by Citizens' Income Trust | May 30, 2012 | Opinion
Kevin Farnsworth and Zoë Irving (eds), Social Policy in Challenging Times: Economic crisis and welfare systems, Policy Press, 2011, xi + 335 pp, pbk, 1 847 42827 1, £27.99, hbk, 1 847 42828 8, £70
Whilst in all of the countries studied in this edited collection the welfare state can be regarded as entering a new age of austerity, the picture that emerges is one of diversity: of different kinds of financial crisis in different countries, of different cultural contexts, and of different effects on welfare provision. For instance: ‘Liberal market economies … are least well equipped in both economic buffers and social solidarity to deal with the impact of a crisis in welfare funding because interests are not shared corporately or between social classes’ (p.24).
The first part of the book tackles more general questions. Has the crisis resulted in a shift in the economic paradigm? No: that would require positive action. Has a crisis in financialised capitalism fostered a new economic and social strategy? No: it has resulted in welfare state retrenchment and widening inequality. Are we all in this together? No: there is one strategy for financial institutions, and another for citizens. Is a global social floor a good idea? It’s a better idea than national safety nets. How will relatively young welfare states in the developing world cope with the financial crisis? In Brazil and South Africa, the crisis has led to the expansion of income transfer programmes, and in particular to the inclusion of 16 and 17 year olds (p.104).
The second half of the book studies individual countries. South Korea’s experience of the 1997 crisis suggests that extreme neoliberalism doesn’t work. China’s response to the recent crisis has been to include previously excluded groups in welfare systems. Germany’s small financial sector, and adjustments already made during unification, have meant that the crisis has had a ‘muted’ effect. Ireland’s weak welfare state is suffering retrenchment rather than reform. Iceland’s crisis has seen the neoliberal model questioned. In Scandinavia unemployment has risen, but only slowly. Domestic policy concerns drove the United States’ healthcare reforms, and in neither the United States nor in Canada has the crisis resulted in much welfare state reform. In the UK, the depth of austerity measures is more ideological than necessary.
‘More of the same’ is the picture that emerges: that is, it is long term cultural and ideological factors that determine welfare structures. Whilst the financial crisis might have precipitated minor change, and in some cases it has exacerbated existing trends (especially in the UK and Ireland, and over the extent of punitive measures imposed on the unemployed), it has stimulated little genuine reform. The editors’ concluding chapter extracts a number of ‘solutions’ from the different chapters, but they can’t be said to constitute any kind of package; and their confident conclusion that
What the contributions here demonstrate is not only that emergency events are crucial to both the shaping of social policy, and to the understanding of that process, but also that challenging times are as likely to widen the scope for progressive welfare state-building as they are to diminish it, and that how states respond is a matter of political struggle and political choice (p.278)
isn’t borne out by the evidence.
The strengths of the book are the amount of detailed evidence and the careful analysis in each of the very different chapters; and a particular strength is that the chapter authors don’t draw clear conclusions where there are none to be drawn. A justifiable clear conclusion is Farnsworth’s: that Government policy is bound to increase inequality in the UK. What he might also have said is that reduced withdrawal rates under the new Universal Credit will reduce inequality and will incentivise labour market activity. The lesson to draw is that reduced benefits withdrawal rates and an increase in universal benefits would both reduce inequality and incentivise labour market activity: both outcomes which would enhance the economic outlook and the social fabric.
by Yannick Vanderborght | Apr 30, 2012 | Opinion
The idea of a regular income that allows people to plan and fulfil a life project is a certainly linked to the topic of job markets reform. However, these two issues do not overlap. The reform of job contracts, new economic incentives, liberalization and tax exemptions can make the job market more efficient, but all these tools can not resolve the issue of effective risk of insecurity and irregularity in personal incomes.
Guaranteeing incomes is not the same than guaranteeing jobs: if the issue of income security involves the workers, the precariat, the unemployed, all the young men and women looking for their first job, it does not concern them as workers but as citizens. Or, to put it more precisely, as people with fundamental rights.
All humans, as biological beings, bear unavoidable material needs like housing, food, clothing, universal needs that are one with the human condition. These needs remain with the same urgency despite the ups and downs of the market, the changes in production and the greater or lesser demand of employees. The right to have an income and the right to work, therefore, are not the same because even in the absence of a stable employment, the continuity of income is essential to meet unavoidable basic needs.
People do not need to prove that they deserve fundamental rights. Basic rights are inherent to the dignity that democratic systems recognize to the human person. The rights to basic education and public health care have already been codified in our (Italian) legal system as rights for all, because they create the essential conditions to exercise and enjoy all the other rights that the Italian Constitution and Law recognizes and protects.
The forced slimming cure of our welfare states in this critical economical moment must be accompanied by a revolution in the way of thinking the protection of social rights. We need a more universal welfare state, with less managing costs, less dependent from an inefficient (and often arbitrary) bureaucratic selectivity that has been the main source of corruption and waste of public money over the years.
The universal ex lege recognition of the right to receive a guaranteed basic income would be a first and effective protection against the hazards of market and would build a safety net to prevent people from falling into a state of misery.
The history of liberal-democratic States, and their legal systems, is the history of the recognition of rights to an always more extended group until the moment in which some rights, considered as essential, were recognized as universal. One of the greatest achievements of the legal culture of the 19th Century was the abolition of slavery in the United States, with the following recognition of civil rights for all, whites and blacks. In the 20th Century, the universal suffrage represents the extension to all citizens of a basic political right. I see no reasons to stop the process only at civil and political rights. Why is it not possible to admit that at least some socio-economic rights have a similar essential value? Why don’t we make them independent from personal conditions, skills and attitudes as we do with the majority of civil and political rights?
The question of a universal and unconditional income, an income that allows at least to cope with the most basic necessities of life is unavoidable. Philippe Van Parijs is probably right in saying that it represents the biggest reform that will define the democratic states of the 21st Century, as the end of slavery and the universal suffrage marked the democratic life of the 19th and 20th Centuries.
by Yannick Vanderborght | Apr 12, 2012 | News
This talk by Guy Standing is organized within the framework of the monthly Forum of the European Trade Union Institute (ETUI). ETUI is the independent research and training centre of the European Trade Union Confederation (ETUC).
Briefing:
At the April gathering of ETUI’s Monthly Forum Guy Standing will present his new book The Precariat: The New Dangerous Class which provides a valuable analysis of the composition of the present globalised labour market in which precariousness has become a structural element. He argues that neo-liberal policies and institutional changes have produced a huge and increasing proportion of people with sufficiently common experiences to be called an emerging class. The Precariat is comprised by the growing number of people across the world living and working precariously, usually in a series of short-term jobs, without recourse to stable occupational identities or careers, stable social protection or protective regulations relevant to them. Standing argues that this class of people could produce new instabilities in society. Why is this new class growing, what political dangers does it represent and how might these be addressed are the main questions which Guy Standing will discuss.
Speaker:
Guy Standing, honorary co-president of BIEN, and Professor of Economic Security at the University of Bath
Commentators:
Judith Kirton-Darling, Confederal Secretary ETUC (TBC)
Laurent Vogel, Director of the Working Conditions, Health and Safety Department ETUI
Moderator:
Philippe Pochet, General Director ETUI
Friday, 27 April 2012, 13h15-14h45, ITUH, Bd du Roi Albert II, 5, 1210 Brussels, room B.
A light lunch will be served from 13h00 onwards in front of the room. To register for this event: Nar Bilgic
ETUI’s website: https://www.etui.org/
by Citizens' Income Trust | Jan 31, 2012 | Opinion
Daniel Dorling, Fair Play: A Daniel Dorling reader on social justice, Policy Press, 2011, xiv + 397 pp, pbk, 1 847 42879 0, £24.99
In this book Daniel Dorling has brought together fifty-two of his academic papers, newspaper articles, magazine articles, and unpublished essays, to create a nicely structured and really quite devastating critique of our unequal society: devastating because so carefully researched.
The book contains sections on inequality and poverty, injustice and ideology, race and identity, education and hierarchy, elitism and geneticism, mobility and employment, bricks and mortar, wellbeing and misery, and advocacy and action. Most of the sections follow the same pattern: a scene-setter (often a newspaper article); then mainly articles from peer-reviewed journals; and finally a newspaper or magazine article, or occasionally a final journal article, suggesting a policy direction which might reduce inequality.
Thus the section on inequality and poverty opens with an article on murder: ‘Behind the man with the knife is … the man who decided that his school did not need funding, the man who closed down the plant where he could have worked, the man who decided to reduce benefit levels so a black economy grew …’ (p.25). Then come articles showing how economic growth is generally higher in urban areas nearer to London, and that ‘society in Britain has become so divided that very few people live anywhere where they can see how a representative range of folk live’ (p.55). Finally there’s a more political piece: ‘Cameron says he is worried about “deep poverty”, about the poorest in society. But he clearly does not want a redistribution of the money, the land, the work, the educational resources and the “opportunities” that the rich have expropriated from the poor over the past three decades’ (p.59).
There are two respects in which the introduction isn’t quite accurate. Dorling claims that he’s edited the articles and extracts so that they have a consistent style, but there is still a considerable difference between the style of an article written for the Guardian and one written for the peer-reviewed Local Economy. The introduction also says that each section ends with a discussion of what we can do about the inequality evidenced. In many of the sections this is only true in the sense that Dorling asks that a current policy trend should be reversed. In just one section he proposes a new policy direction: a land tax (p.129). I suspect that this is because he’s a geographer and has studied our unequal land distribution and the many other ways in which ‘place … matters in what might inspire (or condition) you. Circumstances matter’ (p.343), and where we grow up has a considerable effect on our opportunities and prospects. In the same vein, Dorling shows how recent Housing Benefit changes will result in ‘the cleansing and clearing out of so many poorer people (and people made newly poor) from more prosperous areas of the country’ (p.99).
As well as being Professor of Human Geography at the University of Sheffield, Dorling is President of the Society of Cartographers, and this book would be worth buying simply for the full-colour maps which say more about inequality than words alone could say. However, the main reason for buying this book has to be the sheer variety of evidence which it offers for an increasing social malaise. We are sleepwalking into a seriously unequal society. A land tax would help to reduce that inequality. To distribute the proceeds as a Citizen’s Income would make even more of a positive difference.
by Citizens' Income Trust | Jan 30, 2012 | Opinion
This interview with Guy Standing first appeared in The Times of India, Crest edition, 9th July 2011, and we are grateful for permission to reprint it. For the original interview, please see www.timescrest.com/opinion/social-insurance-is-not-for-the-indian-open-economy-of-21st-century-5775. The interview was conducted by Rukmini Shrinivasan
You have become a strong advocate of cash transfers. Why so?
From my point of view, cash transfers are an essential pillar of a comprehensive social protection system. Social insurance was for an industrial society; it’s not for the Indian open economy of the 21st century. You can’t have unemployment insurance – it doesn’t reach the poor. You can’t have a means-tested system because we’ve seen the problems with it. So, you’re going to need to have some basic income transfer. The technology to do it is rapidly emerging – in some respects, India is becoming a world leader in this – and rolling this out within the next few years is certainly within the capabilities of the Indian state, if there was a will to do so.
I think cash transfers should be seen as whether they’re good or bad in themselves. They should not be discussed as an alternative to any specific policy. I do not think it is fair or correct to see this debate around cash transfers as a substitute for something else such as the public distribution system (PDS). I may have my criticisms of the PDS but they are separate from the reasons why I think cash transfers are good.
That may apply to cash transfers in general, but a general income cash transfer is not on the policy table in India right now. The only cash transfers that are being discussed within the government are those that replace subsidies.
I agree, but then there should be a proper debate. Clearly, there are chronic inefficiencies in the existing subsidy system. It goes right across the board, and anybody who defends that system is just charging against a volume of evidence that says it is chronically inefficient and inequitable and it is not solving poverty. The Prime Minister knows that, Sonia Gandhi knows that. If we know that there are very good reasons why a scheme doesn’t work, then it is intellectually reprehensible to continue in that direction.
But many of the problems in the PDS can be traced to targeting. The state of Tamil Nadu, which has a universal PDS, has both the best record of reaching beneficiaries and the lowest leakages. Why then are cash transfers the natural direction in which you look, rather than universalisation of the PDS?
I don’t know enough about Tamil Nadu, so I’m not going to say anything. Sure, you could universalise if that’s what works. But, I don’t think that’s an argument against cash transfers.
Even if it’s a targeted or conditional cash transfer, as is currently being proposed in India?
I really hope that the conditionality issue can be defeated; I think that’s the wrong way for India to go. One just imagines the scope for corruption and inefficiency; the mind boggles. I also hope that the simplicity and transparency of cash transfers will be appreciated for what it is. I hope that policy makers will look at food security as just a small part of overall security. We saw food security improve dramatically in a universal cash transfer pilot programme in Namibian villages as a result of not handing out food, but people having cash by which they could buy seeds and grow things.
You and the BIEN repeatedly talk of a universal income transfer. However, when this is operationalised by countries like Brazil, they do impose conditions and targeting. Isn’t it disingenuous to continue to talk of a universal income transfer when countries take up only a targeted version?
The whole of my professional career, I have advocated universalised and unconditional social protection and cash transfers. You are right that in Brazil, it was not only targeted in trying to reach just the poor, but it was also selected in trying to reach just women. It was not universal and it was conditional. The realisation was that the conditionality – sending kids to schools and attending clinics – was merely helping to legitimise the cash transfers among the middle class. But in 2004, Brazil passed a law committing the government to implement a universal, unconditional cash transfer for the whole population. The objective has been to roll it out and the number of beneficiaries has risen from 11 million to 60 million and the conditionality is being faded out. I foresee that something like that could happen in India.
What was the impact of the basic income cash transfer pilot in Namibia that you were a part of?
Child school attendance went up dramatically, use of medical clinics went up. Those with HIV/ AIDS started to take ARTs (Antiretroviral Therapy drugs) because they’d been able to buy the right sort of food with the cash. Women’s economic status improved, and the economic crime rate went down. Income distribution improved. This is very relevant in India because with your existing handout of goods and even with NREGA, you don’t alter the structure of local economies; in fact, you almost rigidify them. If you provide an equal amount of cash to all members of a community, you are automatically giving proportionately more to the poor. If you do that, you release the constraints that are on the lower income groups – they can pay off their debts, they can take risks, and they can buy things that they need for petty production.
Are there pilot schemes going on in India?
Social protection policy develops best when it builds on pilots, because pilot schemes allow institutional learning. There is no one-size-fits-all solution. The scheme that may evolve in the Indian context may be unique – we don’t know yet. But what would be sensible is if there were calm, collected, quiet pilot schemes that were tried out with good principles, were professionally advised, developed, and implemented – without fanfare, without misrepresentation. I’m afraid that at the moment, the political polemic is making sensible piloting harder. Too many people are posturing and are keen to disrupt sensible, well-meant pilots being conducted. It is not in the interests of anybody that pilots be disrupted or prevented. The Delhi situation seems to have fallen into that trap and I think it’s very sad.
The Delhi Pilot
The Delhi government, in 2010, appointed the Self Employed Women’s Association (SEWA) and the India Development Foundation to conduct a pilot study into cash transfers as a possible alternative to the Public Distribution System (PDS). The pilot, which began in January 2011, will run for one year in West Delhi’s Raghubir Nagar slum.
100 households volunteered for cash transfers and will receive Rs 1,000 per month but will have no access to the ration shop. Another 100 volunteer families will only get a bank account and will continue to use the ration shop. The third volunteer group of 150 families will neither receive cash nor a bank account and will have to use the ration shop. The last group is of 150 families who did not want cash transfers and will not receive it. All cash transfers will be made in the name of the woman of the family.
The pilot will study the consumption, expenditure, and nutrition of the four groups and compare them against each other to determine the impact of cash transfers, and will submit its findings to the government.
However, the pilot programme has faced serious opposition from NGOs opposed to cash transfers. Members of these groups distributed pamphlets in the slum warning that participating in the pilot would lead to ration shops shutting down, and disrupted public meetings held by SEWA in the area. The pilot continues. RS
