by Kate McFarland | Feb 19, 2017 | News
Sebastian Johnson, Senior Associate at Freedman Consulting, presented a case for basic income at the 2016 Mid-Atlantic TEDx conference.
Held October 21-22 in Washington DC, TEDx Mid-Atlantic 2016 featured over 45 speakers and performers who presented content loosely organized around the theme “New Rules”:
How can we be more empathetic when we design for the future? How can we reconnect policy with facts, truth, and logic? What ethics should we pursue as we shape our rapidly changing world? The answers are elusive — but we become stronger when we ask these questions together. What are the New Rules that will help guide us for the next century?
According to Johnson, presumably, the “New Rules” should include the allocation of an unconditional basic income to all Americans. In his 10 minute talk, Johnson argues that a basic income is the best way to alleviate poverty. He stresses that poverty is the cause, rather than the effect, of poor choices: providing economic security allows the poor to make better choices. He explains that empirical studies have suggested that a basic income encourages entrepreneurship and allow individuals to complete more schooling, while at the same time not causing substantial decreases in workforce participation or significant increases in the consumption of alcohol or tobacco. Johnson additionally argues that work no longer provides a guaranteed route to get out of poverty. Many jobs are insufficiently compensated; meanwhile, many existing jobs are threatened by automation.
Before joining Freedman Consulting, Johnson was a policy fellow at the Institution on Taxation and Economic Policy and a policy analyst for Maryland Governor Martin O’Malley (as well as a number of local officials).
Reviewed by Danny Pearlberg
Photo CC BY-NC-ND 2.0 cool revolution
by Andre Coelho | Feb 18, 2017 | News
(From left to right: Louise Haagh, Annie Miller, Becca Kirkpatrick, Ben Southwood)
As reported recently, a formal hearing called by the Work and Pensions Committee of the UK Parliament was carried out on the 12th of January 2017, in Birmingham, for a session dedicated to basic income. This hearing was recorded on video, and can be watched here.
From the Work and Pensions Committee, the members present (formally named as witnesses) were Steve McCabe (Chair), Mhari Black, Ms Karen Buck, James Cartlidge, Frank Field and Craig Mackinlay. On the witness bench, supporters and critics of basic income were aligned: Louise Haagh (Reader in Politics from the University of York and co-chair of the Basic Income Earth Network), Annie Miller (Chair of the Citizen’s Income Trust), Becca Kirkpatrick (Chair of the UNISON West Midlands Community Branch), Ben Southwood (Head of Research at the Adam Smith Institute) and Andrew Harrop (General Secretary of the Fabian Society) on the supporting side, along with Declan Gaffney (independent political consultant) and Peter Alcock (Emeritus Professor of Social Polity and Administration at the University of Birmingham) on the critical side.
The purpose of the hearing was one of collecting evidence from experts, specifically on the issue of basic income, on which Chairman Steve McCabe noted there seemed to be a “newfound interest”. He then went on to ask whether the witnesses were for or against the idea of basic income, and why, beginning with Louise Haagh.
Louise is firmly in favor of basic income, which she sees as a very important – crucial even – policy that welfare states need to implement, in order to relieve what she regards as a tendency towards more punitive strategies in present day social security schemes. Basic income can help a lot in providing “a more humane form of social security at the bottom of the welfare state”.
Louise Haagh
Seated next to Louise, Annie Miller starts by undersigning all her previous statements. In addition, she points to some definitional information about basic income, such as individuality, universality and non-conditionality except that of age. Miller also clarifies that basic income is only intended to cover basic needs, not luxurious lifestyles. That implies, given regional cost variations and various personal circumstances, that for instance housing and disability benefits would still need to be kept in place, at least in the United Kingdom (UK). She closes this initial statement by saying that basic income schemes will vary depending on the policy maker’s objectives.
Becca Kirkpatrick also began with her support for basic income, including the UNISON West Midlands labor union in that support. She cites ongoing discussions about basic income within the union she represents, which include a right to a dignified existence, as unconditional cash transfer, or as more widely conceived strategies to eradicate or alleviate poverty. Becca frames the question more generally not on a matter of technical or economic feasibility, but as an issue of political will, on “what the public of this country would like to see and believe they are entitled to”.
Following this, Ben Southwood went on to say that, although he supports basic income, he stands somewhere slightly different in relation to the issue. He defends basic income as a simplification of the welfare state, where he sees great opportunity for reducing or eliminating disincentives to work. Cutting most social benefits and replacing them with the basic income would, in his view, allow people currently on benefits a greater degree of freedom.
Annie Miller
On his part, Peter Alcock, while recognizing basic income’s appeal as a progressive idea for society, feels that it is “too good to be true”. Afraid of the co-option of basic income by neo-liberals – as an excuse for slashing away the welfare state – he looks upon it with as a “distraction from other more pressing issues”. He was followed, and supported by, Declan Gaffney. He was also weary that basic income supporters so often defend BI with promises of unconditionality even when, when practically considered, a basic income would still need to be attached to conditions. However, he does give the idea credit as “a thought experiment”.
Finally, Andrew Harrop said he was “sitting on the fence” with basic income. He thinks basic income should be seen more from a tax reform prism, rather than a change to social security. Harrop ultimately envisions a kind of hybrid system that combines universal unconditional cash transfers with means tested benefits for those “who have earned entitlement”.
Ms Karen Buck then raised the question of work and basic income: in an increasingly unstable labor market, with lower and less certain incomes accruing from work – how serious should these tendencies be regarded, and how might basic income address them? Declan Gaffney, in reply, doubted that, given the previous economic instability, we were witnessing permanent job loss due to technological change. In this he adhered to the views of others like Alan Manning. This was followed by a short discussion between Ms Karen Buck and Becca Kirkpatrick, over if the problem was the existence of conditions within the system, or the absence of the system. According to Becca, the system does not exist, not in a way as to “prioritize guaranteeing for everyone”, and went on to state the premises and broad results of UNISON internal debate on the issue of basic income. That survey, she says, has exceeded expectations as to the level of support for the idea, in general terms.
At that point, James Cartlidge joins the conversation, asking what he thinks is “the most important question”: how generous will this basic income be? Ben Southwood then introduces the issue of basic income versus the negative income tax issue. After clarification of the differences between these two systems of cash transfer, Annie Miller points out that the “housing benefit is not a problem of the basic income, it is a problem of the housing policy”. However, James, and to a certain extent, Peter Alcock state their opposition to basic income on a more fundamental basis: that people will not work if given a sufficiently generous basic income. James Cartlidge is also not convinced (about basic income), as some models, according to him, result in greater poverty with basic income.
Mhairi Black then raises the question of effects on the labor market, which she fears will be one without pay raises, if basic income is implemented. Louise doesn’t agree, arguing that people, with increased bargaining power, will only do difficult, unpleasant tasks if paid more to do them. On the other hand, going back to the quantitative value of basic income, Annie Miller reminds that 60% of the median equivalized household income is a good benchmark for quantifying the basic income in any given region, and elucidates about ways to finance it within the UK tax context. She goes on to state that this should actually be inscribed into a national constitution, if only the UK had one. On that point, Andrew Harrop states his preference for a hybrid tiered system, with both conditional and unconditional elements in it, plus some contributory part (for pensions and/or unemployment benefits).
Becca Kirkpatrick then introduced the issue of working conditions – on a general basis but also based on her own experience – which she thinks need to be addressed urgently, and strongly believes basic income is the way to do it. Louise then weights in by underlining that a basic income does not need to be a substitute for work regulations, nor to contributory benefit regimes. The two can go along in the same direction, one of reducing conditionality, complexity and punitive actions.
Craig Mackinlay from the Work and Pensions Committee was himself generally against the idea of a basic income, especially on the grounds that it will discourage work, plus it could increase poverty. Declan Gaffney, although also an opponent, recalls a study for the USA in which a 55% tax rate is applied to fund a basic income. Ben Southwood, on work changes due to basic income, sees a mixed effect which might somewhat reduce working hours – especially for single women with children – but at the same time increase income for extra hours worked. At this point, Louise introduces the calculations done by Malcom Torry, of the Citizen’s Income Trust, to fund a basic income in the UK, which predicts a 60£ a week for everybody, financed by progressive tax rates of 23% for incomes up to 42000£ per year, 43% up to 150000£ per year and 48% above that.
Peter Alcock
As final remarks, Andrew Harrop re-stated his vision of a hybrid social security scheme incorporating conditional and unconditional parcels. Declan declared himself reluctant to accept conditionality in the social security system, as well as some backstop sanctions regime. However, because he thinks basic income will discourage people from working, he favors a more traditional employment framework, with “permanent contracts, with proper in-work benefits with entitlements to holiday pay, sick pay and so on”. Peter Alcock firmly set his case against basic income, as something unachievable or that “isn’t worth pursuing”. Ben also concluded in support of basic income, although from a different point of view from other supporters. According to him, there is no principle distinction between a basic income and a negative income tax.
Becca Kirkpatrick went back to fundamental philosophical grounds justifying basic income, by saying that it “could have an interestingly powerful, new cohesive effect on society that we are yet to really experience”. She also rested her case with a unifying message that, effectively, the human species needs badly to unite, helped by such a policy as basic income, to address all other challenges it is facing in the world today. Annie Miller wrapped up her position by clarifying that, under a basic income scheme, higher earners are net payers of basic income, not receivers. She also added the important aspect of gender inequality, so much in favor of men presently, and that would be made more fair and realistic with basic income, paid individually. She still had time to summarize the current system, which she claimed is “just a regressive system”, and went on to point out that “we have freedom of choice for rich people but not for poor people”. Finally, Louise Haagh presented her closing statement underlying that, although with different views on the subject, the whole witness panel seems to show consensus that the benefits system needs changing. And that change will inevitably go towards basic income, if it is to become less punitive and more humane.
To view the full recording:
House of Commons Committees Youtube Channel, “Session on Citizen’s Income”, Work and Pensions Committee, live streamlined on the 12th January 2017
by Tyler Prochazka | Feb 18, 2017 | Opinion
China’s spectacular growth in the past thirty years has begun to slow down in recent years. Emerging signs suggest that China is woefully unprepared for the fallout from exponentially rising automation of manufacturing jobs. While businesses are still going to sites like https://gembah.com/guides/manufacturing-in-china-like-a-pro/ to find the best way they can manufacture their products, the factories in China need to make sure they are prepared for the increased automation that will be coming to the manufacturing industry in the coming years.
The former Supreme Leader Deng Xiaoping of the People’s Republic of China (PRC) orchestrated the country’s economic miracle through a dramatic increase in exports to the rest of the world. For the next several decades, China reoriented the world economy, and many companies stationed their factories within China to take advantage of the cheap labor. Many of these factories might be making use of system integration software soon to increase the efficiency of their factories. I hear it reduces a lot of admin work and increases productivity. As wages rise and the population ages, the value of the original bargain is starting to erode.
In absolute terms, China is leading the world in the number of robots used for production. Over the next decade, China will start to catch up to other advanced economies in terms of per capita robots. By 2019, China may even nearly double its number of robots. At the same time, robots will complete increasingly complex tasks, threatening an even wider range of jobs for humans. Inevitably, this will cause many low-skilled workers in China (and around the world) to lose their jobs. And absent incredibly disruptive government intervention that would likely do more harm than good, these low-skilled jobs will never come back.
Young people in China are more educated than ever, and are increasingly less likely to want to pursue factory jobs anyway. Automation can help propel China toward a more innovative and service-based economy by freeing up labor for these higher value pursuits. In the meantime, though, college-educated Chinese are having difficulty finding jobs as China’s economy readjusts. Without a proper safety net in place, China risks facing social unrest as automation begins to accelerate.
As it stands, China’s main welfare program dibao is too bureaucratic and ineffective to handle the influx of unemployed individuals because of all of the conditions attached to the program. When addressing automation, China’s best solution may be to universalize the dibao to create a universal basic income. This would allow for a smooth transition away from China’s reliance on human-led manufacturing. The need for product inspection in China is highly important for manufacturers, as they must make sure everything is made to the highest specifications. Using a China inspection service can help prevent issues and malfunctioning products, hopefully, this form of checking is not looked over when the change to more automated manufacturing is completed. China acts as a pillar for world economic growth. The basic income would not only stave off the most destabilizing aspects of the coming automation revolution in China, but it is also crucial for the stability of the international economy.
by Hilde Latour | Feb 17, 2017 | News
Business Insider published an article based on an interview with co-founder of BIEN, Guy Standing, focusing on his analysis of the working class in the Western world.
Standing sees a growing class of “precariat” workers, caused by a political agenda promoting market-led competition since the 1970s. A significant group of this “precariat” is prone to listen to ugly voices playing on their fears and supporting neo-fascist populism as a result. This helps explain the election of Donald Trump in the US, but also Brexit and the popularity of Marine Le Pen and Geert Wilders in Europe.
He refers to his book “The Corruption of Capitalism”, where he describes a growing group of wealthy citizens (the “rentier class”) who live on income from investments and property (including copyright and patents that often last for 20 years). This increases the gap between the rich and the poor.
According to Standing, at least part of the solution could be the introduction of a universal basic income (UBI), and he has seen growing support for this idea from both left and right wing politicians, economists and many others in the last few years.
“I see no reason why we will not have it within the next ten years — and maybe sooner.”
Standing states that a UBI can be seen as a matter of social justice, as a compensation for a system of property that results in a loss of natural inheritance, a point argued extensively by Thomas Paine, who introduced the idea of a citizen’s dividend back in 1795. It would also enhance individual liberty and give people a sense of security.
The affordability of a UBI is not a problem, Standing argues. It would replace other forms of public spending, and could be funded by the establishment of capital funds, like those derived from oil in Alaska and Norway, and the rental flows from patents.
The belief that UBI would remove the incentive to work is ridiculous, he further claims. Enough evidence is available to show it is the opposite:
“If you had a basic income, it would mean that everybody would have a base, on top of which their earned income would be taxed at the standard rate of tax. That would increase the incentive to take low-wage jobs.”
The current Western systems of ‘social welfare’ discourage people from taking low-wage jobs. These systems are poverty traps, argues Standing.
“We must have a new income distribution system [as] real wages will continue to decline in OECD countries, insecurity will continue to grow, and rental incomes will continue to go to the top. That is a recipe for economic instability, political extremism, and a lot of other nasty things.”
Info and links
This article is the second in a two-part series based on Thomas Colson’s interview with Standing. The first article contained ambiguities that lead to inaccurate reports about the Indian situation. It was corrected in a Basic Income News article “Jumping the Gun in India“.
Special thanks to Josh Martin and Genevieve Shanahan for reviewing this article.
Photo: yinxu – oracle bones by Xuan Che, CC-BY-SA 2.0
by Kate McFarland | Feb 17, 2017 | News
Elon Musk — the famed entrepreneur behind Tesla Motors and SpaceX, who now sits on a panel of economic advisors to President Donald Trump — was a featured speaker at the World Government Summit, held February 12 through 14 in Dubai.
In a dialogue with UAE Minister Mohammad Al Gergawi, Musk reaffirmed his belief (first expressed in a CNBC interview) that “some kind of universal basic income is going to be necessary” to cope with unemployment due to automation of labor.
Musk’s attitude was not entirely optimistic, however. He noted that technological unemployment, and the resultant need for UBI, is something he thinks will happen as a matter of fact — not something he wishes will happen — and he expressed concern that many people might lack “meaning” in a world with mass technology-driven unemployment.
As quoted in Fast Company News, Musk said, in full:
There will be fewer and fewer jobs that a robot cannot do better. I want to be clear. These are not things I wish will happen; these are things I think probably will happen. And if my assessment is correct and they probably will happen, than we have to think about what are we going to do about it? I think some kind of universal basic income is going to be necessary. The output of goods and services will be extremely high. With automation there will come abundance. Almost everything will get very cheap. I think we’ll end up doing universal basic income. It’s going to be necessary. The much harder challenge is, how are people going to have meaning? A lot of people derive their meaning from their employment. So if there’s no need for your labor, what’s your meaning? Do you feel useless? That’s a much harder problem to deal with.
According to its website, the World Government Summit drew over 4,000 attendees from more than 130 countries. In addition to Musk, featured speakers included Ruler of Dubai H.H. Sheikh Mohammed bin Rashid al Maktoum, International Monetary Fund Director Christine Lagarde, World Bank President Jim Kim, UNESCO Director Irina Bokova, Linked-In co-founder Reid Hoffman, and many others.
Elizabeth Rhodes, director of Y Combinator’s basic income research project (currently conducting a pilot study in Oakland), attended the World Government Summit as part of a panel on the “legacy of the 21st century” — which also examined the societal impact of automation.
See also:
“Elon Musk warns global governments about the future,” World Government Summit, February 14, 2017.
Reviewed by Cameron McLeod
Elon Musk photo CC BY 2.0 Heisenberg Media