This essay was originally published in the USBIG NewsFlash in December 2001.
As I was putting this newsletter together, the National Bureau of Economic Research officially announced that the U.S. economy has been in recession since last March. The delay in the diagnosis is nothing unusual because a downturn is not considered a recession unless it lasts for a significant period of time. But the point at which a recession is recognized is a good moment for reflection on the performance of the economy. Even though the United States is in a recession right now, the long-term performance of the economy as a whole over the last 20 years has been quite good. The expansion that ended in March lasted for exactly 10-years—the longest in U.S. history—and it came after a short and mild recession in the early 1990s, which followed a long, stable expansion during the 1980s. The last 20 years have had the most stable growth in U.S. economic history. The growth was not particularly rapid, but there is a lot to be said for stability. The economy may decline by a few percentage points over the course of the recession, but an economy that grows by 2 or 3 per year during economic expansions can weather the occasional downturn. Thus, although there are worrying signs on the horizon (such as a persistent trade deficit and a high and growing level of indebtedness), the verdict on the performance of the U.S. economy as a whole over the last 20 years has to be largely positive.
Good performance of the economy as a whole does not necessarily mean that it has performed well for all individuals. If one judges the success of an economy by the well being of its less advantaged individuals the performance of the U.S. economy has been terrible over the last 20 years. Real wages at the low-end of the wage spectrum have stagnated or even declined slightly. Usually, poverty declines slowly during expansions and increases quickly in recessions, but there has been no lasting progress in reducing poverty since the early 1970s. The official poverty rate has been stuck in a range between 11% and 15% since the early 1970s. There was an extremely rapid decline in poverty in the 1940s and again in the 1960s, but it has not been repeated since. The ’40s, ’50s, and ’60s were marred by frequent recessions, but individuals across the economic spectrum were able to count on gains during the expansions that would more than make up for losses during recessions. The ’70s were a period of instability in which the less advantaged lost ground, and since then there has been no return to the progress experienced earlier.
Why were the experiences of the less advantaged so different during the good economic times of the ’80s and ’90s than they were in the ’40s, ’50s, and ’60s? The difference is largely one of government policy. The earlier period saw the GI Bill, the fruition of Social Security, the expansion of AFDC and Medicare, increases in the minimum wage and the creation of Food Stamps and Medicaid. Since the early 1970s, many of these programs have been canceled or allowed to lapse or have been effectively cut by not being adjusted for inflation. These programs were not the best possible programs for fighting poverty, but they were all we had, and rather than being reformed, they’ve largely been cut with little or nothing to replace them aside from TANF, which seems to make welfare so unpleasant that jobs without living wages are preferable. TANF has been declared a success simply because it has reduced the number of families on welfare. The success of TANF should be measured instead by whether it reduces poverty and whether it makes children healthier and happier and whether it helps them grow into better-adjusted adults. Should it be any surprise cutting nearly every program designed to aid the poor should slow or stop the progress we had been making toward the reduction of poverty? Something else is needed if poverty reduction is our goal.
During recessions, people often voice opposition to direct anti-poverty policies, arguing that the best way to help people is to get the economy moving again. During expansions, the argument is usually to keep it moving or to get it moving faster. They say, “a rising tide lifts all boats,” and everyone benefits from economic growth. But the lesson to learn from the last twenty years of economic expansion is that these arguments are simply false. The incomes of low-wage workers stagnated during the good economic times of the ’80s and ’90s because policy turned against the redistribution of income, but they increased during the good economic times of ’40s, ’50s, and ’60s because policy favored increased redistribution of income. There is no inherent mechanism in a capitalist economy to ensure that everyone will share in the fruits of economic growth. I believe that a basic income guarantee is essential to ensure that everyone shares in our economic success. This and other strategies for better distributional equity will be discussed at the First Congress of the U.S. Basic Income Guarantee Network. I invite you to join us.
Philippe Van Parijs, co-founder of BIEN and professor emeritus at Université catholique de Louvain, presented a talk about Basic Income and citizen work duties at the Q Berlin conference, held on the 19th and 20th of October 2017. This was the first installment of Q Berlin but it is set to become an annual event where specialists and influencers from various fields present talks and answer audience questions on five broad topics. [1] Van Parijs’ talk concerned the topic, ‘What do you do when there is nothing left to do?’
When I heard this question, the first thought that sprang to mind was ‘what should a government faced with an unmanageable level of unemployment do when conventional policy has failed to resolve the issue?’ Perhaps then a seemingly radical solution, such as universal basic income (UBI), becomes plausible.
Van Parijs took a different take on this question: what would human beings do when they need not work to survive? Critics of UBI persistently raise concerns that individuals who are not incentivised to work will become idle because they will apparently have nothing left to do. Van Parijs argued that any reasonable proponents of the policy understand that people will have things to do.
UBI frees individuals from having to work, allowing them to broadly pursue their own conception of the good life. Those who prefer to become employed would hold more negotiation leverage with their employer. In fact, Van Parijs stated that UBI gives individuals the freedom to say ‘yes’ to jobs. Individuals will not have to do that which they do not wish to do. Fewer people will engage in menial and unsatisfying work.
UBI creates a floor (minimum level) on the income distribution curve, alleviates poverty, and gives bargaining power to the ones who have it least. In this way UBI acts as a systematic subsidy for all underpaid or unpaid jobs that are undervalued by the market but which people wish to do. With UBI, the demand for menial, gruelling work is expected to decrease. Van Parijs theorised employers may be forced to increase the wages for such jobs.
Van Parijs presented UBI as venture capital that allowed individuals to do anything they wish to do. Those who prefer to change fields can invest in education and training. The option to retrain is a particularly pertinent concern for those whose job is at risk of automation.
Forgetting about work for a moment (if you can), think about what you should do when your physiological needs are no longer a concern. If you’ve had a passion at the back of your mind then you might finally pursue it. If, on the other hand, you’ve passed life going from one kind of busy to another, then you might have missed opportunities to reflect and figure out what you would like to be doing. The cost of failure may have been too high if it meant putting you or your family’s livelihood at risk.
At this point in the talk, Van Parijs paused and asked the audience a question. Assuming UBI ensures a basic livelihood for everyone in a community, do these citizens have a duty to give back by working? Do individuals have a duty to accept paid, available employment? Some supported the idea, more disagreed. He then reframed the question and drew a distinction between formal employment and work broadly. Do individuals have a duty to do something? Van Parijs asked the audience to think of examples of socially-beneficial work. Most respondents agreed individuals have a duty to do something, apparently if it is socially beneficial.
Van Parijs preferred not to tell others what they should do. When asked off-stage, he said he has his own conception of the good life and was reluctant to share the details. Rather he said there was something about people helping each other for its own sake that makes for a good society. A society is not well functioning if it’s members are not interested in actively improving each other’s well-being. Working for your community takes several forms. Van Parijs drew the example of caring for the those who cannot care for themselves (such as the elderly, children and disabled). One could volunteer for various causes they care about, whether they be social, environmental, tech-related or so on.
Even if you disagree that working for your community (or giving back) is a duty, if you’re not doing anything else, why not try it? In the best case, your efforts will be appreciated. Your recognition that you have alleviated the suffering of others might make you feel like you have done something meaningful. In the worst case, you might think your efforts yielded insufficiently satisfying results, be it for yourself or your target beneficiaries, and you have wasted your time. UBI provides the opportunity for you to try contributing to your community in different ways. This freedom lets you find a way to contribute that is most satisfying for yourself.
Notes:
[1] This year, the topics included: ‘Imagine yourself as the other self. How do we embrace tolerance and difference?’ ‘What will be the next social contract?’ ‘Urban Angst and Stamina. What are the promising concepts to handle the rise and fall of the city?’ ‘How should we govern at the pace of economic, social and technological change?’and ‘What do you do when there is nothing left to do?’
Gabriele Von Moers, a German filmmaker, has released her movie Kann Mann Frau [Can Man Woman] with English subtitles. The release has also been accompaigned by a short two-minute trailer. This film is a first part of a larger 90-minute documentary focused on basic income, opening with Götz Werner words at the Basic Income Earth Network Congress in Munich.
At her website, Gabriele describes how she thinks emancipation firstly describes women independence from men as an economical issue. Jobs for an income, as she sees it, is a masculine version of society, and it need not be like that. To acknowledge that already constitutes an alternative to the encompassing pressure in every-day life. Basic income would then be a way forward in that direction.
In an interview with BBC News, Nobel Laureate economist Joseph Stiglitz warned that basic income (citizen’s income) should not be the current priority of the Government of Scotland.
On September 5, First Minister Nicola Sturgeon announced that the Scottish Government would provide funding for basic income trials in the regions of Fife, Glasgow, North Ayrshire, and Edinburgh, where pilot studies of the policy had received the support of local authorities.
During October’s Inclusive Growth Conference, Sturgeon reaffirmed the government’s commitment to supporting trials of basic income, despite acknowledging that the policy might prove infeasible in the end:
Despite the fact that this has some critics, we are going to work with interested local authorities to fund research into the feasibility of a citizen’s basic income scheme.
I should stress our work on this is at a very early stage. It might turn out not to be the answer, it might turn out not to be feasible.
But as work and employment changes as rapidly as it is doing, I think it’s really important that we look and are prepared to be open-minded about the different ways in which we can support individuals to participate fully in the new economy [1].
Stiglitz, who has served as an economic advisor to the Scottish Government since 2012, believes that pursuing a basic income would represent misaligned priorities in light of Scotland’s fiscal constraints. Instead, the distinguished economist urges the government to prioritize benefits targeted to those who need them most, job creation to ensure a job to all who want one, and a livable income for all who work full-time.
I think the point of a citizen’s income is that it recognizes rights of ordinary individuals–that supporting individuals, social protection, is not aimed at those who have been left behind, but is a basic part of our society.
But I do worry about two things. One, as you say, there are fiscal constraints. Should the scarce money be used to give everyone a basic amount, or should it be targeted at those who have particularly strong needs? I think there needs to be some targeting.
Secondly, over the long run, our responsibility as a society is to make sure that everybody who wants a job can get one. And the underlying problems of the lack of employment and lack of adequate pay–anybody who works full time ought to have a liveable income–those are the issues that, in the long run, we need to address.
Stiglitz has previously been hailed in the basic income community as one of a long Nobel-winning economists who have (reportedly) endorsed basic income. His presumed endorsement took place at the World Summit on Technological Unemployment in February 2015, when he was asked if he supported basic income as a policy response to technological unemployment, and replied “Yes, that’s part of the solution,” before going on to stress that basic income alone is not a complete solution.
In October 2016, Stiglitz again said that “the idea of a basic income is a good idea” in response to a question from Vox reporter Ezra Klein (“What you do think about a universal basic income in America?”). He added, however, that he had not yet made up his mind about the question of whether it is better to target limited resources to those most in need:
If you don’t have a lot of resources, isn’t it better to try to target the limited resources you have at those who really, really need it, the people who are disabled, the people who are elderly without other sources of income, a variety of people who are seriously disadvantaged. The problem with the universal basic income is that you give a flat amount to a large amount of people, and that means, because you have so many people, you can’t give as much as you would to help those who most need it.
He went to note that, “on the other side of the coin, those who most need it have difficulty in navigating the bureaucracy” — a problem that would be avoided by a basic income.
It appears, then, that Stiglitz has not changed his mind on basic income so much as determined that, in Scotland and the UK, fiscal constraints and the need for targeted benefits outweigh the advantages promised by universality.
Watch Stiglitz field a question basic income on Sunday Politics Scotland:
On Thursday, October 19th, activists, social justice advocates, economists, futurists, venture capitalists, writers, community organizers and politicians gathered at the Old Mint in San Francisco – a symbolically poetic building – to talk about Cash. Organized by the Economic Security Project, the goal of the conference was to “reimagine what an economy built on the well-being of everyone could look like.”
Cara Rose DeFabio and Sandhya Anantharaman were the MC’s for the day, introducing each segment, panel or presentation, showcasing a range of thoughts around how cash transfers can shape society. See the full schedule here.
The conference embraced a range of reasons why giving cash through a Universal Basic Income is an appealing concept. Most segments were in a panel format with experts in their field, moderated by one of their own. This allowed participants to see the differences in thinking across the movement as well as its broad appeal, regardless of what brought these thinkers into to the movement. The first panel was a discussion on automation’s effect on the work force, and how UBI could provide economic security during retraining, between jobs, or to supplement part time work. Another panel, with representatives from three different venture funds, discussed how a UBI might encourage entrepreneurship, while a third panel talked through historical and current systemic racist and sexist policies and practices, and how a combination of a UBI plus a wealth tax to help fund it could course correct extreme inequality.
A general acceptance for the benefit of cash transfers seemed to be the most basic common denominator. The audience was educated on the results of past cash transfer and basic income experiments, as well as updates on current experiments. You can view a high level video of some of the outcomes of these experiments here.
Mayor Tubbs of Stockton talked about his plans for a UBI in his city. Elizabeth Rhodes also gave an update on the Oakland Y-Combinator project. Then Joe Huston, CFO of Give Directly spoke to the effectiveness of cash transfers and positive outcomes in their work in Kenya and Uganda. He announced that Give Directly is now involved in its first US based project, where they are giving debit cards with $1500 directly to victims of Hurricane Harvey in the Houston area. He noted the work that still must be done changing perceptions around what people will do when they are given cash unconditionally, joking that employers don’t say, “I would like to give this employee their bonus, but I’m worried they might drink it away,” yet this is somehow common thinking that needs to be changed based on research results.
Aisha Nyandoro, CEO of Springboard to Opportunity spoke about where the current Welfare system in the US fails. She illustrated the challenges that families living in poverty in Mississippi have piecing together welfare benefits from the government – housing voucher, electricity voucher, and food stamps. The system creates poverty traps and the benefits don’t cover many of the real needs these families have, but cash would. Cash would also limit interaction with the system and remove the feeling of being judged, as well as the stigmas around welfare.
Damareo Cooper, Director of the Ohio Organizing Collaborative shared his personal story also highlighting how the current welfare system and prison system fails children and young people, making a convincing case for switching to cash. Almaz Zelleke, professor of Political Science at NYU Shanghai, went further, explaining why a UBI must be paid as cash and not a negative income tax.
Throughout the day, however, there seemed to be a lack of consensus on aspects surrounding universality and unconditionality of a cash transfer policy. The range of standpoints could be seen clearly in a panel with Hawaii State Representative Chris Lee and Alaska State Senator Bill Wielechowski, as well as Joseph Sanberg, the founder of Golden State Opportunity Foundation. Bill educated the audience on the Alaska permanent fund. On the aspect of Universality and Unconditionality he said, “Universality is critical. If the policy was needs-based it would diminish it. The fund is framed as each resident’s ownership of shared resources. This is something that Alaskans share together.”
On the other side of the issue, Joseph Sanberg said, “The social contract is work and you will be able to have economic security.” He tied work requirements to the right to economic security and his efforts have been focused on California Earned Income Tax Credits.
Chris Lee from Hawaii seemed to be working out his state’s position on the issue, noting that for their Earned Income Tax Credits they have expanded the definition of work, looking at where people are spending their hours – for example, caregiving. He did note that his task force is looking at a universal benefit across all economic classes.
Aisha Nyandoro cited the work she does as evidence that work requirements are difficult and policy makers are out of touch on the issue. She invited any policy makers that wanted to get in touch to call her. Anne Price, President of Insight Center for Community Economic Development, explained how racism and sexism shaped current welfare policy around judging who is deserving and who is undeserving. She noted that it is degrading to be on the receiving end of morality, and shared her vision for dignity for all: universal benefits – working or not.
How to pay for it was touched on by some, with ideas ranging from a wealth tax to combat inequality, to a shared patrimony dividends, like Alaska, or some combination of these revenues.
Other highlights of the day included a session by Jane McGonigal from the Institute for the future, and A Frank Conversation about Money with Chris Hughes, co-founder of Facebook and Co-Chair of the hosting Economic Security Project. Jane coached the audience on how to create empathy for our future selves and envision a future with Universal Basic Income. Anna Sale from “Death, Sex, and Money” interviewed Chris Hughes about his thoughts and feelings around his own fortune and why he supports Universal Basic Income.
The organizing team is clearly very competent and professional, as the entire conference ran very smoothly from check in, AV, lunch, and seating. All details were thought out and executed well. Participants had many opportunities to make connections and discuss the themes.
All in all, this was a very important gathering for the movement.
