by Andre Coelho | Jul 26, 2019 | Research
Economists Ori Katz (picture: on the left) and Michael Sarel (picture: on the right) believe the implementation of basic income is a task both necessary and desirable in the near future, within the Israeli social reality. So, as researchers, they conducted a thorough study on basic income applied to the economic reality of Israel (used figures from the year 2016). In that study, they considered the elimination of existing (conditional) benefits, abolishing tax exemptions and raising income tax as the financing mechanisms for sustaining an unconditional basic income for all the population.
If adopted in Israel basic income would, according to Katz and Sarel, induce significant bureaucratic savings, encourage employment, eliminate the poverty trap, reduce friction between citizens and the authorities, increase individual freedom of choice, (slightly) reduce inequality and reduce incentives to work in the black market.
In the conclusions it can be read:
Basic income is not a panacea to all the ills of the Israeli economy, and it is unable to create money “out of thin air.” However, it is a more effective way of providing a safety net for the entire population than the current welfare system, and it eliminates the perverse incentives this system creates. As a result of the transition to basic income, Israelis will be able to work, study and manage family life and relationships of their own accord, without fear that their income will be affected due to their choices and without having to justify the way of life they chose. Overall, we believe that this is a saner way of subsisting as a human society.
More information at:
Ori Katz, “Basic income in Israel”, KPF, Kislev 5779 Policy Paper nº42, December 2018
by Jason Burke Murphy | Jul 25, 2019 | Opinion
By Jason Burke Murphy
Chapo Trap House is known for bringing an irreverent, jokey style to US left discussion.
Andrew Yang’s interview with Virgil Texas on the podcast Chapo Trap House helps to answer a lot of questions that keep coming up as his candidacy is debated. After a little while Virgil brings up concerns that one often encounters in debate around basic income.
Full disclosure: I interviewed Andrew Yang a year ago and plan to vote for him. Most of my political training and viewpoint is left-wing. I have fond feelings and understanding for many friends who plan to vote for Bernie Sanders or Elizabeth Warren.
Yang avoids ideological language. He has embraced the slogan Scott Santens often uses of “Not right, not left, but forward.” That is not a slogan for me. I recognize that basic income is a policy that could be attached to any ideological program. I’ve written about that. I would call Yang’s Freedom Dividend a left policy proposal precisely because it re-allocates wealth from the rich to the poor. Yang is proving that basic income (and a diagnosis of “disintegration”) can get the attention of non-voters and even Trump voters.
My goal here is to do a little bit of translating and clarify a couple of points that I have seen raised on cable news and in left magazines. One hears these same points from political newcomers in online Yang discussion pages. Millions of people are thinking about a basic income for the first time. I am sticking to three points that Yang raises in this interview and that I have seen him make elsewhere.
(1) The Value Added Tax. I asked Andrew Yang about the VAT because I was not quite sure it was the best way to go. When you find out why he wants it, you can be better assured that he is ready to take on the one percent.
Yang’s reason for using the VAT to raise about a third of the Freedom Dividend is that it would capture a lot of the revenue that companies like Amazon and Google are making without having to pay tax. Even more important, Yang makes it clear that he will keep looking at ways to make sure these giants of the new economy pay their fair share. In the UK where VAT has been implemented for a long time, the VAT returns process has been claimed to be a confusing process (https://www.rosspartners.co.uk/vat-return-services-london/) However if VAT is implemented with strong easy to understand legislation, issues like these would be less of a problem and potentially bring more companies on board to the VAT system. Yang stressed in this interview that we should “Go where the money is.”
Chapo’s Virgil is not certain about the VAT for the same reason progressives often oppose sales taxes. Yang is clear that “in a vacuum” this would not be a progressive tax. With the dividend, it moves money from the wealthy to everyone else. Yang makes it clear that he also believes in funding the dividend through a carbon tax and a financial transactions tax as well. He would also like to see an increase in marginal taxation of income and wealth.
We should support various, multiple taxes in order to support everyday government and a basic income guarantee. There is less incentive for the wealthy to dodge a tax if there are different kinds in play. The VAT is featured in most of the social democracies that we on the left point to as evidence that good policies can improve social outcomes.
It should be clear now that Yang is NOT the “Silicon Valley candidate”. Everyone who is getting a free ride will end up paying into the dividend and into Medicare for All). That is the goal here. The VAT is a means to that end. A lot of workers in Silicon Valley might share his concern about automation but that is very different from calling him the candidate “of Silicon Valley”. You can bet that Yang is Peter Thiel’s worst nightmare. Yang cites the fact that so many tech companies are untaxed right now as a reason to bring something else into the party. If a VAT doesn’t work, he will try something else.
When it comes to taxing the wealthy, Yang goes further than any of his opponents. Moderates would just repeal previous past tax cuts. Without the dividend, other left candidates run the risk of backlash as people wonder if these new policies really include them.
(2) The size of the dividend. Will $1,000 a month do the work we want it to do? Virgil makes two very different points. First, he points out that there were many periods of his life when even one tenth of this amount per month would have been extremely helpful. Second, he gives cases in which this amount would not help much. Yang’s particular proposal does not give a share until one reaches 18 years old. (I would prefer they be included. I can tell you that, every day, I encounter strong opinions on both sides of this issue.)
Yang wants to point out that a single mother would get her dividend and know that the kid is getting the dividend in the future. He did not say that this was something that many voters can’t get their heads around. Millions of Americans think that low-income people have kids in order to get welfare. That simply never happens.
This is a very interesting line of discussion we are now seeing. I will summarize it:
- You need more than X a month to survive/do well.
- This plan offers less than X as a dividend.
Therefore, we should reject this plan.
The problem with this line of argument is that we are left without any dividend at all. If $1,000 a month is not enough, then zero is much worse. Very few people are arguing for zero basic income, but that is where we are now. Virgil Texas does not reach this conclusion. It is a very friendly interview. But we do run into this a lot. What should we do if we think this amount proposed is not enough?
Andrew Yang is very clear that his goal is a dividend that, combined with Medicare for All, would abolish poverty. This is why he is not talking about gutting current support systems. Everyone who gets support of any kind will have the option of keeping it or going with the Freedom Dividend. He reiterates that when he says “go where the money is”, he knows that low-income people aren’t who he’s talking about. He commits in this interview to tinkering to make sure that this dividend is sufficient, given the expenses that are out there, as well as any price changes in play due to the VAT or carbon tax.
People who say that an extra $1,000 a month is not enough to matter have not seen what low-income people are already doing with what they have. There are many, many communities that are politically invisible. Nothing will increase their ability to develop the stuff of good living-restaurants, shops, studios, dance schools, gyms, etc.-than a dividend. Yang also points out that many people do not get valued by our market at all who should be. Here he includes home-makers and those who care for the elderly in their family.
Some people are worried that this dividend will not matter because of the taxes in play. Sure, it would be bad to get a check and then lose it all to taxation. We only need to be aware of how much more commerce, pollution, and financial transactions are the property of the top ten percent and top one percent of US society. Again, Yang is committed to making sure that the dividend is enough to accomplish the goal of a secure share for all.
Once any amount is secured, we can call to raise it.
(3) Capitalism and “entrepreneurship”. Early in the interview, we hear that the word “entrepreneur” includes a lot more people for Yang than is typically the case. Starting a family or taking care of elderly relatives is included. He also includes creative work, citing the many studies showing that “creatives” improve quality of life and are an economic engine. This is all part of his quest to improve our measurements of economic progress. The Gross Domestic Product and the Stock Market keep improving, even while life expectancy is going down for the first time in the US since the Yellow Fever Epidemic.
This meme is “not my style” but we are seeing conversations like this blossom once people get on board the idea of a dividend for all.
This can be a translation issue for the left. Yang’s “capitalism” and “entrepreneurship” just aren’t the sorts described in our business schools and on television. I tried to address some of these translation issue in an earlier piece for Basic Income News. My main goal there was to get us to think of caregivers and organizers alongside business start-ups. The word “capitalism” puts an image in my mind of someone taking a portion of everyone else’s wealth. I think of Wall Street. Andrew Yang is thinking about markets. To understand him when he says “human capitalism”, think about Main Street in a “nice town”. He wants a lot of that everywhere. This is one reason he wants to improve our measurements of economic well-being. If we can develop better ways of tracking well-being, then an increase in creative and political organizing power (as well as consumer, labour, and negotiating power) will appear in those new measurements. Interestingly, Bernie Sanders and Elizabeth Warren often point to images of Main Street. We shouldn’t let the right own this imagery. They offer nothing to promote actual markets.
The comments on Chapo Trap House’s twitter page include a lot of positive reaction but they can run pretty bad. There is a lot of projection. A lot of people just did not listen to the interview but commented nonetheless. The idea that Yang’s Freedom Dividend is a “neo-liberal trojan horse” should be rendered completely absurd for anyone who listened to this interview. Yet, I have seen this phrase used by credentialed opinion-makers. I do not link here because I want to leave room for them to change.
This sums it up. Creator unknown. “M4A” means “Medicare for All”
Once we win a basic income guarantee, I hope that more people engage in social critique and I hope that solidarity, class analysis and Marxist critiques of alienation and exploitation are important parts of this. The dividend will increase the number of people who can participate in that new debate. And that participation is already starting, as put by a contributor on Facebook:
“One of the great things about this is if you imagine a town, you imagine a community, everyone’s getting $1,000 a month, how many more co-ops are going to be in that town? How many more artists? How man creatives? How many people are volunteering at their local nonprofit? How many more people are going to be civically engaged? How many people are going to join their friend’s book club because they’re not worried about starving to death? You can produce so many immense benefits by spreading the economic buying power. And yes, it would result happily in more people ending up owners of different enterprises.”
The US left needs to embrace basic income. Interviews just like this one brings us closer to making that happen. Those who stick to other candidates can still make it clear that they support a basic income. They can also support Rashida Tlaib’s “Lift Plus Act” which would issue a $3,000 / year grant to all. This measure would reduce the number of people in poverty in the US by forty-five percent. Who can say “no” to that?
Jason Burke Murphy teaches Ethics and Philosophy at Elms College in Massachusetts, USA. He worked as Head Organizer for Arkansas ACORN. He served on the Organizing Committee for the Youth Section of Democratic Socialists of America. He also served on the National Committee for the Green Party USA. He now serves on the National Committee for the US Basic Income Guarantee Network.
by Andre Coelho | Jul 11, 2019 | Research
Leah Hamilton (left) and James P. Mulvale (right)
Leah Hamilton and James P. Mulvale have researched into the implications of the truncated basic income pilot in Ontario, Canada. From a set of controlled, semi-structured interviews, five participants agreed to subject to the procedure. These participants had experienced both conditional welfare programs such as the Ontario Works and the Ontario Disability Support Program, and were beneficiaries of the Ontario basic income pilot until it was terminated by Doug Ford’s cabinet.
The conclusions show that the basic income pilot had effects that contrasted with those experienced by the participants in the traditional social security programs. So, while in the latter, participants felt trapped in “a cycle of precarity and dependence”, the former made them feel “human again”, since “they had always desired to be members of the workforce and gain financial independence”. The study’s conclusions also match other research efforts comparing traditional welfare with basic income type of experiments, which reinforces those same conclusions. It also refers the need to consider potential hidden savings in health costs, and additional economic activity brought by basic income policies. Those cost savings and potentially larger tax collection must then be a part of any serious effort to finance basic income, particularly in high-income countries.
The following abstract accompanies the article:
Neoliberal social assistance programs are broadly seen as inadequate and intrusive. This phenomenological analysis compares social assistance in Ontario, Canada, and a recent pilot project to test basic income as an alternative method of enabling economic security and social participation via qualitative interviews with pilot recipients who had previously received traditional assistance. Results indicate a desire to be financially independent, but that the conditionality of traditional programs had negative repercussions including work disincentives and deleterious bureaucratic hurdles. Respondents reported that basic income has improved their nutrition, health, housing stability, and social connections; and better facilitated long-term financial planning.
More information at:
Leah Hamilton & James P. Mulvale (2019) “Human Again”: The (Unrealized) Promise of Basic Income in Ontario, Journal of Poverty
Leah Hamilton, “Why Welfare Doesn’t Work: And What We Should Do Instead”, Basic Income News, June 29th 20128
by Andre Coelho | Jun 12, 2019 | News, Research
According to a recent report (May 2019) by UCL Institute for Global Prosperity (IGP), guaranteeing universal basic services (UBS), such as health care, education, child care, transportation and digital information, would be more beneficial to low income groups than universal basic income (UBI).
It is argued, in the referred report authored by Anna Coote, Pritika Kasliwal and Andrew Percy, that “extending public services is likely to be more effective in addressing poverty, inequality and wellbeing than unconditional cash payments to individuals”. That assertion is linked to a yet to be published article by Coote and Yazici called “Universal Basic Income, A literature review”, while the present report does not “consider the case for UBI in any depth”. The discussion defending UBS, in the report, seems then to be unilateral. However, cost considerations between the two systems, for the United Kingdom reality, have been done in a previous report (from 2017). From these calculations, the authors have reached the conclusion (stated after the 2019 report’s release) that UBS would cost around 10% less than UBI to implement in the country.
Andrew Percy, co-author of the report (supported by the Joseph Rowntree Foundation) and Citizen Sponsor at IGP, has said that “universal access to basic public services must be the foundation of 21st century welfare that delivers real social security, allows people to make meaningful choices about their work, and can be delivered in an affordable and practical way”, which doesn’t seem to pitch UBS against UBI. Others, like Will Stronge (Autonomy think tank) and Mathew Lawrence (Common Wealth think tank), explicitly consider UBI and UBS to be complementary in an evolving model for society.
Anna Coote. Picture credit to: Green European Journal
Anna Coote and co-author Edanur Yazici have also recently (April 2019) published another report (signing for the New Economic Foundation), entiled “Universal Basic Income: A Union Perspective”, which clearly rejects UBI in favour of a UBS. That study has been published by the global trade union federation Public Services International (PSI), financially supported by the Friedrich-Ebert-Stiftung foundation. This particular report was analysed by UBI activist Scott Santens, who has written that it is “a prime example of a disinformation campaign designed to manipulate public opinion against the idea of universal basic income”, and a “shameless propaganda” move.
The publication of the 2019 report on universal basic services, by the IPG, has also spurred a reaction in Guy Standing, a lifelong researcher, economist, author and activist for UBI. According to him, in an article published in Open Democracy, “there is no contradiction between having some public quasi-universal basic services and a basic income”. He adds, concluding, that these systems “address different needs and stem from different rationales. But having cash enhances freedom of choice, is potentially more empowering and can be more transformative. I plead with those advocating ‘Universal Basic Services’ to stop juxtaposing the idea of more and better public services with giving people basic income security.”
More information at:
Laurie MacFariane, “Universal services more effective than a Universal Basic Income, argues new report”, OpenDemocracy, May 16th 2019
Scott Santens, “‘Universal Basic Income Doesn’t Work’ Says New Prime Example of Fake News”, Medium, May 31st 2019
Guy Standing, “Why ‘Universal Basic Services’ is no alternative to Basic Income”, Open Democracy, June 6th 2019
by Andre Coelho | Jun 8, 2019 | News
Louise Haagh, presently Reader at the University of York, and Chair of the Basic Income Earth Network (BIEN), just released a new book, through Polity: The case for Universal Basic Income. A summary is featured on the editor’s page:
Advocated (and attacked) by commentators across the political spectrum, paying every citizen a basic income regardless of their circumstances sounds utopian. However, as our economies are transformed and welfare states feel the strain, it has become a hotly debated issue.
In this compelling book, Louise Haagh, one of the world’s leading experts on basic income, argues that Universal Basic Income is essential to freedom, human development and democracy in the twenty-first century. She shows that, far from being a silver bullet that will transform or replace capitalism, or a sticking plaster that will extend it, it is a crucial element in a much broader task of constructing a democratic society that will promote social equality and humanist justice. She uses her unrivalled knowledge of the existing research to unearth key issues in design and implementation in a range of different contexts across the globe, highlighting the potential and pitfalls at a time of crisis in governing and public austerity.
This book will be essential reading for anyone who wants to get beyond the hype and properly understand one of the most important issues facing politics, economics and social policy today.
Louise Haagh will be featured in several events and talks in the next few months, given this recent publication. These include Nuffield College, University of Oxford, Institute for Public Policy Research, University of Bath, BIEN Ireland, BIEN Congress in India, BIEN-RSA Civic Forum in Scotland, and at a range of local venues in the United Kingdom, for instance the Citizens’ Advice Bureau, Café Economique, and North Yorkshire Humanists, as well as internationally at the World Health Organisation‘s (WHO) High-level Conference on Health Equity in the WHO European Region, to be held in Slovenia.
More details can be found in an online Appendix.
