by Andre Coelho | May 20, 2018 | News
Andrew Yang has already made his name known by leading a presidential campaign which defends the implementation of basic income. Now he extends that with an interview for the Merion West journal, a news outlet particularly associated with low biases. In that interview, posted on the 9th of May, Yang affirms his conviction that humanity is going through an unprecedented shift, while the (United States) political class “is completely asleep at the switch”.
Yang, as other influential people in the United States, especially those dealing with technological developments and digital-based companies, is very worried about the job loss wave in the United States, due to automation. According to him, that is already happening, and will deepen in the near future. To counteract the predictable consequences of such job displacement “by software, AI, and machines”, he defends the implementation of a 1000 US$/month per adult basic income, which he calls a “freedom dividend”. That and a “human-centric capitalism”, an economic system which measures things like “childhood success rate, mental health, levels of engagement with work, freedom from substance abuse”, instead of GDP.
Asked about a possible parallel with the Industrial Revolution, where, despite strifes and strikes, displaced people eventually found new work, Yang says that (referring to manufacturing workers in the Midwest) “there was no magical reorganization of work; instead, many workers went home and killed themselves by the numbers”. According to him, anyone thinking this “magical reorganization of work” is possible, is “not paying attention to the real data on the ground rate now”.
As for basic income itself, Yang approaches it with a certain humour, even, when he says “One thing I’m looking forward to asking, when I’m president, which state would like to have universal basic income first?” However, he states it very seriously when putting forth his conviction that “universal basic income would dramatically improve the lives of tens of millions of individuals and families. There might be some tweaks and tailoring, but I’m very bullish on the substance”.
As for financing, Andrew Yang is confident that a basic income of 1000 US$/month per adult is affordable, considering its price tag is around 2 trillion US$ per year, compared with current welfare costs of 6 trillion US$ per year. That doesn’t equate to ending all welfare benefits, but that it is possible to include basic income within the benefits systems, by introducing an unconditional parcel. Even still, he defends, like Phillipe van Parijs has also proposed in the European context, basic income can be mostly financed with a value-added tax around 10%, or about half of what is practiced in Europe, on average. An expectation of further economic growth, due to a rise in aggregated demand by influence of the existence of a basic income, will self-finance the rest, given an equivalent rise in collected taxes.
Yang also believes that the US current system of social security, health and education are essentially broken, categorizing them as “dysfunctional welfare systems”. According to him, these systems generate vast disincentives amongst the population, or benefit traps. Hence, the introduction of basic income could break those economic and social traps, by providing a financial floor cumulative with earnings from a job. As far as economic policy is concerned, he concludes the interview with a deeper, more general call to society: “In America, we won’t trust our people, but the only thing we will trust are systems, and more systems and processes—and it’s immensely counterproductive. We need to start trusting our people again; we have to trust ourselves.”
More information at:
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
Henri Matilla, “Interview with Andrew Yang, 2020 Presidential Candidate”, Merion West, May 9th 2018
by Michael Lewis | May 18, 2018 | Opinion
Facebook and Economic Security Project (ESP) co-founder, Chris Hughes has a new book out. Called Fair Shot: Rethinking Inequality and How We Earn, the book is part memoir, part policy proposal. The memoir chronicles Hughes’ childhood growing up in a North Carolina working class family, his school days, including four years at Harvard, his co-founding of Facebook, his failure as owner of the New Republic, and his efforts trying to figure out how best to give away his new-found fortune. The things Hughes learned during this thirty-year journey led to the policy proposal part of the book.
Hughes advocates what he calls a guaranteed income (GI) and is clear about how his proposal differs from a universal basic income (UBI). A UBI would periodically provide everyone with a certain amount of money without any means-test or work requirement. Hughes’ guaranteed income proposal has two provisions which distinguish it from a UBI: it is means-tested and it does have a work requirement. His idea is that we should provide every adult living in a household with an income of less than $50,000 a year a guaranteed income of $500 per month. So if Tara and Willow were a couple with a household income of $45,000 per year, each would each receive $500 per month. Thus, each would end up with $6,000 per year or $12,000 per year for the two of them. If Buffy and Angel had a household income of $60,000 per year, they would be ineligible for the program.
One reason Hughes is so interested in distinguishing his proposal from UBI is that he believes UBI has become too associated with automation. That is, the most frequently heard argument for UBI is that as robots and automation destroy jobs, we will need to reorganize society so people will be able to get their needs meet without having to sell their labor. Hughes rightly points out that there is a fair degree of debate about the extent to which jobs will be destroyed and, therefore, the extent to which concern about automation is a compelling enough reason to advocate UBI. Hughes also rightly reminds us that whether or not automation will destroy all, most, or whatever number of jobs; the job market is already unstable enough for there to be a need now for a policy that promotes economic security. And he believes his GI proposal is that policy.
As an “old timer” in the basic income “movement” I feel obligated to point out that UBI was discussed long before folks in Silicon Valley were paying attention. And many of those discussions had little to do with robots or automation. Thus a name change, from UBI to GI, is not necessary to suggest there may be reasons to support UBI other than worries about robots taking our jobs. But here we get to the crux of the matter: Hughes’ proposal does not appear to be just a name change but a different policy altogether. As I said above, GI would not be universal and would not be granted to those who are not working. The means–tested nature of GI is clear: those in households with incomes under $50,000 per year would get it, while those in households with higher incomes would not. I’m not a fan of this aspect of Hughes’ proposal, but, for the purposes of this essay, I’m going to set this aside. The work conditioned nature of Hughes’ proposal is less clear. This is what I want to focus on in the rest of the essay.
Even though Hughes’ GI would require people to work in order to receive it, however it does not have to be wage-work. That is, Hughes is willing to expand the definition of “work” to include care work, such as uncompensated child and elder care, as well as studying for a formal degree or training programs. So someone caring for their child or studying for a B.A. would be considered a worker and, therefore, eligible for the benefit, as long as their income was under $50,000 per year.
Hughes places such emphasis on work because he believes it is good for us; he tells us that it makes us, “happier, healthier, and more fulfilled” (p. 103).
As I was reading this discussion of the problems faced by the unemployed, I found myself wondering how much stem from an inability to find something fulfilling to do and how much from stigma. I do not think it is unfair to say that our society denigrates people whom we think can work but choose not to.
But let’s say Hughes is right and people do feel more fulfilled if they engage in wage work. Let’s say that engaging in wage work makes us less prone to depression, irritability, and insomnia. Going to college or caring for one’s kids is not wage work. So what do studies showing we are less prone to psychological and physical problems when we engage in wage work have to do with the kinds of non-wage work Hughes wants to compensate with his GI? I suspect it’s fulfilling, at least some of the time, to take care of one’s kids or to attend college. Is this why care takers and students, along with wage workers, should be compensated with a GI? But if something being fulfilling is sufficient to warrant compensation, why stop at wage work, care work, or going to school? People do all kinds of things, besides these three, they find fulfilling. Why not give them a GI too?
On page 92 of his book, Hughes says that, “everyone who contributes to their community” should receive a GI. It seems that engaging in something fulfilling is not what warrants receipt of a GI — making some social contribution does. This raises the question of whether being a wage worker, care taker, or student are the only ways to contribute to one’s community. Hughes’ answer seems to be “no.” On page 112, he argues for a more expansive definition of “work” which would include not just wage work, care work, and studying but also community service, religious service, and artistic work.
Here I found myself wondering how far Hughes is willing to go. That is, how expansive a definition of “work” does he want? The more expansive his definition becomes, the more fuzzy the distinction between GI and UBI (the unconditional part) becomes. To see what I’m getting at consider the following example.
In downtown Manhattan, there’s a famous, at least among many basketball lovers, outdoor basketball court on 4th Street and 6th Avenue. Basketball, in a sense, is a very communal game. A person may shoot jump shots all by themselves. But to play a full-court pick-up game requires ten people. So if someone decides to play, even for the “selfish” reason that they get fulfillment from it, they benefit the other nine players as well, simply by making the game possible. Now the folks who play at this Manhattan court are quite good. Many of us who’ve seen games at this court think it’s some of the best pick-up basketball we have ever witnessed. In fact, the quality of games at this court is so high, that large crowds of people usually gather just to watch the action. Presumably, these spectators get a great deal of enjoyment from watching these folks try to get the “ball in the hole.” Now here’s the question: are the players at this court, simply by playing, making a social contribution? They are not doing wage work, care work, art work, or religious service. Are they doing community work? If Hughes’ GI were enacted and all these players were from households with incomes of less than $50,000 per year, should they receive it?
Another way to get at the question above is this: under an expanded definition of work what would not qualify as work? If it turned out that anything done during one’s waking hours was work, then the difference between GI and the unconditional part of UBI would simply be semantic. Hughes could respond that semantic distinctions are not “merely semantic.”
In a society where work is a fundamental value it may be necessary to call something work, as well as convince others that it is, in order to give the person engaged in that activity a guaranteed income. This is a response I would agree with. But I would add that the importance of semantics cuts both ways.
Requiring an activity to be considered work before the person engaged in it can receive income support is also sending the semantic, or symbolic, message that only working people deserve economic security. I can understand why we might want to do this in a hunter-gatherer society where all are living on the brink of starvation. But do we really need to in the richest society the world has even known? Consider something that may at first appear unrelated.
The U.S. currently imprisons about 1.5 million people. Anyone familiar with the U.S criminal justice system is aware that our prison population is, arguably, one of the most despised groups of people in the nation. Yet we grant all these prisoners a right to food. Prison life is no doubt hard. And we certainly do not feed incarcerated people the best food possible. But we do feed them, and I suspect anyone who proposed that we stop doing so would not get very far. Now here’s a question: is refusing to make a social contribution worse than the most serious violent crimes we have imprisoned some people for committing? If not, why propose a policy which sends the semantic message that non-working people do not deserve income support, income that could help them obtain food, as well as meet other basic needs? Why send a semantic message which implicitly amounts to the claim that non-working people are worse than some of our most violent prisoners?
To anticipate a possible misunderstanding, I am not claiming that non-working people are better than some of our most violent prisoners. My point is simply that if all prisoners have a right to subsistence, why not grant non-working people that same right? Prisoners, non-working people, and all the rest of us are human beings in need of food and other means of subsistence. A UBI, at the semantic level at which I am speaking, acknowledges this. Hughes’ GI proposal does not.
Thanks to Chris Hughes for his very helpful comments on this piece. Any mistakes or errors are, of course, my responsibility alone.
About the author:
Michael A. Lewis is a social worker and sociologist by training whose areas of interest are public policy and quantitative methods. He’s also a co-founder of USBIG and has written a number of articles, book chapters, and other pieces on the basic income, including the co-edited work The Ethics and Economics of the Basic Income Guarantee. Lewis is on the faculties of the Silberman School of Social Work at Hunter College and the Graduate and University Center of the City University of New York.
by Andre Coelho | May 17, 2018 | News
Since the beginning of 2017 that basic income has been on the political agenda in Gironde, a southwestern region in France. At that time, several Administration task groups worked together, from December 2016 up to February 2017 to reflect on the possibility of implementing a basic income policy in Gironde. Those groups included social network representatives, entrepreneurs, social workers and volunteers, and have deliberated (on the 15th of February 2017), as a “citizen jury”, that basic income should be implemented in France, and adapted locally, in this case for the Gironde region.
Jean-Luc Gleyze, the President of Gironde’s Council Department and of its Permanent Commission has been behind this initiative since early 2017, and a strong supporter of launching a basic income experiment in Gironde. Many press references and a video were produced since that moment, motivated by this initiative, which was praised by former French prime-minister Manuel Valls. A motion proposal “for the experimentation with basic income in Gironde” was presented to government after it had already been reflected upon a French Parliament report (with its synthesis document), undersigned by Daniel Percheron, senator and former President of (French region) Nord Pas-de-Calais Regional Council. This report recommended the experimentation with the concept for 3-year periods, in each voluntary department (region), especially targeting young (18-25 years of age) and pre-retirement adults (50-65 years of age).
Jean-Luc Gleyse. Credit to Alban Gilbert.
At the moment, the basic income pilot project in Gironde is being planned for 2019, after President Emmanuel Macron has also shown his will to authorize and support local experiments. In a first step, this could mean co-financing in the order of 100 000 € to support feasibility studies, in preparation for actual experiments. These feasibility studies are thought to last for four to six months, and define the experimental parameters, such as population segments, duration and basic income level.
According to Jean-Luc Gleyse, basic income has the potential to respond positively to poverty and insecurity situations, adequately assist people as instability in the job market deepens due to automation, can provide choices in the present ever-changing lifestyle and also decrease the non-uptake of social benefits, “which reach 34% in Gironde and almost 40% nationally”.
Although the basic income experiment envisioned for Gironde has not been deployed yet, an online basic income simulator has been made available to citizens. This tool allows people to look at the possibilities for a basic income in France, and its consequences as far as financing is concerned.
More information at:
(in French)
Daniel Percheron, “Le revenue de base en France: de l’utopie à l’expérimentation [Basic Income in France: from utopia to experimentation]”, Sénat Francais, October 13th 201
Pierre Cheminade, “Vers un revenue universel en Gironde dés 2019 [Towards an universal basic income for Gironde in 2019]”, La Tribune Bordeaux, November 27th 2017
by Julen Bollain | May 14, 2018 | News
The Red Renta Básica association (official section of the Basic Income Earth Network) announces the offer of two scholarships, covering part of the costs to start the Interuniversity Postgraduate course in Analysis of Capitalism and Transformative Policies (from the Universitat Autònoma de Barcelona and Universitat de Barcelona). The purpose being to enable access to suitable students who are in a difficult economic situation.
In the Interuniversity Postgraduate course in Analysis of Capitalism and Transformative Policies, the main ideas of republicanism, socialism, anarchism, environmentalism, feminism and the theories of justice and the commons will be discussed. Capitalism, jobs, trade unionism and both traditional and the most recent proposals of social policies will also be analysed. Moreover, there will also be several explanations about the most relevant political and social processes. Several members of the Red Renta Básica association will be teaching in the Postgraduate course and some of its lessons will deal with basic income.
Applications are already opened, and more information can be sought at Red Renta Básica. The deadline for submitting applications ends on June 30th, 2018. The jury in charge of selecting applicants winning the scholarships is composed by three members of the Red Renta Básica board: Julen Bollain, David Casassas and Francisco Ramos.
by Karl Widerquist | May 9, 2018 | Opinion, The Indepentarian
This essay was originally published on Basic Income News in December 2011.
I can’t believe the news. We are in the midst of the worst global depression in 70 years, and the governments of almost every major industrialized country are talking about austerity. They’re cutting government services; laying off public sector workers; cutting pay, pensions, and benefits for public employees—all in the name of austerity and balanced budgets.
This astounds me because we’ve been through it before. We’ve seen what works, and we know that austerity is not the way out of a major depression. Austerity makes depressions worse. To get out of a depression, the government needs to spend money—and lots of it. The lessons of history are clear, and the reading of history I’m going to discuss to make my point is not terribly controversial among economists. Let me explain.
In a depression (or a deep recession or whatever you want to call it), we get stuck at the bottom. People can’t spend as much because they’re not making as much, but they aren’t making as much because people aren’t spending as much. Debt is a related problem, and so, I believe, is the real estate market, but there’s no room in this editorial for a full explanation. If you understand the idea of getting stuck at the bottom because of the feedback between spending and income, you get the essence of it. This kind of unemployment is pure waste. Human resources (not to mention idle shops and factories) are simply going to waste unused. We can wait for all that to work itself out on its own—as Japan has been waiting since 1989—or the government can take action.
Austerity is a reasonable response to—say—finding half of our industrial capacity destroyed by aerial bombardment. If our physical capacity to produce goods has fallen, then we’ll all have to make do with a little less for a while. But austerity is the worst possible response to an economy in a depression, because a depression economy is no less able to produce goods than before; it’s simply letting productive capacity go to waste. And that waste exists because people aren’t spending as much. If the governments of the world respond by spending less as well, they simply exacerbate the problem.
We learned how to take action in a big way at the outset of World War II. I wrote a few years ago about “the economic lesson of 1938” (August 2009). Today’s editorial could as well be called “the economic lesson of 1941.” The accompanying graph (at the bottom) shows U.S. per capita GDP for the years 1929 to 1947—from the stock market crash at the beginning of the Great Depression to the bottom of the post-war recession. Per capita GDP is the income of the average American. The figures are in “inflation-adjusted” 2008 dollars, meaning they’re multiplied by an index to show the purchasing power that the incomes of the time would have at today’s prices. No inflation adjustment is perfect, but they give you a rough idea. In general the graph shows we were much poorer back then, but it shows much more about the times.
The austerity years were 1929 to 1933. In addition to many other mistakes, the government responded to reduced tax revenue caused by declining economic activity by reducing its own activity to match. Average income went down from over $11,000 to less than $8,000—a loss of more than 25 percent. You can think of everybody getting a 25 percent pay cut at the same time or of 75 percent of people keeping their entire income while 25 percent of people lose their entire incomes. What actually happened was somewhere in between, a little bit of both. Unemployment went up to 20 percent, and in that sense the Great Depression was roughly twice as bad as what we’re going through now.
In 1933, Franklin Roosevelt was elected and we started spending money to stimulate the economy. He called it “priming the pump.” Years later Keynesian economists would call it “simulating aggregate demand.” Whatever you call it, Roosevelt took what, at the time, looked like big action, spending money trying to help people, to get the economy moving again. And he had several years of success until he returned to austerity measures in 1937 and 1938, suddenly trying to balance the budget. I wrote about that problem in my earlier editorial. Except for that year progress was slow but steady. Yet, by 1941 unemployment was still at 9.67%. After 12 years of waiting for an end to the depression, more Americans were unemployed in 1941 than they are now in the forth year of our depression.
But in 1941 the Japanese bombed Pearl Harbor. The United States entered World War II. And the depression ended virtually over night. We went from a 10-percent labor surplus to a labor shortage in a matter of months. The demand for labor was so great that women entered the labor force in unprecedented numbers. They found good high-paying jobs waiting for them. Average income shot up to $20,000 per year—two and a half times what it was after four years of austerity in 1933.
The depression disappeared because the government spent money and massive amounts of it. The government hired the idle labor (and more) as soldiers and support workers. The government hired the idle shipyards to build boats, the idle automobile plants to build jeeps and tanks, and so on. It was good for people, and it was good for business. The entire New Deal—it turned out—was far too small.
There are dangers to stimulating the economy in the wrong way, at the wrong time, or in the wrong amounts. You can end up with unacceptable debt, inflation, or a delayed depression. This is why I have never thought of myself as a Keynesian, and I do not think that massive stimulus is the best response to a garden-variety recession like most of the ones experienced between World War II and today. I’ve argued in this series (May 2009) that the most important thing government can do during a downturn is the same as during a boom: make sure everyone’s basic needs are met. If that is done, we can often let recessions work themselves out. I guess I’m a last-resort Keynesian. I think most non-Keynesian economists are, although they probably disagree a lot in how bad things have to get before they’ll take up their last resort.
I don’t think we should wait any longer because the possible dangers of a government stimulus can be overblown. None of them manifested themselves during or after the Second World War. Except for the obvious losses to war, the spending was good for people. After the war people got married; they used the money they saved to make down payments on houses, to start families, and to build better lives than they had in the 1930s.
The depression never came back. This is why I end the graph in the recession year of 1947. That year was as bad as the economy got after the war, but yet, per capita income was still nearly $15,000, not quite twice what it was after four years of austerity in 1933 and still 25 percent higher than it was in the boom year of 1929. After 1947 we got good healthy growth punctuated by short, forgettable, recessions. It was one of the best periods of economic growth in American history. The Second Word War spending worked, and there was no post-stimulus hangover, not in the short, not in the long run. The most massive government stimulus we’ve ever had—perhaps the largest in world history—did not cause any significant problems with debt, inflation, or delayed depression.
You can look at the income and unemployment figures for almost every industrialized, capitalist nation at the time, and you will see the same pattern: as soon as they began massive war spending, the depression ended in their country. But we don’t need a war to stimulate the economy. We just need to break the political obsession with austerity and start spending money.
Without the need to spend a stimulus on war, we can spend on schools, bridges, public transits, infrastructure, or on services to help the needy through a basic income guarantee or through something else. What we spend on is less important for stimulating the economy than the need to spend. The basic income guarantee movement now needs to be part of broader movement around the world against the austerity craze. This is one reason I support the Occupy Movement in the United States and the anti-austerity movement in Europe. We must focus the world’s attention on the need for government to spend money to help people. Once we open that door, the possibilities are great. But until then, we practice austerity against the lessons of our history.
-Karl Widerquist (karl@widerquist.com), the Second Cup Café, Doha, Qatar, December 2011
