by Kate McFarland | Oct 12, 2016 | News
Joel Dodge is an attorney and writer based in New York City. Recently, he has been writing articles on the topic of universal basic income, several of which have been published in the online news publication Quartz.
Dodge’s interest in UBI stems in part from his attraction to the idea of a child allowance–a policy he encountered in the Netherlands while studying Dutch social programs. He cites the journalist Russell Shorto, an American expat living in Amsterdam, as an influence. In Dodge’s words, Shorto wrote about “the refreshing surprise of the Dutch government depositing money in parents’ bank accounts to help out with the cost of school books, diapers, and raising kids generally.” Commenting on the origins of his interest in UBI, Dodge explains, “The charm and user-friendliness of the policy stuck with me–how government wanted to be there to help out for the big moments in life, and it did so through simple automatic cash infusions.”
Read more: “The best way to fix child poverty in the US is to give poor kids free money”
With UBI’s recent increase in publicity and popularity, Dodge began researching earlier discussions of basic income guarantee programs in US politics — especially circa 1970, when the US federal government nearly passed a basic income guarantee in the form of President Richard Nixon’s Family Assistance Plan, and Nixon’s challenger, George McGovern, developed his own basic income proposal (the “demogrant”).
Dodge says, “Part of learning about UBI has been excavating our past political debates, which is exciting. So it’s both an old idea and an extremely cutting edge, even revolutionary one.”
Read more: “When Basic Income Was Almost an American Reality“
In his most recent writings on UBI, Dodge has explored some of the main objections from both Right and Left. He dismisses the contention that it will “make people lazy” — pointing that, insofar as people do stop working, they might make other valuable social contributions (as did such “gentlemen of leisure” as Charles Darwin and Rene Descartes).
Read more: “Universal basic income wouldn’t make people lazy–it would change the nature of work”
The major worry from the left — that a basic income would disrupt the welfare state in a way that leaves many worse-off — is one that Dodge finds more pressing. In communication with Basic Income News, he describes motivation for writing “The progressive case against a universal basic income“:
I was motivated to write [it] for two principal reasons. First, I think some of the hype surrounding the cross-ideological embrace of UBI is overstated. The right and left have very different ideas about how UBI would interact with the current welfare state, and I wanted to draw attention to that disagreement.
I also saw certain influential liberal policy figures like Larry Summers, Jason Furman, and Jared Bernstein rapidly coalescing around the same critique of UBI in recent months: namely, that funding a UBI would inevitably come at the expense of other social welfare programs. And I think it’s an important critique. Those who advocate for UBI on the left need to come up with a clear and plausible way to fund a UBI while merging it with our existing social welfare regime.
Scott Santens and some other UBI advocates support retaining government healthcare programs and adding on certain UBI supplements, such as disability benefits. They point to the holes in our social safety net, but that’s really an argument for just plugging in these holes to keep people from falling through the cracks–a much more practical near-term project in our political tradition than a UBI, frankly.
And the reason progressives support certain in-kind benefits like food stamps, housing support, and public healthcare is because we think these are essentially fundamental rights that everyone should be entitled to. Would we really go back on those basic instincts if we replaced the welfare state with a UBI? That is, if someone exhausted their UBI, would we support the hard-line Charles Murray-style position that they are out of luck and must depend on charity? I doubt it, and certainly hope not. So I think UBI needs to be structured in a way that adapts to the moral imperative of guaranteeing that certain targeted, basic needs will be met, understanding that there’s social value to providing more than just cash benefits in some circumstances.
Overall, Dodge describes himself as “deeply curious about UBI” but, at the same time, cautious. He believes that it’s important to wait for the outcomes of upcoming studies of basic income before adopting such a policy. Meanwhile, he maintains that progressive reforms should be approached in an incremental manner. As he relates in other remarks to Basic Income News:
I’m deeply curious about UBI. I admire the ambition, simplicity, and utopian instinct of UBI. But it’s also important to pay attention to how basic income works in practice in the experiments that are just gearing up. The best data we have now are from experiments conducted more than 40 years ago, so we need to see how UBI works today.
I also tend to be an incrementalist when it comes to progressive reform. So I try to harness some of the energy surrounding UBI toward smaller scale reforms. Some of our refundable tax credits could be transformed into direct periodic payments from the government to help out families year-round. There are good fiscal and efficiency arguments to back this up, so the political path is clearer. And if we enact UBI-lite policies today, it could pave the way toward bigger and bolder UBI-style reforms tomorrow.
Bibliographical Summary: Joel Dodge on UBI
“The best way to fix child poverty in the US is to give poor kids free money” (August 19, 2016) Quartz.
“Universal basic income wouldn’t make people lazy–it would change the nature of work” (August 25, 2016) Quartz.
“When Basic Income Was Almost an American Reality” (August 30, 2016) Medium.
“The progressive case against a universal basic income” (September 23, 2016) Quartz.
See also J. DODGE blog.
Photo CC BY-NC 2.0 Zoriah
by Kate McFarland | Oct 3, 2016 | Research
The Government of Ontario plans to move forward with a pilot study of a basic income guarantee, to begin by April 2017.
On September 20, four researchers — Evelyn L. Forget (Professor of Economics at the University of Manitoba), Dylan Marando (PhD Student at the University of Toronto), Tonya Surman (founding CEO of the Centre for Social Innovation), and Michael Crawford Urban (Policy Associate at the Mowat Centre) — released a report called “Pilot Lessons: How to design a basic income pilot project for Ontario”. “Pilot Lessons” offers recommendations to the Ontario government on the basis of previous trials of basic income guarantee programs. It also calls for a greater focus on the impact of a guaranteed income on innovation and entrepreneurship.
The report begins by glossing the meaning of the term ‘basic income’ as it is used by the authors (“basic income is best conceptualized as a policy whereby a government guarantees, to all of its citizens, a regular predictable income sufficient to live a basic but dignified life”), distinguishing between the “demogrant” and “negative income tax” models.
The authors go on to overview past experiments on basic income, especially those conducted in the United States and Canada during the 1970s.
Based on this review of past experience, they identify four lessons:
1. Vary the parameters (e.g. eligibility conditions, amount of income guarantee, tax-back rates), but don’t vary them too much.
2. Communicate the results of experiments through scientific, not political, channels. The authors state that “science and politics don’t mix well”. For example, they point to the politically-driven promulgation of the alleged correlation between receipt of a basic income and increased divorce rates following the United States experiments in the 1970s. This contributed to the deterioration of interest in the policy, especially among Republicans.
3. Don’t overlook indirect benefits of basic income that might be observed in experiments. For example, the authors note Evelyn Forget’s investigation of Manitoba’s “Mincome” experiment: Forget demonstrated that the basic income guarantee in Dauphine corresponded to lower hospitalization rates and increased high school graduation rates.
4. Don’t assume that a decline in the time spent in paid employment implies a decline in the time spent in socially valuable work (e.g. consider whether the time is spent instead in childcare, continued education, volunteer work, etc).
In the next chapter, the authors describe major changes in the labor market that pose important differences between the present context and that of the past experiments, such as the increase in precarious labor and rise of automation. They also argue that, by decreasing the risk associated with leaving a job or starting a business, a basic income could facilitate entrepreneurship and innovation.
The report concludes with 14 recommendations for the design of a pilot study.
The full report is available for download.
Reviewed by Dawn Howard
Photo: Vancouver Science World CC BY 2.0 Franco Ng
by BIEN | Oct 2, 2016 | News, Testimonies
How’d you get an interest in Basic Income (BI)?
My interest in BI started back around 2013 after reading a Reason article. It described how a BI would provide a much more efficient social safety net. It intrigued me at the time and over the next couple of years I periodically would seek out the latest research on BI. I was hooked by a documentary on the basic income featuring Guy Standing.
Standing’s discussion of the “precariat” and the need to counter the challenges of automization convinced me of the BI’s approach. The day after watching the documentary, I reached out to Standing to see how I could get involved with BIEN. He put me in touch with Karl Widerquist and André Coelho. André was my trainer and his patience and encouragement is what kept me on with the team initially.
What makes the BI plan of action unique?
That is a difficult question because there are many ways to implement the BI. I think what unites the BI movement, though, is that we want to fundamentally alter people’s relationship with the market and the government. We do not have to have a job in the traditional sense to contribute to ourselves and society. The basic income liberates us to take on the projects or activities that we are truly passionate about, instead of being forced into a certain line of employment.
There are a host of reasons I think this is good for sustainable economic development. But more importantly, this would be a positive development for human happiness. A basic income would also reorient our relationship with the government. Instead of ceding individual choice to government bureaucrats, a basic income provides freedom of choice to everyone. Centralization of power and resources swallows our humanity, and basic income is an enormous step in bringing that power back to the people.
What are the most common success stories of BI or similar programs?
What has been overlooked in the mainstream press (and what I first tell people skeptical of BI) is the recent release of a meta-analysis of 15 years of cash transfer research across 165 studies. It looks at the best research available and determines there is a consistent reduction in poverty from these cash transfers. It also determined there is no real evidence of lowered work hours while showing some evidence that cash transfers may increase work hours and intensity. For BI advocates, I think it is important to get familiar with this meta-analysis.
In the United States, the most famous example of an actual BI-like program is the Alaskan Permanent Fund. This program is funded by Alaska’s oil reserves and is provided to nearly every Alaskan resident. The experience in Alaska, and most BI programs, is that the policy rarely creates negative unintended consequences and has a much greater potential to create a positive ripple effect throughout society.
What is your work on BI?
I am the features editor for BI News. I will personally write opinion, interview and news-based articles. I have the privilege of working with and seeking out some amazing writers and thinkers, helping to edit and post their features articles. When the need arises, I help to train newcomers to BI News, including contributors and editors. I am currently in Taiwan completing a Master’s degree where I am working with the Taiwanese Basic Income organization. For the future, I have some ideas to promote basic income in Taiwan that will be forthcoming.
What are the main lessons for about BI that should be out in the public domain more?
Everyday around the world there are billions of interactions, transactions and events that would be made simpler by the establishment of the basic income. It helps to take these billions of events and simplify it to one individual to better understand the depth of change this policy would have on everyday life. Among those close to me, I can think of a clear instance where a basic income would dramatically improve a family’s circumstances, much more so than traditional welfare.
Think of how a basic income would help the person with a sick mother, the person whose car gets totaled, the person who wants to take more time to raise their child, the person who wants to find a better suited job…All of these situations would be more easily managed with a basic income, especially for those who are of modest means. Perhaps more significant are the new and unpredictable opportunities created by basic income that would otherwise never occur.
Who are the people to watch – the major BI players?
Here are a couple that come to mind:
Matt Zwolinski is my favorite libertarian scholar, primarily because of his work on the basic income. He has done a lot to bring on the libertarian side of the political spectrum to consider the basic income. The next generation will have significantly more libertarians than the current generation, so I think the philosophical marriage on this issue with libertarians will be increasingly important as we pursue the basic income’s implementation.
Kate McFarland is one of my favorite writers at BI News and a great person to work with. I think she will be a big figure in the BI movement in the coming years because of her non-stop dedication to the cause.
Any advice for would-be policy makers or activists about strategies for the implementation of BI?
During this stage, I think it is important that we maintain healthy disagreement in the movement. There are a lot of different motivations behind the BI which manifests in an array of different implementation methods. Despite this, I hope that we can retain this amazing civility that has united people from such diverse philosophical and personal backgrounds thus far.
On the long-term policymaking level, my hope is that in those areas we think must be earmarked (particularly healthcare and education). We will still utilize the basic income framework. For example, universal education savings accounts and health savings accounts (which there is evidence that these two programs are already effective where they are used). The basic income has the potential to really revolutionize the way we think about government services. The government is really efficient at issuing checks to everyone, but it is not great with creating innovative programs. That is why a basic income framework creates an ideal social safety net, as it brings the security of government distribution and the innovation of the market.
by Roland Duchatelet | Sep 30, 2016 | Opinion
During the 20th century, the increase in purchasing power of the workers in Western Europe was negotiated by the labour unions and paid for by the spectacular increase in productivity of agriculture and industry: we made more and better products with less workers. This yielded generous increases of net salaries and on top of that it allowed governments to pay for schools and health care. This resulted in the general belief that the wealth of a nation is the result of labour, because it paid not only for salaries, but also for social security and other government spending. Since then, the world elite believes that labour participation is the basis of our social security system and our wealth.
There are a few problems with this belief, however.
The first problem is that with the collapse of communism in 1989, the size of the economy grew from 1 billion participants (Europe, the US, Japan and a few small countries) to 6 billion. Cheap labour supply became abundant while the world wide bargaining power of labour unions became irrelevant. Many manufacturing companies moved their production to low cost countries. The “low cost” of these countries was mainly due to the insignificant tax on labour there, compared to Western Europe, where the labour tax was between 100 and 200% of the (higher) net salaries. The saving of the high labour tax was a major cost reduction driver for companies which moved their production, much more than the net salaries of the highly qualified, well trained, loyal, productive local workers which lost their jobs. Political Europe was sleeping apparently, not realising that the corresponding financing of the social security was moving away with the factories.
The second problem is that increasingly machines, robots and computers used in production of goods and services decrease the need for human workers.
The third problem is that social security contributions from the rapidly increasing public and subsidised employment are not real, because the wallet which collects them is the same wallet which pays them: the state.
The fourth problem is that life expectancy is growing, affecting the cost for the state paid pensions. Since health care cost is much higher in old age, the cost of state paid health care increases as well.
The fifth problem is that income from savings is trending toward zero. Citizens owning property are mostly excluded from social aid provided by the state, since they are supposed to derive an income from their property. This induces a new type of poverty. Moreover, the decrease in income from capital affects overall consumer spending, also within the working class.
As a consequence, the purchasing power of the working class has stalled in Western Europe and the US since 2000. This is hidden in the national accounts because in those figures the “income” which households derive from labour is the “gross” income including social security contributions and income taxes. The latter have risen.
Some political parties start to plead the reduction of social security benefits, which would be the start of a negative spiral.
The labour tax based system is structurally unstable. When sales decrease due to economic slowdown and workers are laid off, their income decreases so they buy less leading to further sales decreases and job losses in other businesses. The “Labour Church” will tell you that the central bank then should decrease the interest rate to stimulate investment and spending. This is speculative and slow to start effect. In any case, the interest rate is now zero and hence cannot be reduced anymore. The “Labour Church” system is in deep trouble. They seem to hope for a miracle: I see no “Plan”.
There is however one stabilising factor, our social security, which makes people continue to spend money when they have no work. This hints to the fact that “Purchasing Power” could be the solution to our stalled economic system. When the economy weakens, we should inject additional purchasing power into the economy. When the economy gets overheated, we could reduce the purchasing power injection.
Purchasing Power injection, Basic Income, should replace “labour” as the motor and regulator of our economic system. The distributed purchasing power generates spending, entrepreneurship and work for those who want to earn more money. Tax on labour can only be an auxiliary source of funding if we want such a system to be stable.
Basic Income supporters are a minority still. But we have a Plan.
by Kate McFarland | Sep 28, 2016 | News
A Constituent Assembly of Mexico City is currently developing the city’s first constitution. A proposal for the constitution, currently under deliberation, includes an article specifying a right to a basic income to secure a dignified life.
Miguel Ángel Mancera CC-BY-SA 4.0 ProtoplasmaKid (Wikimedia Commons)
On September 15, Mexico City Chief of Government Miguel Angel Mancera delivered a proposal for the city’s constitution, and a constituent assembly was formed to analyze, debate, modify, and ultimately vote on and approve a constitution.
Mancera’s proposal draws much inspiration from the Mexico City Charter for the Right to the City, developed in 2007 by a coalition of organizations associated with Mexico City’s urban popular movement. The “Right to the City” charter includes a demand for the “right to sufficient income to guarantee a dignified life” (3.4.1). Additionally, another article in the charter’s section on ensuring a “productive city” states, “To democratize productive employment opportunities in the city, it is necessary to … promote the establishment of a universal citizen income” (3.4.3).
A more recent precedent was a seminar on basic income and wealth redistribution organized in April 2016 by the Senate of the Republic of Mexico and the Economic Commission for Latin America and the Caribbean (ECLAC) of the United Nations. In its position document released in the following month, ECLAC further encouraged its member states to investigate a basic income guarantee.
Meanwhile, there has been growing political interest in basic income in Mexico. For one example (amongst others), the young left-wing political party Movimiento de Regeneración Nacional (Morena) has expressed interest in advancing the policy.
These precedents lay in the background of the September 15 meeting to move forward the development of Mexico City’s constitution.
A major purpose of the constitution is to formally specify rights of all residents of the city. The stated objectives of the document include the following (emphasis added):
To include new rights such as those of families, non-salaried workers, the right to the city, to public space, to democracy, to proper administration, to a progressive basic income, to memory, to care, to the protection of animals and cultural rights, among others …
The specific article where basic income is proposed reads as follows:
Right to a dignified life
Every person is entitled to a standard of living that is adequate for him or herself and their family, as well as to the continuous improvement of their living conditions. The right to a basic income will be guaranteed giving priority to the persons in situations of poverty, and those that can’t fulfill their material needs by their own means, as well as priority assistance groups. The rules for accessing basic income will be established in this article’s common dispositions.
Note that, despite the potentially confusing wording of second sentence, the proposal here is not for a targeted or mean-tested benefit; instead, the constitution is recognizing a need to establish some priorities for accessing the basic income grants.
One model of the basic income under consideration is Mexico City’s pension program for individuals aged 68 and older. The pension is universal (among seniors), unconditional, distributed to individuals, and mandated by law. Among its proponents, the basic income is seen as an extension of the pension from the elderly to all.
Describing the proposed constitution, Pablo Yanes of BIEN Mexico states, “Without a doubt, we are at the outset of an intense debate around basic income, and unprecedented moment in the history of Mexico City.”
Yanes says that while “the specific wording [in the constitution] can be improved and made more precise”, the recognition of a basic income as a right is “an immense step forward”:
In addition to the federal constitution reform initiatives presented before Congress by Congresswomen Araceli Damián and Xóchitl Hernández and the one introduced before the Senate by the Senator Luis Sánchez, the inclusion to the right to basic income in the Mexico City Constitution project constitutes, without a doubt, a turning point for basic income’s recognition in Mexico.
A new starting point has been set. This is Mexico City’s contribution to the growing international movement for basic income.
The Mexico City Constitution ultimately approved by the constituent assembly will go into force in February 2017.
Debates will take place ensuing months, including on the topic of basic income.
Information from Pablo Yanes (personal communication).
Reviewed by Pablo Yanes and Cameron McLeod.
Featured image: Mexico City CC BY 2.0 Blok 70.
Special thanks to Kate’s supporters on Patreon.
