by Harry Curzon | Jun 30, 2018 | News
Olli Kangas. Picture credit: What.Happens.Now?
Olli Kangas, one of the masterminds behind Finland’s Universal basic income (UBI) research experiment, has spoken in detail about the process of implementing the UBI experiment and the challenges that have come with it. Finland’s UBI trial, presents the first of its kind in Europe, however different to other examples of UBI, in that it only gives handout to the unemployed. The research study organized and supervised by Kangas involves around 2,000 unemployed participants, with a budget of approximately 20 million euros, where each participant of the study getting around 560 euros a month for two years.
“Although the contribution a person gets is low, it is permanent and secure,” said Olli Kangas, speaking at the 2018 Nordic work life conference. Kangas overarching goal within the project is to uncover what happens when the people being studied no longer must waste time submitting for economic assistance from the state. Would this newfound time be spent looking for jobs or on other activities?
Politically, Kangas has faced multiple problems in trying to get the experiment up and running, which began in 2016. For instance, some politicians in Finland from the Finns party have argued that the UBI will only succeed in turning Finland into a hotspot for welfare scammers and refugees. This has only added further bureaucratic and political resistance to the project.
Opposition to the UBI project has seemingly transcended ideological lines, in terms of Left and Right typical political wings. The most adamant critics of the project argue that UBI simply acts as a tool to give out free state handouts, which acts to kill citizens desires to get jobs and contribute to working society. Kangas replies that the purpose of the study is to shed some light over these questions posed by sceptical politicians and to reveal how people act when they receive unconditional guaranteed payments.
Olli Kangas. Picture credit to: Iltalehti.
The initial planned study was expected to be large in scope and funding, which as stated by Kangas “made us feel like ‘masters of the universe’, planning an experiment with 100,000 participants. But we soon came back down to Earth, since the bureaucrats turned out to be stronger than the politicians”.
A major problem that the political resistance has brought with it is the difficulties in securing funding for the experiment. As remarked by Kangas over the Nordic Work Life Conference 2018, “it has been extremely difficult to secure funding for this. Politicians were willing to provide 20 million euro for the experiment, but just 700,000 euro to evaluate it”. However, the experiment has also received support from each political side too, with some politicians from the Right viewing UBI as a potential method to strip back the welfare system and arguments from the Left which see UBI more as an expansion of the welfare state.
An additional obstacle with the setting up of Kangas research study was the Finish Constitution. It states that there must be no unequal mistreatment of citizens, which impacted the plans to conduct an obligatory study where participants received payments regardless of whether they needed or wanted them. Hence Kangas had to scrap any experiment that implied payments to anyone, regardless of employment status.
Even given the challenges for setting up this experiment, it has been running for almost two years, and is scheduled to finish at the end of 2018, with its findings expected to be published in late 2020. Finish politicians and social researchers alike will have to wait as to whether their differing claims about the UBI experiment come to fruition. Kangas suspects that with the scepticism rising around the expected results of the project, this will be finished a year earlier than first set out and that if any UBI policy is to be implemented in Finland “it would be through the back door – by merging and simplifying some types of benefit”. Due to the great deal of resistance Kangas has faced when trying to implement this experiment on basic income, he is not entirely optimistic about the prospects of implementing UBI in Finland and feels it’s unlikely to happen in the future. However, Kangas admits that “One experiment here or there couldn’t say if basic income is good or not”, which leaves, in a way, the door open to new initiatives regarding basic income from Kela, the Finish Social Security.
More information at:
“Finland’s basic income organisers correct inaccurate media reports of trial’s premature death”. Yle Uutiset, April 25th 2018
Björn Lindahl, “The research project against all odds: Olli Kangas on Finland’s universal basic income”. Nordic Labour Journal, June 22nd 2018
Olli Kangas on YouTube, 2018
Heikki Hiilamo and Olli Kangas, “Universal Basic Income: Does the Carrot Work Better than the Stick?”. Meeting of the Minds, January 27th 2017
Olli Kangas, Sharon Bessell and Martyn Pearce, “Back to basics – Finland’s Universal Basic Income – Policy Forum” (Podcast). Asia & the Pacific Policy Society – Policy Forum, June 1st 2018
by Guest Contributor | Jun 29, 2018 | Opinion
Written by: Leah Hamilton, MSW, PhD
Democrats and Republicans don’t see eye to eye very often, but they can safely agree on one point: welfare doesn’t work. Liberals are concerned that an ever-shrinking social safety net reaches fewer and fewer families in need. Republicans worry that welfare benefits create dependence. They are both right.
The primary cash assistance program in the United States, Temporary Assistance to Needy Families, served 68% of low-income families in 1996. Today, only 23% of poor families receive assistance. This change has been largely brought about by the imposition of five-year lifetime limits (states are allowed to set lower limits) and stricter eligibility criteria. Welfare caseload reductions have been solidly linked to the rise of deep poverty in America, family strain and increased foster care placements. 1.46 million US households (including 2.8 million children) now live on less than $2 per person, per day (the World Bank’s measurement of extreme poverty).
Meanwhile, welfare eligibility rules designed to encourage independence have achieved the opposite effect. For example, though many states impose strict work requirements, states which loosen these rules actually see recipients move to higher wage, higher benefit work, presumably because they have the breathing room to search for a good job rather than take the first one that comes along. Similarly, in states with strict limitations on recipient assets, poor families are less likely to own a car, making it nearly impossible to maintain employment in areas without public transportation. Even worse, some researchers are discovering a “cliff effect” in which welfare recipients immediately lose all benefits (including child care assistance) after a small increase in income. As a result, many parents turn down promotional opportunities because they would be ultimately worse off financially. Any parent would make the same decision if it meant the ability to feed their children and afford quality childcare.
We must redesign this entire system. In the most prosperous nation in the world, it is ludicrous that children are growing up in the kind of deprivation we normally associate with developing countries. Simultaneously, we must ensure that no one is discouraged from growing their income or assets. One potential solution is a universal basic income, which would provide an annual benefit to every citizen. However, this idea comes with a hefty price tag and would either increase our national deficit or increase the marginal tax rate, both of which might be political non-starters. The simpler solution is a Negative Income Tax (NIT) which is potentially cheaper than our current poverty alleviation efforts. An NIT is a refundable tax credit which brings every household to the federal poverty level. The most effective way to do this is to decrease the credit slowly (for example, a $0.50 reduction for each $1.00 increase in earned income) so that there is never a penalty for hard work.
Researchers at the University of Michigan calculated what this might look like in practice. If a family had no income, their tax credit would be 100% of the poverty line ($20,780 for a family of three). If the family’s earned income increased to half the poverty line ($10,390), their tax credit would decrease to $15,585. The credit would phase out completely once the family’s income reached twice the poverty level ($41,560). This plan would cost roughly $219 billion per year and could be almost completely paid for by replacing most or all of our current poverty programs.
With this one simple policy, we can achieve many goals of both the left and right. Poverty would be eliminated overnight. Work disincentives would be removed. American bureaucracy would be significantly reduced. Families would be free to make financial decisions without government intrusion. And in the long run, we would save money. Childhood poverty alone costs the US $1.03 trillion (yes, trillion) per year. In the 21st century, eradicating poverty isn’t complicated. We’re just going about it in the worst possible way.
About the author:
Leah Hamilton, MSW, PhD is an Assistant Professor of Social Work at Appalachian State University. She received a BSW from Metropolitan State University of Denver, an MSW from the University of Denver and a PhD in Public Policy at the University of Arkansas. She served as a Foster Care Case Worker and trainer for five years in Denver, Colorado. Dr. Hamilton’s research interests include poverty, economic justice, and social policy.
by Hilde Latour | Jun 15, 2018 | News
Picture: Deep Dog at the Beach by Botgirl Questi, 2014, CC-BY-NC 2.0
On June 6th 2018, Trent McConaghy, founder of Ocean Protocol and BigchainDB states in his article “Nature 2.0, The Cradle of Civilization Gets an Upgrade”, that a combination of Artificial Intelligence (AI) and Blockchain can result in a future of abundance. Profits from self-owning machines can pay for a Universal Basic Income (UBI), according to this expert in the field of automation.
A Blockchain is a database with new characteristics compared to traditional databases, as McConaghy explains:
- “It’s decentralized — no single entity owns or controls it. There’s no single point of failure
- It’s immutable — once you’ve written into it, it’s there for good. (unless intentionally changed)
- And it has assets – you own something if you have the private key. “
Furthermore, Blockchains can not only be used for data storage, but also for processing data and communications. Blockchains, like Bitcoin, can be seen as information-centric Public Utility Networks (PUNs), states McConaghy, and “as “trust machines” these minimize the human trust (in banks) needed to operate. In doing so, these allow ever larger organizations of people to interact without trust issues arising. McConaghy says that the most important characteristic of blockchains is “incentives”. According to him, “a person can design a network that gets people to do stuff, by rewarding them with tokens.”
Then he takes us a step further and explains that Blockchains can also be designed as a Decentralized Autonomous Organization (DAO), which is a computational process which runs autonomously on a decentralized infrastructure. McConaghy explains: “A DAO is autonomous code that can own stuff.”
Trent also refers that AI and DAO combined can generate value by making and selling art, using Genetic Programming (GP) (as in this example), or Deep Dreams (a twist of Neural Networks). It can be achieved when a computer program ‘orders’ an artwork to be generated, sells it on a digital marketplace for crypto currencies and repeats the process (generating a new artwork). Over time, it accumulates wealth, without any human controlling it, while evolving with its own GP coding.
“This is possible with today’s technology” and AI-DAO’s can get rights using today’s law, McConaghy states. The impact of the combination of AI and DAO is huge because it combines database resources with autonomous decision-making. Making and selling art is only one example, but self-ownership can be done with self-driving cars and even roads, windfarms and energy grids, according to McConaghy. He concludes by stating:
“Many dream of Universal Basic Income (UBI), because it can address worries about job loss in the face of AI, and help more people to chase their dreams and self-actualize. Blockchains make the distribution side straightforward. Anyone that provides some proof of being human (even if imperfect) gets an equal amount of income arriving to the UBI chain. The challenge is how to pay for it. Nature 2.0 gives a solution to this! In short: profits from self-owning machines pay into the UBI chain.”
More information at:
Trent McConaghy, “Nature 2.0: The Cradle of Civilization Gets an Upgrade”, Medium, June 6th 2018
Special thanks to André Coelho for reviewing this article.
by Sandro Gobetti | Jun 14, 2018 | News
Since the new government led by Movimento 5 Stelle (M5S) and Lega (the Italian extreme right-wing party) was formed, the proposal of a so-called “citizen income” in Italy has had much echo. First proposals go back to 2013, having been reported at the time.
This proposal is among the first programmatic points of the M5S and has been included in the “government contract“, among the goals to be achieved in this legislature. It has reverberated widely, and some confusion has been established. It has been suggested that basic income is in the pipe for Italy’s social policy, an idea inflated by some media reports. To that also contributed the reporting on the Livorno case, a small coastal town in Italy, in which a conditional to work type of basic income experiment has been conducted, having even been listed among the basic income experiments in the world at this time (year 2016).
To be clear, the M5S, even conceding the use of the term “citizen’s income” (a term coined in the 90s, by social movements and precarious workers, signifying “basic income”), is proposing a targeted to the poor minimum income scheme, conditional to work. This kind of policy has already been adopted, for many years, in the majority of European countries. The fact is that Italy is still one of the few European countries which doesn’t have experience with social support for those living below the poverty line. Moreover, European institutions have been asking for the introduction of at least economic support for the poor in Italy, which is one of the countries with the highest poverty rates in Europe.
The only social support for the poor up to this moment, in Italy, was introduced by the previous Gentiloni government, which has introduced a “minimum income for inclusion” intended for poor families. This support, however, is very conditional, and includes obligations for the whole family to accept any proposed work and a benefit that averages 130 € per month per person. In addition, only € 1.8 billion have been assigned to fund this social benefit, which covers only a small fraction of the families in need of assistance. The M5S proposal is similar, only the value is increased to around to 780 € per month per person.
The 5 Star Movement has developed, however, the hability to bring forth, in the Italian political debate, a theme that in many other European countries has already been settled with income support for the unemployed or the poor.
Social support in the shape of minimum income has suffered funding cuts across Europe, given the austerity measures of the past few years, with the introduction of severe restrictions which reduce accessibility and introduce more work conditions. The Hartz IV reforms in Germany and the Universal Credit in the United Kingdom are examples of this. Neverthleless, this is the kind of social support the 5 Star Movement is putting forth at the moment, with the “citizen’s income” proposal.
Luigi Di Maio (Photo credit: Andreas Solaro/AFP/Getty Images)
Luigi Di Maio, the current vice-prime minister and minister of labour, is quick to clarify what he means by “citizen’s income”: “those receiving this income will not stay on the couch doing nothing, but will be called on to accept any kind of work, and will be forced to work for the State for at least eight hours per week in the meanwhile”. This adds to a very common mindset of conditional support, based on the belief that people will remain inactive if they are given that chance. A belief grounded on a firm reciprocity work ethic (workfare), particularly remote from the idea of basic income.
The proposal, which provides an arguable light condition to work (a possibility to refuse work if it doesn’t align with the minimum income recipient expectations), has never been discussed in Parliament, even though it was brought into parliamentary committees.
The Movement of which Luigi Di Maio is a part of has made a legislative proposal for this conditional minimum income, but the actual parliamentary debate has not yet started. Part of this proposal is the financing of the policy with a quick-start of 2 billion € in two years, to setup a system of employment certers for ensuring that receipients are controlled in their way to find employment. Simultaneously, a proposal of an income Flat Tax of 15% has also been made, which has been associated with tax cuts, given the present day tax landscape in Italy.
However, there have been other proposals already delivered for Parliamentary discussion, such as the popular bill for the introduction of a guaranteed minimum income, presented in 2013. This bill was backed by over 170 associations, after a six-month social campaign, 250 public initiatives and more than 50 000 signatures collected.
There is no doubt that all this political activity has awakened the debate about guaranteed income, or a right to an income, and also about unconditional basic income. In fact, a series of political campaigns have begun in Italy, particularly thanks to movements of precarious workers, who demand a “guaranteed income immediately” and who took the streets with demonstrations in front of the institutional offices. They lined up in front of job centers, asking for a guaranteed income to be given to them “now”. Citizens movements concerning the right to proper housing and several labour unions, have also demonstrated their request for a guaranteed basic income in several events, while other groups such as the femininst movement “non una di meno” propose ideas such as the self-determination income, which is similar to an unconditional basic income.
More information at:
Sabrina Del Pico, “Italy: 5 Star Movement and the confusing proposal of a citizen’s income“, Basic Income News, March 14th 2013
Brian Wang, “Italian government talks 780 € per month basic income and tax cuts dispite Greece like debt levels“, Next Big Future, June 2nd 2018
Andrew Kaplan, “Italy: Basic Income Pilot launched in Italian coastal city“, Basic Income News, December 28th 2016
Chris Weller, “8 basic income experiments to watch out for in 2017“, Business Insider, January 24th 2017
Chris Pleasance, “Italy will soon have a flat 15 per cent tax rate and universal income scheme if president agrees coalition deal between anti-establishment and far-right parties“, MailOnline, May 18th 2018
Sandro Gobetti, “The bitter Italian situation: no basic income and false protection for the poor“, Basic Income News, April 24th 2017
[in Italian]
Chiara Brusini, “Reddito di cittadinanza? Prima 50mila assunti. Centri per l’impiego senza risorse e banche dati [Citizens income? Only for the first 50 000 hired. Employment centers with resources or databases]“, Il Fatto Quotidiano, March 27th 2018
Basic Income Network Italy, “50mila firme per proposta di legge sul reddito minimo garantito [50 thousand signatures for a proposed law on guaranteed minimum income]“, February 28th 2018
Sandro Gobetti, “Roma 5 giugno: in assemblea per un reddito subito! [Rome, June 5th: assembly for an income immediately!]“, Basic Income Network Italy, June 4th 2018
Article reviewed by André Coelho
by Andre Coelho | Jun 10, 2018 | News
The Innovations for Poverty Action (IPA) group, based in New York, is preparing a large-scale cash transfer study in Liberia, particularly focusing on rural farming households. Cash transfers will be delivered by GiveDirectly, and also coordinated with USAID, to be rolled out for at least two years. GiveDirectly has been responsible for other large scale unconditional cash transfer programs, namely in Kenya, and is applying the randomized controlled trial method to the Liberian study as well.
There have been other cash transfer programs in Liberia, such as the Cash for Work on Vulnerable Youth in Liberia, but “no positive psychosocial or economic impacts were observed”. This program, due to its conditionality, “was found to be undesirable and faced implementation challenges”. It was also managed by Innovations for Poverty Action, now innovating by participating in a basic income-style cash transfer study.
IPA and GiveDirectly are, therefore, recruiting senior researchers, program managers and office administrators. To this end, J-PAL – Abdul Latif Jameel Poverty Action Lab – is also helping with providing ways to draw top human resources to this task. Already onboard are principle investigators Jon Robinson (University of California, Santa Cruz), Jenny Aker (Tufts University), Alan Spearot (University of California, Santa Cruz) and Shilpa Agarwal (India School of Business).
More information at:
Kate McFarland, “US/Kenya: GiveDirectly launches UBI experiment”, Basic Income News, November 17th, 2017
