by Kate McFarland | Aug 13, 2016 | Research
Bédia François Aka, a teacher at the Department of Economics at University of Bouaké, has written a journal article in which he investigates the implementation of a basic income in Côte d’Ivoire.
Abstract:
This paper tries to engage the economic and political debate around the proposition of a basic income grant (BIG) in Côte d’Ivoire. We simulate the economic wide and distributional impact of a universal basic income grant (BIG) in Cote d’Ivoire. How the BIG is financed is investigated. We use a microsimulated computable general equilibrium (CGE) model to analyze the effects of a universal basic income grant on the economy and on households. The model is performed using a Côte d’Ivoire’s 2003 social accounting matrix (SAM) based on the 1998 household survey composed of 4,200 households, and 2003 national accounts data. The paper uses a value added tax (VAT) financing approach to provide a reasonable feasible scenario, as we are all consumers. The results suggest that the macroeconomic impacts of the basic income grant are a powerful social protection tool in fighting poverty and inequality towards a welfare state.
The paper is available online as a free PDF file here.
Bedia François, “Quantitative Impacts Of Basic Income Grant On Income Distribution In Cote D’Ivoire: Time To Change Our Societies,” Revista Galega de Economía, Vol. 25-1 (2016).
Photo of women and girls of Côte d’Ivoire CC Krishna (2011)
by Florie Barnhoorn | Aug 12, 2016 | News
Norbert Klein, the leader of the Vrijzinnige Partij (a small Cultural Liberal Party), has organized a debate about basic income in cooperation with the Vereniging Basisinkomen (the Dutch branch of BIEN). The event is scheduled for Thursday, September 1, 2016 from 13:30 to 17:30 in café Dudok, Hofweg 1a, The Hague.
Earlier this year, Norman Klein (pictured) initiated a memorandum for the Members of the Tweede Kamer (Second Chamber of Parliament). “The labour market is changed fundamentally. The introduction of new, innovative concepts like a basic income is urgently needed to prevent large scale social inequality and social unrest by providing everyone of a secure, adequate income,” he argues in his memo called Zeker Flexibel (Security and Flexibility).
On September 19 (the first day of the 9th International Basic Income Week), this memorandum will be discussed with the Minister for Social Affairs and Employment, Lodewijk Asscher (of the Partij van de Arbeid or Labour Party) and the members of the Committee for Social Affairs and Employment of the Second Chamber of Parliament. The discussion is open to the public, and all are encouraged to attend.
Before this meeting, Mr. Klein wishes to discuss the “sense and nonsense” of an unconditional basic income with the general public. Thus, he organized the debate at café Dudok, which will feature the following participants:
- Reinier Castelein, chairman of the union De Unie (The Union). Castelein recently published a book entitled Welzijn is de nieuwe welvaart (Well-Being is the New Prosperity), in which he argues for the introduction of a basic income.
- Ben Ligteringen, secretary of the Economy Working Group of GreenLeft (a green political party). In a recent statement on policy advice, the Working Group expresses strong opposition to the idea of a basic income, out of both financial and social reasons. Mr. Ligteringen instead supports the idea that municipalities should create “basic jobs” for the unemployed and that such workers should be paid the minimum legal wage. These jobs would bring benefit claimants back into the world of work and allow them to participate in society. The Economy Working Group fears that the costs of a basic income are too high, and that it will provide less benefit for society at large in comparison to a “basic jobs” program.
- Alexander de Roo, new chairman of the Vereniging Basisinkomen (The Dutch branch of BIEN). Along with Philippe van Parijs and Guy Standing, De Roo was one of the co-founders of BIEN in 1986. He proceeded to serve as BIEN’s Treasurer until 2004. De Roo was also a founding member of GreenLeft (the Dutch Green Party) in The Netherlands during the 1980s. From 1999 to 2004 he was a Member of the GreenLeft section of the European Parliament.
- Raymond Gradus, professor of Public Economics and Administration at the Free University (VU University) in Amsterdam and former Director of the Research institute for the CDA (Christian Democratic Appeal). Gradus has published several articles in which he argues against basic income from the principle that each individual has the obligation to contribute to society “according to his ability”. He is convinced that the basic income does the opposite and is therefore a bad instrument to inspire participation in society. Mr. Gradus advocates a “participation income” instead.
by Kate McFarland | Aug 9, 2016 | News
Labour Party leader Jeremy Corbyn stated in a recent HuffPost interview that he is “instinctively looking at” a basic income, along with Labour’s Shadow Chancellor John McDonnell.
Jeremy Corbyn, the Leader of Britain’s Labour Party, was recently asked about universal basic income (among other topics) in an interview with HuffPostUK. Corbyn replied that he and Shadow Chancellor John McDonnell are “instinctively looking at” the policy.
Here is the remainder of his answer:
I am looking forward to discussing it with our colleagues from Norway because we have to think radically about how we bring about a more just and more equal society in Britain, how we develop policies that achieve that.
Because what we are doing is heading in absolutely the wrong direction with a growing wealth inequality and an opportunity inequality for communities, as well as poorer families. It’s got to change and it will.
I can see the headline attraction to it. I don’t want to commit to it until I’ve had a chance to look at it very seriously and very carefully because this would be a major, major change in social policy and it’s something I would invite the whole party and the whole movement to have a serious discussion about.
What I want to do is develop policymaking through to 2020, where it’s very obvious what the general direction is we are going, on environmental policy, on housing policy, and health policy.
Corbyn was soon shown right about the “headline attraction” of basic income. Immediately following the interview, HuffPostUK editor Paul Waugh published an accompanying article with the headline “Jeremy Corbyn Looking At ‘Universal Basic Income'” And, on the next day, an article appeared in The Independent with the title “Universal Basic Income: Jeremy Corbyn considering backing radical reforms”.
John McDonnell has been a supporter of basic income prior to his appointment as Shadow Chancellor in September 2015. Earlier in this year, he encouraged the Labour Party to consider adopting UBI as official party policy on several occasions, most notably at events in February and June. To date, however, the Labour Party has not made basic income part of its platform.
Following Brexit, the Labour Party reached over 500,000 members, its highest number in decades.
More Information
Full interview with Jeremy Corbyn, which also touches upon housing policy and other issues:
Paul Waugh, “Jeremy Corbyn Interview: On Owen Smith, Trident, Brexit, The Housing Crisis And A ‘Universal Basic Income’“, HuffingtonPost UK; August 6, 2016.
Subsequent press concerning Corbyn’s remarks about UBI:
Paul Waugh, “Jeremy Corbyn Looking At ‘Universal Basic Income’; Says House Price Fall Could Help Tackle Housing Crisis“, HuffingtonPost UK; August 6, 2016.
Siobhan Fenton, “Universal Basic Income: Jeremy Corbyn considering backing radical reforms“, The Independent; August 7, 2016.
Background about the British Labour Party’s recent interest in UBI:
Kate McFarland, “UNITED KINGDOM: Labour Party to look into Basic Income”, Basic Income News; June 6, 2016.
Toru Yamamori, “United Kingdom: Labour Party considers universal basic income”, Basic Income News; February 21, 2016.
“Basic Fact Checking”
In his HuffPostUK articles, Paul Waugh states, “The universal basic income idea has been around since the 1970s but has recently become popular and Canada’s Ontario and Norway are both starting pilot schemes.” Two brief remarks:
1. Out of Scandinavian nations, Finland is much more advanced than Norway in planning a basic income experiment, with one set to begin in 2017. While Norway has held conferences to discuss the idea of a basic income, it has not announced any plans for a pilot study.
2. It’s true that the “universal basic income idea has been around since the 1970s” — but perhaps notable that the idea (and even the term ‘basic income’) has been around longer.
Jeremy Corbyn photo CC by ND 2.0 70023venus2009
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by Kate McFarland | Aug 7, 2016 | News
Last week, a group of 35 economists signed a letter demanding that the Treasury and Bank of England consider new policies to stimulate growth, including direct cash transfers to citizens.
On Thursday, August 4, the Bank of England announced that it would cut interest rates for the first time since 2009. This measure is intended to promote spending, and the bank believes that a recession can be averted. Nonetheless, Bank of England Governor Mark Carney warned that an economic slowdown remains inevitable in the wake of Brexit. For those British businesses who are trying to fight through this, they may be looking at ways they can support their business such as looking into merchant accounts from Unicorn Payment to assist with online payments. Anything that can aid in British businesses finding their feet after Brexit is important.
Although many economists expected the bank to make this decision, some lobbied against it — arguing that, after seven years, the lowering of interest rates has proven unsuccessful in boosting the British economy. On August 3, the day before the bank’s decision, The Guardian published a letter signed by 35 economists, directed to Chancellor of the Exchequer Philip Hammond.
The letter called upon the Treasury and Bank to adopt policies that will stimulate spending directly, and it posed several suggestions to this end:
A fiscal stimulus financed by central bank money creation could be used to fund essential investment in infrastructure projects – boosting the incomes of businesses and households, and increasing the public sector’s productive assets in the process. Alternatively, the money could be used to fund either a tax cut or direct cash transfers to households, resulting in an immediate increase of household disposable incomes. Furthermore, competitive business energy prices for UK companies could also boost production and the economy as a result.
In any of these policy scenarios, new money will be directly introduced into the real economy, stimulating aggregate demand and boosting employment, investment and spending. While it is a job for the Treasury to set up the framework for these policies to be deployed, it would remain a decision for the monetary policy committee as to the timing and size of any future stimulus.
Signatories include BIEN co-founder and co-president Guy Standing, anthropologist David Graeber (a vocal advocate of basic income), Keynes biographer Lord Robert Skidelsky (who has also written in support of basic income), Mark Blyth and Eric Lonergan (who have previously written in support of direct cash transfers), and Steve Keen (who coined the phrase ‘quantitative easing for the people’).
Many of the economists were also signers on a similar letter to European Central Bank (ECB) written last year, which encouraged the ECB to consider policy alternatives to quantitative easing — the policy of printing new money to purchase bonds from financial institutions. This letter had recommended that the ECB use its money to stimulate spending directly, such as by simply giving the money to citizens.
Although Wednesday’s letter to Hammond did not impact British monetary policy (yet), it did generate publicity about the economic benefits of one of the central features of a basic income: the direct transfer of cash to consumers. Subsequent articles in The Guardian, by Larry Elliott and Simon Jenkins, stressed the benefit of cash transfers in boosting spending. (As Jenkins concludes, “There could be a ‘spending Olympics’. There could be vouchers, scrappage schemes, Christmas bonuses and, horror of horrors, cash for the undeserving poor. Why not try it? All else has failed.”)
Similarly, writing in The Independent about the projected effects of Bank of England’s interest rate cut, Ben Chu raises the question “Why doesn’t the Bank just print money and give it to people and firms to spend directly?” Referring to Wednesday’s letter, Chu points out that “a growing number of academic economists are arguing that this would be a more effective, and less financially distortionary, way of stimulating the economy.”
References
“A post-Brexit economic policy reset for the UK is essential“, The Guardian; August 3, 2016.
Larry Elliott, “Cash handouts are best way to boost British growth, say economists“, The Guardian; August 4, 2016.
Simon Jenkins, “Want to avoid recession? Then shower UK households with cash“, The Guardian; August 5, 2016.
Ben Chu, “Interest rate cut: What did the Bank of England announce today and how will it affect you?” The Independent; August 5, 2016.
Photo of Bank of England CC Diliff
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by Kate McFarland | Aug 6, 2016 | News
BIEN co-founder Guy Standing will be participating in Social Canada Revisited, a conference on the architecture of Canadian social policy, to be held in Kingston, Ontario from August 22-24.
Standing will speak on a panel on income security, which is scheduled for the afternoon of Tuesday, August 23. He’ll be joined by Miles Corak–an economist at the University of Ottawa who researches child rights, poverty, immigration, social and economic mobility, unemployment, and social policy.
Topics of other panels include equality of opportunity, social inclusion, and public opinion, among others. According to a synopsis of the theme of the conference:
[S]ome Canadians have consistently fallen through the cracks [of Canada’s social policy architecture], most significantly Canada’s indigenous people. And contemporary economic, labour market and social dynamics are posing new challenges. The labour market is increasingly skewed between high and low skilled jobs; income growth is stagnant for many; younger Canadians struggle to secure sustainable career and life paths; many young and old alike worry about retirement income; and new cracks have appeared in Canada’s increasingly diverse social fabric.
Kingston, Ontario has already been considering basic income as a response to such contemporary economy challenges. In December 2015, it became the first municipality in Canada to pass a motion endorsing basic income, calling on the governments of Ontario and Canada “to research, develop, implement and evaluate a Basic Income Guarantee for all citizens” as a means to “reduce income insufficiency, insecurity, and inequality.” Kingston city council sent copies of its successful motion to other municipal governments — some of which, such as Waterloo, have followed Kingston’s lead in endorsing basic income.
One goal of the conference is to “examine persistent and/or new social fault-lines and ask where new approaches and new thinking are needed.” Given Standing’s participation at the conference, and Kingston’s own important position in Ontario’s basic income movement, one can guess that basic income will be among the “new approaches” discussed.
For more information about Social Canada Revisited, including a full schedule of speakers and sessions, see the event’s webpage from the School of Policy Studies at Queen’s University.
Queen’s University photo CC polannahowie
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