by Tyler Prochazka | Aug 29, 2016 | Opinion
Gary Johnson recently told me he is “open” to the Universal Basic Income (UBI). Based on some of the comments on the story (calling me slanderous and Johnson a statist), you might think he just endorsed a socialist takeover of the government.
Understandably, there is hostility among many libertarians toward the idea of the Universal Basic Income. The UBI is not just a pragmatic step to eliminate government bureaucracy. In fact, it is a desirable policy outcome because it will likely help usher in a new era of free markets and civil society.
Much has been said on the pragmatic libertarian case for replacing the current social safety net with a UBI. Primarily, it eliminates government paternalism and enhances the efficiency of welfare delivery.
Moreover, a Universal Basic Income removes the poverty trap created by the loss of welfare benefits as individuals move out of poverty. This incentivizes recipients to remain in poverty to retain these benefits. A UBI has no such incentive and allows recipients to choose the course of action that actually provides the greatest real benefit.
Through the basic income, recipients are also fully in control with how to spend the money, eliminating welfare’s distortions on the marketplace.
Most libertarian UBI advocates take Milton Friedman’s view of the basic income, approving of it as a substitute given that government welfare already exists (and is unlikely to go away). Instead, libertarians should consider wholeheartedly endorsing the UBI as a way to expand free markets.
The last century has shown us that free markets and free trade have been the greatest source for prosperity and peace the world has ever seen. However, the free market consensus seems to be eroding at a frightening pace, even in the Western world.
Free market’s savior? The basic income.
If libertarians are being honest, free markets are the best source for lowering poverty, but they alone are not sufficient. For example, Hong Kong has the freest economy in the world, but also a good amount of debilitating poverty. While visiting McDonalds throughout Hong Kong, it was hard not to notice the McRefugees (as they are called in local media) that were sleeping at tables.
There is good evidence that conditions outside of one’s control, such as whether one’s parents are wealthy or married, have a substantial influence on one’s success.
Socialism is not the answer to the poor’s woes, as we saw with devastating consequences in the human trials of socialism in the Soviet Union, Mao’s China and still today in North Korea and Venezuela.
Instead, the answer is to open up the free market to everyone through the basic income.
Pilot programs have shown that the basic income increased entrepreneurial and market activity (among other positive social benefits, such as improved health). Individuals previously locked out of the free market can now be active participants. The understandable worry that people would stop working is not only overblown, but the opposite was actually shown to be true in Namibia, as business activity dramatically picked up.
The largest meta-analysis of cash-transfers ever further illustrated that the risk of reduced work is nil and in fact it has the potential to increase work hours and intensity. Some parents reduced work hours to care for their children, but this likely brings a positive long-term outcome to society.
Work brings dignity and the basic income does not eliminate the basic desire to contribute to society. When polled, most Americans say they would still work even with a financial windfall.
Basic income gives recipients free choice, unlocking the market’s full potential. People do remarkable things when given freedom and opportunity.
Additionally, poverty is one of the biggest factors when determining a child’s likelihood to succeed in education. Just giving parents money substantially improved their child’s educational outcomes and behavior. The same was shown under the basic income.
The basic income is not a pragmatic giveaway to socialists. It is precisely the opposite: it is the essential element for sustaining the durability and expansion of free markets.
Beyond opening up the market to new participants, it is likely that a basic income would allow society to reevaluate the necessity of a whole host of government policies.
Human beings are born with a natural inclination to be empathetic toward others. And there are individuals that are also inclined (perhaps hardwired) toward government solutions for society’s ills. No matter how effectively free markets lower poverty, there will always be calls for a government backstop.
As libertarians know, these calls for government “solutions” often do more harm than good and end up impeding the very forces that allow the free market to lift individuals out of poverty (e.g. the minimum wage).
As jobs are increasingly automated, it is especially crucial that libertarians guide political discourse toward a light-touch approach to resolve the disruption robots will cause in the marketplace. There needs to be a permanent method to alleviate the fears of the market place, rather than relying on the eternal vigilance of Congress to do the right thing.
A robust basic income would mute many of the calls for government intervention because it gives employees greater freedom to choose their employment situation, rather than being forced into employment by the threat of poverty.
The fears felt by those inclined toward government intervention would be lowered and libertarians would have a far more persuasive case to make for allowing individuals to shape the market instead of the government. Indeed, it would allow libertarians to push for removing many of the excesses of government intervention.
The Universal Basic Income is not just a pragmatic compromise to lower welfare bureaucracy. It is the essential prerequisite to usher in a new era of free markets. And libertarians would be well suited to be at the forefront of this movement.
by Kate McFarland | Aug 27, 2016 | News
American poverty expert Robert Greenstein opposes a universal basic income in the United States due to concerns about political feasibility, even though he is sympathetic to the idea in principle. Vox’s Dylan Matthews has interviewed him to find out more.
Robert Greenstein is the President of the Center on Budget and Policy Priorities (CBPP), which he founded in 1981. Prior to this, he was the administrator of the United States Department of Agriculture’s Food and Nutrition Service under President Carter and a designer of the Food Stamp Act of 1977, regarded as a watershed anti-poverty act. Anti-poverty programs have continued to constitute a major area of research and action for CBPP.
Greenstein’s extensive experience with anti-poverty programs has led him to reject universal basic income (UBI) as a feasible policy for the United States, for reasons that he lays out in a blog post at CBPP (dated May 2016). It is clear that he rejects UBI not on the basis of principle but on the basis of practical issues. He worries that any livable UBI would be too costly to finance by any politically viable means and that, conversely, any politically viable policy package involving a UBI would be worse for poor Americans than the current welfare state. This is because, in his view, enacting a UBI would require a cross-partisan alliance, which would push the policy to the right (e.g. by accompanying UBI with the elimination of all or most current welfare programs, as under Charles Murray’s controversial proposal).
Here are some representative excerpts:
A UBI that’s financed primarily by tax increases would require the American people to accept a level of taxation that vastly exceeds anything in U.S. history. It’s hard to imagine that such a UBI would advance very far …
Proponents often speak of an emerging left-right coalition to support it. But consider what UBI’s supporters on the right advocate. They generally propose UBI as a replacement for the current “welfare state.” That is, they would finance UBI by eliminating all or most programs for people with low or modest incomes. Consider what that would mean. If you take the dollars targeted on people in the bottom fifth or two-fifths of the population and convert them to universal payments to people all the way up the income scale, you’re redistributing income upward. That would increase poverty and inequality rather than reduce them.
Will we really tax the top 1 percent or top several percent enough to finance most or all of UBI — on top of the higher taxes we’ll want the same group to pay to shoulder a substantial share of the burden of restoring Social Security solvency, repairing the infrastructure, and meeting other critical needs?
Greenstein, clearly, believes that the answer is no — and that, as a result, any politically feasible basic income would be much less than the aid currently provided to many of the poorest individuals (and distributed without any supplemental aid).
Nevertheless, Greenstein’s concluding sentence suggests that he is not opposed to UBI in principle:
Were we starting from scratch — and were our political culture more like Western Europe’s — UBI might be a real possibility. But that’s not the world we live in.
Robert Greenstein, CC BY 2.0
US Department of Agriculture
Last month, Vox’s Dylan Matthews — who has written extensively, and sympathetically, about UBI for several years — interviewed Greenstein, calling on him to expand upon his opposition to UBI.
In the interview, Greenstein reveals that he learned about UBI in the 1990s from the Brazilian Senator Eduardo Suplicy, a former co-chair and honorary co-president of BIEN:
We’ve had this long dialogue, where I would say that I very much shared the ideas of UBI but in the United States, I didn’t think it was feasible or practical. There were, however, ways to move in that direction, such as big expansions of the earned income tax credit and the like. It was an ongoing conversation with Eduardo for a number of years.
As in Greenstein’s CBPP post, a tension between idealism and practicality emerges in the interview. At one point, for instance, Greenstein states:
There’s nothing in US political culture to suggest that there’s openness to doing big tax increases, that’d extend well beyond people just at the top, in order to finance cash payments for people who have no earnings and little or no work record. I personally am in favor of doing that! But I don’t see support for that. I think they’d likely be excluded.
Relatedly, Matthews poses an important question regarding the role of individuals — such as himself — who advocate for radical change as a way to begin to change popular opinion:
One reason I write a lot about basic income is not that I think it’s going to pass soon, but because I think giving cash aid to poor people, including the nonworking people, is a very good thing, and I view it as part of my job as a writer with a platform to try in some small way to change public opinion on that. … Do you think there’s any value in basic income as a persuasive tool that can translate to more sympathy for comparatively modest expansions of the safety net?
Greenstein’s reply is worth reading in full, but we might quote some excerpts:
I very much agree with the guaranteed income goal. The question is how do you get there, and, given the math and US political culture and budget politics, make sure that one is making progress toward that rather than going in the wrong direction? I would view UBI proposals like Charles Murray’s, or even other proposals that don’t eliminate Social Security or Medicare but do eliminate all or most means-tested programs, as clearly steps backward when you do the math.
I worry a little about the UBI interest being a little bit of a distraction from the immediate steps and fights that actually move toward that. I’ve had this discussion with a couple of UBI people, about starting with the child credit and moving to phase in at $0 and so on, and it’s sort of like we’re talking past each other. It’s smaller, it’s incremental. But to me, that’s how you get toward the goal.
I like many people, think we need a robust carbon tax. If we could ever get one, I do think there may be a potential to do a modest-size universal payment with a portion of the revenue that’d grow over time. To me, that’s a different route. The biggest obstacle there isn’t UBI; it’s getting the support to actually impose the tax. But if global warming continues to become more and more of a problem, one certainly hopes that at some point our political system accepts that you’ve got to do something about that. I do think that’s a potential platform. …
Such incremental proposals and cautionary notes are worthy of attention, even — indeed especially — from those who are already committed to UBI.
Read the entire interview, as well as Greenstein’s original article, below:
Dylan Matthews, “An expert on fighting poverty makes the case against a universal basic income,” Vox; July 16, 2016.
Robert Greenstein, “Universal Basic Income May Sound Attractive But, If It Occurred, Would Likelier Increase Poverty Than Reduce It,” Center on Budget and Policy Priorities; May 31, 2016.
Featured image CC BY-NC-ND 2.0 Third Way Think Tank
Reviewed by Genevieve Shanahan
This basic income news made possible in part by Kate’s supporters on Patreon
by Andre Coelho | Aug 26, 2016 | Opinion
Safety is a crucial issue. Without a sense of security, we don’t think straight, we don’t connect as well, and we don’t align as well with our core values. If we are not secure, we don’t feel safe, and if we don’t feel safe, fear grows from within. And with that fear comes distrust, anxiety and stress. And all of those blur clear-sighted decisions.
Ultimately, there is no denying that security is a hot topic at the moment. With crime levels rising on a daily basis, there is a general sense of unease within society. That being said, it is important to remember that there are plenty of actions that you can take to improve your sense of security.
For example, if you are a home or business owner, then installing a security system is strongly recommended. Hidden cameras and alarms are both fantastic crime deterrents and can help you to feel safer in your home or at work. Above all, everyone deserves to feel in control, and security systems can provide peace of mind during times of crisis. To learn more about some of the most popular home security options out there, take a look at the Verisure website.
Anyway, within this short essay I aim to provide support for the following proposition: given a minimum level of safety, people will make better decisions. In particular, they will invest more in green technology for their businesses and homes, which is unaffordable to many at the moment.
Before going into any details, though, we should ask this question: what is it that people want, anyway? Do they want more holidays? iPhones? Well-paying jobs? Less crime? Better security? As it seems, at a deeper level, what they want most is none of that.
According to an international questionnaire, created and administered by the association Together, people want the following:
Economy
Guarantee of purchasing power and financial safety for all
Redistribution of wealth for greater equality
Promotion of exchanges and circulation of means without money
The end of rampant consumerism, especially when producers are suffering from underpaid work
The development of a deconcentrated and stable economic system
Use of technology for the well-being and comfort of all
Governance
Zero poverty, zero exclusion, and zero carbon
Affirmation and implementation of the principles of co-responsibility
Empowerment of all and development a relationship of trust, freedom, and equality, to remove laws, regulations and cameras that focus on the control of people
Encouraging and teaching co-responsibility
Supporting all people’s engagement in society, regardless of role
Democracy
Giving participatory and direct democracy a holistic place
Improving representative democracy and abolishing dictatorship
Bringing elected representatives closer to citizens
Developing an ethics of democracy
Learning co-construction of policy by involving different actors including crossing perspective, skills and abilities
Empowerment of policy makers, making sure that they keep the promises that they have made
Transparency in actions of the government
Firmness and impartiality in justice
Simplification of the administration and legislation, and improved logistical organization
Policies to support the population, particularly for providing access to essential needs; an enhanced social state.
The end of media trash-talk that enhances racism and insecurity
Environment
Changing our relationship with nature, plants and animals
Reducing population pressure
Ensuring a rapid energy transition. Using the information provided by a service like Builder And Engineer to help people make changes in their home to waste less energy such as opting for a newer, more efficient boiler.
Fight against waste
Fight against pollution
Production that is more natural and small-scale
Cleanliness in public places, thanks to co-responsibility
Space management
Maintaining and protecting biodiversity
Preserving and developing agricultural and food-production areas such as family or community gardens
Arranging space to make it user-friendly and to facilitate common life, multiculturalism, creativity and new ideas
Adapting public roads for all while reducing traffic and enhancing transportation safety
Making the city a pleasant common good
Time management
Increasing the time available to people and improving management of time
Increasing time available for the family
Promoting volunteering by enabling candidates to get community service and recognizing volunteer spaces
Society
Enhancement of opportunities to live together and learn about others
Eliminating and prohibiting all forms of discrimination and racism in all areas, including employment
Avoidance of all forms of violence, harassment and war, plus eradicate those related to physical integrity
Facilitate networking and communication of the organisations and individuals
Maintenance of ethical and respectful behaviour for the sake of democratic functioning
Changing behaviour to encourage living together and respecting each other
Development of a common culture, whatever our religion
Solidarity with excluded and/or vulnerable people so that all are made to feel accepted
Reception of migrants and refugees as well as the homeless
More care for the poor by taking an upstream strategy to combat poverty
More aid for the disabled, including children and those who are alone and poor
These results are derived from the application of a specific methodology, the Spiral Approach, which has been applied in over 20 countries, involving around 120,000 people1. While this might be a small sample of all humanity, it is big enough to be taken very seriously. If these results mean anything, I assume, it’s that people would prefer to invest more in technologies that would lower their environmental footprint on this planet–if only they could afford it. And affordability has indeed been a major issue in contemporary Portugal. As we can observe in Figure 1, people have been losing purchasing power consistently over the past few years, except for a tiny percentage of people. At the same time, as expected, inequality has also risen (Figure 2).
Figure 1 – Personal income savings in Portugal, percent of GDP
Figure 2 – Income inequality in Portugal (quotient between the 20 percent richest and 20 percent poorest average income)
This is, of course, also mirrored in the growing number of poor people living in Portugal (Figure 3). These people might get free lunches (yes, these apparently do exist) if they prove their poverty – that’s how it goes these days – but, needless to say, it’s much harder to get a solar panel or an electrical vehicle, for example, just for being poor. But if you’re interested in learning more about solar panels check out Sandbar Solar’s residential solar services. You might be surprised as to what you can learn from them about the ranges of services that are available. Solar panels can generate a lot of energy (which can then be sold) but if you want to learn more about this, check out Solar MN.
Figure 3 – Poverty risk rate in Portugal, percent (footnote 2)
The question is: would they (or most of us, for that matter) actually buy these things, if they could afford it? Any direct response is, of course, mere speculation, since it’s impossible to run an experiment given the present mode of things. But we might take a look at what people who can afford greener technologies are actually doing with their money. Figure 4 and Figure 5 show a couple of trends in investment in electric vehicles and photovoltaic panels in recent years.
Figure 4 – Solar and geothermal energy generation, in tonnes of oil equivalent (toe) in energy mix
Figure 5 – Number of electric vehicles sold in Portugal
A quick look at these charts clearly shows increasing trends in purchases of these items. In the case of photovoltaic panels, Figure 4 refers to energy output, but higher output is of course linked to increased solar panel installations. This has happened in the midst of the present day austerity-driven impoverishment of nations, of which the Portuguese society is a victim.
According to a 2012 inquiry / poll, housing and other property amount to 81 percent of all assets3 owned by the 25 percent poorest families, with motor vehicles accounting for 18 percent. This basically means these families own nothing else (or close to nothing). Meanwhile, the richest 10 percent of families own 71 percent of their assets in their own house and other property (30 percent in their own house), 25 percent in businesses and 2.2 percent in vehicles. It is also noteworthy that, according to the same inquiry / poll, 91 percent of all the richest 10 percent of families own vehicles and 20 percent own other valuables compared to 39 percent in vehicle ownership and 5 percent in other valuables for the 20 percent poorest families. These differences are also mirrored in the value structure of those assets: a typical rich family (from the top 10 percent) owns a median value of 17 300 € in motorized vehicles, while the poorest 20 percent own only a median value of 2000 €. In other valuables, the differences are even sharper, with the richest families owning a median of 17 500 €, while poorest own only 300 € (median). Finally, up to the 90 percent richest families, vehicles and other values stays at a median of 13 000 €, which is about 37 percent of the amount the richest 10 percent of families own in these items (median values).
What this means is that, apart from the 10 percent richest families, and maybe some of the 20 percent richest ones, no one can really afford to buy electric vehicles, which have an average cost at 33 400 € (with 7 year batteries), and photovoltaic panel systems (micro-scale systems start at 10 000 € per 4.6 kW package). Given this scenario, what could a basic income to give people the opportunity to purchase these low-carbon technologies and contribute to solve the climate crisis?
According to a basic income viability study for Portugal, a 435 €/month payment to every adult would generate income increases for everyone earning 1200 €/month or less, before taxes. However, that increase will only be truly significant (after taxes) for those earning nothing, or close to nothing. Of course, 435 €/month basic income will only allow for a person to care for basic needs, such as food and shelter–not electric cars or photovoltaic panels.
It would, however, mean more money in the hands of people who are nowadays consuming less than they ought to, given their basic needs. And this will lead to higher economic outputs, especially in local economies. That, in turn, will increase monetary circulation, and eventually enough accumulation that some families will be able to afford green technologies. Another possibility is that people will come together in condos, neighbour associations, cooperatives and such, and pool their basic incomes (or whatever extra amounts they can get, given the existence of basic income). This way, they can acquire this equipment through their shared resources and manage it cooperatively. Also, the prices of these products are getting lower. This is especially true for photovoltaic panels, the price of which has fallen as much as 75 percent since 2009, and is expected to continue falling. The forecast for electric vehicles prices is more uncertain; however, due to technological advancement and higher supply, it is expected that these prices will also drop in the next few years (Joana Balsa, 2013).
The relationship between basic income and increased purchases of low environmental impact technologies is not obvious, at least for the products discussed in this short analysis (photovoltaic panels and electric vehicles). However, I’ve hinted at some factors that may determine that rise, given the implementation of something like a basic income in Portugal. Of course options to reduce environmental impact is not limited to the purchasing of photovoltaic panels and electric vehicles. Many other possibilities are available, at much lower costs, such as replacing existing low efficient lamps for LED technology lamps, riding bicycles or even reducing the ingestion of meat (while eating more vegetables).
Notes:
1 – More information on the data gathering method and resulting platform can be obtained here (in French).
2 – percent of people living in poverty or in risk of poverty.
3 – Non-financial assets.
More information at:
In Portuguese:
Sónia Costa, Luísa Farinha, “Inquérito à situação financeira das famílias: metodologia e principais resultados [Inquiry into families financial situation: methodology and main results]“, Occasional paper 1, Banco de Portugal, 2012
Miguel Horta, “RBI financiado pelas pessoas [Basic income financed by the people]“, October 2015
NOCTULA, Consultores em ambiente, “Energias renováveis: a revolução do preço da energia solar [Renewable energies: the price revolution of solar energy]“, August 2015
Joana Balsa, “Avaliação do impacto da introdução de veículos elétricos na procura de combustíveis em Portugal [Impact evaluation of introducing electrical vehicles in the demand for fuels in Portugal]“, Masters Thesis, Coimbra University, September 2013
Fundação Manuel dos Santos, PORDATA – Base de dados Portugal Contemporâneo website
Sónia Peres Pinto, “Há cada vez mais carros elétricos em Portugal [Electric cars are increasing in Portugal]“, SOL Economia, May 19th 2016
Associação Utilizadores de veículos elétricos, “O Mercedes Plug-In C350e da Mercedes, foi o veículo elétrico mais vendido em junho de 2016 [Mercedes Plug-In C350e was the most sold eletric vehicle in June 2016]“, August 6th 2016
In English:
TOGETHER – territories of coresponsibility website
Statistics Portugal website
by Jenna van Draanen | Aug 15, 2016 | News
File photo: www.sudbury.com
A local health unit in Ontario, Canada — the Haliburton, Kawartha Pine Ridge District Health Unit — has recently endorsed the concept of a basic income guarantee, joining the ranks of many local health units in Ontario who have done the same, such as the Simcoe Muskoka and Sudbury District Health Units. The health units agree that a guaranteed minimum income could give families living in poverty the ability to meet their basic needs. The Haliburton, Kawartha Pine Ridge District Health Unit notes that a basic income guarantee could have “health promoting effects, and reduce health and social inequities” and “is considered to have merits as an effective policy option.” Many other public health organizations in Ontario are saying the same thing. Public health as a topic is always changing and relevant, it is taught in Universities similar to the University of Southern California (USC) as well as others and helps us to look at the way the world works around us.
In fact, the Association of Local Public Health Agencies and the Ontario Boards of Health (organizations which contain local public health units among their members) have also endorsed basic income and are calling on federal and provincial ministers to investigate basic income further. The official position of these groups is that they are “requesting that the federal ministers of Employment, Workforce Development and Labour, Families, Children and Social Development. Finance and Health; as well as the Ontario ministers responsible for the Poverty Reduction Strategy’ Community and Social Services, Children and Youth Services, Finance, Health and Long-Term Care, prioritize joint federal-consideration and investigation into a basic income guarantee as a policy option for reducing poverty and income insecurity.”
Support for this policy can be found within local, provincial, and national public health organizations. The Canadian Public Health Association, a professional association of public health practitioners, is calling on the federal government to “take leadership in adopting a national strategy to provide all Canadians with a basic income guarantee” — saying that every Canadian should be able to meet their fundamental needs for adequate housing and nutritious food, two key factors that affect the health of Canadians.
Key medical associations in the country have come out in support of basic income as well. In 2015, 194 physicians in Ontario signed on to a letter in support of basic income that went to the Ontario Health Minister, Eric Hoskins. In addition, the Canadian Medical Association has publicly voiced its support for a basic income.
Such organizations are globally accessible to raise the issues and rights of practitioners. While other associations help doctors in establishing their private practices, and assist them to prosper. You might have to carry out a little research if you are situated somewhere in America, but you can appraise a few websites – https://pecaa.com/ – to get a deeper understanding of their functionality.
For more information about the health organizations that have come out in support of basic income in Canada see the sources below:
Canadian Public Health Association, “Public Health Matters: Basic Income Guarantee.” CPHA, 2015.
alPHa, “Public Health Support for a Basic Income Guarantee.” Association of Local Public Health Agencies (alPHa) 2016.
Canadian Medical Association, “2015 Canadian Medical Association Resolution: National Support for a Basic Income Guarantee.” CMA, 2015.
Jonathan Migneault, “Health Unit: Lift more people out of poverty with a basic income guarantee.” Sudbury.com April 25, 2016.
