by Kate McFarland | May 18, 2016 | Research
Sergi Raventós (Autonomous University of Barcelona) recently completed a doctoral thesis on the topic of basic income and mental health.
In the dissertation, Raventós — who also works in a mental health foundation in Barcelona and is a member of the board of the Red Renta Básica — examines empirical evidence concerning the effects of direct cash payments (in India, Namibia, North Carolina, Kenya, and Alaska, for example) and concludes that, among other benefits, unconditional cash payments tend to lead to improved mental health in communities where they are instituted.
Plausibly, a basic income could ameliorate the social and economic inequality and insecurity that Raventós demonstrates to have a destructive effect on mental health.
Raventós, Sergi (2016) Socioeconomic Inequality and Mental Health: The Proposal of a Basic Income as a Means to Protect and Promote Mental Health, Barcelona: Autonomous University of Barcelona (Doctoral Thesis).
Abstract
The aim of this thesis is to provide a theoretical approximation to mental health and several related concepts. The social determinants of (mental) health have shown in recent years that human beings are susceptible to economic uncertainty, precariousness of their living conditions and social inequality.
This study considers social and especially income inequalities, and how they affect mental health, drawing attention to the extraordinary importance of policies aiming at social and economic protection, which are seen as essential for offering stability and security in people’s lives and health. The political orientations of a range of health-oriented institutions and agencies working to promote mental health and to reduce social inequality are considered, while critical evaluation is made of some policies being implemented by the Spanish and Catalan governments at a time of serious economic crisis and a concomitant rise of mental health problems deriving from poverty, unemployment and job insecurity. In this situation of severe economic recession and drastically increased poverty, and with everything it entails in terms of psychological suffering and mental health problems, the Spanish and Catalan governments have resorted to the same measures they have used in periods of economic growth, obsolete strategies which have proven ineffective in the long, unabating crisis. All of this has contributed towards worsening economic insecurity which, as a range of research projects have demonstrated, has serious consequences for mental health.
The study concludes with a discussion of Basic Income, a social protection measure offering economic security which has been tested in several countries. Experiments whereby unconditional cash payments made over different periods to target populations in India, Namibia, North Carolina, Kenya, Alaska, for example, have provided empirical evidence of improvement in different aspects of health and mental health in particular, together with a reduction of social inequalities and poverty, advances in education, human relations, and in the economic sphere, inter alia.
by Andre Coelho | May 11, 2016 | Opinion
So the basic income implementation process in Namibia was halted1. Is that surprising?
After an amazing effort by minister Zephania Kameeta to get a basic income implementation program for Namibia up to the (minister) council, it was just swept away and replaced by a program intended to alleviate poverty through economic growth. The progressive approach was replaced by the traditional economic orthodoxy of endless growth and continued inequality. This program, named “Harambee Prosperity Plan”, also includes the creation of a food bank and grants for young people conditional on participation in this food bank and a few other community activities.
Let’s not forget that Namibia was one the few places on Earth where a basic income experiment was actually carried out (at Otjivero), and with excellent results. Among the positive results were better nutrition, clothing, and transportation, more savings and a rise in entrepreneurship. You could now be thinking: Ok, so they tried basic income in a pilot project with excellent results, and they had a minister who was a champion of the basic income who could take it on to national-level implementation. So what’s stopping them now? The answer seems simple, but it is also hard to deal with.
The answer is this: big corporate interests need poverty. And it so happens that Namibia has plenty of poor people2. In a recent essay, a tentative connection was established between poverty (in economic terms) and the refusal/denial of the South African government to test for basic income, let alone implement it at the national level. Basically, the argument entails that government officials deny the proven advantages of basic income, delaying its development, to protect corporate interests. These interests profit massively from the cheap labour that a mass of helpless poor people can provide.
The economic structure of Namibia, as related to income, is not much different from the South African, as can be seen in Figures 1 and 2. The similarity is striking, hence the same unwillingness of the Namibian political elite to try out the implementation of basic income, despite all the theoretical and proven practical advantages it provides for the people.
Figure 1 – The spread of households within the income distribution in South Africa, 2008
Figure 2 – The spread of households within the income distribution in Namibia, 2015
A clear image starts to appear. In these countries, poverty is an asset for big industry, which has, to a great extent, bought political power. So what can be done about it? Well, two things can happen: poverty-dependent corporations automate up to a great extent3, and/or Namibians put pressure on their elected officials – through democratic processes – to get basic income implemented, despite the corporate grip on regime politicians. The first one is highly probable, and so we will be watching a fading interest of corporations in financing political power, since with mechanical machines and Artificial Intelligence they can get their way even without resorting to poor human labour. The second one, less likely but entirely possible, may grow from the first one, when political leaders get less engaged with corporate power – and although remaining eager to please them, no longer have the same financial incentive, thus becoming more susceptible to democratic pressures.
Anyway, automation may actually not be a deterrent but rather a spark for some sort of basic income implementation. We seem to be facing a win-win situation for basic income: automation and/or democratic pressures will guarantee that basic income becomes a reality in the next few years in Namibia, and elsewhere. At this point, only ruthless autocratic power can dismiss it and keep it away for much longer. The time for change has come.
More information at:
Claudia and Dirk Haarnann, 2015. “Relief through cash: impact assessment of the emergency cash grant in Namibia”, July 2015
Claudia and Dirk Haarnann, 2015. “Piloting basic income in Namibia – critical reflections on the process and possible lessons”, Paper delivered at the 14th Congress of the Basic Income Earth Network (BIEN) Munich – 14-16 th September 2012
André Coelho, “On why basic income has not yet been deployed”, Basic Income News, 17th March 2016
Notes:
1 – At the beginning of April 2016, the Namibian president presented his state of the nation address as well as the “Harambee Prosperity Plan”, which focuses on combating poverty by the creation of jobs through economic growth, plus the introduction of a food bank.
2 – According to the Republic of Namibia National Planning Commission “Poverty and deprivation in Namibia 2015”, the account for poverty is that 26,9 % of the population lives under the official poverty line.
3 – According the report “Technology at work v2.0”, it is estimated that in countries like Ethiopia the risk of job automation covers 85% of all jobs in the coming decades (other examples like China and India rate at 77% and 69% of automation risk, respectively).
by Guest Contributor | May 10, 2016 | Opinion
To tackle spiraling deflationary trends, governments and central banks will soon have no other choice but to resort to printing money and giving it directly to the people.
Article by John Aziz, originally published on azionomics.com under the title “Universal Basic Income Is Inevitable, Unavoidable, and Incoming.”
The last time I saw universal basic income discussed on television, it was laughed away by a Conservative MP as an absurd idea. The government giving away wads of cash responsibility-free to the entire population sounds entirely fantastical in this austerity-bound age, where “we just don’t have the money” is repeated endlessly as a mantra. Money, they say, does not grow on trees. (Only as figures on the screen of a computer).
In this world, universal basic income seems like a rather distant prospect. Yes, there are some proposals, like Finland which is set to start local experiments in 2017 and Switzerland which is holding a referendum on universal basic income next month. I don’t expect the vote to pass. The current political climate is just too patriarchal. We live in a world where free choice is unfashionable. The mass media demonizes the poor as feckless and too lazy and ignorant to make good choices about how to spend their income. Better that the government spend huge chunks of GDP employing bureaucrats to administer tests, to moralize on the virtues of work, and sanction the profligate.
But this world is fast changing, and the more I study the basic facts of economic life in the early 21st century, the more inevitable universal basic income begins to seem.
And no, it’s not because of the robots that are coming to take our jobs, as Erik Brynjolfsson suggests in his excellent The Second Machine Age. While automation is a major economic disruptor that will transform our economy, assuming that robots will dissolve jobs entirely is just buying into the same Lump of Labour fallacy that the Luddites fell for. Automation frees humans from drudgery and opens up the economy to new opportunities. Where once vast swathes of the population toiled in the fields as subsistence farmers, mechanization allowed these people to become industrial workers, and their descendants to become information and creative workers.
As today’s industries are decimated, and as the market price of media falls closer and closer toward zero, new avenues will be opened up. To that end, Canada has seen a surge in startups in recent times. Towns that were once oblivious to people in the country have become a melting pot for fresh Fintech startup ideas. Case in point is this FinFund Media app that aims to simplify getting loans in The Pas for individuals by leveraging the power of local rural communities to send and receive money. Similarly, new industries will be born in a never-ending cycle of creative destruction to keep the economy churning. Yes, perhaps universal basic income will help ease the current transition that we are going through, but the transition is not the reason why universal basic income is inevitable.
Welcome to the world of hyperdeflation
So why is it inevitable? Take a look at Japan, and now the eurozone: economies where consumer price deflation has become an ongoing and entrenched reality. This occurrence has been married to economic stagnation and continued dips into recession. In Japan – which has been in the trap for over two decades – debt levels in the economy have remained high. The debt isn’t being inflated away as it would under a more “normal” rate of growth and inflation. And even in the countries that have avoided outright deflationary spirals, like the UK and the United States, inflation has been very low.
The most major reason, I am coming to believe, is rising efficiency and the growing superabundance of stuff. Cars are becoming more fuel efficient. Homes are becoming more fuel efficient. Vast quantities of solar energy and fracked oil are coming online. China’s growing economy continues to pump out vast quantities of consumer goods. And it’s not just this: people are better educated than ever before, and equipped with incredibly powerful productivity resources like laptops, iPads and smartphones. Information and media has fallen to an essentially free price. If price inflation is a function of the growth of the money supply against growth in the total amount of goods and services produced, then it is very clear why deflation and lowflation have become a problem in the developed world, even with central banks struggling to push out money to reinflate the credit bubble that burst in 2008.
Much, much more is coming down the pipeline. At the core of this As the cost of superabundant and super-accessible solar continues to fall, and as battery efficiencies continue to increase the price of energy for heating, lighting, cooking and transportation (e.g. self-driving electric cars, delivery trucks, and ultimately planes) is being slowly but powerfully pushed toward zero. Heck, if the cost of renewables continue to fall, and advances in AI and automation continue, in thirty or forty years most housework and yardwork will be renewables-powered, and done by robot. Water crises can be alleviated by solar-powered desalination, and resource pressures by solar-powered robot miners.
And just as computers and the internet have made huge quantities of media (such as this blog) free for users, 3-D printers and disassemblers will push the production of stuff much closer to free. People will simply be able to download blueprints from the internet, put their trash into a disassembler and print out new items. Obviously, this won’t work anytime soon for complex objects like smartphones, but every technology company in the world is hustling and grinding for more efficiency in their manufacturing processes. Not to mention that as more and more stuff is manufactured, and as we become more environmentally conscious and efficient at recycling, this huge global stockpile of stuff acts as another deflationary pressure.
These deflationary pressures will gradually seep into services as more and more processes become automated and powered by efficiency increasing machines, drones and robots. This will gradually come to encompass the old inflationary bugbears of medical care, educational costs and construction and maintenance costs. Of course, I don’t expect this dislocation to result in permanent incurable unemployment. People will find stuff to do, and new fields will open up, many of which we are yet to imagine. But the price trend is clear to me: lots and lots of lowflation and deflation. This, ultimately, is at the heart of capitalism. The race for efficiency. The race to do more with less (including less productivity). The race for the lowest costs.
I’ve written about this before. I jokingly called it “hyperdeflation.”
Global Japanization
And the obvious outcome, at the very least, is global Japan. This, of course, is not a complete disaster. Japan remains a relatively rich and stable country, even after twenty years of deflation. But Japan’s high level of debt – and particularly government debt – does pose a major concern. Yes, as a sovereign currency issuer borrowing in its own currency the Japanese government runs no risk of actual default. But slow growth and deflation are stagnationary. And without growth and inflation, the government will have to raise taxes to cover the deficit, spiking the punchbowl and continuing the cycle of debt deflation. And of course, all of the Bank of Japan’s attempts at reigniting inflation and inflating away that debt through complicated monetary operations in financial markets have up until now proven pretty ineffectual.
This is where some form of universal basic income comes in: ultimately, the most direct stimulus for lifting inflation and triggering productive economic activity is putting cash in the people’s hands. What I am suggesting is nothing less than printing money and giving it away to people – as opposed to trying to push it out through the complicated and convoluted transmission mechanism of financial sector lending. This will ultimately become governments’ major backstop against debt deflation, as well as the temporary joblessness and economic inequality created by technological acceleration. Everything else, thus far, has been pushing on a string. And the deflationary pressure is only going to become stronger as efficiency rises and rises.
Throw enough newly-created money into the economy, inject inflation, and nominal tax revenues can rise to cover the debt load. Similarly, if inflation gets too high, cut back on the money-creation or take money out of circulation and bring inflation into check, just as central banks have done for the last century.
The biggest obstacle to this, in my view, is the interests of those with lots of money, who like deflation because it increases their purchasing power. But in the end, rich people aren’t just sitting on hoards of cash. Most of them do have businesses that would benefit from their clients having higher incomes so as to increase spending, and thus their incomes. Indeed, in a debt-deflationary spiral with default cascades, many of these rentiers would face the same ruin as their clients, as their clients default on their obligations.
And yes, I know that there are legal obstacles to fully-blown ‘helicopter money‘, chiefly the notion of central bank independence. But I am an advocate of central bank independence, for a variety of reasons. Indeed, I don’t think that universal basic income should be a function of fiscal spending at all, not least because I think that dispassionate and economically literate central bankers tend to be better managers of monetary expansion and contraction than politically motivated – and generally less economically literate – politicians. So everything I am describing can and should be envisioned as a function of monetary policy. Indeed, what I am advocating for is a new set of core monetary policy tools for the 21st century.
by Kate McFarland | May 8, 2016 | News
In light of impending Swiss vote on a basic income, the United Nations Institute for Social Development (UNRISD) has organized a seminar entitled “Informality and Income Insecurity: Is Basic Income a Universal Solution?”
The seminar, which features a diverse panel of experts, will be held at the Palace of Nations in Geneva on May 13, 2016.
From the event description:
The panellists will discuss where and under what circumstances a UBI can be an effective way for states to meet their human rights obligations and achieve some of the major aims set out in the Sustainable Development Goals, namely reducing inequality, eradicating poverty and achieving gender equality. Panellists will also consider the challenges of creating such schemes, such as the availability of resources, issues of long-term sustainability and their adaptability in developing and developed country contexts.
Speakers include UN Ambassadors Päivi Kairamo (Finland) and Regina Maria Cordeiro Dunlop (Brazil), Patricia Schulz of the UN Committee on the Elimination of Discrimination against Women, Swiss federal official Thomas Vollmer, and Guy Standing and Ralph Kundig of the Basic Income Earth Network.
UNRISD director Paul Ladd will be moderating the discussion.
The event is open to the public.
Those who wish to follow live Tweets from the seminar should look for the hashtag #UNRISDseminar.
See the event description here.
Photo of Palais des Nations, Armillary Sphere CC U.S. Mission Geneva
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by Andre Coelho | May 1, 2016 | Opinion
Jobs in security are on the verge of obsolescence. Security jobs usually refer to night watchers, guards, soldiers, intelligence officers, police officers and so on. Armies, police, security companies and related industries employ millions of people worldwide, wielding vast amounts of power and influence on society and the natural world. However, and in spite of that, they are doomed. Why? Because people want to be happy and, on the verge of global societal breakdown, are beginning to understand that their happiness is linked to everyone else’s and that this positive state of being is so much better than the ever present fear, uncertainty and isolation. Happy people tend to be fraternal, cooperative and empathetic (and their happiness reinforced by these behaviors), which in the long term means there will be no need for “security” jobs, as we know them today. Much of the violence, war and conflict in the world today stems from the pure need for maintaining these “security” structures, which are ridden with a mentality of war, mistrust and distorted notions of what security means for most people.
But what is a security-specialized mega-entity, which employs dozens of thousands of people (for example the US Army), to do when people seem oblivious of their past importance and meaning and simply do not value them as much (if at all)? It tries to survive. And that may mean resorting to unconventional, radical approaches, such as covertly instigating conflict or actively promoting or supporting entities or actions which lead to scarcity, inequality and fear among people (which are powerful instigators of conflict and violence). That is their mantra as survival strategy goes. But guess what? The worldwide arrival of the basic income is imminent.
Not a novelty in itself, the basic income is arriving now with a renewed strength, strongly linked to values of peace, equality and freedom. Freedom to pursue happiness, to have a share of what should be shared resources, to connect more deeply with other fellow human beings and the natural world. The basic income, besides helping to liberate millions of people from directly and indirectly imposed slavery, also gives a bright opportunity for those strapped to the “security” business to abandon it, now that their hearts are no longer aligned with its associated roles. With less critical mass, fewer incentives and fewer individuals with a war-prone mentality , security entities will crumble.
Now I am not saying many innocent people who are employed by these entities deserve to be miserable – the idea is to protect them from collapse by systems such as the basic income and allow them to finally start doing what they really believe in with their lives. However, only dramatic transformations in our society (which stem from changes at the personal level) will eliminate security entities as we know them. Jobs in security are about to end and that is – given new and refreshed social approaches like the basic income – great news.
