by Toru Yamamori | Dec 21, 2015 | News
On December 17, the Council of States, the upper house of the Swiss parliament, unanimously approved a motion calling for people to vote against a universal basic income (UBI) in the national referendum to be held next year.
On October 2013, the Popular Initiative for a UBI collected 126,000 signatures. This was enough to gain the right to hold a national referendum. Before the referendum is held, the two houses of parliament can issue recommendations for people to vote in favor or against. On September 23 this year, the National Council, the lower house of parliament, had also recommended to vote against UBI. While the date has not been set yet, the national referendum is expected to take place next year. There are indications that this might be in June 2016.
Although nobody voted in favour of the UBI, some of the interventions by MPs and government Ministers were not dismissive of the idea. Enno Schmidt, co-initiator of the Swiss popular initiative, heard the debate in the Council of States, and noted down some of the more positive statements for Basic Income News.
Alain Berset, a politician from the leftist Social Democratic Party (SP) and a member of the Swiss Federal Council (the Swiss federal government), stated that:
The idea of a UBI is noble and it would be important to think ahead. But there are too many open questions and uncertainties about its introduction. The current social security system relies on the logic of insurance. A UBI is based on the logic of existence.
Anita Fetz, a member of the Council of States from the SP ranks, said:
A basic income would be a sign of appreciation to all those who make their contribution to society, but are not counted in the Gross Domestic Product. Half of all work carried out by people is not financially rewarded and therefore less visible, but is crucial for the functioning of our society. We cannot rely solely on women for these activities. That era is over. Today we are living with a market model that offers a rational and selfish image of humanity. A vision that privileges more freedom and independence would help us give more importance to trust, compassion and cooperation, rather than confrontation and competition. Today only a few can imagine a UBI, but tomorrow technology will make a lot more jobs redundant. After that, we will have to think about the feasibility of a basic income. The greatest ideas in history were always put forward by a small group of people, and met with fierce opposition for many years, until they suddenly found the support of the majority.
Another member of the Council of States from the SP, Liliane Maury Pasquier, said:
The idea to grant a personal income to all citizens unconditionally and for life is simple and fair. It is a project that is socially liberal and focused on the talents of each person. It is neither left nor right, it is about core societal values. Ideals move the world. But unfortunately, we, the politicians, are driven by populism and fears. We do not allow room for utopias.
Both Fetz and Pasquier abstained in the vote.
Basic Income News is grateful to Enno Schmidt for the additional reporting. An interview with him on the Council of States’ motion will be published in our website shortly.
Here is a list of our past news and commentary on the Swiss referendum:
Matthias Lindemer, “Swiss politicians reject basic income because they are scared of humans,” Basic Income News, December 7, 2015.
Stanislas Jourdan, “SWITZERLAND: Parliament rejects basic income initiative, but poll shows popular support,” Basic Income News, October 3, 2015.
Toru Yamamori, “Interview with Enno Schmidt, co-initiator of the Swiss Citizens’ Initiative,” Basic Income News, September 19, 2015.
Jenna van Draanen, “SWITZERLAND: Swiss parliamentary committee on social affairs opposes a federal initiative for basic income,” Basic Income News, July 14, 2015.
Karl Widerquist, “SWITZERLAND: National referendum will be held on basic income,” Basic Income News, October 5, 2013.
by Tyler Prochazka | Dec 20, 2015 | News
On first glance, many may think the idea of giving everyone free money is absurd. However, Sean O’Grady argues in an article in the Independent that a universal basic income, as soon to be tested in Finland and other countries, may have significant merit.
The benefits include lower administrative costs and the elimination of “poverty traps” created when government assistance diminished as an individual’s income rises. Indeed, a basic income might induce more people to work harder.
Despite some worries about implementing a basic income in the United Kingdom, such as the need to cover high housing and childcare costs, O’Grady thinks the British should consider copying the Finn’s new approach to welfare.
Sean O’Grady, “It’s time to copy Finland and give every citizen a basic income”, Independent, December 8, 2015.
by Tyler Prochazka | Dec 19, 2015 | News
Interest in the Universal Basic Income (UBI) is sweeping across Europe, with British think tank RSA coming out in support of the UBI in a new report launched on December 17 at a public debate. The Royal Society for the encouragement of Arts Manufactures and Commerce, also known as RSA, is a prestigious institution founded in 1754 and granted Royal Charter in 1847.
Report authors Anthony Painter and Chris Thoung said the current approach to welfare “is no longer fit-for-purpose” and requires a new approach.
“The major concern is ultimately people: the lives we are able to lead, our ability to have a sense of security so we can pursue our ambition, and our ability to contribute to supporting one another, innovating, and developing the creative potential of society,” the report said.
“That is where Basic Income has the potential to be so much stronger than our current welfare state.”
The RSA endorsement follows another high-profile British think tank, the libertarian Adam Smith Institute. They published a report earlier this year also advocating for a basic income in the form of a negative income tax.
The RSA proposal for a British basic income
The RSA report suggests replacing the current welfare state with a UBI that would cost an additional 1 percent of UK’s GDP. RSA’s proposal is modeled after the Citizen’s Income Trust (CIT), an affiliate of BIEN, and derives most of its figures from this framework – read the CIT proposal here.
Under the RSA, citizens between 25 and 65 would receive an annual income of 3,692 British pounds, or £308 per month. People between 5 and 24 would get an annual payment of £2,925, or £244 per month. Citizens over 65 would receive an annual pension of £7,420, or £618 per month. Parents of children under 4 would receive an additional annual payment of £4,290 for their first child, or £358 per month. They would fetch £3,387 annually, or £282 per month, for additional children under 4.
It suggests potentially gradually rolling out the basic income to different demographics, such as those above age 55 and those below age 25. At the same time, a small basic income could be introduced while gradually reducing other benefits.
Regarding housing, the report notes that housing benefits should not be folded into a basic income because of the high cost of real estate in the UK. It proposes a Basic Rental Income. The idea is to utilize property taxes as a means to ensure universal housing income, but the report does not delve into the specifics. Nonetheless, this novel approach does deserve more discussion in UBI circles.
In offering these policy specifics, the RSA illustrates that a UBI is not simply a utopian ideal, as some of its critics claim. In fact, the report points out that far more radical changes to taxes and benefits have been implemented in the past.
Painter and Thoung note that a UBI would help society confront challenges created by rapidly improving technology and an aging population, a point that most other UBI proponents stress as well.
One of the attractions of the UBI, and why even conservatives and libertarians have been drawn to the policy, is its simplicity compared to the current system. Substituting current welfare policy with a UBI would eliminate its “perverse incentives, intrusion and complexity entirety.”
Since the UBI is universal there would be less fraud, they contend. And it would not undermine relationships and families because a UBI would not punish individuals for cohabitating as the current system does. This “strengthening of the family” aspect will likely win over more conservatives to the UBI cause over time.
More entrepreneurship and more time for family and community
From an economics perspective, the report argues that a UBI is the best system to incentivize work and avoid the welfare trap. In the current system, benefits quickly diminish as incomes rise, discouraging beneficiaries from taking up work. The report also claims that a UBI’s safety net allows individuals to pursue risks and creative endeavors. Instead of taking the first menial job available, a worker can spend more time searching for the work most suited to increasing their productivity.
This argument has been borne out by empirical studies on the UBI, such as the basic income trial in India that substantially increased entrepreneurship.
One of the criticisms of a UBI is that it lets some individuals take more time off from work. The key is whether their free-time activities are more valuable to society than their work hours. “Basic Income is a foundation for contribution. It incentivizes work but supports other forms of contribution too,” the report said. It suggests that the UBI would allow individuals to care for the elderly and other vulnerable individuals, which is especially important as society ages.
The actual work disincentive effect has been found to be small. The report briefly reviews evidence from experiments with a negative income tax carried out in the US and Canada between 1968 and 1980. The loss of labor hours for men was minimal. Women did lower their workload more substantially. They chose to spend more time with their family or newborns, activities of high social value. In Alaska under the Permanent Fund Dividend, a policy similar to a UBI, inequality fell in the 1990s and 2000s, while it increased in every other American state.
Another key issue is who qualifies for basic income and whether it would be extended to migrants. RSA’s proposal states that EU nationals should have first “contributed to the system for a number of years” before receiving the basic income. International migrants would be subject to current rules to access benefits. Individuals serving custodial sentences would have benefits restored once their sentence was concluded.
In recent years, the welfare system has lost public support as people demand more rules and conditions for the poor to receive assistance. However, benefit sanctions are becoming increasingly “inhumane,” the authors said. In order to detect tax credit abuse, the system has become overly intrusive into citizens’ lives and activities.
The RSA makes a few recommendations for how the UBI will be applied to the youth, including requiring young adults between 18 and 25 year old to declare how they would use the income. They would sign contracts “with their local community” and not the government, and there should be “no state monitoring” of the contracts, the authors noted. Additionally, those over 18 would have to register to vote in order to receive the UBI.
In suggesting tying the basic income to the community, rather than the government, the RSA report shows precisely the unique potential of the UBI to move away from the impersonal welfare state and toward a more relationship-oriented society. These arguments parallel that of free-market economist Charles Murray in defense of his own UBI scheme.
This report is a serious and comprehensive look at how a UBI could realistically be implemented in the UK. It provides a persuasive look into the economic, societal and moral underpinnings of the basic income. As the debate over the UBI continues to simmer across Europe, the UK will be hard-pressed to ignore this pragmatic approach for a radical overhaul of its welfare system.
Anthony Painter & Chris Thoung, “Creative citizen, creative state: the principled and pragmatic case for a Universal Basic Income,” RSA, December 16, 2015.
Anthony Painter, “In support of a universal basic income – introducing the RSA basic income model,” RSA, December 16, 2015.
Citizen’s Income Trust, “Citizen’s Income: a brief introduction,” 2013.
Andrew Walker, “Think tank floats ‘basic income’ idea for all citizens,” BBC News, December 16, 2015.
Tyler Prochazka, “Would a universal basic income be the ‘death’ of civil society?” Basic Income News, November 21, 2015.
Maz Ali, “Money. For free. It’s been tested in Canada and India. Now one Dutch city wants to give it a whirl,” Upworthy, September 4, 2015.
by Will Wachtmeister | Dec 18, 2015 | News
Finland is putting basic income on the map and has attracted worldwide media attention by spearheading plans for the world’s largest basic income pilot.
Over the past month, the planned Finnish experiment has fascinated such a large number of readers and news outlets that – perhaps inevitably – many aspects of what is happening in the Nordic country have been misconstrued or exaggerated.
At the same time, most reports have overlooked the underlying reason why Finland is able to even contemplate a basic income experiment at such a comprehensive scale.
During the past year, Finland has been exploring possibilities to reform policymaking, with the aim of moving from a speculative approach to one that is experimental and evidence-based. This allows the government to systematically test new policies, such as a basic income, before introducing them on a larger scale.
Finland’s approach exemplifies a completely new way of doing politics, based on scientific research on how people react to new policies and policy changes. This policymaking approach is expected to spread to other countries, potentially bringing basic income experiments with it.
Why Finland?
Anyone trying to figure out why Finland has taken the lead needs to take into account that the new policymaking approach gives governments the knowledge and confidence to engage in large-scale experimentation. This is exactly what Finland is now doing with basic income, along with other policies.
Future designs: Students participate in a hands-on course in Design for Government at the Finnish Prime Minister’s Office. (Picture: Demos Helsinki)
Demos Helsinki, a Nordic think tank, is behind the experimental policymaking approach that is paving the way for the Finnish basic income experiment, among other research initiatives. Working with Aalto University and fellow think tank Avanto Helsinki, Demos Helsinki developed the Design for Government model, having been commissioned by the Prime Minister’s Office who wanted an “agile, human-centric and evidence-based” factor underpinning experiments and behavioral approaches.
The European Commission and the OECD have recently issued recommendations to their respective member states to use behavioral insights in their policymaking processes. This reflects a widely recognized need for innovative policymaking processes that are more efficient and allow policies to be tested before implementation.
This is why, according to Demos Helsinki, Finland’s basic income experiment is “only the tip of the iceberg” of a major paradigm shift that could well spread across borders.
A step further
While other countries like the UK and Denmark have taken tentative steps towards experimental governance, Finland has gone all the way. “It’s bizarre that the rest of our society works with testing, prototyping and then scaling, but not governance. It makes politics very theoretical, slow and reliant on guesses as opposed to evidence,” says Demos Helsinki researcher Mikko Annala, who was part of the team that produced the Design for Government model.
Taking it a step further: Demos Helsinki researcher Mikko Annala. (Picture: Demos Helsinki)
Annala mentions the UK’s Nudge unit and Denmark’s Mindlab as significant examples of this new type of experimental government innovation. “But,” he says, “we wanted to take this a step further, with large experiments and scaling up to the policy level.”
As a result, the Finnish Design for Government initiative is much more ambitious and comprehensive than any other projects in experimental governance. It is founded on the careful study of the effects of policy changes and the accumulation of a mass of knowledge and models. This will allow policymakers to make bold changes, because their effects will have been properly tested and modeled beforehand. At the same time, the experimental approach will make it easier to fine-tune new policies in response to feedback.
“What the typical government innovation units lack is a feedback loop to policy,” Annala explains. “That is different with the Design for Government initiative. Now the experiments are designed to scale from the start.”
Design for Government
This political direction was set by the Finnish Prime Minister’s Office. Wanting to explore the opportunities offered by behavioral science, the government commissioned a consortium to carry out the Design for Government project, under the leadership of Demos Helsinki.
The Prime Minister’s Office is now setting up an experimentation office to oversee the experiments and scaling. In addition to the basic income experiment, Finland’s ministries are testing other innovative initiatives — such as over a hundred planned or on-going mobility experiments across the country. Eventually, the Ministry of Traffic and Communications aims to “turn Finland into one giant Mobility Laboratory”. Additionally, of more direct relevance to the basic income project, Demos Helsinki is also investigating ways to transform to the funding mechanisms for the experiments themselves. Finally, Finland is sponsoring a project to create advanced communication platforms for experiments so that information, know-how and practices are more easily and more quickly shared.
Radical and fast
“There are clear reasons for Finland to change its governance this radically and this fast,” says Annala. He says the motivations for the change are both “qualitative and quantitative”.
“The need for experimental governance has been recognized in many nations,” he says. “One reason for this is the simple fact that the world is changing faster than ever: for example digitalization, immigration, aging populations and such phenomena bring up situations which we have never encountered before. In these situations it’s almost impossible to plan, and it’s better to experiment.”
The UK’s Nudge initiative has shown that experimental governance can unlock real potential and that there is every reason to take them to a larger scale, he says. “Many [Finnish] ministries are exploring the possibilities of doing large scale experiments and the Prime Minister’s Office is building structures for supporting the experimental culture. On this scale, the basic income experiment is one single experiment among many. Yet it is an intriguing one, of course.”
Annala points out that the Finnish basic income experiment has been misunderstood in some quarters.
Referring to articles in The BBC, Forbes, The Independent, Mashable, The Telegraph, Time and Quartz, among others, Annala also says that “none of the articles uncover the reason why Finland can pull off such ambitious policies in an age where so many government are left powerless with even smallest of changes in the way society works.”
He adds that Finland has taken a promising course, which could spread to other countries in the future. “If steered well, it can turn Finland into the world’s first country with truly experimental governance.”
FURTHER READING:
Demos Helsinki “Design for Government” Demos Helsinki website, accessed 14 December 2015
Vito Laterza, “FINLAND: Basic income experiment – what we know” Basic Income News, 9 December 2015
Mark Easton, “How politicians learned the power of the gentle nudge” BBC News, 22 July 2015
by Citizens' Income Trust | Nov 19, 2015 | Opinion
Paul Spicker, Social Policy: Theory and Practice, Policy Press, 2014, xii + 499 pp.
This third edition of Paul Spicker’s Social Policy combines updated material from two previous books: Social Policy: Themes and approaches, and Policy Analysis for Practice. The subtitle of the new edition of Social Policy, Theory and practice, is accurate. As Spicker puts it: ‘Social policy has always been study for a purpose’ (p.3).
The book is organized in four parts: a study of society (welfare, inequalities, social problems and responses to them, needs, and indicators), policy (how policy-making works, models of welfare, principles and values, strategies, policy analysis), the organization and delivery of welfare (welfare sectors, public services and bureaucracies, service delivery, recipients, administration), and methods and approaches (research, evidence, application). The book is comprehensive and is an excellent resource for lecturers, students, and researchers. The guide to sources, the glossary, and the indexes, add to the book’s usefulness (although the index might have employed additional subentries).
The volume is not a detailed discussion of particular social policy fields. For that, the reader will need to refer to more specialized volumes. What this book does offer is a general education in how to study social policy in order to provide a context for detailed study of particular fields – and sometimes the text boxes provide illustrations of that process. So, for instance, a section on ‘universality’ is followed by a description of Liberia’s health care system.
One very good reason for not arranging the book into different social policy fields is, as Spicker makes clear in relation to poverty (p.222), that the different fields are all connected. For instance: any relevant strategy to improve a population’s health will need to provide for adequate income, good healthcare, high quality housing, and reliable sanitation.
The book raises some interesting questions for those of us interested in the reform of the benefits system – for instance: Should payment of a universal benefit be paid automatically, or is it important to enable people to exercise choice, and therefore to require them to make a claim for the benefit? (p.333). The book also provides some important arguments for universal benefits:
The argument for universality is the argument against selective approaches: the process of selection is inefficient, inequitable, difficult to administer, and it fails to reach people. By contrast, universal social provision can reach everyone, on the same terms. The degree of uniformity simplifies administration … . But there are also positive reasons for universality. One is the view that everyone has basic needs, and those needs can often be supplied more simply and effectively through general provision to everyone. … Second, universality has been seen as a way of establishing a different kind of society – one in which every citizen has a right to basic services, and the basic texture and pattern of social life is one in which people do not suffer unjustifiable disadvantages. (pp.218-9)
Social Policy: Theory and practice comes highly recommended as a thorough and stimulating introduction to the field.
