by Nicole Teke | Jan 13, 2016 | News
Socialist Member of Parliament and former Minister Delphine Batho just tabled an amendment to the National Assembly asking the government to make a report on the feasibility of basic income in the context of digital revolution.
Update 18th January: MP Frédéric Lefebvre and several conservatives colleagues have tabled another amendment with the same wording.
Basic income is slowly but surely entering the political scene. On January 11th 2016, Delphine Batho, MP from the Socialist Party and former Minister of Justice and Ecology, submitted an amendment to a bill on digital technology, asking the government to make a report on different approaches to basic income and its economic feasibility.
This amendment (pdf) calls for a detailed report on this topic by no later than June 2016, which would include “a macro-economic feasibility study, a comparative impact study on different approaches to basic income, as well as an analysis on the experiments on the subject that are currently going on, on a local and an international scale”.
This interesting move happened only few days after an important report submitted to the Ministry for Employment made an important case for basic income. As part of 20 recommendations presented to the Ministry, the report recommended studying the feasibility of basic income in France by carrying out a study, in order to plan pilot-projects in the country. It created a lot of ripples in the media and Ms Batho’s amendment directly refers to it.
The French Movement for a Basic Income (MFRB) supports Delphine Batho’s initiative and calls for broad and cross-party support for it.
Mrs Batho’s support for basic income is not new. In a colloquium organized in the Senate in May 2015, she defended the idea, stating that “our welfare and State-financed system relies on 1945 capitalism and the thirty years of post-war economic growth. We now live in a different era and the system is now subject to changes, due more specifically to this new digital era, but also to the ecological crisis, the depletion of natural resources, etc. We thus need to think about a new organizational and welfare system”.
The Socialist MP emphasized the importance of studying the possibility of a basic income in France, in a context where it could “remunerate ‘unpaid work’ and all tasks that create value, especially through digital tools”. She based her arguments on the “digital revolution and the changes it implies for the labour market”, as new technologies contribute to doing more and more tasks, and consequently replace more and more jobs in France and worldwide.
This new development is the latest in a series of positive signals for basic income in France. Last month in the Aquitaine Region, the left coalition won the election with a proposal for a basic income pilot in their platform, and last November a right-wing MP Frédéric Lefebvre unsuccessfully proposed a similar amendment in another legislative dossier.
Last but not least, MP Lefebvre revealed on twitter this week that he has had a discussion with the Minister of the Economy Emmanuel Macron, and the latter agreed to work on basic income.
On the down side, a new poll shows that only 35% of the French would support basic income. This is a lower score than a previous poll in May 2015 (60% in favour). However this may be explained by the different way of presenting the idea to respondents.
This could thus be a turning point for basic income in France, as more and more decision-makers show an interest in the issue.
Credit picture CC Parti socialiste
by Timothy Roscoe Carter | Jan 9, 2016 | Opinion
Before beginning this essay, let me describe the people about whom I am speaking when I use the term “liberal”. In the American 21st century context, I am essentially describing the people you would likely find in the leadership of the Democratic party. Despite the conservative view of mainstream liberals as radical socialists, they are, at most, cautious reformers. Even that probably goes too far. The way they depict themselves, and probably actually see themselves, is as people who believe in the system, but want it to be fairer, more compassionate, and more efficient. When viewed systematically, the most important of those is efficiency. A look at policy reveals that the primary aim of liberals is using the government to make capitalism work better and more efficiently. This also applies to seemingly non-market concerns like welfare benefits, civil rights, and education.
Let us look at equal pay and anti-discrimination labor laws for women. Some economic theorists on the right argue that such laws are unnecessary. According to them, the market would automatically correct any form of discrimination. If sexist employers refused to hire women or paid them significantly less than their equally skilled male counterparts, other employers would exploit the opportunity to hire the women at higher wages. The productivity gains of the fairer employers would lead to emulation and competition for women workers until parity with men is achieved.
Liberals usually respond by appealing to empirical reality. If this argument were true today, it would have also been true in 1910. We know there was sex discrimination then, as there continues to be today. If markets corrected inefficiencies by themselves, there would never have been any gender discrimination. But liberal arguments do not contradict the claim that sex discrimination is inefficient. Laws preventing gender discrimination may be just and compassionate, but they also make markets work more efficiently. Eventually, laws against gender discrimination turned out to benefit employers as much as they benefited women. In the documentary Inequality For All, Robert Reich showed that employers took advantage of the growing numbers of women in the workforce competing with men for the same jobs, and this was one of the factors that eventually lead to the leveling off of real wage growth that began in the United States in the late 1970s and early 1980s .
This analysis applies across the range of policies pushed by liberals. Consumer protection laws and tort laws may protect and compensate consumers, but they also encourage trade by making it easier to trust strangers in the market. Public health care and education saves and enriches people’s lives, but they also produce a skilled and healthy workforce for employers. Laws that support strong unions help the workers themselves, but they also increase workers’ wages so that they can spend more as consumers. Infrastructure projects provide public goods that are used by all, but they notoriously prioritize the needs of businesses over the needs of the disadvantaged communities where they are inevitably built.
What about same-sex marriage? It is crucial for social justice, but does it help market efficiency to allow people to marry whom they wish? No, it does not, and that is why same-sex marriage provides a useful counter-example. The fact is that same-sex marriage was never really a mainstream liberal goal. Nor was it really a goal of the large mainstream gay rights organizations. The main goal was just for more acceptance of the LGBTQ+ community. If straight people can partake in hookup culture on apps like Tinder then why can’t gay people go on Discreet Gay Dating without being judged for it? If dysfunctional heterosexual couples can have a baby why can’t stable same-sex couples adopt one? Both the politicians and the organizations focused on the acceptances of the community and getting anti-discrimination laws passed, which do serve market efficiency as previously noted. Same-sex marriage as a goal arose from the gay and lesbian grass roots and was pursued more through the courts than through legislation. As late as 2008, all three top contenders for the Democratic nomination for President declared their opposition to same-sex marriage. The speed and enthusiasm with which virtually all of the top Democrats reversed their positions the moment same-sex marriage polled over 50% could certainly cause a person to doubt the sincerity of their previous opposition. But to blame that insincere opposition on political cowardice would be to miss the point. Professional politicians fight uphill battles against initial public opposition a lot. But they also have to pick their battles. And however much powerful liberals may have secretly sympathized with the plight of their gay and lesbian friends who wished to marry, and may have even supported them with donations towards items to help them consumate such a marriage (be it a feeldoe or helping with the ceremony itself), they were simply not going to prioritize a political battle for social justice that would not increase market efficiency, grow the economy, and enrich their campaign donors.
So where does this leave us with basic income? To answer this, we need to examine how liberals approach welfare in general. It is certainly true that they support much more generous benefits than conservatives, they also tend to be even more concerned with separating the deserving poor from the undeserving poor than conservatives, whose main concern is turning whatever welfare spending that does exist into a way to funnel that money into corporate coffers. Liberals usually support robust Earned Income Credits, a kind of negative income tax limited to low wage earners, dropping off quickly above the poverty line. They support benefits for children and the elderly as well as the disabled, although they can be extremely strict about whom they consider disabled. They will give welfare benefits to unemployed single parents sparingly, on a temporary basis, and require education or employment search conditions designed to get the parents back to work as soon as possible. Drug and alcohol abuse are seen as reasons to cut off benefits. For unemployed working age adults, liberals sponsor “Care Not Cash” initiatives, which replace cash benefits with direct services, in the few localities that offer any benefits at all.
The pattern is clear: liberals believe that humans have value primarily as engines of production and consumption. Within this view, welfare is a legitimate tool to push people into the labor market. This ensures that goods and services can be produced. Those who do work and those incapable of working are to be given a sufficient income to take them slightly above the poverty line. This appears compassionate, but the systemic reason is to ensure that they have just enough money that they spend all of it. This way there is sufficient demand for goods and services to be produced, but people can not save enough money to become capitalists or be able to leave the workforce. Indeed, virtually all public assistance programs cut off recipients with any significant savings. While conservatives fight for the direct interests of the capitalist class, liberals fight for the interests of the capitalist system.
I understand that few liberals consciously believe and support the goals and beliefs which I ascribe to them here. They believe they are compassionate people who want to make the system work better for the unfortunate. That is probably true. But it does not matter. Like with institutional racism, the conscious intent of the participants does not matter; it is their actions and the results that matter. And the fact is, if you assume that the primary concern of liberals is market efficiency, you will predict their actions better than if you assume that their primary concern is uplifting the downtrodden or achieving economic and social justice.
Let us look at one more example before we turn to basic income: the minimum wage. One obvious way that the minimum wage fits the pattern I have described is that you have to be employed to benefit from it. A less obvious way is that it looks free, but it is actually a tax that is passed on to consumers, so it is the middle class that pays for it, not the capitalist class.
But the most striking way that the minimum wage fits this pattern is when you look at its amount. Democrats pick a new number every seven to twelve years. They refuse to index it to inflation so they can have at least one winning issue against Republicans every decade. Opponents of raising the minimum wage always mock the arbitrary nature of the new number picked and ask something like, “Why not $100 per hour?” Liberals typically dismiss this mockery with empirical evidence, pointing out that raising the minimum wage has almost never resulted in a loss of jobs, and sometimes results in increased employment due to increased demand.
But as with anti-discrimination laws, just because right-wing critics are empirically wrong does not mean that they do not have a point. What criteria do liberals use to determine how much the minimum wage should be? $100 per hour likely would wreck the economy. But if $10.10 per hour, the current consensus goal of the Democratic Party, would have no ill effects, why not fight for $15, or $20, or $25? Why not commission a study to determine the maximum sustainable minimum wage? Applying the principle that liberals are working to support the capitalist system, we can see where they get their numbers. Liberals pick a minimum wage that puts workers near the edge of the poverty line, where they can be good consumers but never save enough to exit the workforce.
So what can we expect from liberals in the fight for a basic income?
We can start with two broadly optimistic points. First, since liberals are concerned with efficiency, evidence can sway them, and the scientific and empirical evidence is strong that a basic income is cheaper to administer, raises health and education outcomes, and does not cause people to quit working and live an idle life. Masses of healthy and educated people working and spending money churns the economy, and this is good for the capitalist system.
Second, liberals will join the basic income cause with little hesitation when the technological unemployment crisis starts receiving mainstream media attention. While liberals will tolerate significant unemployment because it keeps down labor costs, they will see too large a number of unemployed as wasted potential consumers. This will be especially true if more workers are not actually needed to produce the goods and services that the unemployed could otherwise buy.
Now the caveats.
Let me start off with a particularly American concern. Despite the significant libertarian origins of and current support for a basic income, many people hear the idea of the government giving everyone free money and they think, “socialism”. And in America, this is a problem. Despite the good arguments that could be made that the United States in the 1950s and 1960s had the most socialist economy that has ever existed in human history, America during the Cold War defined itself in opposition to “socialism”. For many, fear of the label has stuck. Conservatives still use “socialism” as an epithet for economic policies they oppose, and many liberals will do or say whatever is necessary to avoid being associated with socialism. If you ask prominent liberals, they will point to surveys showing the unpopularity of socialism in America. This could be a chicken and egg problem: why should most Americans not be afraid of socialism if even liberal leaders oppose it? Fortunately, this also appears to be a generational problem that is going away. Recent surveys of Americans under 30 show support for socialism to be equal to support for capitalism, and the Presidential campaign of Bernie Sanders may be showing that fear of the label “socialism” is overblown.
The next problem with liberals will be to educate them. The facts being on our side will not help if establishment liberals do not know them. The specific problem here is that the misrepresentations of the work participation and family stability effects of the Negative Income Tax experiments that were spread in the mid 1970s are still believed by many establishment liberals. We will have to work hard to correct those misbeliefs.
Another problem will be that if technological unemployment does not reach a crisis point, liberals will simply not prioritize basic income on their own. They will have to be dragged into taking action by political pressure. This will be similar to the example of same-sex marriage, except that instead of claiming opposition up until the public changes its mind, look for liberals to vocalize general support for the concept of a basic income, but not do anything about it. An example of this strategy was how, in the years following the U.S. invasion of Iraq, a lot of politicians of all stripes, including President Bush, voiced support for setting up an Alaska style trust fund to pay oil dividends to all Iraqis, but it never happened. This will be because, even if liberals come to agree that a basic income would be a better policy than the current welfare system, the efficiency benefits to the capitalist system are not great enough to put it on their priority list. Just as the suffering of gays and lesbians who wanted to marry was not sufficient cause to make same-sex marriage a priority, neither is the suffering of the poor. It never has been in the past. Again, this will change when technological unemployment becomes a crisis, and there will not be enough consumers to buy goods and services without a basic income.
The final, and biggest challenge with liberals as allies will be their attempts to dilute the idea of a basic income. While they may become far more generous with the cash amounts, it will be difficult for them not to attach strings and conditions. The reason is that it will be difficult to change their belief that they know how to run the lives of the poor better than the poor themselves. But a bigger danger is that they will try to insist on means-testing. They will try to make the middle-class believe that means-testing will make it cheaper for them. The reality is that means-testing will make the financial burden of a minimum income fall on the middle-classes. This, again, is because the goal for liberals is not economic justice, but making the current capitalist system run better.
In order to relieve the immediate suffering of the poor and establish the principle that poverty is not tolerated in our society, it may be necessary to agree to means-testing to pass an initial guaranteed minimum income. Liberals will trumpet that the job is done. Those of us who count justice as one of our goals need to be prepared to continue the fight.
by Dejan Tachevski | Jan 4, 2016 | News
The Basic Income library is getting another book for its shelves: Mark Walker, Associate Professor of Philosophy at New Mexico State University has written a new book, Free Money for All, in which he proposes a Basic Income Guarantee of $10,000 for all adult US citizens.
According to the publisher’s description, Walker argues that “BIG promotes three positive outcomes — social stability, gross national happiness, and gross national freedom — unlike alternate proposals such as socialism, laissez-faire capitalism, and the traditional welfare state.”
For more info on the book click on the following links:
https://www.palgrave.com/page/detail/free-money-for-all-mark-walker/
https://www.amazon.com/dp/1137471328/
by Guest Contributor | Dec 22, 2015 | Opinion
By Tom Streithorst
The Basic Income Guarantee (BIG) is back in the news. The Finns are considering implementing it, as are the Swiss, replacing all means tested benefits with a simple grant to every citizen, giving everyone enough money to survive. Unlike most current benefits programs, it is not contingent on being worthy or deserving or even poor. Everybody gets it, you, me, Rupert Murdoch, the homeless man sleeping under a bridge. Last seriously proposed by Richard Nixon in 1969, more and more economists and bloggers are suggesting that the Basic Income Guarantee may ultimately be the salvation of capitalism. The BIG will eliminate poverty, lessen inequality, and vastly improve the lives of the most vulnerable among us. But that is not why we need it. It may seem impractical, even utopian, but I am convinced the BIG will be instituted within the next few decades because it solves modern capitalism’s most fundamental problem: lack of demand.
Technology and capitalism have largely solved the problem of supply. We are able to make more stuff, with fewer inputs of labor and capital, than ever before. We have the know-how, we have the resources, we have the trained labor, we have the money. The only thing businesses lack is customers. Making stuff has become easy. It is selling it that keeps entrepreneurs (and central bankers) awake at night. Stagnant wages tell us that the supply of labor exceeds demand. Microscopic interest rates tell us that we have more capital than we need. Since the Great Depression most economists have recognized that demand is the Achilles heel of the modern economy.
Over the past 80 years, we have solved the problem of demand in three very different ways. The first is war. In 1938, US unemployment was almost 20%. In 1944 it was barely 1%. Everybody knows World War II ended the Great Depression. But it is worth remembering that it wasn’t the slaughter of civilians or the destructions of cities that reinvigorated the global economy, but rather the massive fiscal stimulus of government borrowing. Had we borrowed and spent as much on building schools, homes and roads as we did on defeating the Axis powers, the economic effect would have been even greater. The advantage of military Keynesianism is political: conservatives who loathe government spending are able to overcome their distaste when it comes to war.
The second, during the post war Golden Age, was rising salaries. Between 1950 and 1970, the average American worker saw his real wages double: since then, they have barely gone up at all. Back then, productivity improvements translated almost immediately into wage gains. As workers’ wages went up, so did consumer spending. Productivity increases meant each worker was able to make more stuff. Wage increases meant he was able to afford to buy it. Advertising transformed luxuries into necessities. Productivity gains combined with wage hikes gave the Golden Age the greatest GDP growth the world has ever seen.
In our most recent era, from 1982 until the financial crisis, the engine of economic expansion was ever increasing levels of private debt. After Reagan and Thatcher, median wages stopped going up, even as productivity maintained its inexorable rise. With wages stagnant, only by taking on more debt were consumers able to keep spending enough to buy all they produced. As long as banks were happy to lend, the economy managed to grow (albeit much more slowly than during the Golden Age) and the party could go on. But after the financial crisis, both household willingness to incur more debt and bank willingness to lend contracted, leaving us with the stagnant economy we are trapped in today.
These three old methods of stimulating demand have passed their sell by dates. Global war would reinvigorate the economy, but at an unbearable cost. Rising wages, unfortunately, are unlikely, with more and more of us replaceable by robots, software or much cheaper foreign workers. And higher levels of debt not only increase inequality, they also engender financial instability. What is to be done?
Every year, technological progress allows us to make more goods and services with fewer inputs of labor and capital. As consumers, this is wonderful. We can buy better and cheaper goods than ever before. As workers, however, productivity increases threaten our jobs. As we need fewer workers to make the same amount of stuff, more of us become redundant. And it is likely to get worse. The rise of the robots may eliminate 47% of existing jobs within the next two decades. Unfortunately, even though a robot can make an iPhone, it cannot buy one. If we are hurtling towards a post scarcity future, only a Basic Income Guarantee can ensure sufficient demand to keep the global economy ticking over.
It is not just the poor that profit. The rich get exactly the same payment, in the form of a tax cut. Corporations also win. With more money in consumers’ pockets, sales increase, raising profits. And since firms no longer need provide a living wage, labor costs could go down, which would give employers reason to hire. Meanwhile, workers, with a guaranteed income, no matter what, will have the freedom to tell an unreasonable boss to “take this job and shove it.” These benefits suggest that a Basic Income Guarantee could command considerable support from diverse sectors. But these are all merely side benefits.
If technological progress continues to eliminate jobs, the BIG may well be the only way we will be able to maintain demand in a post-work future. By giving every citizen a monthly check, a BIG will be as fiscally stimulative as World War II without requiring the murder of millions. The BIG is economically sensible and politically practical. What then stands in its way?
The first problem is that it sounds too good to be true. We have been told to be suspicious of anyone promising a free lunch, and giving people money for doing nothing certainly seems like a costless gift. Fear of scarcity is built into our DNA. For the BIG to seem viable for most people, they need to learn that demand, not supply, is the bottleneck of growth. We need to recognize that money is something humans create, not something with fixed and limited supply. With Quantitative Easing, central banks created money and gave it to the financial sector, hoping it would stimulate lending. Today, even mainstream figures like Lord Adair Turner, Martin Wolf and even Ben Bernanke recognize that “helicopter drops” of money into individuals’ bank accounts could have been more effective. Technocrats are beginning to recognize the practicality of Basic Income. We in the economic blogosphere need to bring this message into the public eye. The rise of the robots, ever declining prices for goods and services, and disappearing jobs may ultimately teach this lesson more effectively than any number of well-meaning essays.
The second problem is sociological. Most of us are still in employment. We feel, in some fundamental way, that our work makes us more worthy than lazy layabouts on benefits. This simultaneously makes us disinclined to raise benefits for others (or increase the number of people on benefit) and equally disinclined to think of ourselves as the kind of people that receive money from the state. Adam Smith, in The Theory of Moral Sentiments (the book he considered his masterpiece), said that we humans are motivated primarily by the regard of others. We want people to think well of us, and we want to think well of ourselves. The psychological pleasure of considering ourselves better than welfare recipients can trump genuine economic benefit. To overcome this objection, we need to recognize that defining ourselves by our jobs is very 20th century. If technological progress continues to kill traditional jobs, this objection too will eventually dissipate. As full-time jobs become harder to find, more of us will recognize the need for a BIG.
The third problem is perhaps the most central. By stimulating the economy and pushing it towards its production possibilities frontier, the Basic Income Guarantee will be growth enhancing, but it is undeniable that it will also be redistributive. The pie will be larger, but it will be sliced differently. For the past 30 years, we have stimulated the economy by shoveling money towards rich people. A BIG shovels money towards poor people. And for many in the top 1%, that is anathema.
Conservatives generally favor tax cuts as a way of stimulating the economy. Although they do not like to admit it, this is textbook Keynesianism. As long as the government does not cut spending, more money in consumers’ pockets will inevitably increase demand. Unfortunately, tax cuts generally favor the richest among us, and they, unlike the poor, are liable to save rather than spend their windfall. Stimulating savings is a waste of a tax cut. Today, we have an over-abundance of saving and a shortfall of investment and consumption. A BIG can be thought of as a tax cut targeted to those most likely to spend it, which is what the economy needs.
The Basic Income Guarantee solves the problem of demand, stimulates the economy, increases corporate profits, gives workers more freedom, and provides a safety net to the most vulnerable. It is economically sound and politically savvy. But the very rich do not fear unemployment, they fear redistribution and they will be the most significant force against the implementation of the BIG.
Related reading:
Frances Coppola, “The changing nature of work,” Coppola Comment, August 5, 2012.
Francesc Coppola, “The wastefulness of automation,” Pieria, July 8, 2013.
Tom Streithorst, “The central paradox of the 21st Century,” Pieria, June 25, 2014.
Anna Hedge, “Basic income and a room of one’s own,” Pieria, February 26, 2014.
Anthony Painter, “In support of a Universal Basic Income: introducing the RSA basic income model,” RSA, December 16, 2015.
Tom Streithorst has been a union member, an entrepreneur, a war 
cameraman, a promo producer, a journalist. These days, he mostly does voiceovers and thinks about economic history. An American in London, he has been writing for magazines on both sides of the pond since 2008. He is currently working on a book on post scarcity economics, and how the incredible productive power of capitalism and technology has the potential to bring us all prosperity and happiness but so far, we keep screwing it up.
This piece was originally published in Coppola Comment.
by Josh Martin | Oct 24, 2015 | News
Streithorst writes an eloquent, thorough introduction to basic income, highlighting its ability to empower the consumers most likely to spend. Capitalism utilized higher wages and growing debt in previous golden ages to promote consumer spending, and Streithorst argues a basic income could facilitate such spending once again as technological unemployment continues to grow. Streithorst believes a basic income would stimulate demand, grow GDP, and decrease inequality.
Tom Streithorst, “A New Golden Age Part III: The Basic Income Guarantee”, Los Angeles Review of Books, 13 October 2015.
