by Kate McFarland | Jul 13, 2016 | Opinion
A recent article in The New York Times, entitled “Universal Basic Income is Poor Tool to Fight Poverty,” spawned a debate on the desirability of implementing a UBI in the United States. This Basic Income News feature analyzes the NYT column’s argument against UBI, and looks at the counterarguments posed in several response pieces.
On May 31st, the New York Times published an article that launched a debate about the cost and effectiveness of implementing a universal basic income in the United States.
The column’s author, Eduardo Porter, argues that “universal basic income is a poor tool to fight poverty” (to cite the article’s title). He makes two main arguments against UBI:
First, on his assessment, a UBI would be either insufficiently low to end poverty, or require too many cuts to existing programs, or it would be prohibitively expensive to administer:
It amounts to nearly all the tax revenue collected by the federal government. Nothing in the history of this country suggests Americans are ready to add that kind of burden to their current taxes.
Second, even if a UBI could be afforded, Porter believes that it would have “many undesirable features” due to its unconditionality. These include a “non-negligible disincentive to work” — work, in his view, “remains an important social, psychological and economic anchor” — and a lack of social control. (Porter brings up housing vouchers as an example of the latter: “Say we know the choice of neighborhood makes a difference to the development of poor children. Housing vouchers might lead them to move into a better one. A monthly check would probably not.”)
Additionally, Porter dismisses one popular argument in favor of basic income: he denies that technological unemployment is a pressing concern.
While Porter admits that poverty and precarity are problems in dire need of better solutions, he believes that there are better policy options than a universal basic income. In particular, he is fond of the idea of subsidized employment, suggesting that “The government could subsidize jobs as varied as school repairs and fixing potholes.”
Is a basic income too expensive?
Before the end of the day, responses to Porter’s argument appeared across the Internet, defending both the feasibility and desirability of a universal basic income.
Three notable replies include those of Vox columnist Matthew Yglesias, former BIEN secretary Almaz Zelleke, and popular basic income activist Scott Santens. All three of these authors respond to the cost objection, although they employ slightly different strategies in doing so.
While Zelleke remains focused on matters of principle, largely bypassing the attempt to numerically “prove” that a basic income would be affordable, Yglesias and Santens both crunch a few numbers. Yglesias calculates the cost of a basic income of $10,000 per adult (which is, admittedly, below the poverty line) and $6,000 per child. Santens considers an amount of $12,000 per adult (topped-up for seniors and people with disabilities) and $4,000 per child. They conclude that, although expensive, a UBI is not prohibitively costly.
Yglesias points out that the level of spending required, as a percentage of GDP, would not be out of line with the amount of government spending in social democracies like France and Sweden. Thus, while a UBI would “take federal spending to a level never before seen” in the United States, this level would not seem farfetched when compared to other developed nations.
But, of course, the question that worries critics of the UBI is not just “Could America afford a UBI?” but, more to the point, “Where would the money needed to fund a UBI come from?” On this point, all three of Porter’s opponents seem to agree, nodding to an answer that some Americans might not want to hear: funding a UBI will require some tax increases and redistribution.
Zelleke cuts to the chase here: the question of financing a UBI is not really a matter of affordability at all, but of political will:
It’s true that basic income is expensive, but calling it unaffordable short-circuits the discussion we should be having about the costs and benefits of a basic income. Raising taxes is never an easy sell, but might it be worth it if the additional revenues were spent on a program guaranteed to eliminate poverty?
And Santens puts matters even more bluntly, asserting that the money needed to fund a UBI “comes from the raises no one has gotten since productivity decoupled from wages and salaries back around 1973. Basic income belongs to us because it’s been effectively stolen from us for decades.” On Santens’ view, a UBI is not merely an affordable option to eliminate poverty; basic principles of fairness and justice make it mandatory.
At base, the disagreement between Porter and his opponents is not a dispute about the mathematics. It’s a question of value: it is more important abolish poverty, or to give individuals the shares of collectively-generated wealth that they deserve, or is it more important to avoid raising taxes and federal spending?
Interestingly, Porter himself seems to tacitly agree with opponents like Yglesias that, technically, the United States could afford a universal basic income. In an article published just a week later, he complains that paying for a sufficiently high basic income would require “raising taxes to Scandinavian levels.” Similarly, U.S. News and World Reports contributor Chad Stone — in an article echoing Porter’s — says of Yglesias: “he assumes that the goal of ending poverty would make conservatives and GOP politicians comfortable with raising federal spending to European levels…”
Even its adversaries, then, seem to admit that a UBI could be financed if the United States was willing to raise taxes to a level that already has a precedent in countries that rank among the happiest in the world. Where money alone is concerned, the United States can pay for a UBI.
As Santens puts it, “The money is there, it’s just massively maldistributed after decades of upward redistribution.”
A June 6th article in Quartz — written in part as a response to Porter’s New York Times piece — makes a similar point: the debate over the cost of basic income “isn’t really about welfare spending: It’s about tax policy.”
The remaining disagreement, I submit, is twofold:
- Is it fair to raise taxes on the highest earners in order to redistribute money to all?
- Even if it is, could this be a viable sell in American politics?
These are the debates that must be had. I believe that, where matters of justice and fairness are concerned, UBI proponents can easily mount the more compelling normative argument. Political feasibility, to be sure, might require a tough and prolonged fight — but the advantages of UBI are enough to warrant it.
(For more background on these normative arguments and practical advantages of UBI, I recommend further exploration of the BIEN website.)
Would a basic income harm society?
So, then, a universal basic income is affordable in the United States — as long as the country can summon the political will to implement it. But would it harm society?
Porter gives two reasons to think that it could: a UBI would disincentivize work, and it would deprive the state of valuable and productive control over how individuals spend money. While Yglesias and Zelleke do not focus on this portion of Porter’s article, Santens addresses both in some detail.
Porter’s first worry is a common objection to UBI: if people can get money for free, they might stop working (specifically, they might abandon or reduce time spent in paid employment [1]).
Note that, in general, there are two ways to respond to this objection:
- Don’t contest the implicit evaluative presupposition that it’s bad if people stop working (in paid jobs), but deny that this is likely to happen under a UBI.
- Don’t contest the prediction itself, but deny that it would be a bad thing if people spent less time in paid employment; that is, deny the evaluative presupposition that more paid work is better for individuals or society.
Of course, one could employ both tacks in tandem — which is, roughly, what Santens does in replying to Porter.
For the most part, Santens takes the first approach, countering Porter’s empirical claim that a UBI would disincentivize (paid) work. In doing so, he cites multiple studies of cash transfers and basic income pilots — notably drawing upon an article written last fall by none other than Eduardo Porter — that show that unconditional cash transfers have not, in fact, had this effect.
There is a danger, though, in relying too heavily on this first tack: it can tend to reinforce the assumption that, all else equal, more time spent in paid work is better than less. It reinforces the view that the issue is an empirical one (“Will people spend less time at jobs or not?”), when the bigger issue is a normative one (“Is it bad or good if people spend less time at jobs?”).
Ezra Klein’s contemporaneous piece in Vox, which was also inspired by Porter’s article, partially exemplifies this danger. Klein takes for granted that some people would leave the workforce if provided with a basic income — and that this would indeed be an unwanted result “in a world where a job with a steady paycheck is the only path to self-respect.”
In fact, he goes so far as to say,
If that’s the reality of the situation, then, yes, a UBI is a bad idea — it’s better to push people to work by supplementing incomes or using the government as an employer of last resort. Sure, that’s more paternalistic, and it means we’ll waste people’s time in unpleasant or useless jobs and consign others to unemployment.
Although Klein is willing to admit that a UBI could be a good idea if Americans change the way that they view work, he believes that Americans have not yet reached this point.
I submit, however, that it is precisely the job of the UBI advocate to challenge Americans to change the way that they view work — assuming that Klein is correct about the status quo.
This brings us to the second of line of response to Porter’s “a UBI would disincentivize work” objection — which, in fact, Santens also touches upon (although he does not develop it in his response to Porter to the extent that he has elsewhere):
[B]asic income is not at all an idea about paying people to do nothing, but instead about paying people to do anything. There is so much work being done right now that is not seen or recognized as work, but is. And there is so much work people want to be doing on their own volition that they are prevented from doing in a system that requires they spend their hours working for someone else just to survive.
Again, if Klein is right about how Americans view work, then Americans must change the way they view work. She might, though, simply be wrong about the current state of affairs in American culture: plausibly, Americans can see the value of unpaid work — or, in Santens’ words, “work that is not recognized as work” — even if it’s not always obvious that they can.
“Frustrated man at a desk” CC LaurMG
This leaves Porter’s contention that, as Santens puts it, a UBI “would not be paternalistic enough.” Santens’ response here is to argue that the lack of paternalism is for the best: allowing individuals more discretion over how they spend money, and with fewer restrictions and qualifications on who receives it, has been shown to produce the better outcomes.
He takes up Porter’s own example — housing vouchers — to create a compelling case study, combining anecdotal and statistical evidence in favor of the effectiveness of cash transfers and against that of means-tested programs. According to the research he cites, over three out of four people who qualify for housing assistance in the US don’t receive it. Meanwhile, studies of cash-transfer programs show that many beneficiaries do, in fact, use their cash to move into better houses or neighborhoods.
As Santens repeatedly complains, Porter’s attack on UBI rests on little in the way of empirical evidence. Now, perhaps Santens himself has cherry-picked studies in favor of his pro-UBI conclusion. Even if that were the case, however, he at least does provide some hard-and-fast data. Minimally, this shifts the burden of proof back to Porter to demonstrate — with evidence — why paternalistic welfare programs would provide a greater benefit to individuals and society.
Finally, in addition to arguing that direct cash transfers are more effective in producing certain results, one might directly object to the normative presuppositions of means-tested welfare programs — as Santens does here:
I’m fed up with people with positions “up on high” looking down at everyone else and telling them they know better who needs assistance and who doesn’t, and how that assistance should be provided and when that assistance should be taken away. I’m fed up with the idea that anyone must prove their right to live to anyone at all.
I will close with this passage. We do need to consider the evidence; sometimes, though, we need just to step back and ask “What does this policy imply about basic human dignity?”
[1] When critics like Porter complain that a basic income might cause people to “stop working”, they often conflate “working” with working for money — ignoring the many types of unpaid activities that add value to society (if not to the GDP), and that are even colloquially regarded as “work” (e.g., volunteer work, care-work, and housework).
Continuing to use the word ‘work’ in this narrow sense, they paint a false dichotomy between working for money and idleness. The important category of “unpaid work” is ignored — even though it might well that, given a basic income, many individuals would choose to engage in more unpaid work rather than either paid work or “idleness”.
In the interest of clarity, I’ve disambiguated ‘work’ as ‘paid employment’ in my treatment of the argument — but it should be noted that, quite misleadingly, Porter does not.
BIBLIOGRAPHY
Original article:
Eduardo Porter, “Universal Basic Income Is a Poor Tool to Fight Poverty,” The New York Times, May 31, 2016.
Critical responses:
Scott Santens, “Universal Basic Income Is the Best Tool to Fight Poverty,” The Huffington Post, June 2, 2016.
Matthew Yglesias, “A universal basic income could absolutely solve poverty,” Vox, May 31, 2016.
Almaz Zelleke, “Actually, a Universal Basic Income Will Solve Poverty,” May 31, 2016.
Sympathetic responses:
Chad Stone, “A Universal Basic Income Is No Solution,” U.S News & World Reports, June 3, 2016.
Related:
Alexander Holt, “Critics of Universal Basic Income just don’t understand how the policy would actually work,” Quartz, June 6, 2016.
Ezra Klein, “A universal basic income only makes sense if Americans change how they think about work,” Vox, June 1, 2016.
Thanks to Asha Pond, Tyler Prochazka, and André Coelho for reviewing a draft of this article — and, as always, to my supporters on Patreon (click the link to join ’em!).
Featured image CC Luis Felipe Salas.
by Kate McFarland | Jul 11, 2016 | Opinion
An article in the June 4th edition of The Economist, entitled “Basically Flawed,” argues that universal basic income is a radical policy that is just too risky to pursue. The anti-UBI argument itself is flawed, however, largely due to understating the benefit of UBI–if not ignoring its moral necessity.
According to an article in the June 4th edition of The Economist [1], universal basic income (UBI) is a policy of uncertain need but certain costs. A simple risk-benefit analysis, then, would advise us to maintain our current welfare states (perhaps with less radical adjustments) rather than gamble with a UBI.
The argument has two main components: first, establishing that there is no definite need for a UBI; second, establishing that a UBI presents unavoidable costs.
Concerning the first, the author assumes that there is one (and only one) reason why something like a UBI would become necessary: widespread unemployment due to new technologies. Here the author notes that the robot job takeover has not happened yet, and expresses skepticism that it ever will:
Worries that technological advance would mean the end of employment have, thus far, always proved misguided; as jobs on the farm were destroyed, work in the factory was created. Today’s angst over robots and artificial intelligence may well turn out to be another in a long line of such scares.
Having set aside robot-driven angst, the author turns to defend the claim that UBI has sure costs. The first and most obvious of these is financial: a UBI is certain to be expensive to any government that implements it. For example,
An economy as rich as America’s could afford to pay citizens a basic income worth about $10,000 a year if it began collecting about as much tax as a share of GDP as Germany and replaced all other welfare programmes with the basic-income payment.
Moreover, the author complains that a UBI would “destroy the conditionality on which modern welfare states are built” — leading to an “erosion” of the workforce:
During an experiment with a basic-income-like programme in Manitoba, Canada, most people continued to work. But over time, the stigma against leaving the workforce would surely erode: large segments of society could drift into an alienated idleness.
Finally, the author worries that it would be impossible to combine UBI with a reasonable immigration policy; immigrants would have to be barred or else treated as “second-class citizenries without access to state support.”
Thus, the author concludes, the risks of UBI — which are both large and near-certain — greatly outweigh its sole benefit as insurance against technologically-driven job loss (which might or might not occur).
Reply by Basic Income News editor Kate McFarland
The basic income proponent could, if she wished, directly attack any one of the author’s premises. She might be tempted to argue that a universal basic income could be afforded and that it could be reconciled with a fair immigration policy, contest the claim that it would cause people to stop working, or produce evidence that mass technological unemployment is indeed very likely.
For my own part, I am not particularly interested in quibbling over any of these points, however important they might be independently. Instead, I will concentrate on two overarching problems with the author’s argument:
1. The argument understates the potential benefits of a universal basic income, which far exceed security against a robot job apocalypse.
2. The argument assumes that risk-benefit analysis is an appropriate method by which to answer the question of whether to adopt a universal basic income. But this would not be the case if, for example, a basic income is required as a matter of individual rights or social justice.
Why do we need UBI?
In an article published last April, Rutger Bregman writes, “Forget about robots. The reasons why we need basic income are infinitely better.” This is a crucial viewpoint–and one common in basic income discourse, the media’s apparent fondness for “the robot issue” notwithstanding–which must be taken into account when addressing potential benefits of UBI.
Take, for instance, the elimination of poverty. When scholars and researchers like Pranab Bardhan, Nkateko Chauke, and the team at GiveDirectly–to name only a few–argue that developing nations should adopt a basic income, they are not worrying about robots; they are thinking about poverty and inequality.
But, of course, poverty is also a pressing and immediate concern in high-tech countries like the United States. Indeed, a recent article in the New York Times sparked a debate about whether a UBI could abolish poverty in the US. When Scott Santens and Vox’s Matthew Yglesias joined the fray to argue that it indeed could, they remained focused on the issue of present poverty–not future automation.
Perhaps the author of The Economist article believes that a UBI is unnecessary to fight poverty, because existing welfare programs could just as well be tweaked to accomplish this goal. But, if so, the author would overlook many known problems with means-testing, which a UBI might eliminate.
The abolition of poverty–along with all the hurdles, stigmatization, and poverty traps created by means-tested programs–is a potential benefit of UBI that is clearly quite profound, yet one the author fails to mention.
Furthermore, a benefit unique to UBI is that, if high enough, it would enable workers to refuse employment. This too promises many positive results in the here and now, without waiting for robots to arrive at the door.
A UBI could be an enormous boon to workers who need or desire to leave full-time employment, if only temporarily, in order to raise a child, care for an ailing family member, return to school, start a small business, participate in voluntary community services, contribute to the arts, or pursue any other unpaid project. UBI is often said to recognize the value of unpaid labor in all of its forms; current systems of social welfare do not.
Moreover, it is often argued that this ability to refuse work benefits even those workers who do wish to retain full-time employment, insofar as it increases their bargaining power: if a worker cannot be replaced by someone desperate to take any job just to survive, it is easier for that worker to demand higher wages, better working conditions, or shorter or more flexible hours. It is UBI, not existing welfare systems, that would generate this type of bargaining power.
None of these advantages of UBI are mentioned in the risk-benefit analysis in The Economist, despite the fact that they are arguably as near-to-certain as any of the alleged risks–robots or no robots–and would be positive impacts of very high magnitude. A UBI might well be expensive, but one should to consider its full range of benefits in order to properly assess whether it is worth its high price tag. The author does not.
Of course, this is all to grant that the use of risk/benefit analysis is a fitting approach to the decision of whether to pursue UBI–but I believe that even this assumption can, and should, be questioned.
Is UBI “just just”?
As evidenced by the various articles linked above, it is popular to argue in favor of basic income on the basis of its predicted effects: pro-UBI authors of cite empirical evidence of effectiveness cash-transfer to establish the claim that a UBI “will work”. That is, many authors argue that UBI will achieve certain desired outcomes (or not cause certain outcomes generally deemed undesirable, such as decreased workforce participation, laziness, or higher spending on alcohol or other temptation goods).
But what if a basic income is not merely an effective means to attain socially desirable ends? What if universal and unconditional basic income is mandated as a matter of social justice?
This is, in fact, far from an uncommon view within the basic income movement.
For example, Guy Standing and Yanis Varoufakis have recently described UBI as a form of social inheritance (cf. their linked lectures). The idea here is this: the money distributed in a UBI is money that rightfully belongs to all of us, equally, as inheritors of the wealth generated through the collective activities of our forebears.
Alternatively, one might argue for a right to a livable basic income in other commonly recognized individual rights–such as, perhaps most straightforwardly, a right to a certain minimal standard of living, just for being alive. Furthermore, a well-entrenched view in philosophical work on basic income–canonically presented by Philippe van Parijs and later developed in a somewhat different form by Karl Widerquist [2]–holds that the protection of freedom mandates an unconditional basic income.
If a universal basic income is a universal human right, then there is no question of whether the benefits are worth the risks; thus, arguments of the form given in The Economist don’t get off the ground. There is simply no question as to whether a UBI should be adopted: it should. The only question is how to manage whatever risks the policy would create, or perhaps how to tweak and fine-tune the policy to minimize risk.
If a basic income is a right–if it’s necessary as a matter of social justice–then we must find a way to fund it, even if it requires hefty tax increases on the rich (or even German levels of government spending!). And we must be willing to assume risks, including the possibility that some individuals will leave the workforce (some of them, perhaps, to simply smoke weed and watch Netflix).
This is not to suggest that we should ignore the potential risky outcomes. On the contrary, it is crucial to understand what the risks are, so that we might build safeguards against them. But, under the present supposition that basic income is simply a right, they should be viewed as potential problems that can–and must–be surmounted for the sake of what is owed to individuals and society.
[1] “Basically flawed,” The Economist, June 4, 2016.
[2] Such arguments are made in the books mentioned in the embedded links. N.B. All chapters from Widerquist’s work are available for free download from his website.
Thanks to Genevieve Shanahan and André Coelho for reviewing a draft of this article, and thanks to my supporters on Patreon.
“MET II Robot Lab” photo CC Georgina Rose.
by Tyler Prochazka | Jul 8, 2016 | News
This past month, United Kingdom’s Compass advocacy and publication website published an analysis of the basic income. The report discussed how the basic income could be introduced in the UK, and how it would interact with other social service programs.
One of the authors, Stewart Lansley, a Compass associate and visiting fellow in the School of Policy Studies at the University of Bristol, discussed how “income support is being weakened while secure work is becoming less available,” and how the basic income would address the impending “robotic revolution.”
The Compass report mentions the sanctions that have been introduced in UK’s entitlement system and how that was leading some to fall through the cracks. What do you think the biggest challenge of the UK’s current entitlement system is and how does the UBI address it?
Britain’s system of social security – complex and unpopular – needs a fundamental rethink. With much greater reliance on means-testing, and the erosion of the role of universal benefits, it has moved sharply away from the original Beveridge blueprint. Further, the level of conditionality has been raised, with governments exercising greater and greater control over the lives of claimants, making the system much more punitive and intrusive. Since 2013, more than one million claimants have been sanctioned, leading to a loss of benefits for between one month and three years for some of the most vulnerable of claimants.
Mass sanctioning has led to an increase in destitution and has been one of the principal drivers of the great surge in dependency on food banks. By guaranteeing a weekly income, even at a modest rate, a universal basic income (UBI) would boost the universal element of income support, reduce dependency on means-testing and bring an end to sanctioning.
What are the economic and societal risks that the UBI schemes outlined in the Compass report address?
A UBI would help tackle two key economic and social risks. First, the widespread insecurity and growing risk of poverty associated with work. Today, more than 60 percent of those in relative poverty in the UK are in work, a significant rise compared with the immediate post-war decades. By providing a guaranteed, if modest income, a UBI offers a more robust safety net in a much more insecure, low paid and fragile working environment and will help reduce the risk of poverty amongst those in work.
Secondly, whatever its ultimate impact, the impending technological and robotic revolution is set to bring further disruption and upheaval to jobs and pay. Crucially, a UBI offers an effective way of providing income protection from the wider repercussions of accelerated automation. Further, the robotic revolution may eventually bring significant productivity gains, though to what extent and when remains uncertain. Although these are yet to be realized, these could offer potentially new and significant social and economic opportunities. There is a very real risk, however, that the gains – if they are realized – will be colonized by a small powerful elite, leading to a further jump in inequality and a surge in joblessness. A UBI would play a key role in ensuring that such gains are more evenly shared.
Do you think the alignment between the left and the right over the UBI is sustainable once the specific policy details for implementation are worked out? For example, the report makes clear the UBI would not be revenue neutral nor would it eliminate all means-tested benefits, which might alienate some supporters on the right.
The right and left see a UBI from very different standpoints. The right favours a basic income as a way of achieving a smaller state, and would see its introduction as an opportunity to sweep away a range of other forms of social protection. This is undoubtedly the motive behind the support coming from some Silicon Valley enthusiasts.
The left, on the other hand, views such a scheme as part of a strong state, as a way of securing a robust income floor, of tackling poverty and as a means of promoting equal citizenship. For the left, it is a profoundly democratic and egalitarian concept that promotes both security and greater personal freedom, and a recognition that all citizens have the right to some minimal claim on national income.
These views are clearly incompatible and it is inconceivable that a scheme could be devised that satisfied both sides. Left supporters are clear that a UBI scheme must be seen as a supplement to the wider public provision of services and not as a substitute. A continuing and strengthened role for the public provision of key public services and other forms of state intervention including a generous living wage remain essential as a way of creating further platforms for a more equal and just society.
What other benefits might a UBI offer?
Integral to the concept of a UBI is the promotion of greater freedom and choice, progressive changes with transformative potential. By providing basic security, it would give people more time and more bargaining power in the labour market. With a growing debate about how to balance work-life commitments in an era of much more insecure work, a UBI would offer people greater flexibility between work, leisure and education, and over the type and length of employment while providing greater opportunity for caring and wider community responsibilities. Some might choose to work less or take longer breaks between jobs. Others would be incentivized to start businesses. Some might drop out of work entirely to care or retrain while others might devote more time to leisure, personal care or community support and less to paid work. But implicit to a UBI is that all lifestyle choices would be equally valued.
Importantly, a UBI would both acknowledge and provide financial support for the mass of unpaid work, disproportionately undertaken by women, in childcare, care for the elderly and voluntary help in the wider community.
It would value but not over-value work. The solution to working age poverty has traditionally been through a mix of decently paid employment and state income support. But income support is being weakened while secure work is becoming less available. One of the great strengths of a basic income is that it separates survival from employment and production. Tackling poverty would become less dependent on the ‘work guarantee`.
In the various schemes outlined in the report, it is noted that some form of disability benefits and others would be preserved with the UBI. How would these benefits likely operate with a UBI and how would they change?
Because a flat rate payment makes no allowance for those with additional needs, some types of means-testing would need to stay, even as we moved over time to a fuller and more generous scheme. A feasible UBI system would, for example, need to be supplemented with, at least, the continuation of disability benefits and additional help to cope with high and variable essential living costs, especially housing and childcare.
To deal with the additional costs of disability, existing benefits for disabled people would remain and run alongside the UBI. In the simulations of different UBI schemes in the report, we have retained the Personal Independence Payment and Employment and Support Allowance.
What would be the benefits of creating a Social Wealth Fund to finance the UBI?
Creating a UBI-linked social wealth fund would be one way of securing an independent source of funding outside of the general tax pool. Social wealth funds are a potentially powerful tool in the progressive policy armoury. They are collectively held financial funds, publicly owned, and used for the wider social benefit of society. Such funds have been widely used across a range of countries and would ensure that a higher proportion of the national wealth is held in common and used for public benefit and not for the interests of the few. They are a way of ensuring that at least part of the benefits of some economic activity are pooled and shared amongst all citizens and across generations.
There is already one example of a fund dedicated to a citizen’s payment, one operating in Alaska since 1982. Here, the returns from a sovereign wealth fund, funded by oil revenue, are used to pay an annual citizen’s dividend. There is an important principle involved in such an arrangement: that citizens are the proper owners of the environment and have the right to share equally in its benefits. The benefits from a common asset should not be hived off to a small number of private owners.
Although the UK has already spent most of its oil revenue, there is no reason why such a social wealth fund could not be established using other sources of income. These could include the dividends from a range of other assets – including other natural resources – and the occasional one-off taxes on windfall profits. As in Alaska, such a fund could be allowed to grow over time, with part of the proceeds from its management paid back into the fund, and part used each year to partially fund a UBI scheme. Over time, such a fund could grow significantly, sufficient to help top up any shortfall necessary to pay for a workable UBI scheme.
An alternative, and more radical way of paying for a dedicated UBI fund would be by the dilution of the heavy concentration of capital ownership, achieved through a small annual charge on the owners of shares. Such a proposal was originally made by the distinguished economist and Nobel Laureate James Meade in the 1960s, as a direct way of tackling the risk of ever-growing inequality. Such an idea was widely debated and discussed in the UK, and in some European nations, in the 1970s and 1980s, while one version of such a scheme – the wage-earner fund – was introduced in Sweden in 1981 and lasted for 10 years, though it was not used to fund a UBI or citizen’s payment.
The report notes the growing support across Europe and the UK for the UBI. What are some steps UBI advocates can take to make it a reality?
The pilot schemes being planned for Canada, Finland, the Netherlands and France are having a profound effect on the wider debate about UBI. These forthcoming experiments are helping to build momentum in support of an idea that, until recently was confined mostly to a few think tanks, commentators and academics. Crucially, they will help provide some evidence of the dynamic effects – including on the incentive to work, employment patterns, changes in participants’ well-being and the reaction of employers.
The pilots have helped build interest in the UK, and it is now time to start building on that to promote a much wider national debate on the issue.
Ultimately, a real test of how such a scheme would work depends on the application of a proper, lengthy and adequately sized pilot with a control group. To take advantage of these developments, the UK campaign should follow the lead taken by others and work to build to case for its own pilot scheme.
by Tyler Prochazka | Jul 7, 2016 | News
“Shouldn’t I have enough to eat? And don’t I deserve a safe place to sleep?”
These are the first lines from the song that shook up this year’s North American Basic Income Guarantee Congress. The song, “Just Because I’m Alive,” was performed live at the congress by musician Brandy Moore, an advocate for the basic income.
Moore is starting a GoFundMe campaign to help fund a studio version of the song that she hopes to release in August. Moore said she has already raised over 10 percent of the goal, and hopes “the momentum keeps going.”
One of the primary reasons that Moore supports the basic income is that it would let all of us be “free to do what we want with our lives.”
“I believe that art is a priceless contribution to society and that artists should be valued. I believe that all the unpaid work that people carry out in our society should be recognized as priceless as well. Anytime anyone is caring for another who cannot care for themselves in some way,” Moore said.
About two years ago, Moore came across the idea of basic income on Facebook and, as she puts it, became “intrigued.”
Her curiosity did not stop there . Moore was inspired to write a song about basic income and wrote it in “one sitting.” She said she started with the first two lines of the song “and everything else flowed out of that.”
Moore said that it is important to create art related to the basic income, because art “has the ability to touch hearts and inspire minds in a very immediate way.”
“It gives a voice to feelings and subjects that people often find hard to talk about in words to each other about, but still need to be expressed. It helps people feel less alone and more connected with the rest of humanity,” Moore said.
“It beautifies our lives. It captures people’s attentions and gets conversations going. It can make an unfamiliar idea feel more acceptable because it has touched people in a deeper way than it would have by just talking about it.”
Ursule Critoph, an attendee at NABIG, said Moore’s performance “struck a chord” with the audience. Critoph said using art to promote the basic income will help “appeal to the human heart and spirit.”
“While Brandy never mentioned the words basic income, her lyrics express the essential foundations that underlie the importance of a guaranteed basic income. Appealing to the universal human need for affirmation, food, shelter and other aspects of a full life is critical to convincing persons that access to a basic income must be a universal right,” Critoph said.
Maria Wong, a worker at the Vancouver Rape Relief and Women’s Shelter, also listened to Moore’s live performance. She said loved the lyrics because it illustrated the reason she is “fighting” for the basic income: “it’s a human right.”
Wong said the basic income would help women, such as those at the shelter.
“Women experience poverty at higher levels because of their responsibilities to care for family and lack of options or value in the workforce. We think a Guaranteed Livable Income will give women more autonomy and be less invisible in society,” Wong said.
Prior to becoming a full-time artist, Moore worked as an office temp, but she said she “hated the way it would suck all my energy away,” so she started focusing wholly on her music.
She said she thinks that others should also have the choice to do what they love.
“We were meant to be free,” Moore said. “And when enough of us believe that we deserve to be free, we will be.”
Click here to see the live performance.
Lyrics:
Shouldn’t I have enough to eat?
And don’t I deserve a safe place to sleep?
Where no one can take what doesn’t belong to them,
And I don’t have to look over my shoulder
Why must I pay for my existence
And why must I prove my worthiness
I have a right to basic needs
Why? Why? Why? Why? Why? Just because I’m alive
I don’t look like you
And I don’t act like you
And I could never make it in your world
But I still deserve a decent life
Why? Why? Why? Why? Why? Just because I’m alive
I’m alive. Just because I’m alive
I’m hungry
I’m cold
I’m lonely
I feel
Just like you do
Why? Why? Why? Why? Why? Just because I’m alive
I’m alive. Just because I’m alive
Alive Alive Alive
Just because I’m alive
Shouldn’t I have enough to eat?
And don’t I deserve a safe place to sleep?
by Kate McFarland | Jul 6, 2016 | News
A recent survey of economists at leading institutions purports to show that 58% oppose a universal basic income, while only 2% support it. However, the survey asked specifically about a UBI that replaces all other social insurance programs and is paid only to adults over 21. Many opposed these qualifications, not UBI itself.
On Tuesday, June 28, the IGM (Initiative on Global Markets) Forum released the results of a survey on “universal basic income” distributed to the Economic Experts Panel — a panel consisting only of “senior faculty at the most elite research universities in the United States” chosen to be diverse in their specializations, locations, and political orientations.
Out of these economics experts, 58% either “disagreed” or “strongly disagreed” with a description of a specific universal basic income policy, while only 2% “agreed” and none “strongly agreed”. (The remainder were either “uncertain” or had no opinion on the matter.)
At first blush, such results are apt to shock and disappoint supporters of basic income. However, as with any survey, attention to the detail is key: what, exactly, were respondents asked?
In this case, respondents were asked to rank their opinion on the following statement on a five-point scale (or declare no opinion):
Granting every American citizen over 21-years-old a universal basic income of $13,000 a year — financed by eliminating all transfer programs (including Social Security, Medicare, Medicaid, housing subsidies, household welfare payments, and farm and corporate subsidies) — would be a better policy than the status quo.
Presumably, this particular policy proposal comes from Charles Murray, who endorsed exactly this in a recent Wall Street Journal feature.
Even before looking at the survey responses, we should take pause here: Charles Murray is a controversial figure even among — perhaps especially among — supporters of UBI. Left-leaning advocates tend to regard Murray and his proposals as “downright undesirable”, to use the phrase wielded by Daniel Raventós and Julie Wark in their June 15th article in CounterPunch.
Last January, to give another example, an article in Jacobin argued that a UBI “could do little to achieve egalitarian objectives — or even backfire badly” if the policy poorly designed. The author presented Murray’s proposal as an example of “non-liveable” basic income, due to its low amount and concurrent elimination of Medicaid, Medicare, and Social Security.
With this in mind, then, it should not be too surprising that several economists in the IGM Forum also took issue with the proposed elimination of all other benefits — but not UBI per se — when explaining their votes of “Disagree” or “Strongly Disagree”. Some even expressed support of policies closely related to UBI. For instance, Richard Schmalensee (MIT) said, “A properly designed negative income tax could be part of a better policy, but replacing everything is a bad idea.” Similarly, Eric Maskin (Harvard) replied, “A minimum income makes sense, but not at the cost of eliminating Social Security and Medicare.” And Christopher Udry (Yale) opined that UBI could work if “coupled with universal health care and tax reform … but we are far from that.”
Larry Samuelson (Yale), who responded as “Uncertain”, stated, “There is much to recommend a universal basic income, but specifically a 13k income while ending all other transfers is difficult to assess.”
The proposed restriction of the UBI to adults over 21 worried other economists — such as William Nordhaus, who said, “And the children get nothing? The basic idea is sound but too simplistic as stated.” Likewise, Robert Hall (Stanford) simply offered, “Limitation to people over 21 can’t be the right answer.”
This is not to suggest, of course, that all of the economists surveyed were inclined to support a basic income (but just not Charles Murray’s version). Some did express opposition to UBI itself, and for reasons that we might expect: it’s too expensive, it might discourage work, it’s not necessary given current welfare programs, and “Bill Gates would get 13k, which is crazy.”
Nonetheless, it’s striking that many explanations of “Disagree” responses did not criticize UBI per se, and were sometimes even implicitly (or explicitly!) supportive.
Not all respondents gave explanations of their answers. However, looking through the list of economists surveyed, it’s further notable that the Murray-inspired UBI proposal elicited disagreement and uncertainty from some others who have previously expressed support of basic income. For instance, the Nobel Laureate Angus Deaton voted “Disagree”, despite having recently come out in favor of “basic income grants”. Even distinguished MIT Professor Abhijit Banerjee — who is an advisor for GiveDirectly’s basic income pilot and recently wrote a compelling case for UBI in The Indian Express — voted “Uncertain”.
Thus, supporters of UBI — and especially those on the left-side of the political spectrum — should not be discouraged by this particular poll, despite its purportedly showing that only 2% of a forum of economics experts “support a universal basic income”.
If there’s anything to concern us about this survey, it should be the implicit conflation (in its headline) of the general idea of UBI with Charles Murray’s specific, and very controversial, proposal.
On the other hand, the economists themselves do not make this conflation — and, indeed, their responses serve as a reminder of the danger of tying the idea of UBI to any one particular policy implementation.
As basic income researcher Jurgen de Wispelaere writes in a recent blog post,
Agreement at the level of the general idea amongst opposing political factions is often hailed as a virtue of the basic income proposal. However, once we move from idea to policy implementation, persistent disagreement may return with a vengeance.
This is an important message, and one which the IGM Forum survey illustrates well.
Reference:
“Universal Basic Income,” IGM Forum, Chicago Booth, June 28, 2016.
Thanks to Asha Pond for reviewing a draft of this article.
Thanks to my supporters on Patreon. (To see how you too can support my work for Basic Income News, click the link.)
