by Albert Joerimann | Jan 4, 2018 | News
Michael Strobaek, Global Chief Investment Officer (CIO) of Switzerland’s second largest bank Credit Suisse (CS), is interviewed in the December 2017 issue of CS’s “Bulletin“, dedicated to questions around aging. According to Strobaek, it will be crucial to secure the livelihood of the millions of people who will be unemployed through technological development, automation and robotization, and that this has to be done through some sort of unconditional basic income (UBI). Although Strobaek has not provided any specifics about UBI, he is clear that it is required by future unemployment. This future unemployment, however has not been proven as a fact. Despite often cited reports, there is still no proven link between automation and net job loss, since these reports focus on job destruction, not job creation. For an alternative view, that finds that new technology will create new jobs as well as destroying old ones, see Ursula Huws’ article.
Asked who would be supposed to pay for the UBI, Strobaek answers: “The taxpayer. But the question then becomes just what is being taxed? Bill Gates proposed a robot tax to replace the income tax and social security contributions that will be lost through automation. As a society, we still need to find answers to this question.” But according to Strobaek the main challenge relates to future possibilities for human activities when there is very little paid work left. He suggests that “the structures of the world of work will need to be replaced by individual and self-selected structures. Intrinsic motivations will replace extrinsic ones. (…) When people have material security, then they will be able to become involved in the care of older people or of children”. This, however, seems to be in conflict with a deep job-centered logic that he defends throughout the interview, alongside a defence of large families, fearing for population and social security system decline.
Although Strobaek’s interview supports UBI, there is no information indicating whether this is the view of the CS board of directors, or of CS in general. Big banks do not usually publicize particular positions or make their own proposals, except about taxation and regulation within their own framework or on behalf of their clients, since they are doing business with a wide variety of clients, who support all political orientations. There is also no evidence in the interview of an alternative view to Strobaek’s support for UBI. This is consistent with the fact that large financial institutions are generally not criticized in any way in Switzerland, except at times by the political Left.
More information at:
“The New Old Age“, Credit Suisse Bulletin 4th Trimester 2017
Ursula Huws, “The future of work“, personal blog, January 29th 2017
This article was updated by André Coelho and reviewed by Malcolm Torry.
by Karl Widerquist | Jan 3, 2018 | Opinion, The Indepentarian
This essay was originally published in the USBIG NewsFlash in September 2006.
I was struck by a report in the Associated Press reported on October 12th that a 63-year-old Ohio man intentionally had himself convicted of bank robbery. Timothy J. Bowers sought a three-year prison sentence to bridge the gap until he becomes eligible for full Social Security benefits. Bowers had lost his job making deliveries for a drug wholesaler more than three years ago and had been unable to find anything but minimum wage labor, which he could not live on. So, finally, he went to a bank, handed the clerk an envelope and demanded that she put cash it in. He then walked straight to the bank’s security guard, confessed, handed him the envelope filled with only $80 in cash, and calmly waited for the police.
The court-ordered psychological evaluation pronounced him sane and competent to stand trial. Judge Angela White gave Bowers the three-year sentence he asked for. According to the AP, “Prosecutors had considered arguing against putting Bowers in prison at taxpayer expense, but they worried he would do something more reckless to be put behind bars.” Arguing against tough sentencing is an ironic position for American prosecutors well known for locking away petty criminals.
This is an isolated incident. It is hardly a repeat of the Irish Potato famine when there were stories of large numbers of people getting themselves arrested to avoid starvation. But still, I think it says something about the low-wage labor market in the United States today. U.S. prisons are not easy, pleasant, or kind places to be under any circumstances. America is not in a famine; by some measures, it is the richest country in the world. What does it say about the jobs we offer the underprivileged when a sane person can choose prison over labor market?
-Karl Widerquist, New Orleans, LA, September 2006
by Toru Yamamori | Jan 1, 2018 | News
Sonia Sodha (Twitter account image)
Sonia Sodha, lead writer at the Observer, urges the British Left not to support UBI. According to her latest opinion piece for the Guardian, UBI will not cure any social disease that UBI advocates claim will be alleviated, and rather, it is currently a fatal distraction from other battles on which the British Left should focus.
Sodha charted the rationales for UBI in the following three categories: tech utopians’s prophecy of a decrease of jobs, Ken Loachian welfare critics’ blame against inhumanely complex welfare system, and.labour market dystopians’ poverty backstop against insecurity.
Sodha dismisses the tech utopian’s argument by insisting it falls ‘lump of labour fallacy’. According to Sodha, ‘[f]ar from robots stealing jobs, the reality is that many firms are underinvesting in technology, suppressing productivity’ in Britain, and ‘technology will radically reshape the world of work without reducing its sum total’. She also dismisses the argument of what she calls ‘Ken Loachian-welfare critics’ (though Loach himself has never argued what Sodha labels under his name) and states:
“We could fix the caring issue simply by increasing the generosity of the stingy state benefits paid to those who care full-time for older people or adults with disabilities. If we were so inclined, we could get rid of punitive benefit sanctions and replace them with a welfare-to-work system that puts much more emphasis on training and support for people to find the job that is right for them, not the first that comes along.”
Finally, Sodha opposes the labour market dystopians, by accusing them of not fighting for labour rights but for ‘a dribble of cash’. Similar points to Sonia Sodha’s were made by Bo Rothstein in a recent Social Europe article, ‘UBI: A bad idea for the welfare state’ A response followed, ‘Universal Basic Income: Definitions and details’. The same detailed response would apply here.
Behind her accusations, there is a recent move for UBI inside the Labour party. See the articles below for more on Labour Party activity regarding UBI support:
Toru Yamamori, “UNITED KINGDOM: Jeremy Corbyn, candidate for Labour Party leader, recruits Basic Income advocate to draft economic plan”, Basic Income News, August 8th 2015
Toru Yamamori, “United Kingdom: Labour Party considers universal basic income”, Basic Income News, February 21st 2016
Kate MacFarland, “UK: Labour Leader to Investigate Universal Basic Income“, Basic Income News, September 15th 2016
Genevieve Shanahan, “UK: Labour Party sets up working group to investigate UBI”, Basic Income News, February 10th 2017
More information at:
Sonia Sodha, ‘UBI is no panacea for us – and Labour shouldn’t back it’, The Guardian, 18th December 2017.
by Karl Widerquist | Dec 24, 2017 | Opinion, The Indepentarian
This audio is of talk I gave on why we need a Universal Basic Income. I gave the talk for the “Sydney Ideas” series in August of 2017, and I’m particularly happy with it. It summarizes the reasons I think are most important, and I think I did a relatively good job of delivering it. It discusses how Basic Income removes the judgment and paternalism that pervade the world’s existing social welfare systems, and why doing so is so important not only for people at the bottom but also for the average worker. It also briefly addresses how to craft a realistic Basic Income proposal, how much it costs, options for paying for it, and evidence about what it can do.
Following the lecture the audio file includes a question and answer session where I’m joined by Dr Elizabeth Hill, Chair of Department of Political Economy, School of Social and Political Sciences, University of Sydney, and Professor Gabrielle Meagher, Department of Sociology, Macquarie University.
by Micah Kaats | Dec 24, 2017 | News, Research
In the three years since its initial publication, Rutger Bregman’s Utopia for Realists has helped spur a global conversation on universal basic income (UBI). The book has become an international bestseller, garnering praise from intellectual heavyweights and propelling its author to the TED stage this past April. However, Stephen Davies, education director at the Institute for Economic Affairs (IEA), remains skeptical of many of the young Dutch journalist’s ideas. He makes his case in the most recent edition of the Journal of Economic Affairs.
“Rutger Bregman’s book is both interesting and irritating,” declares Davies in the opening line of his review. To clarify, he quickly notes that it is interesting “not so much because of its particular content…but because it gives us an insight into what may turn out to be a development of both intellectual and political importance” (p. 442). Such an off hand rejection of a book advocating basic income from the education director of a think tank advocating free market capitalism may be unsurprising to some, but Davies’ response is actually not as inevitable as it may seem. Historically, UBI has found supporters on both sides of the political divide.
Davies distinguishes between two types of arguments Bregman makes for basic income. The first considers UBI to be a pragmatic solution to the shortcomings of the current social welfare system. The second considers it to be a necessary means of radically transforming the existing social order. While Davies may be more sympathetic to the second line of reasoning, he spends most of his time critiquing the first.
Steven Davies. Credit to: The London School of Economics and Political Science
In Utopia, Bregman draws on a wealth of research to highlight deficiencies in the means-tested benefit programs that constitute the welfare states of most developed societies. He notes that many of these programs create negative incentives, keeping beneficiaries locked in a poverty trap. Even worse, financial instability can result in a scarcity mindset, making it even harder for poor people to make responsible financial decisions. According to Bregman, unconditional cash transfer programs (UCTs) have proven to be the most successful remedy to this vicious cycle of poverty and dependence. In support of this view, Bregman offers additional in-depth analyses of related programs, including Richard Nixon’s Family Assistance Plan, negative income taxes, and the Speenhamland system.
Davies acknowledges the implications of this body of research. He writes, “Much of the evidence presented by Bregman is indeed very striking and should encourage us simply to trust people more and have greater confidence in their judgment and their knowledge” (p. 447). However, he is far more hesitant to interpret these results as evidence for universal basic income.
Davies notes that many of the policies Bregman touches on are in fact means-tested in one way or another, and may therefore be more analogous to standard welfare programs than basic income. Additionally, Davies argues that many of the UCT programs discussed in Utopia for Realists have not been around long enough to show lasting impacts, and he calls for more research to determine the specific amounts at which UCTs can begin to induce behavioral change. Yet, even more worrisome for Davies is the “bold assumption that there is no meaningful distinction between single lump-sum payments and continuing income stream” (p. 448). He notes that while individual cash transfers may bring sudden and liberating benefits, similar effects of ongoing basic income payments may become muted over time.
According to Davies, all of this “reveals confusion over what a UBI is thought of as being – is it a way of establishing a floor or minimum that is guaranteed to all or is it a redistributive mechanism designed to narrow income differentials?” (p. 449). This confusion motivates Davies’ second critique of Bregman’s argument for universal basic income as a response to the widening global wealth gap. While basic income programs may go a long way in ensuring no one lives in a state of absolute poverty, Davies writes that “it is not clear how a UBI by itself will do anything to reduce relative poverty or inequality” (p. 449). In fact, he notes it may even make the problem of inequality worse if UBI programs seek to replace other means-tested benefits.
However, while Davies takes issue with many of Bregman’s pragmatic arguments, he seems much more sympathetic to the idealistic aspects of his account. As automation increases and “bullshit jobs” proliferate, Davies grants Bregman his assumption that UBI could become a useful tool to decouple meaningful activity from paid work. He writes, “This is clearly the vision that truly inspires Bregman, the utopia of his book’s title, and he would have done better to stick to this rather than muddy the waters by conflating it with more limited and pragmatic discussions of a guaranteed income in a society where wage labor is still widespread and predominant” (p. 456).
While he may be unmoved by Utopia for Realists, Davies clearly recognizes the significance of the political and intellectual movements it represents. The book’s international success seems to reflect a growing anxiety about stagnation of big ideas in the face of an increasingly unsatisfying status quo. Davies concludes, “What we are starting to see is an attempt to work out what a non-capitalist or, more accurately, a post-capitalist political economy would look like” (p. 457).
Davies review appears in the most recent edition of the Journal for Economic Affairs.
