptical about policies they believe will allow people to shirk this responsibility. But I think another part of the answer has to do with the role of race in our society. I suspect that in the minds of many citizens/residents the degree to which a basic income would allow people to shirk their obligations to work would vary by race. To put it bluntly, I suspect many assume that black and brown people would be more likely to shirk this responsibility than whites would be. If I’m right about all this, then perhaps it shouldn’t be surprising that the U.S. isn’t naturally the most fertile place for the basic income idea to take hold. But why would it take hold in the form of the automation argument? I think the answer here might be pretty simple. If machines are about to take all our jobs, then automation represents a relatively indiscriminant force. That is, “hard working white people” might be threatened just as much as “lazy shiftless brown ones” are. Perhaps this has been enough to get white folks to take notice of a policy that perhaps could address the problem.
About the author: Michael A. Lewis is a social worker and sociologist by training whose areas of interest are public policy and quantitative methods. He’s also a co-founder of USBIG and has written a number of articles, book chapters, and other pieces on the basic income, including the co-edited work The Ethics and Economics of the Basic Income Guarantee. Lewis is on the faculties of the Silberman School of Social Work at Hunter College and the Graduate and University Center of the City University of New York.
by Andre Coelho | Feb 8, 2017 | News
Mayor Lee Jae-myung. Credit to: Pangyo Techno Valley.
On December 9, 2016, the National Assembly of the Republic of Korea voted to impeach Park Geun-hye over a corruption scandal with her lifelong friend Choi Soon-sil. Due to the impeachment, the next presidential election in Korea is expected to take place early, in April or May 2017 instead of December, 2017. As the details of the scandal have emerged, a previously less well-known presidential candidate has been rising in opinion polls – Lee Jae-myung, the current mayor of Seongnam city. This city is located to the southeast of Seoul and is one of many municipalities of the Gyeonggi province.
In two months, Mayor Lee has emerged as a so-called “dark horse” candidate with a poll approval rating of 18%. He has been ranked as the third most popular of the presidential candidates. The strongest driving force of his rise is attributed to his prompt action in advocating for the impeachment of President Park. He was the first among the presidential candidates to call on the National Assembly to impeach Park Geun-hye. Lee is also famous for his clear stance against powerful vested interests, including the “ in Korea.
Yet, there is another important factor that grabs attention. His major campaign promise is about providing universal basic income. Mayor Lee has successfully implemented the youth dividend policy, which pays an annual dividend of one million Korean won (approximately 850 US dollars) to individuals who are 24 years of age and who have lived in Seongnam city for three years or more. The policy finds its philosophical roots in the idea of universal basic income. The Park Geun-hye administration used several strategies to deter the implementation of the local youth dividend policy, however, Mayor Lee eventually fulfilled his promise.
A survey of 2866 youth distribution recipients shows that 96.3% of youth who received the benefit are satisfied with the policy. Some responses revealing satisfaction and even gratitude include the following: “Upon receiving the youth credit, I have gained confidence, which is more valuable than money”; and “Society looked after me for the first time”.
In his presidential candidacy announcement speech for the 19th Election, Lee Jae-myung said he will expand the universal basic income system to the national level. More specifically, he outlined a detailed plan to provide the ‘life-cycle dividend’ and ‘special dividend’ shortly after his inauguration.
The life-cycle dividend will pay a child dividend to individuals aged between 0 and 12, a teen dividend to those in the 13-18 bracket, a youth dividend to 19-29-year old, and an elderly dividend to individuals who are 65 or older. The special dividend is aimed at specific populations, such as farmers, fishermen and people with disabilities. The amount of the annual dividend is set at one million Korean won per person (874 US$/person), regardless of the kind of dividend. Lee explained that he finds it feasible to allocate 28 trillion won, which accounts for about 7% of the total budget, to the dividend policy by tightening central government spending.
Lee Jae-myung. Credit to: Bloomberg / Getty Images
Moreover, Mayor Lee has also promised that he will secure a total of 15.5 trillion Korean won (13.6 billion US$) by establishing a new ‘land holding tax’. He argues that the revenue from the land holding tax should be used as a source of a land dividend, which provides an annual dividend of 300,000 won (approximately 255 US dollars) to all citizens of the Republic of Korea. Not only can this tax collect a portion of all rents from real estate publically, it can also help realize the idea of universal basic income. Lee firmly believes that land is a common property for all citizens.
In fact, the Republic of Korea is a country that appreciates the ‘publicness’ of land. The Constitution of the Republic of Korea states, in Article 122, that “The State can fulfill necessary restrictions and obligations related to the efficient and balanced use, development, and preservation of land, which is the basis of production and living of all citizens.” In the past, when the government has attempted to implement policies in the spirit of this clause, the country has witnessed numerous attacks from powerful vested interests, the so-called “top 1%”. Most of the time, the government has thus had to withdraw from such policies. However, Lee Jae-myung is seen as a well-equipped candidate with the ability and courage to fight against the powerful elites in Korea and successfully implement this policy.
Mayor Lee’s ideas about basic income
Lee Jae-myung’s basic income policy combines two ideas of basic income theory: 1) the state is responsible for ensuring the de facto freedom of all citizens; and 2) land, natural resources, the environment, and knowledge are common property that must be shared by all members of society. On these grounds, his basic income policy is thought to have positive prospects and much room for growth, particularly in terms of the payout amount. Thus, proponents of universal basic income around the world should pay attention to Lee Jae-myung in Korea.
If Mayor Lee is elected as the next president of the Republic of Korea and successfully fulfills his campaign promise on basic income policy, he would be able to address many problems currently undermining Korean society, such as income and wealth inequalities, unfair competition, and real estate speculation. Then, Korea might be able to follow a path of inclusive growth, which will eventually lead to a fair and equal society.
About the author:
Gangsoo Jun is a professor of economy at the Catholic University of Daegu, South Korea, and is involved in Lee Jae-Myung policymaking team.
More information at:
Language: Korean
Se-young Lee, “전국민에 연간 130만원 … – 이재명 ‘기본소득 마케팅’ [Annual Dividend of 1,300,000 won to All Citizens … – Lee Jae-Myung ‘Basic Income Marketing’]”, The Hankyoreh, 18 January, 2017.
Language: English
Kang Jin-Kyu, “Seongnam mayor declares presidential bid”, Korea JoongAng Daily, 24 January, 2017.
Hyosang Ahn, “SOUTH KOREA: Seongnam City announced to implement ‘Youth Dividend’”, Basic Income News, 7 October, 2015.
Toru Yamamori, “SOUTH KOREA: Mayor of Seongnam City talks on his plan for ‘Youth Dividend’”, Basic Income News, 15 September, 2015.
