Krugman, Paul, “Sympathy for the Luddites”

Nobel Laureate, Paul Krugman endorsed a “minimum income” in his edition of his regular Op-ed column in the New York Times. The column is mostly about technological unemployment, but Krugman concludes that the solution requires, “a strong social safety net, one that guarantees not just health care but a minimum income, too.” The term minimum income is a bit vague and is not spelled out by Krguman, but among economists the term minimum income is usually used to mean some kind of basic income guarantee, usually along the lines of a negative income tax.

Krugman, Paul, “Sympathy for the Luddites,” The New York Times, June 13, 2013

Paul Krugman

Paul Krugman

Mikael Krogerus and Roman Tschäppeler, The Change Book: Fifty models to explain how things happen, Profile Books

Mikael Krogerus and Roman Tschäppeler, The Change Book: Fifty models to explain how things happen, Profile Books, 2012, 1 78125009 9, hbk, vii + 167 pp, £9.99

For each of the fifty models there is a page or two of text and a page or two of diagrams. To give a flavour: There is a page about the ‘m=3 and n=1’ model: that is, we experience three dimensions of space and one of time. The text points out that the mathematics of quantum field theory can be formulated in rather more dimensions than that, but that more than three dimensions of space would offer too little stability, fewer than three insufficient complexity (and so no gravitation), and only a single time dimension permits causality inferences. (Readers beware: the authors have muddled up their ms and their ns.) The final paragraph theorises about a multiuniverse in which universes with different numbers of time and space dimensions are uninhabitable. The following page explains the situation with a diagram: and that’s wrong, too, because the text does foresee a universe with three spatial dimensions and more than one time dimension.

To take another, more successfully executed, example: a page of text explains why economic booms and busts occur (rising share prices attract investors, falling share prices prompt selling); and a diagram usefully portrays how expected share price varies more than earnings per share (which more nearly reflects economic reality).

The models are divided into ‘Explaining our world’ (the section containing the examples above), ‘Explaining my world’, ‘changing my world’, and ‘changing our world’. The divisions are somewhat arbitrary. Take the example in which we might be most interested in this Newsletter: the Basic Income Model is located in the ‘changing my world’ section, but could equally well have been included under ‘changing our world’.

The two pages of text on a Citizen’s Income (pp. 84-5) begin with a paragraph on problems facing our society (‘the death of the social’), and then describe a Basic Income as a ‘polemical as well as fascinating concept based on the idea that those who want to work should not be hindered and those who do not want to work should not be forced to do so’. The advantages of a Citizen’s Income are well described (‘There would be no more unemployment nor the social stigma attached to it’, ‘The job market would be “freer”, etc.), and possible disadvantages are faced: for instance, ‘a restrictive immigration policy’. The authors finally offer some questions: ‘Would people become lazy …?’

The authors are clearly rather taken with the idea of a Citizen’s or Basic Income, and their enthusiasm is welcome, but the fact that the book is all about ‘change’, and preferably change as radical as possible, a Citizen’s Income is described throughout as a world-changing policy. Rather than calling the pages ‘Basic Income’, they use the title ‘What would turn our society upside down’ (without a question mark); and in the text the idea is called ‘polemical as well as fascinating’. This might not be helpful. Another way of describing a Citizen’s Income is as a minor administrative change that would deliver appreciable economic and social benefits, and it is by framing the proposal in that way that we might be more likely to see movement towards establishing a Citizen’s Income.

The following two pages offer a very useful, and rather less polemical, diagram, showing the connections between the current benefits system and a system based on a Basic Income (wage labour, money, and social status) and the differences: minimal bureaucracy in place of lots, freedom in place of stigmatisation, a focus on potential rather than a focus on need, and good wages for bad jobs rather than bad wages for bad jobs. The only problem with the ‘Basic Income’ side of the diagram is that’s entitled ‘utopia’. It wouldn’t be.

In the edition of The Big Issue for the 14th to the 20th January Mikael Krogerus has written a two page article about The Change Book. The three models featured are about the pain that results from change, about how world governance might evolve, and about ‘What would turn our society upside down?’ (this time with a question mark) – and here he repeats the full text and diagram from the four pages in the book about Basic Income.

There is much food for thought in The Change Book, and particularly in the pages on a Citizen’s Income.

Slate magazine publishes four articles by Matthew Yglesias on basic income

Aynur Bashirova – BI News – 2013.

Basic Income has a new advocate at a major U.S. publication. Since December 2012, Matthew Yglesias has published four articles in Slate magazine, each arguing for basic income, either on the basis that it would speed up the economic activity and that it would reduce poverty.

Matthew Yglesias

Matthew Yglesias

Yglesias argues that the current system of getting out of economic crisis and ending poverty is too complex and it does not work. Instead, he says, we should find a simpler and faster approach, which is to print money and distribute it to everyone, regardless of his or her income. If people had more money, they would be buying more things. Increasing the size of savings would reduce the borrowing costs of firms and this will push up the value of stocks and other financial assets.

Yglesias accepts that there is one downside to this approach, which is the risk of inflation due to printing too much money. However, the central bank has promised it is temporarily capable of tolerating 2.5% of inflation, until unemployment falls below 6.5%. Currently, inflation is just below 2%, which means that there is a room to implement Yglesias’ plan, which should help the US get out of the crisis.

On the issue of poverty, Yglesias draws the simple conclusion, “I’ve come to think that directly transfering [sic] cash money to people in need is the most underrated tool around for fighting poverty.”

He makes the connection between his two goals for basic income clear from his first article. Specifically discussing international poverty relief in Kenya, he writes, “when you give a poor household stuff that helps them but in some ways may undercut local businesses involved in the production and distribution of stuff. Transferring purchasing power (i.e. money) to a high-poverty community not only helps the recipient, but creates economic opportunities for others to obtain that money by providing useful goods and services.”

Matthew Yglesias is Slate’s business and economics correspondent. Before joining the magazine he worked for ThinkProgress, the Atlantic, TPM Media, and the American Prospect. His first book, Heads in the Sand, was published in 2008. His second, The Rent Is Too Damn High, was published in March.

All four articles are online at Slate:

Yglesias, Matthew. (2013). “The Best and Simplest Way to Fight Global Poverty.Slate. May 29, 2013.

Yglesias, Matthew. (2013). “EITC Isn’t the Alternative to a Minimum Wage. This Is.” Slate. Feb. 17, 2013.

Yglesias, Matthew. (2013). “Print Money. Mail Everybody a Check.” Slate, April 1, 2013.

Yglesias, Matthew, “Fighting Poverty By Giving Poor People Money” Slate Magazine, Dec. 25, 2012

Richard K. Caputo (ed.) Basic Income Guarantee and Politics: International experiences and perspectives on the viability Income Guarantee

Richard K. Caputo (ed.) Basic Income Guarantee and Politics: International experiences and perspectives on the viability Income Guarantee, Palgrave Macmillan, 2012, 0 230 11691 7, hbk, ix + 322 pp, £62.50

This volume gathers together a huge of diversity of analysis of national and international political debates over the introduction of a Basic Income.

A big challenge for a survey of the Citizens’ Income debate is to balance breadth with depth. How does one best combine the detail and insight that different authors offer with the need to offer comparative analysis and discussion of themes across countries? Richard Caputo provides a gentle editorial steer through this global journey, helping the reader to pick up specific nuances of debates in individual countries and regions whilst also providing an overview and some connections to international themes. Key topics covered in all of these essays are the historical drivers and opportunities that push forward discussion of Citizen’s Income, the political enablers and barriers to progress in these debates, and the prospect for progress in the future.

The first four chapters offer a helpful overview and comparative approach.  Following Richard Caputo’s introduction and overview, De Wispelaere and Noguera outline a potential framework for considering political feasibility of the Basic Income project. De Wispelaere and Nogerua consider feasibility in strategic, institutional and psychological dimensions by mapping two different types of agency against two types of constraints. It feels a bit of a missed opportunity that this framework is offered at the start of the book but not addressed directly by other contributors. However, even without explicitly addressing this framework the reader will find the key barriers and key enablers identified by De Wispelare and Noguera cropping up in the individual chapters. Most notably,  the challenges of institutional inflexibility, and the need to convert key political actors and to build coalitions across parties and interests in order to create strategic feasibility for a Citizens Income.

The region and country specific analyses begin on a confident note. In Chapter 3 Suplicy makes a powerful economic and political case for a Basic Income for underdeveloped economies aiming to jumpstart their global competitiveness. In the subsequent chapter, Guy Standing reflects on the first twenty-five years of BIEN and considers that richer nations may turn again to the issue of universal benefits in response to continued economic strife, the depletion of social protection, and the rise of social unrest.

The rest of the book is made up of 11 chapters that draw on social policy and political debates to examine the prospects for Citizen’s Income in a number of different contexts. This reviewer found the most satisfying chapters those that took a thematic approach, which allowed a lay reader to make their own comparisons between the experiences of different countries. Sacha Liebermann’s chapter on the German experience does this masterfully. It is introduced with a quick summary of the current debate and then thematic headings covering the major barriers addressed by discussions over Citizen’s Income in the last thirty or so years. In Germany’s case, this includes: the challenge of unconditionality (or ‘to live at the cost of others without any contribution’) and debates over the link with citizenship and over how to resolve the position of families and childcare within the overall welfare system.

There is a lot of richness in this volume. The authors have reflected widely and fully on social and political discourses, taking in formal actors and policy makers as well as think tanks and more grass roots movements. One of the difficulties and the rewards of a volume like this is the sheer diversity of experiences. Markku Ikkala looks back over twenty years of debates in Finland, identifying and analysing strands of support from the Green Party and some sections of the Press. Malcolm Torry’s analysis of the backdrop to current debates about universality in the United Kingdom examines themes from the process that led to the Family Allowance Act of 1945 and from the Child Benefit debates of the late 1960s. Alongside these we have in depth analyses that focus on the immediate context of contemporary welfare debates. For instance, the chapter on Spain focuses on the deficit reduction package from 2010 onwards and Hamid Tabatabai’s account asks what we can learn from Iran’s 2010 cash subsidy programme.

One important theme across the regions analysed is the important role of economic instability as a precursor to the revival or creation of new debates on universal benefits as the fragile consensus on welfare systems and social entitlements comes under ever more pressure. In the analysis of the Spanish experience, by Daniel Raventos, Julie Wark and David Casassas, the authors distil the frustration experienced by supporter of a Citizen’s Income in the wake of the economic crisis. For families and workers, a Basic Income could provide much needed security, a serious anti-poverty policy, and a sustainable way of maintaining family income following the debt-based consumption of the early years of the twenty-first century. And yet precisely when the supporters feel the case is most pressing politicians are under pressure to reduce expenditure and target welfare spending on narrow sections of the population.

While it seems churlish to criticise a volume of essays for BIEN members and supporters for not including contributions of opponents of the Citizen’s Income, one limitation of the chapters is a lack of context for some of the more aspirational comments on the future of pressure from think tanks, student groups and activists. While many authors are able to cite specific publications, events and movements as evidence, several chapters include a general positive endorsement or aspiration which feels less contextualised. This includes the aside at the end of the essay on Spain’s experience. The authors argue that ‘it can only be expected’ that the interest in a Citizen’s Income will keep growing from activists as the economic crisis persists and unemployment grows, but don’t offer more solid grounds for hope than that statement.

Looking across the chapters, one key question this reviewer was left with was how supporters of a Citizen’s Income should view these national and international debates as an indicator of progress and possible next steps. De Wispelaere and Noguera discuss how we might frame public perception of a Citizen’s Income in the context of arguments about reciprocity and deservingness of benefit recipients. This is salutary for those who already support Basic Income. A number of different chapters point to elements of universality as indicators of the progress of the argument for a Citizen’s Income or as building blocks on which to develop a stronger case for universality. Changes in pensions in Australia and to tax credits in the UK and Ireland can be seen either as useful stepping stones on a gradualist and pragmatic journey towards a Citizen’s Income, as diversions from making the full case for universality, or as further confusing already complex systems. Alternatively, should a Citizen’s Income be considered as a separate discourse of its own? More fundamentally, this reviewer was left asking, what can we learn from these experiences about how to frame a theory of change for the future? And what would ambitious but realistic intermediate goals look like for the next ten years?

It is a strength of this book that it provides the depth and breadth of reach not only to prompt this kind of question but also to provide significant evidence for the analysis of these issues. The volume offers a timely stocktake, and an opportunity to reflect on debates in the past, present and future.

Washington Post Op-Ed Starts Blogosphere discussion of BIG

Basic Income

Basic Income

Konczal, Mike “Thinking Utopian: How about a universal basic income?”
The Washington Post
, Wonkblog page, May 11, 2013

This op-ed piece in the Washington Post has inspired a buzz in the blogosphere. The author goes over some of the common arguments for and against basic income, showing how it has aspects that attract to (and sometimes repel) both left and right. The author, Mike Konczal, is a fellow at the Roosevelt Institute, where he focuses on financial regulation, inequality and unemployment. He writes a weekly column for Wonkblog.

Pieces responding to Konczal’s include:

Weisenthal, Joe, “There’s A Way To Give Everyone In America An Income That Conservatives And Liberals Can Both Love”
Business Insider May 13, 2013
This short op-ed piece describes BIG as “an idea for stimulating the economy: Free money for everyone, all the time, with no exceptions or conditions.”

Bruenig, Matt, “Is a Universal Basic Income Really Utopian?”
Policy Shop Blog / Demos
, May 13, 2013
Matt Bruenig he describes BIG as a ‘sadly-neglected policy idea” and calls Mike Konczal’s op-ed “a wonderful piece,” but he takes issue with Konczal’s description of BIG as “utopian.”

RiseUpEconomics, “That Vision Thing: our need to search for Utopia”
Daily Kos
, May 13, 2013
This piece does not take issue with the term utopian. Instead it calls for the need for more utopian thinking. It calls on people to imagine utopian things such as the transformation of work where more worker-owned businesses are possible and where banks don’t get bailed out.

The Daily Bell, “Universal Basic Income Promotion Hits Washington Post, May 13, 2013
This piece responds to the Washington Post article and connects it to Beppe Grillo’s misleadingly named citizen’s income proposal.

Mike Konczal’s piece is online at:
https://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/11/thinking-utopian-how-about-a-universal-basic-income/

Joe Weisenthal’s piece is online at: https://www.businessinsider.com/universal-basic-income-2013-5#ixzz2TUIyu5DT; and it is cross-posted online at: https://www.demos.org/blog/universal-basic-income-really-utopian

RiseUpEconomics’s piece is online at:
https://www.dailykos.com/story/2013/05/13/1208812/-That-Vision-Thing-our-need-to-search-for-Utopia

The Daily Bell piece is online at:
https://www.thedailybell.com/29093/Universal-Basic-Income-Promotion-Hits-the-Washington-Post