by Michael Howard | Feb 11, 2017 | Opinion
The Climate Leadership Council just put forth a proposal for a carbon fee and dividend, as a key policy to combat climate change. The authors are conservatives, including Republican former Secretaries of State James Baker and George Schultz, Treasury Secretary Henry Paulson, and two Chairs from the Council of Economic Advisors in the Reagan and George W. Bush administrations. While there are some aspects of the proposal to question, progressives should get behind the main idea: a steadily rising carbon fee and dividend.
First, the proposal is a very welcome development for the effort to fight climate change, and for the introduction of a partial basic income. At a time when the President and many Republicans in Congress make light of or outright deny the problem of anthropogenic climate change, it is encouraging to see such concerted effort by people with impeccable conservative credentials proposing a policy that is also favored by many progressive Democrats and environmentalists like Bill McKibben. The dividend would be a significant benefit especially to poor and working class families, and, if revenue-neutral, would more than compensate for the regressive income distribution effects of a carbon tax.
How effective this particular carbon tax and dividend proposal will work depends on details not spelled out in the proposal. The proponents propose starting at $40 per ton of CO2, and a lot depends on how quickly the tax rises. They claim that a commission will decide after five years whether to raise the tax, and if it is flat for five years, that would not be adequate. One analysis of the proposal assumes that if the tax rose by $5/year, it would reduce US carbon emissions 40 percent below 2005 levels by 2030. While not as much as we need, it would be a big step beyond the status quo, and could be strengthened as the political will rises to do so.
The authors propose a tradeoff between the carbon tax and regulation. The authors claim, “To build and sustain a bipartisan consensus for a regulatory rollback of this magnitude, the initial carbon tax rate should be set to exceed the emissions reductions of current regulations.”
If this is indeed the effect, the tradeoff might be worth it with respect to the EPA’s Clean Power Plan. According to Charles Komanoff of the Carbon Tax Center, “well over 80 percent of the plan’s targeted reduction in electricity-sector emissions for 2030 had already been achieved by the end of 2016,” so an economy-wide carbon tax is the logical next step. But worrisome is the Climate Leadership Council’s apparently wider scope of reduction of regulatory power of the government, which serves many other purposes unrelated to climate change. And unless the carbon tax is set high enough and is assured of rising regularly, to give away the EPA’s authority to regulate carbon emissions might be a fool’s bargain. The challenge for progressives and environmentalists is making sure that any tradeoff gives us a robust climate fee and dividend.
A deeper question is whether a carbon fee and dividend will stimulate growth. The model suggested here does not give us enough detail, but a similar proposal by Citizens’ Climate Lobby is projected to create millions of new jobs in clean energy, and not inhibit growth. However, as we steadily use up our carbon budget, the level and pace of reduction in greenhouse gases necessary to avert catastrophic climate change may not be compatible with sustained economic growth.
This leads me to question whether the challenge of climate change — more than two decades after the international community became aware of the problem and initiated treaties to address it — can now be addressed through a carbon tax alone. We may also need direct investment in research and development of alternative technologies. We need to make good on our promise in the Paris Agreement to aid poor countries in the transition to a non-carbon future, so that they do not face an intolerable dilemma between economic development and environmental safety. And we may need to manage a scaling down of our consumption in a manner that does not cause widespread misery.
But there should be little doubt that a carbon tax is a key pillar in the battle against climate change, and using the revenue for dividends is an equitable and politically prudent policy. For basic income supporters, it is the closest analogue on the national scale to Alaska’s Permanent Fund Dividend that we can hope for in the near term.
Reviewed by Kate McFarland
Photo: CC BY-NC-ND 2.0 macwagen
by Andre Coelho | Feb 8, 2017 | News
Mayor Lee Jae-myung. Credit to: Pangyo Techno Valley.
On December 9, 2016, the National Assembly of the Republic of Korea voted to impeach Park Geun-hye over a corruption scandal with her lifelong friend Choi Soon-sil. Due to the impeachment, the next presidential election in Korea is expected to take place early, in April or May 2017 instead of December, 2017. As the details of the scandal have emerged, a previously less well-known presidential candidate has been rising in opinion polls – Lee Jae-myung, the current mayor of Seongnam city. This city is located to the southeast of Seoul and is one of many municipalities of the Gyeonggi province.
In two months, Mayor Lee has emerged as a so-called “dark horse” candidate with a poll approval rating of 18%. He has been ranked as the third most popular of the presidential candidates. The strongest driving force of his rise is attributed to his prompt action in advocating for the impeachment of President Park. He was the first among the presidential candidates to call on the National Assembly to impeach Park Geun-hye. Lee is also famous for his clear stance against powerful vested interests, including the “ in Korea.
Yet, there is another important factor that grabs attention. His major campaign promise is about providing universal basic income. Mayor Lee has successfully implemented the youth dividend policy, which pays an annual dividend of one million Korean won (approximately 850 US dollars) to individuals who are 24 years of age and who have lived in Seongnam city for three years or more. The policy finds its philosophical roots in the idea of universal basic income. The Park Geun-hye administration used several strategies to deter the implementation of the local youth dividend policy, however, Mayor Lee eventually fulfilled his promise.
A survey of 2866 youth distribution recipients shows that 96.3% of youth who received the benefit are satisfied with the policy. Some responses revealing satisfaction and even gratitude include the following: “Upon receiving the youth credit, I have gained confidence, which is more valuable than money”; and “Society looked after me for the first time”.
In his presidential candidacy announcement speech for the 19th Election, Lee Jae-myung said he will expand the universal basic income system to the national level. More specifically, he outlined a detailed plan to provide the ‘life-cycle dividend’ and ‘special dividend’ shortly after his inauguration.
The life-cycle dividend will pay a child dividend to individuals aged between 0 and 12, a teen dividend to those in the 13-18 bracket, a youth dividend to 19-29-year old, and an elderly dividend to individuals who are 65 or older. The special dividend is aimed at specific populations, such as farmers, fishermen and people with disabilities. The amount of the annual dividend is set at one million Korean won per person (874 US$/person), regardless of the kind of dividend. Lee explained that he finds it feasible to allocate 28 trillion won, which accounts for about 7% of the total budget, to the dividend policy by tightening central government spending.
Lee Jae-myung. Credit to: Bloomberg / Getty Images
Moreover, Mayor Lee has also promised that he will secure a total of 15.5 trillion Korean won (13.6 billion US$) by establishing a new ‘land holding tax’. He argues that the revenue from the land holding tax should be used as a source of a land dividend, which provides an annual dividend of 300,000 won (approximately 255 US dollars) to all citizens of the Republic of Korea. Not only can this tax collect a portion of all rents from real estate publically, it can also help realize the idea of universal basic income. Lee firmly believes that land is a common property for all citizens.
In fact, the Republic of Korea is a country that appreciates the ‘publicness’ of land. The Constitution of the Republic of Korea states, in Article 122, that “The State can fulfill necessary restrictions and obligations related to the efficient and balanced use, development, and preservation of land, which is the basis of production and living of all citizens.” In the past, when the government has attempted to implement policies in the spirit of this clause, the country has witnessed numerous attacks from powerful vested interests, the so-called “top 1%”. Most of the time, the government has thus had to withdraw from such policies. However, Lee Jae-myung is seen as a well-equipped candidate with the ability and courage to fight against the powerful elites in Korea and successfully implement this policy.
Mayor Lee’s ideas about basic income
Lee Jae-myung’s basic income policy combines two ideas of basic income theory: 1) the state is responsible for ensuring the de facto freedom of all citizens; and 2) land, natural resources, the environment, and knowledge are common property that must be shared by all members of society. On these grounds, his basic income policy is thought to have positive prospects and much room for growth, particularly in terms of the payout amount. Thus, proponents of universal basic income around the world should pay attention to Lee Jae-myung in Korea.
If Mayor Lee is elected as the next president of the Republic of Korea and successfully fulfills his campaign promise on basic income policy, he would be able to address many problems currently undermining Korean society, such as income and wealth inequalities, unfair competition, and real estate speculation. Then, Korea might be able to follow a path of inclusive growth, which will eventually lead to a fair and equal society.
About the author:
Gangsoo Jun is a professor of economy at the Catholic University of Daegu, South Korea, and is involved in Lee Jae-Myung policymaking team.
More information at:
Language: Korean
Se-young Lee, “전국민에 연간 130만원 … – 이재명 ‘기본소득 마케팅’ [Annual Dividend of 1,300,000 won to All Citizens … – Lee Jae-Myung ‘Basic Income Marketing’]”, The Hankyoreh, 18 January, 2017.
Language: English
Kang Jin-Kyu, “Seongnam mayor declares presidential bid”, Korea JoongAng Daily, 24 January, 2017.
Hyosang Ahn, “SOUTH KOREA: Seongnam City announced to implement ‘Youth Dividend’”, Basic Income News, 7 October, 2015.
Toru Yamamori, “SOUTH KOREA: Mayor of Seongnam City talks on his plan for ‘Youth Dividend’”, Basic Income News, 15 September, 2015.
by Jason Burke Murphy | Feb 3, 2017 | Opinion
Basic Income as All-inclusive Democratic Subsidy: Securing the Social Freedom and Economic Power for All People
Written by: Katja Kipping
[A long translator’s note: Katja Kipping is chair of the Left Party (Linkspartei) in Germany and a member of the national parliament. She has served as spokesperson for Germany’s Basic Income Network (Netzwerk Grundeinkommen). Within the Left Party, she organized the “Emancipatory Left” faction and writes for the libertarian socialist magazine “Prague Spring” (Prager Frühling).
Kipping presented this lecture “Grundeinkommen als Demokratiepauschale” at the Basic Income Earth Network Congress in Seoul, Korea, July 19th. She has frequently argued for basic income throughout Germany and has helped organize a “Basic Income faction” that includes most political parties in parliament.
I have translated this with the hope that left organizations worldwide will pay attention to her vision of basic income as a core component for the democratic left. Basic income would provide a clear sign that the left has learned from problems wrought in the past by bureaucracy, technocracy, and authoritarianism. Kipping draws from a constitutional republican tradition of investigating institutions that promote robust citizenship and deliberation. See Casassas and De Wispelaere 2012 and 2015. She also links her hopes with that of the degrowth movement. I see basic income, as Kipping presents it here, as an antidote to alienation and right-populism. Social analysis shows basic income to be part of the design of truly public institutions.
Any lapses in quality or argumentation should be attributed to me.
Please note that Kipping also presented in Dublin at the 12th Basic Income Earth Network Congress in 2008. “Moving to Basic Income (BI) – A left-wing political perspective” can be found at BIEN’s website.
You can a video of Kipping presenting the original German speech at https://bien2016.org/en/video-basic-income-and-politics-of-democracy/.
The text of her speech can be found at: https://www.katja-kipping.de/de/article/1112.grundeinkommen-als-demokratiepauschale.html. ]
Basic Income as All-inclusive Democratic Subsidy
Securing the Social Freedom and Economic Power for All People
Contents
- Social Freedom and Democracy – radical democratic approaches to basic income.
- Economic Might for All – basic Income and democratic institutions
- Closing Remarks on social transformation
1. Social Freedom and Democracy – radical democratic approaches to basic income.
Radical democratic approaches to basic income pay close attention to the connections between people and to their mutual dependencies within a community. The community is here understood as something public and political. It is oriented towards the well-being of all and should be shaped by all. From this it follows that freedom should not be understood as a mere absence of intervention or interference. On the contrary, freedom should be understand as independence over against any arbitrary authority [Fremdherrschaft]. Freedom, in this sense, implies no arbitrary interventions or interference on the part of state institutions and also no possibility of such interventions and interference. Intervention is arbitrary if an intervention comes whenever the intervener wills it.
Freedom, on the other hand, is fulfilled primarily through self-governance. Self-governance is formed by social and individual organization and also by monitoring these potential interventions and the institutions capable of them. Individual freedom, viewed in such an intersubjective political context, is also social freedom. The highest value is active participation of all in the res publica – a collective deliberative democratic self-determination. This naturally implies social equality and the securing of social freedom, which implies preventing any economically grounded dominance and dependency. Laws and institutions also need to reflect, promote, and enable the common good and self-governance. (See Socialist Party South Korea 2009, Patry 2010, Cassasas/De Wispelaere 2012, Cassasas/De Wispelaere 2015).
The following six theses on the establishment of a basic income as an all-inclusive democratic subsidy can be derived from these basic principles of radical democracy and social freedom.
- Basic Income must secure what a political community requires from each citizen in terms of money. This includes securing existence, social participation, and participation in political life. This unconditional guarantee of existence and participation has a monetary component. Non-monetary components also exist, such as free access to public goods, and to public infrastructure and services. These monetary and non-monetary components do not exclude each other but rather they complete one another. Both these monetary and non-monetary forms should, first, provide people socio-economic independence and, second, preserve their status as citizens with economic negotiating power whereby they can participate in the formation of society. Without the adequate safeguarding of free and equal conditions of social participation, no democratic participation is possible – formal possibilities for participation are not enough.
Whoever does not have enough material resources is first of all excluded from political participation and, secondly, doesn’t have enough negotiating power within political processes. This means that basic income, like all vital services, needs to be provided long-term. As I see it, this is not a problem in a time of high productivity and surplus. At most, it is a problem for those who do not want to give up economic privileges and political power. There is enough for all—worldwide!
- From a radical-democratic perspective, the basic income on a regular basis is preferable to single disbursements, like with a stakeholder grant or starting capital. Only regular payments can guarantee a lifelong income and its corresponding participation.
- The right to an unconditional basic income must be combined with a modern understanding of citizenship. A distinction between a majority of citizens and a minority of immigrants with regard to elementary socioeconomic rights and opportunities would lead to a problematic division of the community and a majority’s dominance over a minority.
- From a radical democratic viewpoint, people receive the unconditional basic income as equal members of the political community, not as part of a needy group that depends on the state. Any particular stigmatization of population groups splits the community and is a source for domination. That would still be true with a partial basic income (or transfers that do not secure survival or make social participation possible) that is supplemented by need-tested, income-tested, or asset-tested social benefits in order to reach a sufficient level.
It is clear that a person, who must make him or herself a stigmatized petitioner at the social office has a significantly harder time taking an upright path towards the political formation of the community. As Zygmunt Bauman formulated it: “The decisive argument in favor of the basic income is that it is the conditio sine qua non of a republic, as it can only exist in the union of people with self-confidence, of people without existential anxiety. A basic income which actually secures existence and allows social participation would establish a principle of citizens’ rights, rights that are not subject to a divisive and disqualifying ‘access test’ by need tests.” (Bauman 1999). [Note: this is a translation of the Bauman quote as found in Kipping’s speech. –JBM]
Therefore 5 holds: All citizens only have their rights fully recognized reciprocally through a sufficient basic income. This also means that more affluent citizens are comparatively more likely to contribute to the financing of the basic income than the less well-off citizens. This poses the question of the redistribution of economic resources and economic power.
- Basic income is not tied to any condition. An obligation towards any social or political participation would be sources of new domination. These would enable arbitrary interventions. The question of what makes something socially recognizable, and what does not, opens up a considerable amount of bureaucratic discretion. A citizen’s right to a basic income that included a direct citizen obligation would also transform voluntary engagement into regulated compulsory participation.
I would like to end this section with a quote from a German supporter of basic income who is also a politician. “It is farcical that MEPs [Members of the European Parliament] claim to maintain their substantial independence through relatively high salaries in order to make themselves non-extortionable but most of these deputies do not consider it necessary to ensure such independence and non-blackmail for the sovereign, the people” (Spehr 2003, 105). Basic income’s individual guarantee of a secure existence and participation is, alongside other forms of universal security for people (such as free access to public goods, social infrastructure, and social services), an indispensable prerequisite for social freedom, democratic and political engagement and the negotiating power for all people. It is an all-inclusive democratic subsidy!
2. Economic power for all – basic income and democratic institutions
Whoever says A must also say B. Who calls for basic income so that people can enter the public sphere with negotiating power must also call for the public shaping of our political foundations, economy, and everyday life (see Casassas and De Wispelaere 2012 and 2015). We need this to secure a basic income and other sorts of public services. Arbitrary interferences in human affairs through economic power, by endangering survival, health, and natural resources is not acceptable. An economy that is deprived of public organization, an economy that is privatized, is unacceptable. That also means that an economy and a financial sector that is immune to democratic control and influence is likewise unacceptable.
An imbalance in power through the deprivation of the public (privatization) in one form or another reaches deeply into real political and social power relations and removes the political and therefore citizens from the formation and control of public affairs. On the one hand, this includes power that arises from economic distribution—income, assets, and investment opportunities. This certainly also includes power in the realm of shaping and administering the economy and the financial sector. Who actually determines the use of natural resources, production resources, investment and the way in which economic activities are taxed? Who is exercising an alienated domination over the people today with real, unequally distributed, forms of design and control, and who subjects society and the economy to the will of a minority?
In addition to basic income and other forms of life and of participation for all people, social freedom requires the self-government of the citizens: by means of joint and individual control and appropriate intervention possibilities, which are secured by appropriately democratic institutions. These institutions must give all people the opportunity to shape social and economic life individually and collectively (see Cassasas / De Wispelaere 2015).
Economic power for all means basic income, including other unconditional support for existence. It also means the safeguarding of the economy and society for all and the institutionally secured public and political shaping of the economy and the society by all. This makes a democratic social transformation all the more necessary and urgent. Tomorrow, I am speaking at another conference about the challenge that this entails for the European left.
3. Concluding Remarks on Socio-Ecological Transformation
Poverty and exclusion, power over the many by the few, and destruction of the natural foundations of human life – that is the situation.
The international degrowth movement, which is committed to a world with significantly less natural resource consumption and to a rollback of ecological destruction and damage to our planet, therefore argues for the cohesion of ecology, democracy and social security of all people, and thus for the convergence of the various social movements and political actors (see Blaschke 2016).
It seems to me that only with this complex point of view and a committed relationship between social movements can the challenges of the 21st century be countered. Basic income, which in fact assures material existence and enables social participation, is an important component of a social-ecological transformation, which seeks to also be a democratic transformation!
Literature:
Bauman, Zygmunt (1999), In Search of Politics. Cambridge. Polity Press.
Blaschke, Ronald (2016), Grundeinkommen und Degrowth – Wie passt das zusammen? https://www.degrowth.de/de/2016/02/grundeinkommen-und-degrowth-wie-passt-das-zusammen/
Casassas, David / De Wispelaere, Jurgen (2012), The Alaska Model: A Republican Perspective. In: Karl Widerquist / Michael W. Howard (Ed.): Alaska’s Permanent Fund Dividend. Examining his Suitability as a Model, New York, 169-188.
Casassas, David / De Wispelaere, Jurgen (2015), Republicanism and the political economy of democracy. European Journal of Social Theory, September, 1-18.
Kipping, Katja (2009), Ausverkauf der Politik. Für einen demokratischen Aufbruch, Berlin.
Patry, Eric (2010), Das bedingungslose Grundeinkommen in der Schweiz. Eine republikanische Perspektive, Bern, Stuttgart, Wien.
Socialist Party South Korea, Unconditional Basic Income and General Social Care, Party Program, Supplement No. 1, 2009 (Translation of Socialist Party of South Korea, “Basic Income for All und Universal Welfare”, translation by Min Geum, https://www.grundeinkommen.de/ Content / uploads / 2010/08 / 10-05-22-bge-program-socialist-party-korea-endrb.pdf
Spehr, Christoph (2003), Gleicher als andere. Eine Grundlegung der freien Kooperation, in: Christoph Spehr (Hg.), Gleicher als andere. Eine Grundlegung der freien Kooperation, Berlin, S. 19-115.
Spehr, Christoph (2003), Gleicher als andere. Eine Grundlegung der freien Kooperation, in: Christoph Spehr (Hg.), Gleicher als andere. Eine Grundlegung der freien Kooperation, Berlin, S. 19-115.
Translated by Jason Burke Murphy, Elms College
by Andre Coelho | Feb 3, 2017 | News
Photo: Nick Pearce. Credit to: Bristol Festival of Ideas.
In this audio recording of a conversation, in front of a live audience at the Bristol Festival of Ideas on the 17th of November, 2016, Louise Haagh, Anthony Painter, Nick Pearce and Torsten Bell discuss the pros and cons of the basic income idea, chaired by Jonathan Derbyshire.
In this talk, Anthony Painter, the Director of the Action Research Center at the RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce), starts by describing what he calls the “gig economy” (one economy driven by tasks, not by jobs). He also refers to the great changes in the distribution of work which are occurring right now, and in the relationships with intelligent machines. According to him, people are feeling increasingly uncertain and powerless, which generates stress. That is his first argument for basic income: it is an agent for freedom. He says politics for basic income must be based in solidarity, empathy and compassion, and that basic income should not be pursued as an end in itself, but as a test and a measure for the betterment of society.
Nick Pierce, professor of Public Policy at the University of Bath (and former Director of the Institute for Public Policy Research), goes on to say that he considers himself to be a “friendly skeptic” of basic income. He recognizes qualities in the basic income movement, led by many activists, who defend tackling problems with current welfare states and pursue a vision/trend for the betterment of society; not simply reacting to problems. On the other hand, he does not agree that basic income can liberate individuals (from entanglement with the State and with the market), nor that it can liberate individuals from work. According to Pierce, work is a way to gain personal fulfillment and, as such, looks at basic income proponents as “anti-work” in a sense. He also fears basic income might lead people to disengage from one another, hence he considers it a dangerous form of dependency, particularly towards the State (seen as a provider). Pierce also points out that basic income, as a policy, will be a result of the social forces that have forged the different welfare states, hence may differ considerably from region to region. He advises basic income advocates to consider all of these regional differences, in order to propose meaningful basic income strategies.
Louise Haagh
Louise Haagh, as Reader at the Department of Politics in the University of York and co-Chair of the Basic Income Earth Network (BIEN), replies that basic income is a “natural outgrowth of social democracy”. This comes despite Haagh’s agreement that, in fact, the basic income movement has failed to detail the implementation realities of basic income around the world. However, she feels it has succeeded in getting basic income out of academia and into mainstream discourse. She also points out that other welfare features, such as public education and health, do not contain as many conditions as income support (e.g. behavioral conditions), but agrees that basic income should not be seen as a replacement for organized fulltime employment. Rather, they should be seen as a complementary feature to guarantee full citizenship. She also sees basic income as a small but crucial strategic element that enables societies to think about their development with a more long-term approach.
On the critical side against basic income, Torsten Bell, Director of the Resolution Foundation, says that basic income interest has appeared due to two anxieties: robot anxiety (human jobs are being “eaten” by machines) and Left Existential anxiety (real wages stagnate or dropped, plus support for the traditional Left is fading). However, he perceives this interest as waning progressively. Bell is convinced basic income is not going to happen in the UK, reasoning that robots are systematically underperforming compared to their human counterparts, and that there have never been more jobs in the UK. Moreover, he says, statistics show that part-time jobs are not rising, or have not been, since records have existed. Bell detaches the United States case from the European reality, stating that what is happening in the former is not likely to happen in the latter, and equates basic income to higher taxes and higher poverty. He further reasons that it makes no sense to give a basic income to rich people, and that generally the public does not like the idea that “you should be paid not to work”. Finally, he disagrees with a political organization system where an elite at the top own the robots and make all the money, which is then redistributed to everyone else (assumed idle).
Replying to criticisms, Anthony Painter underlines that the world of work is getting more precarious, less paid and more insecure; hence something – like basic income – must be done about it. Contrary to Torsten’s assertion, he highlights that basic income advocates usually justify basic income as a way to validate work, giving people the opportunity to contribute to society in a meaningful way. He also points out that any basic income implementation cannot possibly surpass the already tremendously bureaucratic welfare state in the UK, so it is only bound to reduce it. On the other hand, Nick Pierce disagrees that basic income is waning, but agrees that politicians are constantly searching for “big ideas” to hold on to. Finally, Louise Haagh agrees that fortunately the basic income idea is not defended on a pure philosophical ground anymore, but instead has progressed to a more hands-on, practical approach. As Nick, she also disagrees that the notion of a basic income is waning, judging from the daily activity at BIEN.
Listen to the full conversation:
Bristol Festival of Ideas, “Basic Income – An idea whose time has come?”, in association with the Institute for Policy Research and the University of Bath, November 17th 2016
by Kate McFarland | Jan 24, 2017 | News
The Indian Statistical Institute hosted its 12th Annual Conference on Economic Growth and Development (ACEGD) on December 19-21, 2016. ACEGD’s plenary sessions included a 90-minute panel on universal basic income and its relevance for India.
Universal basic income (UBI) has become a hotly debated issue in India. At the end of January, the Ministry of Finance will release its Economic Survey, which is expected to include a chapter addressing UBI. Leading economists have defended various forms of UBI for India (see, for example, a recent e-symposium in Ideas for India), and MPs such as Varun Gandhi and Jay Panda have voiced support.
Perhaps unsurprisingly, then, a panel on UBI was also held as part of the latest Annual Conference on Economic Growth and Development, held in December at the Indian Statistical Institute (ISI) in Delhi. This conference included a panel on UBI, featuring five economists: Debraj Ray (New York University), Kalle (Karl Ove) Moene (University of Oslo), Rajiv Sethi (Columbia University), Himanshu (Jawaharlal Nehru University), and Amarjeet Sinha (Government of Bihar).
Ray and Moene have jointly developed a proposal for what they call a “universal basic share” (UBS) in India. Like a UBI, a UBS would provide each citizen with regular unconditional cash transfers of an equal amount. However, in contrast to most UBI proposals, a UBS fixes the amount of these transfers to a fraction of the GDP rather than a specific monetary amount. Ray and Moene recommend that India dedicate 12% of its GDP to the provision of a UBS. They calculate that, at present, this would provide each adult citizen with a basic income approximately equal to the country’s poverty line.
At the ACEGD panel, Ray introduces the idea of UBS, after briefly outlining the present worldwide interest in UBI, precursors such as the Alaskan Permanent Fund and Dividend and the Government Pension Fund of Norway, and several sources of the present interest in UBI in India, including the pilot studies in Madhya Pradesh, the Goan permanent fund, and political and popular “exasperation” with the nation’s current subsidies for the poor. Following Ray, Moene elaborates upon the UBS proposal and some of its advantages, such as encouraging risk-taking and allowing individuals to do the work they want. Moene also replies to the common objection that a basic income would discourage work, stressing that this is not what is observed in the most generous welfare states, nor what’s observed when wealthy people receive an inheritance.
Sethi, who has studied UBI primarily in the US context, presents additional arguments in favor of the policy, including its cross-partisan appeal and its ability to mitigate economic shock due to automation. He also raises questions concerning the precise design of a UBI, such as whether the basic income should extend to minors and how it would be linked with macroeconomic policies.
The last two panelists, Himanshu and Sinha, argue that India should prioritize public spending on universal basic services, rather than simply distributing cash to individuals. About UBI, Himanshu states that the question is not whether it should be adopted, but why and when. While allowing that UBI is a good idea in principle, he maintains that it is not yet time to introduce such a policy in India, given that many in the country lack clean water, access to education, and other essential public goods. Sinha, expanding on Himanshu’s thesis, stresses that “we should not lose sight of the need to craft credible public systems” — and worries that a UBI would divert money and attention from necessary improvements of education, health, housing, and public infrastructure.
Video, Part 1: Ray, Moene, Sethi
Video, Part 2: Sethi (cont’d), Himanshu, Sinha
The five presentations were followed by a 30-minute Q&A session, touching on such topics as private versus public provision of services (which Ray eventually describes as a distraction from the real issues), immigration and basic income, UBI versus UBS during economic downturns, and others.
Video: Q&A
Reviewed by Danny Pearlberg
Photo: Delhi, India CC BY 2.0 Ville Miettinen
