by Furui Cheng | Jun 15, 2017 | News, Research
In an article published in the Journal of Political Ecology, Professor Alf Hornborg of the human ecology division of Lund University proposes that each country establish a complementary currency for local use only, which would be distributed to all its residents as a basic income. In this way, humanity as a whole would regain justice and sustainability.
In pre-modern societies, monetized exchange was largely limited to long-distance trade in preciosities, while most basic needs were met through socially embedded relations of reciprocity and distribution. Radical institutional changes in the nineteenth century then made money a medium for obtaining all kinds of goods and services – what we might call “general-purpose money”.
Efficiency is the inherent logic in general-purpose money. Adam Smith identified the benefits of general-purpose money at the local level. Yet when such efficiency is pursued at the level of a globalized economy (possible because fossil fuels have minimized transport costs), the potential for power differences, polarization, exploitation and collateral damage is vastly greater. In this way, the claimed “efficiency” is perhaps even inverted. As long as we subscribe to the assumption of general-purpose money as the medium of exchange organizing human societies, exploitation and underpayment are inevitable implications of production processes.
Economists often deplore such negative aspects of globalization: environmental damage, increasing inequalities, growing regulations, and resource depletion. Yet few tend to consider general-purpose money as a cultural peculiarity to which there are alternatives. Not even Adam Smith drew this conclusion, nor did Karl Marx.
Hornborg suggests that current concerns with climate change and financial crises offer a historical moment for reflection on how the operation of the global economy might be reorganized in the interests of global sustainability, justice, and financial resilience. The societal objective must be to strike a balance between such distinct interests and concerns as market principles and capitalism, everyday local life versus global finance, and long-term sustainability and survival versus short-term gain. In Hornborg’s opinion, the solution is to establish ways of insulating these competing values from one another, rather than allowing one to be absorbed by the other.
To increase sustainability, reduce vulnerability, and diminish inequalities, he advocates a complementary currency issued as basic income. To the long list of questions one may have regarding this policy proposal, Hornborg provides some preliminary answers in his article.
In fact, addressing the negative aspects of general-purpose money itself is not a new idea. Silvio Gesell (1862-1930), a German-born entrepreneur living in Buenos Aires, was an early pioneer of this endeavor. John Maynard Keynes mentioned Gesell in his General Theory of Employment, Interest and Money:
“It is convenient to mention at this point the strange, unduly neglected prophet Silvio Gesell, whose work contains flashes of deep insight and who only just failed to reach down to the essence of the matter. …their significance only became apparent after I had reached my own conclusions in my own way. …I believe that the future will learn more from the spirit of Gesell than from that of Marx. The preface to The Nature Economic Order will indicate to the reader, if he will refer to it, the moral quality of Gesell. The answer to Marxism is, I think, to be found along the lines of this preface.”
“Gesell’s specific contribution to the theory of money and interest is as follows. In the first place, he distinguishes clearly between the rate of interest and the marginal efficiency of capital, and he argues that it is the rate of interest which sets a limit to the rate of growth of real capital. Next, he points out that the rate of interest is a purely monetary phenomenon…This led him to the famous prescription of ‘stamped’ money, with which his name is chiefly associated and which has received the blessing of Professor Irving Fisher. According to this proposal currency notes would only retain their value by being stamped each month, …with stamps purchased at a post office… The idea behind stamped money is sound… But there are many difficulties which Gesell did not face.”
From the above, the reader can identify the similarities between Hornborg’s and Gesell’s proposals, from different perspectives, for redesigning and constraining the power of ‘man-made’ general-purpose money.
Alf Hornborg, 2017, “How to turn an ocean liner: a proposal for voluntary degrowth by redesigning money for sustainability, justice, and resilience,” Journal of Political Ecology.
John Maynard Keynes, 1936, Chapter 23 of “The General Theory of Employment, Interest and Money,” Palgrave Macmillan.
Article Reviewed by Genevieve Shanahan.
by Kate McFarland | Apr 11, 2017 | Research
Canada’s Citizens for Public Justice (CPJ), a faith-based nonprofit organization dedicated to researching and promoting justice in public policy, has published a briefing note on CPJ’s position on guaranteed livable income (GLI) (sometimes also referred to as a ‘guaranteed minimum income’ or ‘guaranteed annual income’). CPJ defines a GLI as an “income security system that would ensure that everyone has access to the basic necessities of life and the means to participate meaningfully in the life of their community” — which encompasses several types of policies, including a negative income tax (NIT), top-up programs, and a universal basic income (here called a ‘demogrant’ as is common in Canadian terminology*).
A long-time supporter of GLI, CPJ has published work on the topic in the past, including an infographic previously featured in Basic Income News (here and here) and a backgrounder report and position paper that were published as two-part feature “Toward a Guaranteed Livable Income” in June 2008. Additionally, CPJ has participated in events hosted by BIEN’s two North American affiliates–the Basic Income Canada Network and US Basic Income Guarantee Network–and, indeed, the organization was a cofounder of the Canadian affiliate at the 2008 BIEN Congress in Dublin, Ireland.
In the new paper, CPJ re-articulates its position that GLI is “an important strategy for addressing fundamental societal inequities” in Canada. More specifically, it recommends an incremental approach to implementing a nationwide GLI program, expanding successful programs for children and seniors to poor adults of working age. In this, CPJ calls for an NIT or top-up design–which would involve transfers only to the poor–over a basic income or demogrant, which judges to be “prohibitively expensive” even at amounts below the country’s most commonly used low-income levels. Moreover, CPJ recommends that, while benefits should be granted to individuals (as in a basic income), the program should be structured to account for household characteristics (such as numbers of children and caregivers) in determining the amount of the benefit.
CPJ advises the use of pilot studies to determine what specific design of the GLI is most effective at reducing poverty while guaranteeing that no low-income individuals are worse off than under the current system. In doing so, the organization stresses the importance of community involvement in the research.
The CPJ’s new briefing note comes at a time when GLI is in the spotlight in Canada–with Ontario planning to launch a pilot study in the spring of this year. In February 2016, the provincial government allocated part of its budget to a GLI pilot, and the project has been in development since this time. Following the release of a preliminary discussion paper by project adviser Hugh Segal (a former Canadian Senator and long-time GLI advocate), the government solicited public feedback on the design of the pilot. Results from the public consultations were published in March 2017.
Reference
Citizens for Public Justice (March 2017) “Briefing Note: Towards a Guaranteed Livable Income“
*In the Canadian context, the term ‘basic income’ or ‘basic income guarantee’ is frequently used to mean guaranteed livable income.
Reviewed by Dawn Howard
Photo CC BY-NC 2.0 Kat Northern Lights Man
by Kate McFarland | May 14, 2016 | News
The Revolution of Social Justice international conference will be held in Budapest on May 21, 2016, on the theme of “the chances of progressive politics and basic income in Europe and Hungary.”
Keynote speakers include Guy Standing (economist, Research Professor at University of London, and co-founder of Basic Income Earth Network), Iván Szelényi (Professor of Sociology at New York University), and Enno Schmidt (artist and co-initiator of the popular initiative for basic income in Switzerland).
The conference also includes two panel discussions on themes related to basic income: the first on basic income pilot projects and how to move from these experiments to national projects, and the second on how to build progressive social and political movements to support (or be supported by) basic income initiatives.
A third panel discussion, featuring a diverse group of national public figures, asks “What’s next, Hungary?”
The conference concludes with a festival–which will include a poem and song recital by Virág Erdős and László Kollár-Klemencz and concert by Kistehén Band.
Attendance is free upon registration.
by Citizens' Income Trust | Dec 4, 2015 | Opinion
Benjamin K. Sovacool, Roman V. Sidortsov, & Benjamin R. Jones, Energy Security, Equality, and Justice, Routledge, 2014, xix + 213 pp.
This book is a recent product of the Vermont Law School’s Institute for Energy and the Environment’s research on how to ‘equitably provide available, affordable, reliable, efficient, environmentally benign, proactively governed, and socially acceptable energy services to households and consumers’ (p.xvii). The aim of this book is to describe current inequalities and injustices associated with energy use and make suggestions as to how greater justice might be both understood and achieved.
As the first chapter points out, we are drifting ‘into a future threatened with climate change, rising sea levels, severe pollution, energy scarcity and insecurity, nuclear proliferation, and a host of other dangers’ (p.1), and our desire for low-cost and reliable energy conflicts with the pursuit of the sustainable and cleaner environment that we also wish and need to experience. The chapter provides enough evidence for these statements.
Chapter 2 is more philosophical, and concludes that ‘energy justice’ should be based on two principles:
- a prohibitive principle: ‘energy systems must be designed and constructed in such a way that they do not unduly interfere with the ability of any person to acquire those basic goods to he or she is justly entitled’ (p.42);
- and an affirmative principle: ‘if any of the basic goods to which every person is justly entitled can only be secured by means of energy services, then in that case there is also a derivative right to the energy service’ (p.46).
Because a sustainable and clean environment and a stable climate are basic goods to which we are all entitled, the prohibitive principle requires that the damaging externalities associated with energy production must be minimized.
Anyone who doubts the environmental and climate damage being done by the ways in which we currently produce energy should read chapter 3. The damage done to health by fuel poverty in the UK and elsewhere, and the volatile and increasing cost of carbon, are described in chapter 4 – John Hills’ Getting the Measure of Fuel Poverty ought to have been referenced. In chapter 5 the socio-political dimension is described in terms of corruption, authoritarianism and conflict, which are as problematic in the so-called developed world as in the developing world. Chapter 6 charts the disproportionate way in which the poorest communities fail to benefit from energy production and at the same time suffer the most from production methods. Chapter 7 describes widespread environmental damage and finds that the extension of conventional technologies can only increase inequality.
The impression left by this book is of ubiquitous environmental damage and fuel inequality, that is, damage and inequality in the world’s wealthiest as well as in the world’s poorest countries. The answer is not new technologies: the answer is to ask who is affected by investment and pricing decisions, and to factor in the externalities when relative costs are calculated. If this is done, then solar and wind power turn out to be both more just and cheaper than nuclear power or fossil fuels.
The problem is therefore a political one – a fact that could have been made more explicit in the book’s concluding chapter.
This book should be read alongside Fitzpatrick and Cahill‘s Environment and Welfare: Towards a Green Social Policy (Palgrave Macmillan, 2002), in which Tony Fitzpatrick suggests that a citizen’s income could encourage economic growth and therefore greater environmental damage, and James Robertson proposes a carbon tax to fund a citizen’s income, which would encourage renewable energy production at the same time as promoting income justice and therefore fuel justice. It should also be read alongside the recent Institute for Fiscal Studies’ report Energy use policies and carbon pricing in the UK which recognizes that an increased carbon tax is needed on domestic gas use and that this would require poorer households to be compensated. The acknowledged problem here is that such a compensation package would require an increase in means-testing, which would impose additional disincentives, administrative complexity and income volatility on those households least able to cope with them.
Energy Security, Equality and Justice lacks a bibliography, which is a pity, and its index is sketchy, which will make the book difficult to use as a reference volume. But it is a well argued and carefully evidenced discussion of issues vital to our future and it deserves a wide audience.
by Josh Martin | Mar 21, 2015 | Research
Irani writes a review of Erik Brynjolfsson and Andrew McAfee’s book The Second Machine Age, in which they argue for a basic income as a solution to increasing automation and technology.
Lilly Irani, “Justice for ‘Data Janitors’”, Public Books, January 15, 2015.
