by Karl Widerquist | Sep 1, 2015 | News, The Indepentarian
A recent poll asking Alaskans how to deal with the state’s increasingly severe budget deficit found that trimming the Permanent Fund Dividend or PFD (also know as “the Alaska Dividend”) was the most popular solution. The poll also found that a second strategy for trimming the dividend was third in popularity.
-Alaska Dispatch News
The Alaska dividend is the closest program to a basic income in the world today. Each year it pays out a dividend, usually between $1000 and $2000 per year, financed out of the returns from the Alaska Permanent Fund or APF—a savings portfolio of more than $50 billion accumulated from past state oil revenue. Its enormous popularity earned it the nickname of “the third rail of Alaskan politics,” meaning that any politician who touched it died.
This poll might be an indication that the dividend is losing that status in the face of Alaska’s financial situation, which is deteriorating because of the state’s dependence on oil revenues. The state has no sales or income tax. The vast majority of its revenue comes from taxes, fees, and royalties on the state’s oil exports. Not only have oil prices declined by more than 50 percent since 2014, but the amount of oil exported from Alaska has been declining significantly for years. The state is quickly running through the savings it built up in good years, and it is faced with the situation in which it must either make deep cuts in spending or seek new revenue.
Asking Alaskans to respond to several strategies of dealing with this issue, the Rasmuson Foundation found the following:
- 66% of Alaskans agreed with “Using a portion of excess earning from the Permanent Fund to fund public services and programs while protecting the dividend program.” 27% opposed.
- 57% agreed with “Introducing a statewide sales tax.” 41% opposed.
- 55% agreed with “Putting a cap on the yearly amount of Permanent Fund dividends.” 41% opposed.
- 54% agreed with “Reducing oil development tax credits offered by the state.” 32% opposed.
- 41% agreed with “Introducing a state personal income tax.” 55% opposed.
- 16% agreed with “Making deep funding cuts to essential public services like schools, police, health care, and roads.” 16% opposed.
The first option might not sound like a cut in the dividend, but it is. There are no “excess earnings” in the PDF. Every dollar the PDF receives in returns either goes to spending or to generating more returns and higher dividends in all the years to come. Any strategy that defines some returns as “excess” and diverts those to other spending, necessarily means lower dividends in the future. This opinion protects the existence of the dividend, but it does not protect its future growth or even its current level. If any significant amount is taken in “excess earnings,” it will slow the growth of the dividend in the future, and it might even create negative future growth in the dividend.
The poll did not ask people whether they would support eliminating the dividend entirely, but over time either of the two strategies suggested would lead to significantly smaller dividends than what would otherwise occur.
The poll also did not ask about spending the principal of the PFD, which is constitutionally protected. The legislature would need a constitutional amendment to spend down the $52 billion fund, but with a simple majority vote, it could cancel the dividend and use that money to finance state spending. Before the recent fiscal crisis, such a strategy was politically untenable, but the poll shows that movement in that direction might have become politically tenable.
The poll results suggest that Alaskans might view the dividend as a luxury to be distributed as long as the state is booming. If so, it is very different than how most basic income supporters view it: as an essential tool to promote social justice and an important way to show solidarity with economically disadvantaged individuals. Whether this or any other view of the dividend is strong enough to project it during Alaska’s fiscal crisis remains to be seen.
For more information see:
Alex DeMarban, “Poll: Alaskans prefer new revenue over deep cuts, including tapping Permanent Fund.” Alaska Dispatch News, August 13, 2015.
The Rasmuson Foundation, “Alaska Attitude Survey On The State Fiscal Climate.” The Rasmuson Foundation, Conducted July 13 – 21, 2015
Representative Wes Keller, “My Turn: Don’t be snookered, ther’es no ‘free ride.’” The Juneau Empire. August 20, 2015
Rep Les Gara, “My Turn: Open discussion needed on oil taxation.” The Juneau Empire. August 19, 2015.
NOTE: The paragraph beginning, “The first option might not sound like a cut…” was added after this article was first posted in response to questions from readers.
by Vito Laterza | Jul 29, 2015 | Opinion, Research
Give a Man a Fish: Reflections on the New Politics of Distribution, by James Ferguson (Duke University Press Books, 2015).
James Ferguson’s latest book focuses on the rise of social welfare programs in southern Africa, in the form of grants to low income and vulnerable groups, primarily the elderly, women and their children, and the disabled. Post-apartheid South Africa has led the way. It has an extensive system which administers grants to 30 percent of the population. Other countries like Botswana, Namibia, Lesotho, Swaziland, and Mozambique have also implemented nationwide programs, while pilot programs are being tried elsewhere in the region.
Ferguson’s goal is not to provide an extensive ethnographic treatment of these developments, but rather to analyze their implications and the field of political possibilities they might open up. Half comparative ethnography, half political pamphlet, Ferguson’s impressive narrative is a tour de force questioning, deconstructing and reconstructing classic and contemporary notions of poverty, development and the welfare state in the region and beyond. Through a focus on direct cash transfers, the author brings together the anthropology of southern Africa, with the latest debates in development practice and anti-poverty activism.
Written in a highly readable style, the book is structured around a series of self-contained chapters, originally given as the Lewis Henry Morgan lectures in 2009 at the University of Rochester. One can easily read the chapters independently or as part of a larger whole.
Ferguson’s starting point is the contradiction between dominant narratives on the relentless expansion of the neoliberal state, and the substantial extension of state social provisions through grants. The modest size of these social payments sets them apart from more comprehensive welfare measures in Nordic countries, yet the author believes that this phenomenon marks the rise of what can be legitimately called “welfare states” in southern Africa. While their impact might be limited in the present form, the systems in place lay the foundations for more radical possibilities.
Breaking away from conventional welfare and poverty interventions, grants are not delivered with the final goal of reproducing a healthy and productive workforce in the cities, or creating a class of productive farmers in the rural areas. The eligibility criteria are simple – mostly age for pensions and child care grants – and do not include conditions like searching for employment or investing in productive activities.
This hints at economic structures that affect the vast majority of southern Africans: the rural areas are witnessing a constant decline in agricultural production, while the formal sector in urban areas, even when experiencing high growth, simply fails to absorb most people who are in need of employment. Far from being a temporary situation that can be rectified through economic policies, this is a chronic feature of contemporary capitalism in southern Africa and increasingly in other parts of the world, including Northern economies like the US and Europe.
The author points out that production remains the dominant paradigm in economic anthropology, development discourse and practice, and radical left thinking. He calls for a radical shift away from “productionist” tenets towards distribution. His wide-ranging critique builds on a re-elaboration of key themes in classic and contemporary southern African ethnography, from kinship-based reciprocity across the rural-urban spectrum to a mix of moral and economic concerns at play in sex, love and intimacy in times of precarious livelihoods.
The “distributive political economy” mapped by Ferguson is characterized by a myriad of acts of wealth distribution, entangled in multiple and complex relations of dependence influenced by configurations of gender, kinship, labor, community, ethnicity, society and the state. Rather than producing more wealth, this “distributive labor” is primarily directed at dividing sources of wealth into “smaller and smaller slivers as they work their way across social relations of kinship, clientage, allegiance, and solidarity” (p.97). It is this kind of activity that sustains and reproduces society, more than engagement in production as defined by macro-economic frameworks centered on the labor of able-bodied men in the formal sector and the reproductive work of women as wives and mothers. One powerful example of this reversal in South Africa is the shift from dependence of women, children and rural relatives on remittances from men working in the mines in the heyday of the apartheid economy, to the central distributive role played today by women and elderly people. The latter are the main beneficiaries of state grants, and disenfranchised men at the margin of the productive economy have increasingly come to rely on them.
Establishing and maintaining dependence on others who have access to wealth becomes a full-time job for those who are excluded from the benefits of middle class life. Dependence, in Ferguson’s treatment, has more to do with sharing than either gift or market exchange. Sharing and dependence cannot be easily subsumed under the conventional opposition between equality and inequality. These relations hint at a “new politics of distribution” beyond these two poles.
Within this framework, Ferguson convincingly reinterprets varied political movements calling for redistribution in the region, from the populist socialism of new radical movements in South Africa to the region-wide basic income grant campaign, and debates around land reform and resource nationalism. Calls for redistribution go beyond narrow views of African patrimonialism. People demand what Ferguson labels their “rightful share” in wealth that is owned collectively. Legitimate participation in this process can be framed along citizenship lines at the state level, but there are other levels of belonging too when local communities and traditional leaders are involved. These claims are not exercised from a position of inferiority or supplication. People own collectively all the resources of their community of belonging, hence they have a claim to a share of the wealth produced from these resources.
By inserting the normative and political dimensions of these movements into a long history of local idioms and practices, Ferguson provides a different angle on activist discussions around radical measures like the basic income grant (BIG). BIG is argued from a variety of perspectives, ranging from radical Marxism to left-leaning libertarianism and technocratic social democracy. The distinctive feature of a basic income is that it should not be tied to any condition and everybody should be entitled to it. The ideal world imagined by BIG activists is one where all human beings receive a basic income that would afford them a decent livelihood, with no compulsion to work for a wage or generate income through other activities. This is a radical break from existing welfare measures that tie unemployment benefits to the reintegration of beneficiaries in the labor market. In line with other activist scholars, Ferguson notes that these emerging state systems of cash distribution provide an essential infrastructure for the possible establishment of BIG. At the same time, his anthropological analysis develops moral and political arguments in favor of BIG that are grounded in local discourses and aspirations, a dimension often missed by global activist groups and regional campaigners.
Ferguson joins a growing number of anthropologists who subvert the conventional boundaries between analysis and engagement. With his creative and flexible analysis, he provokes thinking for action beyond narrow ideological boundaries. One could imagine enthusiastic endorsements of his work by Marxist campaigners, World Bank technocrats and traditional leaders alike. This highly original book is likely to leave a lasting mark not only on contemporary anthropological debates around poverty and development, but also policy and activist thinking in southern Africa and beyond.
This review was originally published in Anthropology Book Forum.
by Stanislas Jourdan | Jul 9, 2015 | News
Announcements from Finland and the Netherlands on the launch of basic income pilots are making ripples across Europe. In France, the Southern Region of Aquitaine might well be the next place where experiments are conducted to assess the viability of basic income.
Last Monday, July 6th, the regional Council based in Bordeaux voted through a motion marking the start of a process towards running basic income pilots in the region.
Despite a heated debate before the vote, the motion proposed by Green Council member Martine Alcorta was passed unanimously. In fact, several political groups opposed the motion, but decided to abstain when it came to a vote (see the video of the plenary here).
The president of the Council, Alain Rousset in particular rejected the proposal, which he believes is “against the work ethic”. But in the end he also stated he “could not oppose generosity”.
The motion was obviously supported by the Greens, but also with enthusiasm by the radical left coalition “Aquitaine Région Citoyenne” and by one right-wing member and deputy mayor of the city of Bordeaux, who explained her position to the online newspaper Rue89:
« I have always been in favour of the thinking around basic income. Many people don’t get by despite the number of benefits and social assistance schemes. We have to simplify everything: both administrative procedures for citizens and the workload for social workers.
Basic income is not an incentive not to work. On the contrary, it reveals people’s capacities once freed from pressures. We have to launch new experiments with a new spirit. We need new proposals, new models from what currently exist, and to think of a new system. »
So far, the adopted motion only commits the Council to start a call for projects to assess the feasibility of basic income pilots in the region. Under french law, such pilots could only be conducted under the direction of a voluntary department (sub-sections of regions in France), with the agreement of the government. The region would only provide financial support.
The initiator of the motion suggests that the pilots should be based on a proposal drafted last March by BIEN’s Affiliate, the French Movement for Basic Income, to reform the existing means-tested minimum income in France, the “Active Solidarity Income” (RSA). Under this proposal, the RSA would be automatically distributed with no work requirement and along with a taxation system more friendly towards part-time workers.
The current system suffers from many flaws. It is complex, discriminatory, household-based, and moreover it discourages people from pursuing paid work – or encourages them to instead pursue undeclared work – because of its threshold effects. Because of this, the RSA is neglected by the very people who need it. The take-up of RSA is only just over 50% of those eligible.
The proposal being pushed forward is certainly not a perfectly unconditional basic income, but it would constitute a solid step in that direction.
“This is a unique and unprecedented decision in France,” said Green local representative Marc Morisset. The Green Party of France has officially supported basic income since November 2013. Its members have been increasingly active in the promotion of the idea. Last February, another Green regional council member in Rhone-Alpes made a similar proposal, but unsuccessfully.
After this historic vote, the next step will be to finance a feasibility study, find a voluntary department and locate possible areas for experiment.
by Francisco Nobrega | Jun 12, 2015 | Opinion
The debate and protests over the importance of an unconditional basic income policy for our time have been spreading worldwide and gathering momentum. Here in Brazil we keep an open ear due to the success of conditional transfer policies (The Bolsa Família program) and also because we have a moot 2004 law that says that such universal and unconditional money transfer is to be inaugurated in Brazil, “in steps”. Most view Bolsa Família as one such “step”. I have been following the idea for over five years together with other activists, trying to implement a basic income pilot program here, in a small city. This is a distilled reflection of my current view about how to make utopia turn into a “protopia”, a term proposed by Kevin Kelly as a “gradual improvement in humanity” or a viable utopia.
The camp of supporters in the world is diverse and we can see two distinct and extreme interpretations of the idea:
One group sees basic income as a way to increase government through social welfare and “eliminate” work that they see as exploitative and envision complete maintenance of social services and centralized decisions, besides the monthly unconditional grant, independent from work.
Another group embrace basic income as a tool to drastically reduce government, replacing the social programs with the monthly grant independent of work.
These polarized views also disclose an important characteristic of the idea: it attracts people from the entire political spectrum, something that certainly will help future implementation. There is another surprising coincidence in all basic income visions reported in writing and video: the unanimous presentation of what I will call the “classical model”: the monthly grant will be bestowed upon all: rich, middle-class, poor and unemployed. I seldom met anyone who dared to challenge the idea of rewarding people with economic means and a job. To me this is in contrast with was in fact a strategy to eliminate poverty and the attached main evil of social welfare programs: the “poverty trap”. This is a phenomenon in which you punish economic success by removing the benefit as soon as someone is employed or becomes an entrepreneur. The poverty trap creates an incentive to stay put and avoid the risk of relinquishing the subsidy and face the competitive world outside.
A basic income payment is a right for everyone without a decent earning, whatever the reason. The logical justification is that society as a whole has been unable to provide opportunities for everyone either as an entrepreneur or an employee with the government or the private sector. Additionally the increasing efficiency in production, and the great advances in microelectronics, artificial intelligence and robotics are on the way to eliminating jobs on a massive scale. Brynjolfsson and McFee1 have shown that notwithstanding a continuous rise in productivity, the last two decades exhibit a marked reduction in job opportunities. Frey and Osborne2 released a very interesting study of 702 occupations, identifying many that are on the road to extinction due to the modern trends mentioned. In the US the authors estimate that 47% of jobs are at risk of being automated within a decade or two. This will add to the jobs already lost by “off-shoring” manufactories. Also a fundamental psychological barrier exists and resides in the deeply engrained notion that income has to be linked to work. People will have to overcome this notion just as we had to overcome certain prejudices in the recent past related to slavery, torture and the rights of women and minorities, finally embracing solidarity in the economic realm.
It is our duty as a civilized society to provide a monthly grant that will allow those without means to provide for their basic needs. But the classical model of basic income is unjust in handing over cash to those who are well off. This practice could be acceptable if we suppose that a given population was living within the same level of their means. Then the grant would be a benefit equal to all. In all countries we have a centuries-old history of inequality. In Switzerland just about one citizen in 13 is poor and needs help from the state. In Brazil about one-quarter of the population is poor and are presently helped by the Bolsa Família program. The cost of benefiting everyone will be a formidable barrier to implement the idea besides being unjust. The classical model was probably born out of our prejudice against people receiving money without pay. Apparently to appease the well off, the most indignant against giving “money for doing nothing”, the classical model wants to “buy” them as beneficiaries of the idea. But we have to give cash “for doing nothing” because the affluent societies of today have to be responsible for the lack of job opportunities. Giving cash to the needy and letting them choose what to do with it has been shown to be not only just but also cost effective. Among other pilot experiments like the one in India3 it is noteworthy to remember the success of giving cash to homeless people in London4 or home for the homeless in Utah5. The excellent results cost less than the usual city expenses for caring for the homeless in both cases. The winning GiveDirectly initiative in Kenia and Uganda also reinforces the idea of addressing the poor. Many other experiments exist with excellent results.
The social services network present in all countries should be used. The first measure I propose, considering Brazil, is to remove all conditionalities linked to Bolsa Família or to unemployment benefits. The bureaucracy should analyze requests from the needy, families or individuals without income. After entering the monthly grant system the newcomer would have a generous time interval (years) before the grant expires. This longer interval will remove the “poverty trap” long enough for progress out of the grant system. In case a lack of income remains, the person/family will apply, near the end of the allotted time, to stay in the system. So whoever is in need will be helped and whoever falls into economic need will be supported. The amount paid should be enough for the basic needs of the person/family. Recipients who want to advance economically will pursue whatever full or part-time jobs are available or even start a business. The basic monthly cash should be followed with provisions of communal facilities for support and education for the beneficiaries whenever appropriate. In parallel, some of the suggestions exposed6 in the “Get America Working!” study could be implemented to reduce the cost of having workers by means of a tax rearrangement that would drastically shorten the current payroll expenses and many more jobs could be created.
Reducing economic uncertainty will have multiple benefits for society: the mental health value of reducing the anxiety and stress linked to insecurity, the social environment will be safer, and most importantly, the poverty trap will be neutralized, unleashing the creative potential of men and women.
Francisco G. Nóbrega
MD, PhD, is President of the Municipal Council for the Citizen’s Basic Income in the city of Santo Antonio do Pinhal, SP, Brazil. francisco.nobrega@gmail.com
The opinions expressed here are solely those of the author. I thank Jim Hesson for improving the English and suggestions by him and Marina P. Nobrega.
1- Race Against the Machine – how the digital revolution is accelerating innovation, driving productivity, and irreversibly transforming employment and the economy. Erik Brynjolfsson and Andrew McFee, 2011, Digital Frontier Press, Mass, USA
2- The future of employment: how susceptible are jobs to computerization? Carl Benedikt Frey and Michael A. Osborne, 2013, https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf
3- Basic Income: A Transformative Policy for India. Sarath Davala, Renana Jhabvala, Soumya Kapoor Mehta, and Guy Standing. New Delhi: Bloomsbury Publishing India, December 2014.
4- The London experiment: https://www.washingtonpost.com/opinions/free-money-might-be-the-best-way-to-end-poverty/2013/12/29/679c8344-5ec8-11e3-95c2-13623eb2b0e1_story.html
5- The Utah experiment: https://www.newyorker.com/magazine/2014/09/22/home-free
6- Get America Working! site: https://www.getamericaworking.org
by Andre Coelho | Jun 3, 2015 | Research
Red Renta Basica. Article “Negative Income Tax em Portugal”
Abtract:”The NIT – Negative Income Tax – is a wealth redistribution system. It works through a tax which reaches for a part of the richest population wealth and distributes it through all others, in an automatic and unconditional fashion. This means no questions asked and no job seeking requirement, but also without introducing a disincentive to work.
This study is a simulation over such a tax in Portugal, in its present day conditions. This tax would be the actual labor tax with some changes. From the simulation with labor tax working this way in a “closed circuit” and a 50% tax on each citizen’s income over 7000 €, it would be possible to guarantee to all adult Portuguese citizens a monthly income of at least 300 €.
Comparing to present day values, this simulated tax represents an increased taxation on the highest incomes. But this tax can be set at any other level, which conditions how much redistribution will occur.
NIT will turn several State social benefits obsolete. Eliminating these programs will relieve public spending by an amount around 70% of what is presently collected with labor tax. Furthermore, the NIT challenges present day public programs for employment and support in unemployment. These programs are based upon the idea that jobs are the source of income for citizens, which means that if those incomes can be guaranteed by other means, then the former can be eliminated, total or partially. This can save public treasury up to more than present day labor tax collection.
The NIT is also associated with solidarity and social cohesion, which naturally will clash with maintaining large incomes and pensions for a minority, as it supports dignified income for all as a human right. This can lead to ceiling caps on pensions, which will liberate even more public funds.
Finally, NIT will reduce poverty and, proportionally, its weight on public funds, in terms of health costs, security costs, among others.
Miguel Horta (2015), “Negative Income Tax in Portugal [Negative Income Tax em Portugal]“, Red Renta Básica, April 24 2015
