The Web Lecture is being delivered by Professor Guy Standing, Professorial Research Associate, SOAS, University of London; Co-founder and Co-President, Basic Income Earth Network and Former Director of ILO’s Socio-Economic Security Programme. MS. Renana Jhabvala, Chairperson, SEWA Bharat will Moderate the Web Lecture. A basic income system is one in which all individuals within a community receive a modest regular cash payment without conditions as a non-withdrawable economic right. It is a component of a distributive system, necessarily complemented by other public benefits and services. Drawing on recent books, this lecture will examine the ethical justifications for a quasi-universal basic income, considering the standard objections, and then argue that in an era of severe economic shocks and pandemics, in which the neo-liberal economics revolution has generated a global system of rentier capitalism, it is also a policy imperative. As such, it should be understood as a feasible, affordable base of a new income distribution system. Finally, it will consider how its economic and social effects differ from other possible policy interventions. This will draw in part from pilots done in India and Africa covering thousands of individuals in many communities. It will plead for an end of a dialogue of the deaf that has characterised much of the debate on basic income in India.
For further details, click here; and to register for the webinar, here
It is undeniable that the new wave of engouement for UBI (universal basic income) that has shaken the US, the EU, India and so many other parts of the globe in the wake of COVID-19 has also reached Brazil. Everywhere, the simple idea of guaranteeing a regular income, duty-free, underwritten by the State, appears to be the way forward to mitigate the still unmeasurable consequences of the appalling disruptions brought about by the pandemic. UBI would swiftly reduce income insecurity, preventing poverty; it could also significantly contribute to accelerate the economic recovery in the post-COVID-19 era by stimulating aggregate demand.
The idea of a UBI was galvanized when governments promptly decided to extend the amount, coverage, and length of different sorts of monetary transfers to confront the gravity of the multiple crises created by the COVID-19 outbreak. Unemployment benefits, job allowances, one-time pay-checks, welfare benefits, or even special forms of credit line have spread out to inject liquidity in the economy. All of a sudden, we have a new opportunity for making the case for UBI.
Brazil was no exception. The comprehensive national social security system created in 1988 that provides free, universal health care (among many other rights) had been made vulnerable by years of underfinancing. But the system continues to be the most effective and democratic institution when it comes to guaranteeing social rights and wellbeing in Brazil. When the COVID crisis hit, the federal government and Congress could have reinforced social assistance, public healthcare, unemployment insurance, and other job allowances — all constitutive dimensions of the Brazilian social protection system. Instead, they united to favor ad hoc measures that, though sounding generous, are inevitably temporary.
The ultraliberal government of President Jair Bolsonaro backed a bill that Congress approved unanimously early April to adopt an “emergency basic income” program that would last the entire state of emergency declared on March 20, 2020. In principle, this program should expire on December 31, 2020, along with the state of emergency. In Brazil, a state of emergency allows extraordinary spending, suppressing the 2016 cap imposed by a constitutional amendment that impeded any real increase in social spending until 2036 regardless of economic growth or rise in tax revenues.
It bears reminding that Brazil is the only country in the world to have passed a law on Basic Income in 2004, hours prior to the adoption of the Bolsa Familia Program. Yet the law remained a dead letter and largely unknown to most Brazilians. To date, it remains unclear why the Workers’ Party started its mandate presenting a bill on UBI, which was approved without encountering any opposition, too soon after paying no heed to it. Today, despite the existence of a UBI Law, activists, progressive parties, and members of Congress chose the easiest way out, bypassing the already existing institutional framework. They chose a transitory and short-term program over existing law. This narrowed sighted strategy further debilitates Brazil’s social security system, because it deepens defunding. It also fails to bring greater comprehension of what a UBI is in the public opinion, thereby further diminishing the chances to make it a true, permanent, and unconditional right.
Today’s “emergency basic income program” provides a three time-payment – now extended to four months – of R$ 600.00, the equivalent of $120 USD per month. It is means-tested. Anyone over 18 years old (threshold waived for single mothers) living with a monthly per capita household income below half a minimum wage (R$ 552.00 / $110 USD) qualifies. The Minister of the Economy estimates that this benefit has reached 54 million people, encompassing the target-population previous recipients of Bolsa Familia, informal and precarious workers, and the unemployed who registered. Let’s not forget that Brazilian monthly median per capita household income, including labor income and all forms of social benefits, like pensions and welfare schemes, corresponds to R$ 862.00, equivalent to $172.00 USD. A monthly stipend of R$ 600.00 is therefore a very significant figure that amounts to 70 percent of the median per capita income and is three times higher than the Bolsa Familia cash transfer. It was the first time that Brazil set the bar so high with regard to compensatory benefits.
It is worth noting that indigenous and traditional black communities who were proportionally the most hardly hit by the pandemic have been denied the right to this temporary benefit, which is very telling about the challenges for universalizing rights in Brazil. The mortality rate among indigenous in the Legal Amazon is 150 percent higher than the national average. The deficiency of the specific care system for native peoples, the invasion of their lands by miners who can take the virus into their territories and communities, and continuous deforestation are pointed out as reasons that can explain such a high mortality rate and lethality. Faced with the threat posed by COVID-19 to indigenous communities, opposition parties passed a law in early July in Congress that provides for a set of 16 emergency measures to protect some 800,000 indigenous people. President Bolsonaro, however, immediately vetoed the most important ones, such as guaranteeing the supply of drinking water, food baskets, hygiene products and specific ICU beds for indigenous people infected with the virus, arguing that the Union could not afford mounting non-essential expenditures. Brazil remains a very unequal society and has not yet reckoned with its colonial structures of racialized discrimination.
The Brazilian Bureau of Census (IBGE) just published the first results regarding the impact of the Emergency Basic Income Program: 38.7 percent of all Brazilian households received the program, with the bottom 40 percent benefitting most. 45 percent of all Brazilians received the temporary emergency workers’ allowance and three-fourths of all monetary transfers benefitted the 50 percent at the bottom of the distribution scale. According to IPEA, this allowance has compensated 45 percent of outstanding earning losses due to the pandemic. It also increased by 2,000 times the average income of the poorest 10 percent. This is good news, especially because the recovery of the economic activity that has been noticed in early July significantly relies on the rebound of household consumption.
There is now strong evidence that providing monetary transfers at large scale and in substantial amounts that make a real difference in people’s lives is a powerful mechanism to boost economic activity, prevent destitution and humiliation, and help people cope with all sorts of hardships.
Did the crisis and the measures adopted increase the support for a true UBI? Are Brazilians really aware of the challenge and motivated to fight for it? In 2013, I carried out a national survey to assess how Brazilian society values social policies. There was a specific question on UBI. Back then, 51 percent disagreed, and one-third agreed with the idea of implementing a UBI. The current estimates are unknown since no survey asking the specific question has yet been re-conducted. But let us keep in mind that the current emergency workers’ allowance is no UBI.
The question is whether or not the evidence aforementioned would suffice to bolster the implementation of a true UBI in Brazil.
During the pandemic, doctors, health workers, and the many who support the universal public health care system (SUS) persevered in order to advance a temporary program, called ICU Beds for All. In Brazil, for every 5 ICU beds fully equipped in the private sector, we have only 1 in public hospitals. The problem is that only 25 percent of all Brazilians have subscribed to private health insurance, whereas 75 percent go public. Given that a significant and growing number of ICU beds were underutilized in the private sector, a campaign was launched to create a pool of ICU beds, coordinated by a public entity, to improve access and sort out the waiting list problem. But no agreement could be reached and today Brazil is second only to the United States, with 1,7 million confirmed cases, and 68,000 fatalities, both figures broadly underestimated given that testing is rather rare in Brazil. It is now obvious that the COVID-19 pandemic was insufficient to unite Brazilians, even when so many lives are lost.
This paradox raises two major concerns:
Is UBI the most urgent need for Brazilians? Will it be possible to couple a universal basic income at a relatively significant amount at least to eradicate abject poverty with other universal social policies that are urgently needed such as public healthcare, good public education, social housing, adequate sanitation? Is this affordable?
To what extent would endorsing UBI strengthen the social security system already threatened by austerity measures derived from the cap on public spending and by attempts of the Bolsonaro government to fully reshape it through tax reform and the merging of different social benefits restricting them to poverty relief programs?
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In regards to the first question, what would be the cost of a UBI in Brazil? Of course, the cost depends on the design of the program. To get a rough idea of the cost of a very basic program, let us consider a stipend that would be equivalent to the monthly benefit of Bolsa Familia today, which is R$ 200 per month ($40 USD). This amount should be acceptable by all parties and civil organizations across the political spectrum. The difference lies in the fact that it would apply to individuals (UBI) rather than households (Bolsa Familia Program).
Let us then imagine that when the law was approved in 2004 the Brazilian government decided to implement the program starting with children under 5. Given that it would be impossible to grant a stipend to all Brazilians, the idea is that we would launch a UBI by targeting the children to prevent intergenerational poverty. The new benefit will accompany the beneficiaries throughout their lifetime as an unconditional right. Focusing on children sounds appropriate because the pension system in Brazil provides a satisfactory income security to the elderly: 85 percent of all seniors over 65 receive a public pension, either contributory or non-contributory, whose monthly amount (floor) corresponds to no less than a minimum wage.
By providing a UBI of R$ 200.00 to children under 5 in 2004, today’s number of potential recipients under 20 years old totals 60,7 million people (IBGE, PNAD 2004 & PNADc 2020). This would cost R$ 323 billion, or 10 times the annual spending with the Bolsa Familia Program (R$ 32 billion or, 4.4 percent of GDP in 2019). The good news is that 57 percent of all stipends would go the bottom 40 percent of the distribution. The current Emergency Workers’ Allowance Program amounts to R$ 150 Billion, consequently less than half of the proposed UBI, reaching an almost equal number of recipients.
To grant $40 USD a month to 60 million people in 2019 is three times higher than the federal spending, with the public healthcare system (only R$ 117 billion or 1.64 percent of GDP). Such a program would also surpass by 11 percent of all benefits conveyed by the federal government (including higher education, housing, sanitation, labor, and agrarian initiatives), which accounts for R$ 289 billion (Lavinas 2020).
In 2019, outstanding federal social spending amounted to R$ 1.73 trillion. Paying a basic income of R$ 200.00, therefore at the level of the current anti-poverty Bolsa Familia program, would compromise 27.5 percent of all social spending. That same year federal social spending in kind corresponded to only 4.12 percent.
Monetary transfers remain the bulk of social spending, accounting for 68 percent. Should Brazil continue to expand cash transfers, to the detriment of providing running water, sanitation, housing, equal standards in education and healthcare? The most recent data from IBGE (2018) show that 31.1 million Brazilians (16 percent of the population) have no access to tap-water, whereas 72.4 million (37 percent of the population) lack proper sanitation. Not to mention decades of deep housing shortage affecting millions of poor and low-income families who end up living in slums, which makes them less immune to all sorts of diseases in times of pandemics.
The second question relates to the future of the Brazilian social protection system, which was underfinanced for quite a long time, and now risks being completely dismantled. The Minister of the Economy, an old member of the Chicago Boys who worked for the Pinochet Regime, intends to overhaul social security. He initiated a pension reform in 2019, making it harder for informal workers to get a full pension at retirement.
Now, that same ultraliberal minister proposes the creation of a “Brazil Income Program”, resulting from the merging of a large number of benefits, both contributory and non-contributory. Workers’ rights like job allowances, unemployment benefits, and other benefits alike will all be suppressed and replaced by an anti-poverty program to reach 57 million people, granting a monthly stipend of R$ 232 per month, 15 percent above the average payment of Bolsa Familia. They expect to spend R$ 52 billion per year with this new program, which is less than one percent of the 2019 Brazilian GDP. This means that the coverage against risks and poverty will be shortened and people’s autonomy and wellbeing consequently corroded.
In addition, the government intends to provide a voucher to pay for private daycare for two million children up to three years old, which will increase prices and fees and discriminate based on income. Lessons from Chile are well-known to envision that in Brazil things could be different. A voucher of R$ 250,00 corresponds to 10 percent of what middle-class families pay for private childcare in cities like Rio and São Paulo. The best daycare centers, however, charge double or triple. According to the government, churches could be interested in providing this service, an idea that breaks with the logic of secularism in the provision of public education.
Both concerns point to the ineluctable call for a joint perspective associating basic income and universal public provision to democratize access and opportunities by fully de-commodifying wellbeing. Otherwise, under financialized capitalism, a guaranteed income will just serve as collateral propelling citizenry to take out loans and go indebted in order to meet their financial obligations.
Early July, that same Congress that approved the Emergency Workers’ Allowance Program voted for the full privatization of water supply and sanitation, maybe having in mind that enlarging access to cash to those most affected by the pandemic would also make it easier to expand further a business model grounded in denying basic human rights and ensuring huge profits for pension and mutual funds that today drive investments in infrastructure in developing and emerging countries. After the longest and most severe recession Brazil has faced over a century since 2015 and given the growth projections ahead (-9.1 percent for 2020, according to the IMF), fiscal resources will dry up while competing and clashing issues will fill up antagonisms, stirring tensions. All the care may not be enough in designing social policies if the goal is eventually to forge a truly egalitarian society in the country.
The major differential of a UBI is to de-commodify labor. It is thus equally crucial to de-commodify the social reproduction of labor, by ensuring that education, daycare, healthcare, training, and other basic needs will also be fully de-commodified. Otherwise, UBI will perform as a powerful pro-market mechanism, upholding income-related and highly segmented private provision, mostly through the financial sector, and fueling rather than overcoming discrimination and inequality.
This Review was originally published in the Review of Political Economy, December 6, 2009. It’s reproduced here as originally published.
In Our Hands: A Plan to Replace the Welfare State, by Charles Murray, Washington, DC, AEI Press, 2006, 230 pp., $20.00 hardcover ISBN 0-8447-4223-6
Charles Murray is not known as a friend of the poor. His 1984 book, Losing Ground argued that the government should ‘zero-out’ all programs designed to help the poor. His 1994 book, The Bell Curve (co-authored with Richard Herrnstein) used questionable methodology purporting to show that people are poor because they are less intelligent than average and that blacks are disproportionately poor because they are genetically less intelligent than whites. If racism is the belief that your race is mentally or physically superior to others, The Bell Curve is a racist book. Yet, his new book, In Our Hands: A Plan to Replace the Welfare State, Murray puts forth a plan to provide more healthcare, more retirement security and more actual income to the poor with no supervision or conditions attached.
For those familiar with universal basic income, Murray’s proposal sounds very familiar. Murray calls it ‘the Plan,’ saying, ‘I have not been able to contrive a better name,’ but it is essentially a version of the program known as ‘basic income,’ which has been widely discussed by political philosophers in the last twenty years. Basic income is a regular government-ensured grant provided to every citizen on an individual basis without a means test or work requirement. People with middle or higher incomes pay more in taxes than they receive in the grant, but everyone receives the grant in cash every month. A great deal of literature has appeared on basic income in the last twenty-five years. Basic income is similar to, but not quite the same as, the negative income tax, which was widely discussed in the United States in the 1960s and ‘70s. The major difference between the two is that the negative income tax is given only to net recipients and phased out for people who earn above a certain amount, so that no one both receives a grant and pays income taxes. Both programs are ‘guaranteed incomes’ in the sense that they are designed to ensure that everyone has a small but reliable income, and both programs eliminate ‘the poverty trap’ in which some people find that they can attain a higher income by not working than by working.
Murray cites some of the literature on the negative income tax, but he appears completely unaware of the basic income literature, giving the impression that he reinvented the idea independently. When he discusses people who might drop out of the labor market, his example of what they might do is surf. This example is well-known in the basic income literature from an exchange between John Rawls and Philippe Van Parijs, neither of whom is cited by Murray. Is it a coincidence or is he merely neglecting to connect himself with that movement?
The Plan is most similar to a little-known basic income proposal by Leonard Greene, and elaborated by Irwin Garfinkel, although this connection is probably coincidental. Both Murray and Greene propose canceling everything the US government is currently doing to support individual incomes and use all of that money to finance a basic income for every citizen. The Plan is not quite a universal basic income. Only people age 21 and over are eligible, but it is a basic income in the sense that it has no means test and it is given to everyone who reaches the age of eligibility regardless of income.
Murray promoted the book and the Plan with several lectures in 2006. When questioned whether a guaranteed income is an affront to the work ethic, he responded, ‘You’re a conservative. I’m a libertarian.’ But make no mistake, Murray is profoundly conservative. His books have blamed the welfare state for everything that a conservative might find wrong with modern society, from welfare dependency though unwed motherhood to a decline in ‘man’s’ ability to craft a meaningful life. Many of the benefits he expects from the Plan align with conservative goals. He believes it will lead more people to attend church, more people to support private charities, and more of the poor to adopt the superior values of middle- and upper-class people.
Many people were shocked that a man who wrote a book arguing to zero-out the welfare state would put forward a plan for a basic income and universal health care. But it should not be completely surprising. Murray was sympathetic to the negative income tax in his contribution to Lessons from the Income Maintenance Experiments; and in What it Means to Be a Libertarian, he wrote that some form of income guarantee was the next best thing to the complete elimination of redistribution.
There is in fact a long history of free-market conservatives who have seen an income guarantee as a streamlined, conservative alternative to the complex, conditional welfare system. F. A. Hayek and Milton Friedman promoted the negative income tax on those grounds, and it seems to have been part of the motivation behind Richard Nixon’s watered-down negative income tax proposal in 1970. Most recently, Governor Sarah Palin pushed through a bill for a one-time increase in Alaska’s regular basic income (the Alaska Permanent Fund) from $2000 to $3200 per person per year. The free market appeal of an income guarantee is twofold. From the point of view of taxpayers, conditional welfare programs waste a large percentage of their budgets in overhead cost that could be saved under an income guarantee. From the point of view of the recipients, the rules and constant oversight of a conditional welfare system can be humiliating and oppressive.
Murray’s earlier books give the impression he believes that the poor are unproductive, genetically unintelligent people with bad values who have babies just to get welfare checks. One might therefore wonder why he cares about freeing the poor from oppressive government supervision. The answer is that while Murray seems to believe capitalism is a near-perfect meritocracy and that the poor are genetically inferior, he honestly believes that the poor should be free and that humiliating supervision by government bureaucrats cannot make the lives of the poor better. This kind of thinking led Murray to reinvent basic income.
This book—typical of Murray’s research—seems designed to give laypersons the impression of broad knowledge while having little concern with giving that impression to people who know the field. It is a thin volume with lots of numbers and footnotes but without a deep understanding of the research he cites. His discussion of the negative income tax is a case in point. He is aware that Milton Friedman supported the idea and that experiments were conducted on it, but he misstates what a negative income tax is and what the experimental results were. He gives the impression that a negative income tax has a 100% take-back rate, meaning that for each dollar earned privately recipients lose one dollar of their grant. If so, recipients who make money in the private labor market are no better off financially unless they get a job that pays more than the entire grant (pp. 8–9; 74). Almost no one who supports the negative income tax supports this draconian variant. Friedman supported the negative income tax largely because it could be designed to eliminate the work-incentive problems of conditional welfare programs, and none of the experiments tested a 100% take-back rate. Murray also implies that the experiments found evidence that large number of recipients dropped out the labor market. In fact, none of the experiments found evidence that anyone dropped out of the labor market. The relative decline in hours for the experimental group was 2–9% among primary wage earners and up to 20% for mothers of young children, but none of this relative decline represented anyone ‘dropping out’ of the labor market. It was instead attributable to people who happened to become unemployed taking longer to find their next job. Perhaps most importantly, the relative decline of work hours was not always an absolute decline. The largest predictor of whether recipients worked was not whether they were in the experimental or control group but the health of the economy. The people who conducted the experiments concluded that the work disincentive effects were small and did not put the viability of the program at risk.
Murray has not been careful with the facts, but is his plan a good one? Is the Plan a good workable idea that people who actually have sympathy for the poor could support? The answer is mixed. It is small; $10,000 per year minus $3,000 for mandatory private health insurance minus $2,000 for possibly mandatory retirement savings with no additional provision for children’s healthcare. That is, $5,000 per year ($416.67 per month) if retirement savings is mandatory and $7,000 per year ($583.33 per month) if it is not mandatory—for each adult whether she lives alone or with children. A single parent will be able to sue for child support out of the grant to the noncustodial parent, and so might have access to something in the neighborhood of $833.33 per month for herself and her children. But even an adult with no dependents is well below the official poverty line of $9,359 if she tries to live on $5,000 a year. (Following Murray, I’m using 2002 figures.)
Murray’s typically conservative response is that they can double-up with friends and relatives and they can all go out and get jobs at minimum wage. He calculates that when you add $583.33 to the income from a minimum wage job it would get most people—even single mothers with one dependent—out of poverty. He neglects to mention that this strategy involves mortgaging their retirement savings so that they will be more than $4,000 below the poverty line in retirement if they do this every year. He also neglects to mention that he is an opponent of the minimum wage. Since the whole idea of getting rid of the minimum wage is to enable employers to pay their workers less, we can assume that all of his calculations about how well off the recipients will be after they get these jobs are overestimates. He also neglects the very possibility that unemployment might exist, that the market may not be able to absorb the millions of new entrants to the labor market he hopes to see, and that most single mothers cannot work full time or in many cases even part time.
Consider a single mother with three dependent children at ages that make it difficult if not impossible for the parent to work outside the home. Her poverty threshold is $18,307. If she’s on her own and retirement contributions are mandatory, her income ($5000) is less than a third of the poverty threshold. If she can effectively sue the father for his entire grant (an optimistic assumption), she can increase her income to $10,000. If she and the father both mortgage their retirement savings, she can get up to $14,000. That is probably enough to keep her family off the street, but it is still more than $4000 below the meager US poverty line. Murray suggests combining incomes is as a solution. If she cohabitates with another mother in exactly the same situation, their combined income is $28,000—still $1,600 below the poverty threshold for a two parent family with six children of $29,601.
The grant is too small to give a dignified life to the poor without at least the addition of a child grant, but is it better than the current system? I have to admit that on this point, I am inclined to agree with Murray. As horrible as it sounds, in most states, TANF recipients work for less than they would get unconditionally under the Plan. Many people who aren’t eligible for TANF, SSI, or Unemployment Insurance get far less or nothing at all. Even the small grant of $416.67 a month can help many people get by if it is unconditional and tax free. The Plan would save many people from the utter destitution and homelessness that they experience in the United States today. On top of that, a retirement fund of $2000 a year put into a protected savings system would make for a better retirement than many Social Security recipients experience today, and $3,000 per capita could buy basic universal health coverage, solving one of the most important problems in American society today. If the Plan were put in place now, maybe we could eventually get the benefit increased to a decent level. Therefore, despite all of its faults, the Plan would be an improvement for many people living at or near the margins in the United States.
This short video introduces the new book, The Prehistory of Private Property, by Grant McCall and me. The book examines the origin and development of the private property rights system and the experiences of peoples who have lived in other systems to debunk three false claims commonly accepted by contemporary political theorists. These false claims are: (1) Inequality is natural and inevitable, or egalitarianism is unsustainable without a significant loss in freedom. (2) Capitalism is more consistent with negative freedom than any other conceivable economic system. (3) Private property is somehow “natural,” meaning that when free from interference people tend to appropriate and transfer property in ways that lead to a capitalist system with strong, individualistic, and unequal private property rights.
The book presents a great deal of anthropological and historical evidence that show that all three of these claims are false: (1) Many societies known to anthropology have maintained egalitarianism and freedom. (2) The least free people under capitalism are significantly less free than people in societies with common access to resources. (3) The first people to “appropriate” property tend to share resources; the elite private ownership system was forced on the world by the colonial and enclosure movements beginning only about 500 years or so ago and not fully complete yet.
The book is not primarily about Universal Basic Income (UBI), but it attacks many arguments used against UBI and other forms of redistribution. It also makes a brief case for UBI in the very last chapter, as the video explains.
As a bonus, early in the video, if you look closely, you can see Alexander de Roo eating breakfast in the background.
Thanks to Ali Mutlu Köylüoğlu for inviting me to give this talk and for recording and posting it.
-Karl Widerquist, Morehead City, North Carolina, June 17, 2020
BIEN | Media On this page you will find a variety of videos that you might find useful. BIEN Conversations is a series of discussions about how the coronavirus pandemic is affecting the Basic Income debate around the world. To see the videos, click here. Korea...
