by Kate McFarland | Sep 6, 2016 | News
The Fabian Society, a prominent left-wing think tank in the UK, has published a book-length report on recommendations for improving the country’s social insurance, especially for non-pensioners (“For Us All” by Andrew Harrop). Among other topics, the report discusses–but not does not endorse–basic income. As an alternative, its author recommends a universal (but not unconditional) “individual credit” for adults.
In a Fabian Society report published on August 31, general secretary Andrew Harrop advises that the UK not replace existing social insurance benefits with a basic income (which he describes as a “single flat-rate payment for each individual”). His main concerns are that a basic income “would create many losers and would not reduce poverty or improve the incomes of those with least today,” unless there were to be a substantial increase in tax revenue, and that it would not eliminate the need for certain means-tested benefits, especially those related to housing (p. xix).
Harrop does, however, propose a type of universal cash payment that he calls an “individual credit”. All adults would be eligible to receive this payment in addition to Universal Credit payments and child credits for primary guardians. Universal Credit, a centerpiece of Britain’s current system of social insurance, is means-tested — and Harrop believes that retaining and supplementing the policy, rather than replacing it, “would significantly reduce poverty and increase low and middle incomes” (p. xx).
It is worth noting here the fact that the individual credit does not replace all means-tested benefits does not, in itself, imply that it is not a type of “basic income”. In principle, at least, basic income — a universal and unconditional cash payment paid directly to individuals — could be distributed in addition to universal credit or other conditional and means-tested benefits. Indeed, Compass, another British think tank, has recently recommended such a “modified scheme” as a way to introduce a universal basic income in the UK.
However, there are still important differences between Harrop’s individual credits and a basic income. Notably, the scheme that Harrop proposes is not strictly unconditional. He states that “Eligibility for the adult credit should depend on paying direct taxes or on productive participation in society” (p. xx). He elaborates on the “participation requirement” in the section on individual credits:
As a start, it [the credit] should only be available to people who both have a national insurance number and are on the electoral register (or an equivalent register for people without the right to vote). This would promote political participation and reduce the risk of fraud. Except for people with significant disabilities, receipt should also be dependent on either paying a certain amount of income tax or national insurance, or on learning, parenting, caring, job search or work preparation. The policing need not be particularly onerous, but people who refused the offer of a guaranteed job or educational place, after a significant time without working or paying direct taxes, should not continue to receive the credit (pp. 144-5).
Thus, unlike a basic income, the individual credit does carry a work requirement — even if a comparatively lenient and flexible one, which allows exemptions for students, parents, and caregivers.
At the same time, Harrop does not rule out basic income as a potential long-term goal. Indeed, he describes his own proposal as one that might provide a “gradualist, ‘Fabian’ route to creating a full basic income in the distant future”:
It would at least put in place the machinery that would make it possible to make larger universal payments should it be required, becoming an insurance policy in the event of a structural decline in the total hours of work, or of a severe recession which required a fiscal stimulus to support household spending (p. 143).
But paving the way for a basic income is not Harrop’s own goal in proposing individual credits. On the contrary, he goes on to say that “it is better to think of individual credit as ‘child benefit for adults’ not a step towards a basic income – i.e. a universal component in a hybrid system, which also includes contributory and means-tested elements” (pp. 143-4). Elsewhere, he enjoins policymakers to “focus on practical, incremental policy changes which embody something of the spirit of the basic income idea, but make sense as reforms in themselves” (p. 139).
Indeed, Harrop himself seems ambivalent as to whether basic income is a desirable himself endpoint — at one point stating that the case has not yet been settled either way (cf. pp. 137-9). An appendix to the report includes a summary of the reasons for and against a basic income (see Appendix 7, on final page).
In a September 1 interview with The Independent, Labour Party shadow chancellor John McDonnell — a long-time supporter of basic income — referred to the Fabian Society’s report when discussing his intention to continue to push for a universal basic income in the UK:
The Fabian society has just introduced a report today which is looking at reforms to the welfare state and it’s recommending a form of initial basic income for us to explore so we’re going to take that into account. When we look at the experiments that are taking place across Europe at the moment we’ll review those then consider what are options are.
Thus, McDonnell does seem to view Harrop’s proposal as route to basic income — even if Harrop himself deemphasizes this potential facet of the policy. (In the same set of remarks, McDonnell suggests that he also views child benefits, in the form of unconditional cash transfers to primary caretakers, in much the same way — that is, as a type of “initial” basic income.)
The Fabian Society is Britain’s oldest political think tank, founded in 1884. Today, it has approximately 7000 members and 70 local chapters. The society was one of the founders of the UK Labour Party, although it is not organizationally affiliated with the party today.
It summarizes its political mission as follows:
Our commitment to Fabianism means we believe in the fight against inequality, the power of collective action and an internationalist outlook. We believe in social progress, evidence, expertise, rationality and long-termism. We advocate gradualist, reformist and democratic means in a journey towards radical ends. We are a pluralist movement and create space for open debate.
The Fabian Society’s sister organization in Australia (not formally affiliated) recently sponsored a debate in Sydney on the topic of whether Australia should adopt a universal basic income.
To learn more about current basic income schemes proposed in the UK, see the compiled list at Basic Income UK.
References:
Andrew Harrop, For Us All: Redesigning social security, for the 2020s, Fabian Society, 2016.
Ashley Cowburn, “John McDonnell: I will win the argument to give every citizen in the UK a basic income“, The Independent; September 1, 2016.
See also:
Jon Stone, “Tax free allowances ‘must be axed to pay out modest basic income’, radical welfare blueprint suggests“, The Independent; August 30, 2016.
Reviewed by Cameron McLeod
Photo of Fabian Society conference attendees CC BY 2.0 Fabian Society
This basic income news made possible in part by Kate’s patrons on Patreon
by Toru Yamamori | Sep 1, 2016 | News
The Forum on Shrinking Society is hosting its 35th symp
osium on 11 September 2016. The symposium’s theme is Unconditional Basic Income for Shrinking Society.
Time of Symposium:
13:30-19:15 (UTC+9)
11 September 2016
Venue:
Lecture room 3, New Building of Faculty of Letters
Yoshida (main) campus, Kyoto University
(Number 8 on this map)
Speakers:
Toru Yamamori
Kimio Ito
Hiroshi Matsuhisa
The language used in the symposium is Japanese. However, at the reception (see program below), there will be some people who could communicate in English, including speakers of the symposium. One speaker is fluent in Italian as well.
To register online:
https://confreg.ate-mahoroba.jp/confreg?conf_idstr=byBxaD90pgTqIM9nkdINSvb3876
Detailed program:
13:30-15:00 Toru Yamamori (professor, Doshisha university): Keynes’s prophecy, Meade’s degrowth, and the Working Class Women Liberationists’ Prefiguration
15:15-16:00 Kimio Ito (professor, University of Kyoto): From Operaismo to Autonomia: Wages for Housework, Unemployment, Students, etc. in Italy
16:00-16:45 Hiroshi Matsuhisa（professor emeritus, University of Kyoto): A provisional plan for Shrinking Society based on UBI
17:00-17:30 Discussion
17:45-19:15 Reception（3000 yen at a different venue nearby）
About The Forum on Shrinking Society:
The phrase ‘Shrinking Society’ might sound unfamiliar to readers. The organization deliberately chose the term after collective discussion. They found that terms such as ‘sustainable’ and ‘degrowth’ are not sufficient to represent their purpose, because they believe that “it is necessary to shrink the physical size of society” (as they put it in their founding).
The whole statement is as follows:
The economic growth strategy is facing a dead end. Fossil fuel depletion and environmental concerns have been the topic of discussion recently, with the only solution provided being to hold some superstitious belief that future technological advancement will somehow overcome the problem. In order to maintain the current exponential economic growth, available resources and land must also increase annually. Even a 2 percent annual growth rate will in 100 years lead to a 7.2 fold, and in 200 years a 52 fold increase in necessary land and resources. This is obviously not possible and will only result in a world-wide corruption. The whole world will be fighting over scarce resources. In fact, the war over fossil fuel is already underway. This is why the discussion for “de-growth” and sustainability has come under the spotlight in recent years.
So what kind of “sustainability” are we talking about? Is it that of the current economic growth, lifestyle, environment, or resources? It’s simple – we’re talking about sustaining resource and environment for our future generations. For this, we must reduce our resource usage. Say we have a 100 years’ worth of fossil fuels. If we reduce our usage of this valuable resource by 1 percent a year, there will be another 100 years’ worth of fossil fuels left forever. If we reduce our usage further, the resource will be available for more than 100 years. This is the most practical way of preventing resource exhaustion.
In terms of the environment, the amount of carbon dioxide in the air will perpetually increase as long as we continue to use fossil fuels. If we can reduce the usage of fossil fuels then we can also slow down the increase in carbon dioxide emission. If, in the future, a new resource or technology becomes available, then an adjustment can always be made to this reduction plan. However, it is not smart to continue the current growth with an unsupported hope “for an alternative resource to become available and make everything fine”.
The current economic system is based on mass production and mass consumption with quantitative growth and global competition. As a result, our lives are flooded with physical “stuff” which we have become addicted to. Our ever-growing society is already showing signs of discordance instead of happiness. The desirable model of shrinking
society on the other hand supports local production and consumption, which requires less energy, is more ecological, and more durable in the long-term. People will no longer be addicted to physical “stuff” but instead nurture each other and promote creative life.
After the drastic earthquake that hit Fukushima, Japan’s electric power usage has decreased by 10 percent. This in itself shows that the above-mentioned road to shrinking society is possible. Happiness comes from not only physical abundance but also affluent community life and creative work. By following the road to shrinking society we are taking responsibility for our future generations.
The economic growth strategy is facing a dead end. In order to avoid crisis, it is necessary to shrink the physical size of society. At present, there are many problems, such as resource depletion, environmental pollution, population explosion, expanding inequality and terror attacks and wars. The Forum on Shrinking Society is being created to link and unite professionals from various fields in hopes of finding solutions to these problems.
January 22, 2013
by Kate McFarland | Aug 30, 2016 | News
The Australian Fabians — Australia’s oldest left-leaning political think tank — will host a discussion and debate about universal basic income in Haymarket, NSW on September 9.
Speakers include Ben Spies Butcher (Senior Lecturer at Macquarie University), Peter Whiteford (Professor at ANU Crawford School of Public Policy), and Louise Tarrant (former National Secretary of United Voice).
Luke Whitington, Deputy Chair of the NSW Labor Party Economic Policy Committee, reports that interest and discussion surrounding has UBI has been on the rise within Australia’s Labor Party. Whitington sees the Fabians’ event as exemplifying this new trend.
The labour movement in Australia is getting serious about basic income. It’s great to see the Fabians facilitating this debate. The motion calling on the ALP to investigate a basic income is gathering momentum in the Labor Party branches. The next NSW and National Conferences will see a strong push for the ALP to investigate a basic income.
Douglas Maclaine-Cross, a Sydney-based software engineer who will be attending the meeting, remarks:
I’m just looking forward to the meeting, and getting an idea for how much support there is for it. Finding out if there are any concerns from people I’m not yet aware of. The prospect of finally having a way of solving out-of-control inequality, that people can rally behind has given me hope.
There are some additional signs that interest in UBI is increasing throughout Australia. In June, for instance, a Productivity Commission of the Australian Government released a research paper on “digital disruption” in which UBI was brought up as a potential solution to economic disruption caused by technological change. The Australian Pirate Party has endorsed a basic income (in the form of a negative income tax), also in June of this year, and one of the newest books in Palgrave Macmillan’s Exploring the Basic Income Guarantee series contains essays concerning the implementation of a UBI in Australia.
For more information about the event on September 9, see the website of the Australian Fabians.
Photo CC BY-NC 2.0 Emmett Anderson
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by Kate McFarland | Aug 29, 2016 | News
Philosopher Elizabeth Anderson has written an article in Boston Review in which she analyzes and reviews the political and economic theories of Thomas Paine, Friedrich Hayek, and others.
Anderson identifies the roots of modern systems of social insurance in Paine’s Agrarian Justice. She traces the history of the idea and its implementation through the late 1800s — when German Chancellor Otto von Bismarck instituted the world’s first social insurance scheme — and on to the present. In the latter half of the article, she critiques Hayek’s opposition to social insurance programs such as Bismarck’s pension system. Whilst people are fine with people getting insurance from Covered.com.au or other sites, there can be confusion about this part of the social system. Anderson connects modern right-wing opposition to the welfare state with Hayek’s criticisms of social insurance, criticisms which she argues to be unwarranted.
The article is not presented as an argument for basic income, but as a general defense of social welfare schemes — especially those that protect the middle classes. Indeed, Anderson herself clearly favors Bismarck-type schemes, in which “pension and disability benefits were graded according to each payer’s contributions” over Paine’s (and Hayek’s) idea of distributing equal benefits to all. She only mentions basic income “by name” when describing right-wing proposals, such as that of Charles Murray. She rejects these right-leaning basic income proposals — which would do away with all other benefits and keep individual subsidies below the poverty line — as insufficiently generous and detrimental to the middle class.
Although she seldom discussing basic income directly, Anderson situates some of the idea’s most important predecessors in their historical and political contexts. Paine’s Agrarian Justice and Hayek’s The Road to Serfdom are both canonical works in the history of the basic income movement. However, Paine and Hayek endorse very different types of basic income policies, for different reasons and as responses to different political currents — which Anderson’s article does much to illuminate.
Elizabeth Anderson is the John Dewey Distinguished University Professor of Philosophy and Women’s Studies at the University of Michigan (or, as we say here in Columbus, “the school up north”). Her areas of research in democratic theory, equality, racial integration, the ethics of markets, rational choice theories, and the political philosophy of John Stuart Mill and John Dewey. Her current work focuses on the history of egalitarianism.
Read the full article here:
Elizabeth Anderson, “Common Property: How Social Insurance Became Confused with Socialism,” Boston Review; July 25, 2016.
Photo: Statue of Otto von Bismarck, via Bernt Rostad
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.
