by Andre Coelho | Oct 10, 2018 | News
There is a plan for distributing dividends, unconditionally, for all Americans. It has been coined as the Social Wealth Fund (SWF), an idea developed and pushed by the People’s Policy Project (3P) founder Matt Bruenig, a known lawyer, blogger and policy analyst in the United States. 3P is a think tank founded in 2017, focused on studying policies benefiting citizens at large.
This plan, described in greater detail in a booklet, rests on the idea of turning national a kind of wealth fund such as the Alaska Permanent Fund (APF). However, unlike the APF, the SWF would have to rely on other sources of revenue (other than oil). Bruenig’s suggestions range from voluntary contributions, managing state-owned physical assets through the fund, various kinds of taxes (including eliminating tax breaks for the rich), leveraged purchases, to monetary seigniorage. This income is supposed to come from the highest earners in society (ex.: corporate taxes, financial taxes, philanthropy, stock exchanging), distributing it by all people.
Peter Barnes, an advisor to the Economic Security Project, has written about the SWF. According to him, the SWF is “refreshing”, because apparently none of the past policies have solved or even reduced inequality, such as “greater funding for education, infrastructure investment, low interest rates, a higher minimum wage, trade wars, tax cuts, or even a federally guaranteed job”. The inequality problem runs deep in society, and that’s where an unconditional dividend distribution of commonly owned assets could really be effective.
As for distributing dividends, Bruenig’s idea is to set this as a percentage of a five-year moving average of the fund’s market value. This could equate to a withdrawal rate of, say, four or five percent. If, at a given moment, the total fund value is $10 trillion, then the available dividends for distribution are $400 billion (Note 1).
On an article published by Anne Price and Jhumpa Bhattacharya, on wealth funds and racial inequality, the concept is summed up nicely:
“Often referred to as a Social Wealth Fund, Citizens Wealth Fund or Sovereign Wealth Fund, this concept rests on the principle of shared ownership, and builds from the foundational vision that all Americans have a right to reap benefits from wealth that we all created together.”
Note 1 – billion = 1 thousand millions
More information at:
Matt Bruenig, “Social Wealth Fund for America”, People’s Policy Project, 2018
Peter Barnes, “Opinion: All Americans would get an income boost under this new plan to share the country’s riches”, Market Watch, September 10th 2018
Anne Price and Jhumpa Bhattacharya, “Why a Social Wealth Fund Must Account for Racial Inequity”, Medium, September 19th 2018
by Daniele Fabbri | Oct 6, 2018 | News
Democratic presidential hopeful Andrew Yang spoke at the Political Soapbox on Saturday, August 11th, 2018, during the Iowa State Fair in Des Moines.
Andrew Yang, a democrat running for president, former entrepreneur and CEO, and author of “The War on Normal People”, addressed the crowd at the Political Soapbox explaining his program.
VIDEO: https://www.youtube.com/watch?v=OjaMqNUwD3I
He stated that one problem he identified lies in the fact that you need to move from places like Iowa in order to be able to find better career opportunities but, he said, there should be something better to do for young people rather than to move to Wall Street to make a lot of money for themselves. Ideally, after graduating from college, people would find a job, or build businesses, in the communities in which they are born and raised. An undergraduate should be able to volunteer, and make a living wage or better in his state, but nationwide people are required to move in order to pursue working opportunities.
This is the reason why he founded Venture for America in 2011, a non-profit with the aim of providing funds to top graduates and allowed them to take part in promising start-ups in developing cities around the U.S. But then he realized that this was not enough. There was a structural problem in the job market, and funding Venture for America alone was like “pouring water in a bathtub with a hole”.
The point is, in Andrew Yang’s opinion, technology will make human labor less essential.
He uses the example of some of the most common jobs in America – retail and sales, truck driving, and food prep. Automation is going to hit them all, with self-driving trucks already being tested in the field, moving in strict formation in order to optimize costs – a driving arrangement called platooning – and that expected savings from automation will be in the order of $168 billion per year in the freight industry.
Call centers will not be spared from automation, automated kiosks at McDonald’s will soon be more widespread, and 30% of malls will disappear in the next four years, due to Amazon gaining more and more of the market. The transformation will make many jobs obsolete, while stripping value from the many and concentrating it into the hands of a few.
Automation, if not dealt with appropriately, comes at a great cost, and people need to act together as a society to counteract the potential disruption brought by A.I.
In order to do so, Andrew Yang presents the three pillars of his campaign:
1)A $1,000 freedom dividend for each adult (which is a form of Universal Basic Income). Value is being hoovered up by the richest people, with the recent $1.5 trillion tax cut being spread unevenly, as only 6% went to workers. The time of trickle-down economics should come to an end, he says, and it should be substituted with trickle-up economics; money should move the other way around, from families and communities up. The economy is up to $19 trillion dollars, with an increase of $4 trillion in just the last ten years, and the Freedom Dividend is something feasible, he maintains.
2)Medicare for all, as healthcare costs are the number one cause of bankruptcy. People should be able to worry only about getting better, not about how to pay for it.
3)A new American Scorecard, which is a way to measure things differently than GDP does. This would include new indicators including well-being, mental and physical health, not only economic figures. This would also have an instrument which could account positively for motherhood work and parenting, and not for national defense expenses.
More information at:
Brianne Pfannenstiel, “Presidential hopeful Yang floats idea of $1,000 monthly ‘dividend’ for American adults”, Des Moines Register, August 18th, 2018
Sara Bizarro, “United States: Andrew Yang is running for President in 2020 on the platform of Universal Basic Income”, Basic Income News, April 8th, 2018
Article reviewed by Dawn Howard
by Daniele Fabbri | Sep 30, 2018 | News
Four Ontario mayors, with a letter addressed to Jean-Yves Duclos, who sits in the present Canadian federal cabinet as Minister of Families, Children, and Social Development, appeal to the Federal Government for assuming oversight over the Basic Income Pilot project in their communities.
The letter from the Mayors of Brantford, Hamilton, Kawartha Lakes and Thunder Bay follows the early end of the pilot, wich was announced on July 31st by the new center right government of the Ontario province. It was and abrupt end, just three months after the pilot program was fully subscribed, following its announcement by the previous government in April 2017.
For the pilot, the province had enrolled 6,000 people, 4,000 to actually receive the payments, the others to act as a control group. In order to be selected for the pilot, the requisites were: being between the ages of 18 and 64, and living on a low income, defined as under $34,000 per year for singles and $48,000 for couples. Participants were to receive, under a tax credit model, $16,989 per year for a single person, less 50% of any earned income, or $24,027 per year for a couple, less 50% of any earned income.
The communities of Brantford, Hamilton, Kawartha Lakes and Thunder bay were among those to be chosen as the sites for the pilot test, and Ontario’s pilot was at the center of a diffused international interest for the concept of basic income, with delegations from the United Kingdom, Japan, South Korea and the Unites states visiting the communities in order to observe and learn from the experience. “We believe the results of the Ontario Basic Income Pilot would have provided crucial information that could enable not just the Ontario Government, but other jurisdictions around the country to determine the efficacy of such a program on a larger scale”, the mayors write.
The end of the project was justified by the minister of Community Social Services (CSS) because it supposedly provided a disincentive to work, ignoring that two thirds of pilot participants are currently working (some with part-time jobs), but nonetheless interested in contributing to the community and to upgrade their professional skills, the letter says.
The fallout from the Ontario government’s cancellation of the pilot is twofold, on the one hand it is detrimental to participants, and on the other one it is a step back in the research for a better, more comprehensive way, to assist citizens.
The pilot was in the first of the three scheduled years of duration, and its findings and level of success could not be determined appropriately, although many participants could already identify positive changes in their lives as a result of it. These reported having used the money to stabilize their housing, improve their health through better dieting and checking for opportunities to specialize themselves, going back to school and enhance their level of skills. The letter continues by saying that many participants reported an amelioration of their well-being and the regaining of confidence, self-esteem and dignity, as they become able to afford housing and improve their intake of healthy food. Futhermore, as a consequence of being able to afford the time for civic activities and volunteering, these people were becoming active members of their community.
The decision to stop the program is harmful the participants, as they made financial decisions having in mind the commitment of the Ontario government to supply them with a stable income over the next years. They were elected among the most vulnerable members of their communities and, once the pilot started, many incurred in expenses which are now irrecoverable. Planning ahead for the following three years period, some moved to safer rental accommodations, finding themselves locked in tenancy agreements they cannot afford, while others paid up-front to go back to school or to enhance their skills, and found themselves indebted.
In the letter, the mayors of the cities of Brantford, Hamilton, Kawartha Lakes and Thunder Bay say that they fear that many of the participant will “inevitably fall into situations of homelessness and significant financial distress” without any fault of their own, and those struggling with mental health will now need additional support.
The mayors thus request that the federal government assumes oversight over the Ontario Basic Income project for the following two years, in order to complete it. They provide three reasons in support for their request. Firstly, the pilot infrastructure has already been built, with many of the up-front costs having been paid, the participants chosen and a project staff in place with given timelines and an evaluation team at work. Secondly, information gathered through the pilot, which is the greatest such test in the world and the first in Canada since Mincome in the seventies (the Manitoba Basic Annual Income Experiment, conducted between 1974 and 1979), would benefit the Federal Government, providing a bonanza of valuable data. And thirdly, one third of the total cost of the project, $50 million, has already been spent. There is no hope of recovering that amount, which considering the negative fallout produced by the premature cancellation of the pilot, is an expense that would end up only creating distress in the communities which were taking part in the experiment.
“Minister, when the program was launched, you said that you would be watching it closely and looked forward to seeing the results – as did we. Federal oversight of the Ontario Basic Income Pilot project would be the best option to revive the critical information that will be generated, protect pilot participants from crisis who entered into the program in good faith and ensure the funds that have already been spent on this program are not wasted.”
The termination of the pilot provoked turmoil and induced various reactions from the communities involved, and awaiting for an answer from the federal government, a judicial review has been requested over the cancellation of the experiment and a class-action lawsuit has been launched by Mike Perry, a social advocate for the program which is handling the cases pro bono, representing four pilot participants.
For more information:
Shawn Jeffords, “4 Ontario mayors asking feds to take over basic income pilot“, Global News, September 7th 2018
Chris Friel, Fred Eisenberg, Andy Letham and Keith Hobbs – Letter to Minister Duclos, September 4th 2018
Official Ontario Basic Income Pilot website
Kate McFarland, “ONTARIO, CANADA: New Government Declares Early End of Guaranteed Income Experiment“, Basic Income News, August 2nd 2018
Article reviewed by André Coelho
by Andre Coelho | Sep 25, 2018 | News
On September 15th 2018, Donut-D-Day brought together various Dutch organizations and citizens committed to integrated systemic reforms to fight climate change, socioeconomic inequality, and unstable financial systems. The organizers used Kate Raworth‘s model of Doughnut Economics to imagine possible approaches that would balance the need for minimum standards of living for all people (the social foundation), within the environmental limits of the Earth. This day was intended to be the first encounter of longer series of meetings, aiming to connect people working on themes that are strongly linked and to facilitate their integration and collaboration.
Kate Raworth was present through a prerecorded video presentation in which she emphasized how we are currently overshooting the donut on both sides, with poverty and hunger in the center of the donut, and climate change and environmental destruction on the outside of the donut. In order to eliminate human deprivation while staying within planetary boundaries, she argues we need economies that are distributive and regenerative by design. Sources of wealth creation, particularly housing & land, energy generation, enterprise ownership, money creation, and info & technology, will need to be pre-distributed. Simultaneously, we will need to work within the cycles of the living world toward a circular or cyclical economy, investing in renewables, recognizing the potentials of waste, creating systems of repair and share, and pushing for open source standards, resources, and data. She invited people to join the discussion groups on these topics on her website.
The second presenter was Harold Boven, an economist and co-initiator of the plan Courageously Forward by the Young Democrats, which is a financially covered plan for basic income that would end all poverty in the Netherlands. Harold presented data from a Dutch study (CPB, 2016) that could not find any positive results of the 6.5 billion euros invested in activating employment policy to get unemployed people into jobs. He emphasized that basic income would not lead to inflation because it is fiscally financed and does not require the introduction of extra money. According to him, a basic income of €1200/month per single adult and €300/month per child, adding €600/month per adult when sharing a household. He presented a financing mechanism to cover the 164 billion euros annual cost for such a policy, which would come from the elimination of existing welfare programs (134 billion), the introduction of lightly progressive property taxes (14 billion), environmental and energy taxes for companies (14 billion), and inheritance taxes (2 billion). Disability payments would remain untouched. Apart from the usual advantages attributed to basic income, Harold added that it is a response to the failure to the current system and dissatisfaction with the political establishment, while presenting an alternative for emerging populism.
Anne Knol, from Environmental Defense, shared her insights on what she learned about the incredible complexities of interconnections between environmental and social problems. Anne estimated that science guides about 5% of debates, while emotion, lobby, and the interests of political parties guide the rest. She argued that campaign leaders need to present appealing stories that can compete with the story of capitalism and the widely spread and accepted idea that the market should be allowed to run its course. Anne reminded the audience about the donut economics, and to the dangers of overdoing policy on the environmental front, and then affecting people on the bottom of the income scale. On the other hand, there is the fear that if people’s standards of living are risen, that could lead to more environmental excesses. Hence the need to work on both “sides” of the donut simultaneously, ensuring a just distribution of both the costs and the benefits of environmental policies.
Herman Wijffels (Wikipedia)
The last main speaker of the day was Klaas van Egmond, professor of Geosciences at the University of Utrecht, co-initiator of the Sustainable Finance Lab, and board member of the NatureCollege. He discussed the problems in the current configuration of our financial system and the reforms necessary to break with the types of practices that led to the 2008 financial crisis and that will result in more problems in the future in they remain unchecked. Klaas explained that, in a healthy society, the main goal is the expression and implementation of values, as supported by the economy, in turn supported by the financial system. Klaas proposed that clear boundaries between the public and the private must be reinstalled, banks must not be bailed out and cannot have the power to create money. The community misses out on 40-50 billion euros per year due to money creation by private banks. This could instead be used to fund basic income and a smooth transition to sustainability. These measures would break with the cycle of growth and collapse, lead to a stable economy, and allow for complete elimination of government debts.
The day was wrapped up by Herman Wijffels, co-chair of Worldconnectors and until last October professor of sustainability and social change at the University of Utrecht. He emphasized that our current system is socially and economically dysfunctional and has been bought by capital. According to him, we are facing the end of material growth due to the exhaustion of natural resources and are on a journey through the desert to find a new promised land. Wiiffels spoke about a new type of society, with a fairer distribution of wealth, while putting the planet first. Basic income and financial reform would be key elements in the transformation of the capitalist system. In addition, he said that we need to acknowledge that masculine values are no longer appropriate for the 21st century and we should embrace feminine values, which would mean a greater care for life, connections with the Earth and all people on it.
More information at:
Donut-D-Day was live streaming on Facebook (in Dutch)
Article written by Karin Berkhoudt, reviewed by André Coelho.
by Andrew Sanchez | Sep 19, 2018 | News
Sam Altman. Picture credit to: San Francisco Chronicle.
Y Combinator (YC) Research will begin its basic income study in 2019 after regulatory hurdles slowed a pilot program in Oakland, California.
The proposed study, entitled “Making Ends Meet,” will provide monthly cash transfers of $1,000 to 1,000 participants for three or five years. Another 2,000 people will serve as a control group and receive monthly transfers of $50 for the duration of the study. As reported by Wired , the experiment will take place across two states with the exact locations to be decided in the upcoming months.
As outlined in their project proposal , YC Research’s basic income study will assess the effects of unconditional cash transfers on a variety of factors including time use, objective and subjective well-being, and financial health. The study will be administered by staff at Y Combinator Research in collaboration with the University of Michigan Survey Research Center.
Y Combinator Research is the non-profit research arm of start-up accelerator, Y Combinator. In 2016, Y Combinator president Sam Altman posted a “Request for Research” in which he forecast the need for a universal basic income (UBI) in an increasingly automated future: “I am fairly confident that at some point in the future, as technology continues to eliminate traditional jobs and massive new wealth gets created, we’re going to see some version of this at a national scale.”
In September 2016, YC Research initiated a pilot study in Oakland to evaluate experimental design in preparation for the full-scale study. Although the pilot was intended to enroll approximately 100 participants, it ultimately included fewer than ten people as bureaucratic obstacles slowed the study’s implementation. The researchers encountered difficulties in trying to ensure that participants would still receive means-tested support payments as their nominal incomes were increased through receipt of cash transfers.
Elizabeth Rhodes
YC Research’s study will go ahead even as other UBI trials have been cancelled in recent months. In Ontario (Canada), a new administration led by premier Doug Ford, prematurely cancelled a basic income trial earlier this year , and in Finland, a highly-publicized trial has been refused future funding.
Despite the cancellation and discontinuation of government-led trials in Canada and Finland, other studies in the United States are still on course. The Economic Security Project, led by Facebook co-founder Chris Hughes, has plans for a basic income trial in Stockton, California and Greg Duncan, at the University of California, is organizing a long-term study of cash transfers to low-income mothers, under the name “Baby’s First Years.”
These trials will not be the first studies of UBI in the United States. Beginning in the 1960s, four Negative Income Tax (NIT) trials were conducted in the U.S. as new forms of welfare provision, attracted attention across the political spectrum. Although the trials represented a milestone in experimental social science at the time, their results were subject to differing interpretations by the media, politicians, and participating researchers. Some results, such as a reported increase in divorce rate – a result which was not replicated and has subsequently been disputed – were used to discredit basic income as a legitimate alternative to traditional welfare programs.
The current trials proposed by YC Research, the Economic Security Project, and Greg Duncan will mark a new chapter in the study of basic income in the United States. Unlike earlier studies and recent efforts in Ontario and Finland, the American studies will be privately funded and thereby insulated from changes in government policy which have hindered state-sponsored projects.
As UBI attracts increased attention in the political sphere, long-term studies like the proposed YC Research project will be necessary to assess competing claims about the effects of cash transfer programs in different social and economic contexts.
More information at:
Nitasha Tiku, “Y Combinator learns basic income is not so basic after all”, Wired, August 27th 2018
Kate McFarland, “Ontario, Canada: New Government declares early end of guaranteed income experiment”, Basic Income News, August 2nd 2018
John Henley, “Finland to end basic income trial after two years”, The Guardian, April 23rd 2018
Kate McFarland, “Stockton, CA, US: New details revealed in planned basic income demonstration”, Basic Income News, 23rd August 2018
Karl Widerquist, “The basic income guaranteed experiments of the 1970s: a quick summary of results”, Basic Income News, December 3rd 2017
