by Jenna van Draanen | Nov 9, 2014 | News
Dilma Rouseff’s government reported that the Bolsa Familia, a type of basic income given to poor families in Brazil, has increased by 44% in the last three years. The government also made plans in May, 2014 to increase the benefit by a further 10% in June 2014. The Bolsa Familia program is believed to be positively impacting infant mortality, malnutrition, and education levels in the country as well as increasing Brazil’s GDP. It was introduced in 2005, explicitly as a step toward introducing basic income.
For more information on the increase to the Bolsa Familia Program see:
World Without Poverty, “Dilma Rousseff’s government guarantees a real increase of 44% for the Bolsa Familia Program”. Brazil Learning Initiative, May 2, 2014.
by Karl Widerquist | Sep 2, 2014 | News
SUMMARY: This article connects its arguments about labor with basic income, concluding, “[I]f the ultimate goal is liberation from poverty, that will only occur when we abandon the delusional quest for full employment for a system where income is separated from work.” Bernard Marszalek, editor of The Right to be Lazy (AK PRESS), can be reached at info@righttobelazy.com . He was a member of a worker cooperative for seventeen years.
Bernard Marszalek, “Laborless Day: Why Labor Day Needs Retooling.” CounterPunch, Weekend Edition August 29-31, 2014
The right to be lazy
by Karl Widerquist | Aug 23, 2014 | Research
-Foreign Affairs
SUMMARY: Without using any familiar terms for Basic Income Guarantee, this article argues for a temporary BIG as a response to the Great Recession (or recessions generally). The U.S. Federal Reserve usually tries to stimulate the economy during recessions through monetary policies (such as reducing interest rates or increasing the money supply). These policies favor large financial institutions and according to authors, Mark Blyth and Eric Lonergan, “stimulating the economy in this way is expensive and inefficient, and can create dangerous bubbles — in real estate, for example — and encourage companies and households to take on dangerous levels of debt.” Instead, the authors argue that the government should simply give cash unconditionally to citizens. They argue, “In the short term, such cash transfers could jump-start the economy. Over the long term, they could reduce dependence on the banking system for growth and reverse the trend of rising inequality. The transfers wouldn’t cause damaging inflation, and few doubt that they would work. The only real question is why no government has tried them.”
Blyth and Lonergan suggest building up a sovereign wealth fund (SWF) capable of paying dividends, much like the Alaska Dividend, funded by its SWF. They claim, “The Bank of England, the European Central Bank, and the Federal Reserve already own assets in excess of 20 percent of their countries’ GDPs, so there is no reason why they could not invest those assets in global equities on behalf of their citizens.” They even suggest that government could take advantage of current near zero interest rates to spend another 20 percent of GDP buying equities, which would be likely to return 100 percent in 15 years. It is uncertain then whether the fund would pay dividends regularly or distribute them only during recessions. In either case, this plan would be a significant step toward a BIG.
Mark Blyth and Eric Lonergan, “Print Less but Transfer More: Why Central Banks Should Give Money Directly to the People.” Foreign Affairs, September/October 2014 Issue.
by Aynur Bashirova | May 21, 2014 | Research
This article argues we’ve lost the correlation between contribution and compensation, and considers basic income as a solution.
Mickey Peled, “Why The World of Work Has Changed Forever”, Worldcrunch, 6th May 2014.
Could guaranteed basic income be a solution? Russel Higgs
by Citizens' Income Trust | Mar 28, 2014 | Opinion
Malcolm Torry, Money for Everyone: Why we need a Citizen’s Income, Policy Press, 2013, xiv + 300 pp, 1 44731 125 6, pbk, £24.99, 1 44731 124 9, hbk, £70
Malcolm Torry delivers a blockbuster argument in favour of a Citizen’s Income to wholly or partially replace current benefits. His book is well-researched, well-informed, well-written, and is articulate and readable. His main argument is that, given widespread acceptance of a benefits scheme of some sort, then a Citizen’s Income is by far the best option. Specifically it avoids the disincentives of very high marginal deduction rates of current benefits which create the familiar unemployment and poverty traps. According to Torry, a Citizen’s Income would incentivise employment, training, new business formation, women’s participation rates, and can even reduce teenage pregnancy in Namibia. It is socially cohesive. It is less expensive administratively, less intrusive into the private detail of people’s lives, and less distorting of the markets for labour, goods and services. The Iain Duncan Smith / Steve Webb universal credit comes close, but is based on households rather than individuals as a Citizen’s Income would be, and is therefore deficient.
Torry’s very thorough presentation is worthy of the LSE tradition to which it belongs, established by major figures such as Richard Titmuss whom he frequently quotes. It offers a substantial social commentary. The excellent essay on poverty in chapter 11 is a classic case. Torry works as a vicar in London, and so has widespread awareness and understanding of the life situation of people with lower income struggling with a range of adversity, and this gives him great insight into the effect of benefits systems in the population. His deep study of the benefit system itself enables him to offer a uniquely powerful synthesis. The strength and extent of his argument for a Citizen’s Income appears to render it uncontentious. It is only cynical civil servants whose jobs may be at risk who stand in the way, together with inertia in the political system.
Due to its thorough coverage, the book is long, and sometimes repetitive. The argument on marginal deduction rates is repeated too often. But the main weak point is the lack of attention to economics, since herein lies one of the most powerful objective arguments for a Citizen’s Income. Torry’s uncertainty in economics appears immediately on page 1 where he writes ‘Citizens might spend it (a Citizen’s Income) on goods and services, thus creating employment; or they might save it, making lending and investment possible’. The first part of this sentence is thoroughly Keynesian and correct, whilst the second part is thoroughly neo-classical and incorrect. Saving in the Keynesian paradigm does not enable investment, but by reducing demand, reduces investment which businesses plan to meet demand.
Only on page 122 does Torry mention the economics argument for a Citizen’s Income, where he presents Stewart Lansley’s argument that ‘income inequality reduces productivity’, so that wages and therefore consumption reduce, leading to the current crisis that only greater equality can resolve. Even this ignores an alternative powerful economics argument that the crisis has been driven by technology increasing productivity, reducing the wage and consumption element of output, raising output GDP above disposable consumer income, which has been corrected with unsustainable credit. According to this argument, the technology-led wage reduction is inevitable and inexorable, and contrary to Lansley’s proposal, only a Citizen’s Income can replace consumer credit in order to raise consumption to match output GDP. In this model the Citizen’s Income would need to be spent rather than saved, perhaps by being distributed on stored value cards with the value expiring over time. It needs however an alternative theory of money, i.e. that money is virtual and its distribution only has to respect output GDP and not be supported by gold reserves or government debt. This removes the need for Torry’s argument on the affordability of Citizen’s Income – it is output GDP which makes it affordable. These arguments would add considerably to Torry’s case. They also dismiss current deficit reduction and austerity policies as the nonsense they are.
