by Citizens' Income Trust | Aug 2, 2015 | Opinion
Peter Barnes, With Liberty and Dividends for All: How to save our middle class when jobs don’t pay enough, Berret-Koehler Publishers, 2014, 1 62656 214 1, pbk, xii + 174 pp, £13.99
There are not enough well-paid jobs to sustain a large middle class, and Peter Barnes offers as a solution to this problem the idea that co-owned wealth could pay dividends to everyone. The Alaska Permanent Fund is the model, and the inspiration is Thomas Paine’s Agrarian Justice, in which Paine proposes an equal distribution of the income generated by the property which belongs to all of us. This is the ‘co-owned property’ that is at the heart of Barnes’ proposal; and he extends the meaning of the economist’s term ‘rent’ to include payments made to all of us in recognition of the uses that are made of our co-owned wealth.
Drivers of the changed outlook for the United States’ middle class – and the middle classes of all developed nations – are globalization, automation, and deunionization. The effect of all three of these is to reduce the proportion of the proceeds of production going to labour, and to increase the proportion going to the owners of capital ( – the main point made by Thomas Piketty in his book Capital). Economic stimulus, education, and job creation, might ameliorate the situation slightly in the short term, but automation, globalization and deunionization will defeat them in the end, as will the fact that the economic system quickly magnifies small differences in wealth into sizeable inequalities. As Barnes suggests, the system needs to be fixed, not the symptoms. One particular change that is required is that means-tested benefits need to be replaced by universal ones, but the most important change is that the rent that owners extract from assets that belong to all of us (‘extracted rent’) should be distributed to everyone (‘recycled rent’) as a Citizen’s Income
Barnes suggests several types of co-owned wealth that could be made to generate the income to pay for a Citizen’s Income: the money infrastructure, the electromagnetic spectrum, sovereign wealth funds generated by extraction royalties (as in Alaska and Norway), and the atmosphere ( – rather than ‘cap and trade’, Barnes recommends ‘cap and dividend’, in which anyone who pollutes the atmosphere has to pay, and in which what they pay is redistributed as Citizen’s Incomes).
This is a very American book, and the context in view is always the USA. For Barnes, it is the middle class that needs to be cared for, and, by implication, not the rest. The situation looks very different in the UK. Here we have a generally more egalitarian society ( – compare the universal NHS with the United States’ differentiated health systems), and the ways in which a Citizen’s Income would benefit everyone will be higher up the UK’s agenda than would be the protection of the middle class. But having said that, this is an engaging introduction to a Citizen’s Income and to how we might pay for it. Something similar for the UK and for other European countries would be welcome.
by Liam Upton | Jul 13, 2015 | News
Ireland’s Fianna Fáil party will include a commitment to a Basic Income of €230 a week in its manifesto for next year’s general election.
The news was revealed by Fianna Fáil spokesperson for social protection and social equality, Willie O’Dea in an interview with the Sunday Times newspaper. O’Dea said that he will outline the plan in the party’s social protection policy document, which is due to be published in a few week’s time.
This commitment makes Fianna Fáil the most significant party in Ireland to support Basic Income, they are currently the largest opposition party and are usually the third largest party in opinion polls, not far behind those in front. The €230 Fianna Fáil proposal is also higher than that suggested by Social Justice Ireland, who presented a Basic Income affordability study at a BIEN conference in 2012. The Green Party also supports Basic Income but has never campaigned on it nor laid out a concrete proposal.
In terms of costing, the document says that refunding tax credits would be the first step to a Basic Income and that “Any income earned above [the Basic Income] would be taxed at a new single rate.”
The policy document will also outline some of the justification for Basic Income, making a number of criticisms of Ireland’s current taxation and social welfare system, noting that social work such as caring and volunteering go financially unrewarded. It will further mention that “It would promote gender equality, as all forms of ‘work’ are rewarded, not just paid employment.” and that “It would remove poverty traps and unemployment traps, as seeking paid employment or increased income would still be worthwhile.”
The inclusion in Fianna Fáil’s manifesto reflects the increasing political support Basic Income has been receiving worldwide in the last year.
by BIEN | Jun 27, 2015 | News
The Minister of Poverty Eradication and Social Welfare of Namibia, has come out in criticism of Namibia’s current economic model based on self-interest and profit in favor of the Blue Economy, an economic philosophy centered around social and environmental justice. Kameeta, who was appointed by President Hage Geingob with the goal of tackling poverty head-on and narrowing the gap between the rich and poor, is advocating for the Basic Income Grant (BIG). Kameeta’s program would provide a universal minimum income allowance be paid to any person not above 60 years of age who is not earning above the tax threshold (currently N$ 50,000 per year) and is not receiving any other government grant, such as disability grant, maintenance grant or war veteran grant. Namibia experimented with the BIG from 2008-2009 by providing recipients a monthly grant of N$100. Kameeta renewed his support for the BIG and criticized Namibia’s economic model during the Blue Economy Conference in Windhoek on April 27-28 2015.
For more information on Bishop Kameeta’s advocacy for the BIG, see:
“Calls to review Namibia’s economic model” The Southern Times. May 11, 2015.
by Citizens' Income Trust | May 24, 2015 | Opinion
Donald Hirsch, ‘Could a Citizen’s Income work?’ A paper commissioned by the Joseph Rowntree Foundation as part of its Minimum Income Standard programme, and published in March 2015. www.jrf.org.uk/publications/could-citizens-income-work
The Citizen’s Income Newsletter usually mentions relevant think tank research and working papers in the ‘news’ section, or occasionally in the context of an editorial, but Donald Hirsch’s paper is particularly significant and so demands a full review. Its importance is twofold: it evaluates a number of Citizen’s Income schemes for viability; and it identifies the changes that might be required in the ways in which the public and policymakers think about income maintenance if a Citizen’s Income were to be a possibility. The paper therefore tackles a number of different feasibilities: financial feasibility, psychological feasibility, and what we might call institutional or policy process feasibility.
The paper recognises that a Citizen’s Income would address some very real problems experienced by the UK’s current largely means-tested benefits system. For instance: a Citizen’s Income would not be withdrawn as earnings rose, and so would not impose the employment disincentives that means-tested benefits currently impose; no stigma would be attached to a Citizen’s Income; and a Citizen’s Income would be simple in structure and so would not suffer from the complexities of much of the current system. The full list of arguments on page 4 of the paper is a model summary of the case for a Citizen’s Income.
The major contribution of the paper is the way in which it outlines the three ‘seismic shifts’ that would need to occur in public attitudes if a Citizen’s Income were to be implemented. The public and policymakers would need to be convinced
- ‘that everyone should be given some baseline level of financial support from the state, even if they choose not to do anything to try to earn money for themselves;’ (p.5)
- ‘that the basic marginal tax rate should be substantially higher than it now is, since otherwise almost everybody’s net income from the state would rise, and there is no obvious way to finance this.’ (p.5)
- ‘potentially a reduced role of the state in ensuring that each citizen can afford particular essentials, notably housing and childcare, through income transfers, if a citizen’s income replaced means-tested payments for these.’ (p.3)
Hirsch says of the first two of these seismic shifts:
Politicians are likely to perceive both of these as unacceptable to voters, a view supported by evidence on social attitudes. It can be argued that both of these conditions could become more acceptable under a regime with a citizen’s income than they are now. Persuading the public and politicians of these arguments, however, would not be easy. (p.5)
And he says of the third:
Under a system of largely market-based rents, it would not be easy to include a simple rent element in a citizen’s income payment without creating shortfalls for some or large surpluses for others. (p.5)
Particularly in relation to the first two seismic shifts, Hirsch’s conclusion is that ‘a debate about the principle of a citizen’s income may thus contribute to a long-term reconsideration of policies and attitudes towards state support’ (p.3).
The paper contains a useful study of the differences between Universal Credit, Negative Income Tax, and Citizen’s Income; a discussion of the ways in which Income Tax would have to rise to pay for different levels of Citizen’s Income; an exploration of the different ways in which Citizen’s Income schemes might tackle differing housing costs; and a discussion of the way in which abolishing tax allowances, such as the Personal Allowance, rather than simply raising Income Tax rates, could pay for a Citizen’s Income. It also contains a description of the differences between the levels envisaged in various researched schemes and the Minimum Income Standards researched by the Joseph Rowntree Foundation ( – although it has to be said, of course, that the current benefits system does not come anywhere near to the levels of the Minimum Income Standards). Then follow descriptions of the kinds of households to which a Citizen’s Income would tend to redistribute income, and the important statement that ‘all the [paper’s] calculations make the simplified assumption of no behavioural change. Knowing what would actually happen to earned incomes as a result of a citizen’s income is very difficult, but is likely to affect outcomes quite profoundly’ (p.16). Then come discussions of household and individual assessment units, the effects of different approaches to meeting housing costs, and lifecycle redistribution. A particularly important section is a discussion of a Partial Citizen’s Income as a stepping stone towards a full one. A partial Citizen’s Income would be likely to impose losses on low income families if means-tested benefits were abolished, and to impose additional complexity if they were not. Hirsch suggests that a Partial Citizen’s Income might be useful if it could be implemented as one stage of an already agreed plan to implement a full Citizen’s Income. There is much merit in this suggestion.
Hirsch describes the Alaska Permanent Fund, and the Namibian and Iranian schemes, but not the more recent Indian pilot project. He correctly points out that these schemes have not reduced employment market activity, and might also have said that in the Namibian pilot project a significant increase was in evidence.
Hirsch makes the important point that income is different from such services as healthcare and education because households generate income as well as require it. This means that it is important to ensure that a Citizen’s Income scheme does not inadvertently reduce the amount of income created, and that both removal of the Personal Tax Allowance and higher Income Tax rates might have such effects on earned incomes. In his concluding section, Hirsch suggests that a Universal Credit with a lower taper rate might be a useful step in the direction of a Citizen’s Income. He might also have pointed out that Universal Credit is not universal, is not based on the individual, is not unconditional, is still means-tested, and is regressive.
When it comes to the study of particular Citizen’s Income schemes in the paper’s appendices, the paper makes two valid points: that the immediate implementation of a ‘full’ Citizen’s Income is unlikely to be feasible in the short term; and that, because a ‘partial’ Citizen’s Income would not fully replace means-tested benefits, it could make the system even more complicated.
Following a description of the Citizen’s Income Trust’s 2013 illustrative scheme, Hirsch proposes changes and lists their additional costs, which is useful, but is not itself a criticism of the scheme as published. He then studies the Institute for Social and Economic Research working paper proposals (reprinted in the previous edition of this Newsletter), and correctly recognises that in order to reduce losses in disposable income, a means-tested system needs to be retained and that this would create an additional level of complexity.
Hirsch’s descriptions of these recently researched Citizen’s Income schemes are largely accurate. There are places in the discussion at which a broader canvas would have been helpful. For instance, the discussion of the higher rates of Income Tax that would be required might have included consideration of overall gains and losses – for if a household’s Income Tax rate rises, but the overall effect of the Citizen’s Income, increased Income Tax, and alterations in other benefits, leaves the household with the same disposable income, then for households originally on in-work or out-of-work means-tested benefits, it really is no problem that Income Tax rates have risen – except that, as Hirsch correctly points out, Income Tax rates are a psychological issue as well as a fiscal one: and it is in the area of the psychological issues related to Citizen’s Income that his paper makes a most useful contribution. An additional important issue is that where households are not currently on means-tested benefits, and Income Tax rates rise, then even if there is no overall loss in disposable income at the point of implementation of a Citizen’s Income, those households’ marginal deduction rates will rise. This might result in behavioural change in the employment market.
A further issue to which Hirsch correctly draws attention is that of redistribution. For schemes in which means-tested benefits are abolished, redistribution effects could be substantial. Hirsch evaluates a particular scheme of this nature, and concludes that
the overall distributional effects would include, but not be restricted to, a redistribution of income from better to worse off groups. There would also be a significant redistribution from people without children to those with children among lower earners, and also some losses for those with very low part-time earnings. Finally, … among groups presently receiving transfers from the state, couples would do relatively better than single adults (with and without children). (p.15)
So either such redistributional effects would need to be justified, or a different kind of scheme would need to be selected. Hirsch does not study in detail the redistributional effects of Citizen’s Income schemes that retain means-tested benefits, where those means-tested benefits are recalculated by taking into account households’ Citizen’s Incomes as existing income. This would require the kind of microsimulation work contained in the Institute for Social and Economic Research working paper (Torry, 2015). The low levels of gains and losses generated by such modelling of the alternative schemes in that working paper suggest that redistributional effects would be far less significant than for schemes that abolish means-tested benefits. Clearly further research is needed in this area.
In relation to those same alternative schemes, and to his discussion of housing costs on p.13, Hirsch might have mentioned that the schemes researched in the 2015 Institute for Social and Economic Research working paper are clear that housing costs support would be left as it is under the current system. A further issue that Hirsch might have discussed is that the ISER paper employed the Euromod modelling software and Family Resource Survey data to generate entirely robust costings and results on gains and losses. As he recognises on p.26, his own paper does not calculate precise tax rates and income outcomes. It would have been able to do so if his suggestions had been modelled using Euromod.
This review cannot do proper justice to the detail contained in Hirsch’s well-researched and well-ordered paper, but we hope that it will encourage our readers to read his paper for themselves, to study his arguments, and to ponder his conclusions. Any future study of the feasibility of a Citizen’s Income, and of particular Citizen’s Income schemes, could do a lot worse than set out from the arguments of this paper.
Hirsch has already done the Citizen’s Income debate a significant service, and we hope to see further such analysis and argument in the future. What would be particularly useful would be to have a side-by-side evaluation of the current benefits system and of a Citizen’s Income scheme (both with and without accompanying means-tested benefits), treating the two systems as competitors on a level playing field, and evaluating them according to a set of clear criteria. As Hirsch says,
the present system suffers from strong negative perceptions and a consequent lack of political support, which has helped the implementation of recent cuts in the real value of benefit levels without obvious political fallout. If a citizen’s income or any other reform could command public confidence, this would help strengthen the underpinning of a system which ensures that nobody in the UK lacks a basic level of income. (pp.4-5)
by Guest Contributor | May 14, 2015 | Opinion
April 28, 2015
A Basic Income Women Action Group
Statement Prepared by
Liane Gale, Ann Withorn and Kristine Osbakken
Inspired by conversations and presentations at the 2015 North American Basic Income Guarantee Congress in NYC
- The broad goal of the group is to connect women within the Basic Income movement, and also to connect with women of other economic/social/environmental justice activist groups, where people are mindful of the dignity of all people and the planet. We are committed to exposing the problems within current economic, political and social systems, to questioning these systems from a women’s point of view and to arguing for Basic Income as a vital avenue towards systemic change. Group members are also committed to contributing to a healthy community, connecting and interacting with each other based on solidarity and compassion.
- Support for a Women Action Group within the Basic Income movement draws from both historical and contemporary sources. Martin Luther King wrote in 1967: “I am now convinced that the simplest approach will prove to be the most revolutionary. The solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed annual income”. The history of the U.S. Welfare Rights movement also reminds us that poor women and their allies recognized a “Guaranteed Adequate Income” as their welfare plan, particularly to eliminate sexism from welfare, with National Welfare Rights Organization leader Johnnie Tillmon affirming in 1972 “the right to a living wage for women’s work, [is] the right to life itself”. And today, activist men from across the world have joined the call. Here is globalist Nafeez Ahmed: “If we want to save the planet, patriarchy must die. That means recognizing and taking responsibility for the fact that patriarchy is integral to the structures of power we take for granted, across East and West. There’s no time to waste. If misogyny wins, the planet dies.”
- Action Items. We propose several general avenues for how a Women Action Group can come together as part of the full Basic Income movement. We seek further discussions and refinement regarding these proposals from all sections of the movement.
The Basic Income Women Action Group will:
- Connect with women already active in the Basic Income movement, both nationally and internationally, for the sake of building stronger networks and solidarity;
- Promote the staging of forums in venues that will examine Basic Income through a gender lens — and introduce this perspective within all public discussions of Basic Income;
- Serve as a nexus for informing people about the existing literature and activist resources on Basic Income and women;
- Support the writing of open letters asking international, national, state and local organizations and movements to discuss and endorse Basic Income, especially in regard to its immense potential to positively affect all women and their families;
- Support initiatives that promote gender parity within Basic Income organizations such as NABIG and BIEN, especially in regard to events that are the “public face” of our movement.
- Support pro-Basic Income policy campaigns. When possible, we would also like to offer coordinated support for women candidates and those leaders, who are working toward a Basic Income at any political level.
We seek suggestions and reactions from all, but also specifically encourage comments and ideas from those who are already connected with the Basic Income movement.
Feel free to join or to contact any of us in the Basic Income Women Action Group:
Liane Gale, liane.gale@gmail.com (Roseville, MN));
Ann Withorn, withorn.ann@gmail.com (Boston, MA);
Kristine Osbakken, krissosbakken@gmail.com (Duluth, MN).
