by Kate McFarland | Nov 24, 2016 | News
British journalist and broadcaster Paul Mason, author of Post-Capitalism: A Guide to Our Future, recently delivered a lecture in Amsterdam in which he points out the need for a universal basic income as a partial solution to changes in the economy due to new technologies. He raises related concerns in an article in The Guardian published shortly thereafter.
On October 25, author Paul Mason delivered a lecture at the De Balie culture center in Amsterdam, the Netherlands, wherein he argues that technological advancement has been not only correlated with but in fact a cause of economic stagnation. He attributes this to several characteristics of new information technologies: the ability to automate more jobs and job tasks, the ability to produce and reproduce goods at very low (even zero) marginal cost, and the ability to combine data through networks to generate new goods not reflected in standard measures of economic growth.
In addressing how the left should respond, Mason says, “Our long-term aim should be to push more and more economic activity [to be] done outside the market and the state.” This requires, in part, that we “end [the] reliance on wages for work.” In this context, he continues: “We need quickly to pursue the experiments with the universal basic income … and aim within 10 years for states to be in a position to roll out the policy itself.”
He goes on to add, however, that UBI alone is insufficient; the state, for instance, should also provide “cheap basic goods” (he mentions housing, healthcare, education, and transportation) and promote open source and non-profit businesses.
The entire lecture, along with the Q&A session, can be viewed below. Mason has also published a text version of his lecture on Medium.
https://vimeo.com/188859000#t=8m42s
In an October 31 article in The Guardian, Mason again broached UBI as a potential solution to technological unemployment — predicting a world in which smart technologies, such as autonomous vehicles, cause paid work to become scarce and sporadic. Here, in passing, Mason also links UBI to the potential fulfillment of Marx’s vision of a society in which people are free to “hunt in the morning, fish in the afternoon, rear cattle in the evening, [and] criticise after dinner” without ever assuming an occupational identity as hunter, fisher, cattle-rearer, or critic.
References
Paul Mason (October 27, 2016) “Postcapitalism [in Amsterdam]” Medium.
Paul Mason (October 31, 2016) “The battle over Uber and driverless cars is really a debate about the future of humanity” The Guardian.
Photo: Paul Mason in 2015, CC-BY-SA-4.0 DTRocks via Wikimedia Commons
by Roland Duchatelet | Nov 23, 2016 | Opinion
About 25 years ago, when internet emerged, I addressed an audience saying: “If newspapers [didn’t already] exist today” there is “no way investors or bankers would support the business-idea to collect news, print it on paper around midnight and dispatch this printed stuff using thousands of vehicles to bring it to shops and individual readers before morning comes”.
In most western countries, social security became significant approximately 70 years ago, when it got an extensive legal basis. It now plays a crucial role in developed countries to give purchasing power to citizens who do not have an income from a job. Moreover, in many countries it provides free health care for everybody.
Just like internet changed the way news is distributed, the fact that computers and robots replace human work is a “game changer” for social security, which was totally based on labour contributions since its inception. More and more jobs are subsidised and therefore do not really “contribute” to the social security system anymore. Just like we continue to get news, even better and faster, we want to keep social security and improve it despite paid labour becoming less important in our economic system. In most West European countries, the amount distributed by the social security system increased constantly as a share of income of households and is now, if you include benefits in kind, more or less equal to the net pay households get from work. There is little political awareness of this fact.
Assuming social security never existed and we decide to create it, how would we organise the cash redistribution part of it? Just like blood in the human body redistributes blood cells to make all parts of our body work, money fulfils a similar role in society: allowing exchange of goods and services amongst individuals.
Like the heart of the human body pushes blood in various parts of our body and collects the blood on the other side, the social security system injects money, purchasing power, into society to fuel exchanges of goods and services.
In the future, the total amount of money distributed should be no less than today, and should gradually increase when automation further decreases the demand for paid labour in our economic system because we need purchasing power to drive economic activity.
The conditional character of the current social security system limits freedom to work, to move in with friends and so on. It is a huge deterrent to work and enjoy life. Assume a Belgian person gets 1200 € unemployment benefit and could get a job paying 1350 € net per month. Because that person loses the 1200 € as soon as she/he starts to work, the marginal reward is 150 € per month. Since there are approximately 150 working hours in a month, it is only worth 1 € per hour. Stupid system, yes indeed.
Therefore, the biggest part of the new social security system’s cash distribution, around 90 percent, should be a straightforward unconditional basic income distributed to everyone, the amount solely depending on the age. In the example above, this unconditional basic income could be 800 € per month for the 26 to 67 age group, lower than the highest “replacement income”, but not much lower than the average unemployment benefit in Belgium today. A second layer to the system should be conditional, based on specific needs or situations like invalidity, requiring administration. By comparison the administration cost of the new social security system would be roughly 90 percent lower than the current one.
There is no need of for additional taxes in the new system (see this Economist graph) if the basic income becomes a part (and does not come in addition) of the current income from work (or current social security benefits). For example if we decide the basic income for adults in the US to be 900 $ per month and a person’s net income from work is presently 1900 $, his pay-check will read: “basic income 900$, income from work 1000 $”. This could be done in two ways. The first way is the employer pays the basic income of his employee. The second way is that the state pays the basic income to the employee but charges a tax equal to the basic income to the employer. Either way, the employee keeps getting the same income, the employer has the same employment cost as before and the state has no extra cost. But to be aware of all these things, the employer might need to take advice about employment law from the advisors of the consultancies like Sentient in Leeds. If you own a company, you can look out for similar firms in your city or state to get an idea of all the laws before any kind of settlement about salary or employment contracts.
Only citizens which have no income at all or less than 900 $ would get more cash from the new system than what they get today. This extra distribution of money can be funded thanks to the lower administration cost of the basic income system in comparison to the present one.
If we could start all anew, we would cherish the local economy, promoting free and uncomplicated exchanges of goods and services between individuals to improve our well-being. For instance, if we have a plumbing issue in our home, instead of calling expert service providers, who have already made a big name for themselves and are doing well, we might want to contact local plumbers (such as royalflushsa.com.au) who do not necessarily have much publicity, but have excellent reviews. With an unconditional basic income-based social security, working for each other would be allowed. It would be even better if there were no labour taxes on services individuals provide to each other in the “proximity economy”.
Would the state lose much of the revenue from the income tax? Not much, since those exchanges of services do not tend to occur now, unless in “black”. But there would be an increase in revenue for people involved in proximity services, like for those who do not perform paid work today. Retired people would also consider earning money on top of their pension if they are sure there is no paperwork hassle at their Social Security office locations in Colorado, or wherever was local to them, and no risk for them to lose part of their retirement benefit.
The extra income would – for example – be spent in restaurants. That spending will yield income taxes and consumption taxes for the state, paid by those restaurants.
The social security system we know is a 70-year-old house to which our governments did not stop adding extensions. Meanwhile, they changed the windows, put in a new kitchen and bathroom, isolated the roof and connected everything by lots of cables.
We can reorganise the redistribution or purchasing power in a much better way: let’s build a new house.
by Kate McFarland | Nov 20, 2016 | News
Eight, a charitable organization based in Belgium, is preparing to run a basic income pilot in Uganda (as previously announced in Basic Income News). The two-year pilot is set to launch in January 2017, and will form the basis for a documentary.
Documentary filmmaker Steven Janssens and sociologist Maarten Goethals founded the charity Eight in 2015, with the vision of reducing global inequality and allowing all people the opportunity to flourish. Eight euros per week is the amount needed to provide a basic income for one adult and two children in impoverished areas, such as parts of Uganda.
According to Janssens, the founders were inspired partially by their own experiences in work and travel, and partially by research and writing on basic income — including the writings of Philippe Van Parijs, Sarath Davala and Guy Standing’s book on the Indian basic income pilots (Basic Income: A Transformative Policy for India), Rutger Bregman’s Utopia for Realists, Eldar Shafir and Sendhil Mullainathan’s Scarcity: Why Having Too Little Means So Much, and the results of other basic income pilots, such as those in Dauphin and Namibia.
Two-Year Pilot of Village-Wide Basic Income
As a first step towards its vision, Eight is preparing to launch a pilot study in the Fort Portal region of Uganda in January 2017. The two-year pilot will involve the distribution of unconditional cash transfers to all residents of an undisclosed village of 50 households.
Eight officially registered the village for the pilot in July, and marked this accomplishment by publishing video footage (a “moodclip”) from the location:
https://vimeo.com/181199016
The amount of the basic income has been fixed at approximately 30 percent of the average income of lower-income families in Uganda (read more about the decision here), amounting to 18.25 USD per month for adults and 9.13 USD for children (small changes to adjust for inflation are possible before the pilot is launched in January). Eight is cooperating with a local bank and local telecom operator to arrange for the disbursement of payments using mobile phones.
The organization will be primarily investigating the impact of the basic income along four dimensions: education participation of girls and women, access to health care, engagement in democratic institutions, and local economic development.
Anthropologists from the University of Ghent, Belgium, are helping to develop and conduct a study of the effect of the basic income, and are presently collecting data on the state of the village prior to the initiation of the pilot. They will compare these initial data with data collected during and after the basic income intervention.
Janssens emphasizes that the study is truly a pilot — intended to inform more and larger basic income trials: “Important to mention is that it is really a pilot project. From our experiences with this pilot we will learn and adjust where necessary, because in the long term we want to scale-up to more villages as our organization grows.” He adds that, after two years, “the priority of Eight will lay in the possibilities to scale up in a good way.”
Village One: The Documentary
Eight does not only plan to publish the results of the pilot study in journals. In addition, it will create a cinematic documentary, Village One, which will trace the story of the introduction of the basic income and its effects on the community over the course of the study.
Currently, Village One is anticipated to be released in October 2018. Janssens — who describes the documentary as “like a siamese twin” to the pilot — plans to disseminate it through television, the Internet, and film festivals.
https://vimeo.com/136620874
Musician and actor Jenne Decleir has already begun composing the soundtrack to Village One. In a short video, Decleir encourages others to join the cause and donate eight euros a week (“the cost of three servings of french fries, without any sauce”):
https://vimeo.com/170170494
Eight has received a sufficient amount in contributions to fund the entire first year of the pilot and two-thirds of the second. At present, Eight is still collecting donations for the remainder of the second year and the documentary.
Visit eight.world and follow Eight on Facebook and Twitter for more information.
Thanks to Steven Janssens for input on this article and Genevieve Shanahan for review.
Images & videos used courtesy of Steven Janssens.
by Dave Clegg | Nov 16, 2016 | Opinion
The London-based Apolitical website’s article on basic income (BI) opens with “Money for nothing – it sounds like a utopia” and then looks at some examples of BI concepts that have already been applied around the world.
This phrase, “money for nothing” represents a commonly held bias that, when there is no commodity returned for the money, whether that commodity is a thing or someone’s labour, then there is no tangible value returned for the monies. This bias is widely held and promoted by many adherents of modern-day economic theories – a bias which too often dismisses, or simply ignores, the numerous personal and societal benefits that others have evaluated and documented as attributable to BI models.
The article does a fairly good job of maintaining its organizational claim of being “apolitical” in that it does not overtly favour any particular side in the issue. Yet that does not mean it has escaped the narrow-minded focus that so many politicians, their handlers, and media commentators alike have grudgingly adopted regarding the BI. In fact, the Apolitical article offers a wonderful example of the very limited ways in which the BI idea is being appraised, namely as simply a response to job automation and/or carrot-and-stick welfare programmes.
Apolitical does, occasionally make mention of the fundamental roots of a BI, roots that run far deeper than simply jobs and poverty. Yet to emphasize that a BI is simply about addressing poverty or unemployment is to overlook the very foundation of a BI – namely that such a policy is meant to be an expansion upon, and commitment to, something that should never be commodified, namely personal freedom. All other aspects of a BI flow from this fundamental premise. That is, if a nation and its people are sincerely committed to the idea of freedom itself.
The five points made by Apolitical in the above article are all legitimate and commonly discussed around the world. Yet the shallowness of these points is intricately tied to the same old penny-pinching issues that surround welfare, as well as the easy access to cheap human labour that employers have enjoyed for far too long.
Yes, a BI can help eliminate the stigma and overbearing bureaucracy associated with welfare programmes. It would also force employers to be truly competitive regarding employee wages and hours. However, the most valuable asset each and every person possesses is our time in this life. We should be the stewards of that time – not employers and not bureaucrats. It is the personal freedom provided by a BI that is truly important to everyone, not just the workforce and welfare recipients.
A BI would allow individuals to tend to family and personal concerns without the anxiety of how to survive without a “job” income during these times of personal need. For example, if a family member severely injured as the result of a car accident. The family of this person may be too young for jobs, or on very low income as they had been relying upon the injured family member for income and cannot afford a carer to help in these times. In this case, a BI would help tremendously. Some might say that they can seek a uber accident attorney Glendale or a personal injury lawyer in order to seek compensation and financial security. Indeed these cases can bring great compensation, but court cases can take time, what will the family do in the meantime? Again, a BI would allow individuals to tend to family and personal concerns should anything happen. There may be no greater freedom than to have the time and economic stability necessary to order our lives as we, ourselves, see fit, rather than as employers demand, as is becoming far too common these days.
Politicians are slowly coming to accept that individuals are the best stewards of their monies, not bean-counting governments who tend to value the beans over the people the beans are intended for.
Let us examine each of Apolitical’s five points to see how personal freedom is addressed here.
1. Governments are not thinking the same as tech optimists
Apolitical is right about this and politicians are notoriously slow to respond to social changes of any kind, never mind one of this magnitude. Yes, the tech optimists foresee an evolutionary step in human time management when robotics and automation take over the monotony and the drudgery of the repetitive and injury-prone tasks found in so many labour-intensive “jobs”. Of course, these robotic inventions will not come soon enough to stop so many of our hardworking population from getting injured. In the meantime, if you’ve been injured at work, you will likely be entitled to personal injury compensation. Hopefully, the workforce of tomorrow will mean fewer people will have to take legal action in the future. If at all an employee needs to take some legal action but do not know where to head out for the same, check for firms similar to Douglas Beam, P.A. We should create a new workforce that is far more reliable (never taking time off), disposable (without regrets or complaints), and economically more efficient than human beings.
From the technologist’s viewpoint, a BI becomes an essential aspect of employment and personal advancement because of the accelerating pace of technological advancement. Every new innovation requires that the humans who will be utilizing those innovations undergo time-consuming training and up-skilling. These advances can even lead to whole new careers for which a BI would be the springboard to pursue those educational and up-skilling goals. To tech experts, this is not “money for nothing” but instead an investment in the future of the nation, its economic infrastructure, its people and its economy.
But there is also a very real need to understand how a BI frees workers – especially those who only have labour, rather than any marketable skills or training, to sell – from the spectre of destitution and homelessness if they are unable to find work, or simply to feed and/or shelter themselves on the meager, subsistence wages offered today to unskilled labourers.
Of course, time management in this case refers only to the workplace. What is overlooked here is the personal freedom that a BI introduces into the optimist’s time management scheme. A BI would provide an individual with the economic freedom to then choose to acquire more skills or education, or to spend more time with family, or to take a much-needed break. This freedom is of great value to the individual, as well as their future prospects, but has little or no meaning to many economists.
Apolitical, however, does make a very good point about welfare reform. It is true that eradicating the expensive and needlessly patronizing welfare bureaucracies would entail huge cash savings for governments at national, provincial/state and municipal levels everywhere – savings that could be utilized far more efficiently and effectively when incorporated into a BI.
2. People already get money for nothing
Actually people get money from their government because they are deemed, by their government, to be in need and it is a government’s principal responsibility to succor to its citizens in times of need. While Apolitical talks about how “money for nothing already exists in the state pension” system, it ignores a number of other social safety net programmes such as health care, welfare, student loans, disability, make-work projects, employee subsidies, food banks, and shelters, to name a just a few of the most common.
Social safety net programmes always incur infrastructure and staffing costs associated with the policing and distribution of these monies. A BI removes the stigma associated with so many of these programmes via its universality but it cannot ignore the special needs associated with people such as the disabled, seniors, and the unemployed. Their special circumstances can easily entail more than simply a “free money” infusion involving things such as in home support, accessibility of public buildings, mobility aids, wheelchair-friendly streets and curbs, and emotional and mental supports to deal with chronic and acute complications, to name just a few.
Apolitical also mentions the Alaska Fund, a decades old statewide “free money” programme that, today, is surrounded by much controversy, with some demanding the money be used, instead, to fund state social programmes while others are happy for the money to be put directly into the hands of the people themselves.
This is a very good example of how the assets of a community – its resources, both natural and human – are the heart and soul of its economy. However, the Alaska Fund’s greatest feature is that it offers good, sound support for the premise that some of the wealth flowing from a community’s resources should be returned to the people that comprise the community.
The debate here is not whether “free money” should be distributed to the citizenry, but rather how much and in what manner.
3. The schemes in the developing world aren’t really analogous
Apolitical is absolutely right to point out that the drastically modified BI programmes implemented in Namibia, India, and Brazil cannot be directly applied in more developed areas. These programmes are largely a response to severe destitution and poverty in those countries, while here in North America the BI is framed as a response to automation and welfare inequities.
However, Apolitical does recognize that there is a self-empowerment and entrepreneurial spirit that blossoms within the poorest individuals in the above-mentioned countries once they have been freed to make their own choices of how best to utilize their time and abilities to address their own needs and interests.
These observations correlate well with Canada’s own Dauphin Manitoba Mincome BI programme, which ran for five years. Mincome was well monitored and documented at a variety of levels and interests. Documentation that highlighted the many personal advantages derived from a BI. These advantages included the reduction of both individual and family stress levels, greater ability to cope with family issues and, most importantly, noticeable improvements in children’s health and growth due to better nutrition which lead to higher learning evaluations. While some people did indeed leave the workforce, they did so to upgrade their education and skills, to attend to personal and family issues, or simply to take a much needed break.
All of these findings amount to huge social and personal savings that invariably strengthen and improve communities, yet, once again, they are not benefits that economists are able to quantify or put a monetary value on and are too often deemed to be without value.
4. It actually all comes down to incentives
Here Apolitical addresses the commonly held fear that a BI would act as a disincentive to “working,” as if “paid employment” should be every person’s preoccupation rather than the management of their lives. However, Apolitical cites Hugh Segal, a Canadian senator who has been a long-time advocate for BI programmes and who laments the very real disincentives to improving one’s life that have been built into Canada’s social programmes. This is why Senator Segal has long applauded the personal empowerment that a BI could provide to all Canadians.
It is here that Apolitical acknowledges Sam Altman of Y Combinator – a US private investment firm – who sees a BI as the seed money necessary to provide the personal freedom allowing individuals to be economically empowered to address the rapidly changing education and training demands of a technologically driven economy. Of course, Altman seems far more interested in employing a BI to address the demands of technology and its impact upon production and the workforce than in actually addressing personal freedom per se.
Apolitical is absolutely right to acknowledge that BI differs from existing, welfare-style social programmes and highlights the divide as between those who insist upon “incentives” used coercively to promote job seeking and those who support the “freedom to choose” as incentive enough for anyone.
5. It’s not utopia or bust
Apolitical wisely concludes that, if supporters of a BI succeed, “…they will establish the principle that you can simply give people money and trust them to use it in a way beneficial to themselves and, indirectly, to society.” This is a sentiment long-shared by those who advocate for BI and wonderfully demonstrates that this sentiment is central to personal freedom and the creation of an empowered population. For Apolitical and the rest of us only time will tell.
by Furui Cheng | Nov 10, 2016 | News
Written by Cheng Furui
In the process of Chinese industrialization and urbanization, more and more rural villagers have been transformed into urban citizens. Decades of industrialization have left China with a typical dual economic structure: people who make wages live in the cities, and peasants make a living on the land in villages around them. With the rapid expansion of city suburbs, there are always some villagers in the transition zones. As they change from crop growers to wage earners, villagers will lose their land and be accustomed to a totally new way of life. An important question is how to make these large-scale unnatural transitions as smooth and successful as possible.
China provides many examples. One of the most common and successful strategies has been the establishment of cooperatives. Huaidi, one of the many successful cooperatives in China, demonstrates the effectiveness of this approach to the challenges of urbanization.
Huaidi [1] is one of the urban villages in Shijiazhuang, the capital of Hebei province in China. It has a population of around 6000. Unlike most villages around the city, Huaidi villagers initiated a deep “one-villager-one-share” cooperative from the beginning of the urbanization process. In China’s countryside, land is collective owned and privately used by villagers, in an equal fashion, as long as their households are registered in that village. In the process of urbanization, local government compensates villagers for the land which has been taken from them, paying them a single value and a specific transition fee for several years. The value partly depends on the market, and partly on the bargaining power of villagers. Under the leadership of Chen Yuxin [2], Huaidi villagers received very good compensations for their lost land in 1996, 1998 and 1999.
The success of the cooperative has come from these big compensations. In a weak organization, as is common in surrounding villages, villagers will get their money individually and make their living in the city on their own, abandoning the collective at that point. But Chen Yuxin persuaded the villagers to give up the first cash compensation, and bought back the land development rights in the future. In 1996, the Huaidi villagers collected a total of 10 million yuan [US $1,475,797] [3] compensation to build a new shopping mall. In 1998 and 1999, according to the urban plan, Huaidi land was taken by the government to build a road and a big park, respectively. In 1998, they got future development rights on both sides of the road. In 1999, they gave up a land compensation of 200,000 yuan [US $29,516] per mu (equivalent to US $44.3/m2, which is much lower than current land price) and bargained for a 33,350 m2 land patch, for their own future development. Most local governments are happy to accept this kind of exchange because of fiscal implications.
In this way, Huaidi villagers pursue their own urbanization pattern: self-demolition, self-transformation, and self-development. Under this process, villagers get more autonomy and create their own future city life, not becoming the sorrowful victims of social policy. Their core ideal is serving the city, influencing its development, and assuring a smooth transition between city and countryside. With these development rights, Huaidi villagers have amassed billions in assets, including famous and prosperous shopping centers, a decorative empire, food street, private schools, a cultural center, and other attractions. The current annual profit is about 100 million yuan [US $14.76 million]. As shareholders, Huaidi citizens now benefit from a very good welfare system.
First, every family gets identical, well decorated houses. In rural China, besides the arable land each person tends, every family has a house on a separate patch of land. In remote areas, there is also forest land per person. After the land is taken away, families get the transition fee [4] for several years, which is mainly used to rent the house they just lost, before moving into the new one. But many people have no ability to buy their own houses in the city in their lifetime. So after the transition period, every Huaidi family is placed into three or four houses, with a total area of 330 m2. They are given two choices. Under the first choice, they have three houses of 140 m2, 110 m2, and 80 m2 respectively. Under the second, they have four houses of 82.5 m2 each. All the 6000 citizens are very happy to own new houses in the city. These houses are more than enough for the whole family to live, and most can rent one apartment for several thousand yuan [more than US $400] per month. [5]
Second, every child is free to enjoy education. Huaidi villagers have built a famous private school [6], which has facilities from kindergarten to high school. The high quality of this school attracts students from outside of Huaidi, who are accepted in exchange for high fees. Every year, the school organizes various kinds of activities and interaction with other famous schools throughout the world. Teachers are proud of working there. Across the country, China has nine years of compulsory education, from primary to middle school, but Huaidi offers 15 years of free, high-quality education. This private school is one part of the villagers’ collective assets, and all their own children are exempt from tuition fees.
Third, every person benefits from healthcare. Huaidi has had a universal healthcare system since 1996. China, on the other hand, has employee healthcare only since 1998, and universal healthcare just since 2008. Nowadays, Huaidi citizens have double protection. All people are expected to participate in the national healthcare system, and the community pays the medical insurance premium for all collectively. Additionally, everybody can benefit from community healthcare if they choose. It only costs 10 yuan [US $1.48] per year, and supports the beneficiary with another 60% compensation for the money paid by oneself above 1000 yuan [US $148], up to 60,000 yuan [US $8,855], after national medical insurance reimbursement.
Huaidi citizens discussing their new apartments
Fourth, every person of age has a pension. Since 1996, every woman in Huaidi older than 50, and every man older than 60 years, have benefitted from pensions of at least 2000 yuan [US $296] per month—with larger pensions for older people. Currently, the Chinese pension system requires a minimum 15 years of contribution, whether a person is employed or not. Huaidi integrated its own pension system with the national one in 2010. People who are employed participate in the pension system via their employers. For those who are not employed, the community pays three quarters of the total annual contribution, and citizens only pay one quarter. The minimum contribution is 20% of the local per capita income in the previous year.
Fifth, every person gets a whole set of benefits in kind. Everything from rice, flour, edible oil, beans, salt, eggs, beef, pork, vinegar, soy sauce, chicken powder, milk, mineral water, to all kinds of vegetables, tooth paste, toothbrush, tea, sugar, washing powder, soap, toilet paper, cleanser, towel, etc. are distributed regularly in specific quantities, enough for everybody’s consumption, all with good quality.
Finally, all Huaidi citizens have had a basic income of 1500 yuan [US $221] per year since 1995, which is directly transferred to their bank accounts in shares of 125 yuan [US $18.5] per month. For children under 18, this money is kept in parents’ accounts. This amount money was significant in 1995 (Chinese cities’ nominal per capita annual income was about 5000 yuan [US $738] in 1995), but not as much now, due to the rapid rise of GDP in the last 20 years (in 2015, the nominal per capita annual income in Chinese cities was about 50,000 yuan [US $7,379]).
One might wonder why the people of Huaidi get some cash regularly, and unconditionally, after receiving so many benefits in kind. The answer is that the basic income gives people more freedom, especially for those who are unemployed, even though they get enough distributed food and very good social security system. Additionally, this basic income acts as prevention of social ills, reducing crimes, fights and other hurtful behaviors.
Huaidi’s welfare system is much higher than Chinese average social security level, so nobody in the community applies for social assistance. Moreover, there are a lot of other benefits, such as free newspaper, free cable, public utility subsidy, university subsidy, and so on. These welfare benefits come from their original rural collective assets, especially land. Land reform is the biggest achievement from the Mao era. This kind of basic income–often called a social dividend–comes from assets, not tax. It is more likely to be universal for a highly populous country like China.
Notes:
[1] Baidu map, “Location of Huaidi“, 2016
[2] Chen Yuxin, “Leader of Hebei Huaite Group“, 2016
[3] At October 2016 exchange rates.
[4] The transition fee and the compensation for the land, are both paid by the government to the villagers, but the real land taker (future developer) should pay to the government first. Huaidi only keeps one part of this land development rights, and the other part is sold to the developer, who is the real payer of the compensation and transition fee. It is very difficult for single individuals to make good bargains during the land taking process.
[5] It is not very common for urban families to own multiple houses. So Huaidi citizens are richer than most of their neighbours.
[6] The Private School, “Shijiazhuang Foreign Language Education Group“, 2016
More information at:
(in Chinese)
Ge Jizhong, “People’s trust“, YanZhao Evening News, February 6th, 2015
Jiang Hongjie, “An interview with Chen Yuxin“, Hall of Fame Home Online, August 14th, 2012
Other information in this article comes from the author’s field research.
Article reviewed by André Coelho and Kate McFarland
