Korea: Interview with pro-UBI provincial governor

Korea: Interview with pro-UBI provincial governor

The Dream of a Just Society Found in Basic Income

[Interview] Meeting with Gyeonggi province governor Jae-myung Lee

Interviewed by Jun-ho Oh

Author of Basic Income Can Change Our World (2017, in Korean)

Translated by Hee Su Jung

“The combination of basic income, local currency, and national land holding tax will make the majority of the people happy.”

“It pains me to see people having no land misunderstand the national land holding tax.”

Governor Jae-myung Lee introduced the “Seongnam Youth Dividend” in 2016 during his term as the mayor of Seongnam city. It was a partial basic income, which provides 1 million won per year to 10,000 24-year-olds residing in Seongnam city. At the time, he faced negative reactions from the former Park Geun-hye government of South Korea and was criticized for being a populist, but gained strong support from local businesspeople and the youth.

After being elected as the governor of Gyeonggi province in the local election of 2018, Lee started to provide the Gyeonggi Youth Basic Income to 175,000 24-year-olds residing in Gyeonggi province since April 2019.

The amount of Gyeonggi Youth Basic Income is 1 million won per year, and it has been paid in local currency. The increasingly positive reactions towards the policy after the implementation of the Seongnam Youth Dividend helped to make this policy a reality throughout the province. Lee wants to go further than Gyeonggi Youth Basic Income and create a universal basic income covering all citizens of South Korea, along with the implementation of “basic income funded by national land holding tax” to fund the proposal.

The interview with Jae-myung Lee was held at Gyeonggi Provincial Government Building, at 11 am, June 20th, 2019.

Unlike other politicians, you are a strong advocate of the basic income movement. What aspects of basic income were you drawn to?

On one hand, basic income resonates with my dream of a just society. Also, I think that it is an unavoidable policy in order to preserve our societal system. The decrease in the importance of labor due to the fourth industrial revolution, and the current situation where a few wealthy individuals hold excess profits makes it nearly impossible to prevent society from collapsing. Historically speaking, when social inequality reached a certain point, the system collapsed. This may be what our society is facing, which is the reason why policies should be revisited. In my opinion, basic income may be our only choice. Another problem caused by the excessive concentration of wealth and exaggerated excess profits is that it decreases resource efficiency. Distributing wealth to the people, who have fewer opportunities to work compared to the past, will aid in sustainable economic growth, regime maintenance, ultimately achieving real freedom and equality.

There were a number of basic income experiments held abroad, but they primarily targeted the poor. In contrast, Gyeonggi Youth Basic Income was implemented where it was given to every single 24-year old. What is the significance of the policy?

As you know, basic income aims to provide all people with a minimum amount of livelihood regularly in cash. What we are doing here is limited to a certain age, so it does not completely correspond with basic income. It may be quite insufficient, but the form and principle are similar. I would like to stress that it was an introductory measure. As to the reason why I chose the youth to be the recipients, the youth these days are in the most disadvantageous position in their overall lifespan, but at the same time, they are least protected by the state. In the past, we used to say “The hardships of youth are invaluable,” “There is always a second chance” to young people who had ample opportunities, but the situation is different for the youth nowadays. I thought young people needed special political consideration. I also considered the ripple effect of the policy. It is not yet a perfect system, but a process of throwing a buzz to society. In terms of necessity, the young needed this most, and, I think, there would be an explosive power of a basic income policy for the young in making basic income a social agenda.

One of the unique elements of Seongnam city Youth Dividend and Gyeonggi Youth Basic Income is that they are paid by local currency. On the other hand, there are criticisms of the dividend not being paid by cash. Why did you choose local currency? (Gyeonggi province local currency can be used either in the form of a certificate or a rechargeable debit card. It can be used similarly as cash at affiliate stores in the region. Businesses with large revenue including big retailers are excluded.)

One reason is to overcome resistance. The notion of giving youth cash met criticisms of being populistic, and I had to admit that. New policies always meet resistance, no matter how ‘correct’ the policy is. But resistance decreases when the effect of the policy and the people who gain from it increases. Since it is a policy project funded by public finance, we have designed it to benefit the self-employed and the local economy as a whole, even though it may raise a few inconveniences caused by the local currency for the youth who use it. Another reason is about gaining the support of traditional market merchants and small businesses. This was an effect proven in the case of Seongnam city Youth Dividend. Sales of traditional markets in Seongnam city increased by 26% in the year 2016, when the policy was implemented.

You insist on giving all citizens universal basic income, going further than Gyeonggi Basic Income. At the Gyeonggi province basic income international conference held at April 29th, you have argued to “distribute profit that comes from the commons”, and are consistently arguing for the implementation of basic income funded by a national land holding tax. What is your specific plan in introducing universal basic income?

Making a new policy is important, as is combining necessary policies. One of the biggest problems in our society is the unearned income issue. People do not make creative efforts in a society with excessive unearned income. In such a society, people are trying to take power and take away power from others.

The problem of unearned income must be solved to build a ‘normal’ society where labor is respected and people are assured their share in accordance with their contributions. The biggest issue is a sharp increase in unearned incomes from lands and real estates. And that has significantly worsened compared to the past. One reason is the low real estate holding tax. The way to recapture unearned income from real estate is to increase the tax on it. Currently, real estate holding tax is about 0.3 percent. This is one-sixth of the automobile tax, which is about 1.8~2 percent despite the fact that it is the same type of tax based on property. Why is a tax on cars, usually owned by ordinary people, so high when the tax on land is so low? After fully understanding the situation, there will not be as much resistance towards raising tax rates to 0.5 percent, which is about half of the tax rates in advanced countries. By collecting 15 trillion won more in addition to this, we can pay each citizen 300 thousand won per year.

Is it to combine basic income and policies that aim to recapture unearned income from real estate?

Let us combine the important policy project of overcoming a ‘republic of unearned income from real estate’, and a basic income policy. It is an aim worth pursuing which will make the majority of the people happy. The combination of basic income, local currency, and national land holding tax make sense. This is how to raise support for my policies. You need to change people’s lives, gain support, and minimize opposition. For this, we had to start off with a partial basic income, small amounts of basic income and find a source of revenue that can be agreed upon among people. Land is the most typical type of common wealth and nobody can completely own land in this country, even though s/he has the ownership of that land. The Constitution states a public concept of land. Also, there is no reason for it to require a massive source of revenue at this moment. A child allowance implemented this year by the government is an example of a partial basic income. We can give out child allowance to children under seven, give basic income to 24-year-olds in Gyeonggi province, give basic pension to all the elderly regardless of income level in the future, and fill the gaps as we proceed. In the end, we will be able to build a basic income system even though it may be a low amount at the beginning. The amount can be increased. Implementing a basic income is not about financing sources, but about the authority’s will.

Distrust against the proper use of tax revenue is common in South Korea.

We need to get people to experience that if they pay tax, it would benefit them. 15 trillion won from national land holding tax might only pay 300,000 won per year to all citizens. But people will think “Did I get what I paid for? Would I get more if I pay more?” South Korea is a “low burden, low welfare” society and we need to increase both taxes and welfare. If we only support the poor, the taxpayers would think “Why do I have to pay taxes to help them?” In order to decrease resistance, we have to make the taxpayers think that paying taxes will benefit them. In the Nordic countries, people do not complain that they pay almost half of the GDP to tax, because the majority of the people benefit more than they pay. I want Koreans to have the same experience. After experiencing first-hand, it wouldn’t be difficult to increase basic income from 30,000 won per month to 50,000 won per month, or even more. This will allow for increasing taxation without resistance. At present, there is no taxation power for local government. One possibility is that the National Assembly makes related laws, based on the public concept of land stated in the Constitution, and local governments then enact the municipal ordinance.

Could you comment on the significance of what you’re doing for basic income supporters abroad?

While there were basic income experiments in other countries, we are actually implementing the policy. To be honest, the amount is not enough to result in experimental effects. 1 million won a year is insufficient as a basic income. But I am trying to spread the idea of basic income through this policy. Anyway, it will benefit over 150 thousand people a year, and hundreds of thousands for some years ahead. Even though we started with a small amount of basic income for a particular age group due to financial reasons, but we should expand the recipients and increase the amount in time. A national decision is necessary, which is ultimately made by the people. In order to do so, people need to know about the basic income idea and have a desire for it. I think this policy would help them with that.

Note. This article is a translation of an interview included in the first issue (link: https://basicincomekorea.org/wp-content/uploads/2019/07/BasicIncomeMagazine_Issue001-Summer2019.pdf) of Basic Income Magazine (quarterly published by the Basic Income Korean Network). The magazine is in Korean, and this article is a summarized version of the original article.

The American Dividend: In the Name of Prosperity

The American Dividend: In the Name of Prosperity

Written by: Conrad Shaw

There is an idea out there. It is of the transformational variety. It exists in various forms and goes by many names: universal basic income, basic income guarantee, negative income tax, citizen dividend. All of these monikers highlight important aspects of this concept. “Universal” because it applies to everyone with no conditional requirements. “Basic” and “guarantee” to emphasize that, rather than subsidizing luxury or ease, it’s about guaranteeing the right to simply live in dignity and security. “Negative income tax” to illustrate that tax structures can be understood and utilized not only as a way to extract money from the people, but also as a means of fair predistribution to those being underserved by our system. “Citizen” to encourage taking ownership of one’s community and obligations. “Dividend” to emphasize that it is not a form of charity, but a return on an investment, the rightful entitlement every one of us has to our proper share of this country’s resources and opportunities.

“A basic income is a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.”


-Basic Income Earth Network (BIEN)

This idea, if you haven’t heard of it before, is the simple premise that the government (composed of the people) would deliver a regular, guaranteed, and unconditional amount of income to every person in a society. Some argue that only citizens should receive it, some say legal residents, some suggest only adults, and some insist that every breathing human within the borders deserves the payment. There are valid arguments for all of these viewpoints, and I hope that soon enough we will have the good fortune of debating at great length these strategies on the national scale, because it will mean that the very premise has been accepted into our hearts and consciences as both essential and moral moving forward.

For that to happen, the idea must first inspire the support of the people as a whole, and because the United States is a nation of pride and marketing savvy, nothing sells here without a good, cohesive pitch. As a first order of business, we should settle on a name for our American version of this policy, and I have a suggestion:

The American Dividend

“American” because the only requirement is that you, in fact, are a part of this great country, and we will recognize that with your “Dividend,” your carried interest in the investment you and your family have made and continue to make in this country by merit of your participation in it.

On to the details. Perhaps alarm bells are ringing and red flags are waving for you right now. “That sounds like socialism,” you might point out. I freely admit that it is a socialistic policy, and I argue that an appropriate amount of socialism is essential in a successful and just society – even a capitalist one. We seem, in America, to cling to the naive idea that we can or should only have one or the other, socialism or capitalism. That idea has run its course; we must have both. Neither of these simple, broad ideologies is robust enough to run our complex economy alone, because our economy is not only one of markets, but also of human beings. Markets run by the laws of supply and demand, and are greatly motivated and spurred on by capitalism, the great incentivizer. A purely socialized, redistributive society in which all citizens received the same reward regardless of their contributions could squash the immense growth, motivation, and innovation that capitalism fosters. Human beings, though, survive and thrive by the natural laws of inalienable rights, defined and set out by and for ourselves as entitlements to which we are guaranteed by dint of nothing other than our humanity. Socialistic regulations are required to make sure we adhere to these natural laws. Healthcare, for example, must eventually be socialized and untethered from the need for financial means, because no supply and demand curve can fairly measure the value of health. The demand is infinite, because a sick or dying individual will agree to pay any amount for even a chance at survival. This is where capitalism fails. It eventually localizes far too much power in the hands of the few, the owners of property and corporations, and we find ourselves in a situation closer to extortion than free markets.

My argument even leaves aside our very significant problem with automation. As we continually and irretrievably lose massive chunks of our labor market to machines, these pressures toward economic inequality will exponentially intensify. Properly addressed, however, these same technologies could provide abundance to society rather than greater scarcity and insecurity.

The answer to the question of growing complexity in human and economic markets is not to throw away our hard-won structure as a total failure, but rather to keep tweaking the capitalism/socialism balance to calibrate it to the changing needs of the times. In determining what should be socialized, we can tie it all back into life, liberty, and the pursuit of happiness. Written deep within our American values, these freedoms are the inheritance of all people regardless of circumstance, be it race, culture, gender, age, or financial means. Life requires, at the very least, food, shelter, and health. Liberty and the pursuit of happiness require the ability to choose one’s path without fear of harm or retribution from any authority, and without fear of starvation. Our system has never fully guaranteed these things, and so we have not yet managed to fulfill our constitutional mission statement. The American Dividend can be used to ensure those rights. It can guarantee all people the ability to feed and house themselves as well as the power to say NO to any path in life that doesn’t serve their interests, be it a line of employment or an unhealthy relationship.

If we understand that we have always lived in a blended society of both socialism and capitalism, we can let go of our distrust of these words, our reflexive labeling of them as inherently evil or good, and instead see them simply as tools in the constant balancing act of governance.

Let’s address the two main sticking points the American Dividend will encounter: 1) the fear/resentment of subsidizing laziness by paying hard-earned money for others to sit around and do nothing, and 2) the very prudent concern that it might be simply infeasible to fund a program of such broad scope – essentially the fear that we can’t afford to guarantee these rights to all.

Paying for Sloth?

As to subsidizing laziness, this fear is created and nourished by a skewed perspective in the American capitalist culture that money is the driving motivator for work. We place the dollar on a pedestal far above all others, but money does not deserve this worship. The adage that money is the root of all evil is myopic. Insecurity is the root of evil, and money, or more accurately the lack thereof, is merely our means of expressing and comprehending insecurity. Whereas money is nothing but a tool, poverty is a force. It is the lack of freedom. Because we have been inculcated our entire lives with the idea that money represents value and merit, we have fallen into a misunderstanding of our fellow human beings. We have descended into the weary and preoccupied mind’s fallacy of “othering.” This is to say we have allowed ourselves to perceive the other members of our society as opponents, statistics, enemies, leeches, and threats to our own security. When we are in constant competition mode, we forget the other players for the sake of the game.

When we take the time to truly examine and understand our neighbors, compatriots, brothers, and sisters, however, we see that they are merely reflections of ourselves. We all have hopes and dreams; we all want to be special; we all want to contribute. The current system, which clumsily attempts to reward valuable effort but often disincentivizes hard work and ethics, leads people to despair and apparent laziness, sapping their motivation. In its current form, welfare assistance disappears the moment someone gets a job and increases their income, creating welfare traps. Additionally, other societally valuable endeavors like child-rearing, home healthcare, the arts, furthering education, and entrepreneurialism aren’t deemed worthy of any kind of salary in this economy. They can only be done on faith, at a loss, and at risk of harm to oneself. Throughout human history, a great majority of the movers and shakers of the arts, sciences, and business have had the luxury of pursuing their passions without earning an income from an employer because theyither came from means or they gained access to a benefactor. Wouldn’t it be something new and remarkable if those rich in inspiration and motivation but lacking an inheritance or extreme risk tolerance weren’t forced to spend years of their lives struggling to survive, seeking funding, essentially asking permission from corporations and the owner class in order to pursue the realization of their visions? With guaranteed security and the freedom to choose one’s work and define one’s value, people will contribute their best selves, and we can slowly change our national ethic from one of taking and hoarding to one of contribution. Productivity increases, health improves, and crime decreases in a society that chooses not to allow poverty, thereby permitting its members to be more effective versions of themselves. “Survival job” should not be a term, and a gun to the head is not nearly as effective a motivator in the long term as the ability to pursue meaning in life.

But the Cost!

Now comes paying for it all. Let’s do some simple, back-of-the-napkin, ballpark math for the numerically inclined. To immediately raise every American above the poverty line, we could provide a dividend of $12,000 per year to every adult and $4,000 per year to every child. That’s a bit under $3.25 trillion, which is certainly a huge number, but it’s not a direct expense. Think of it this way: the US GDP is approximately $18 trillion. If a simple across-the-board tax increase was levied on every American to raise that full amount for the dividend, a flat tax plopped down on top of our progressive system, that would mean about an extra 18% in taxes we’d each pay. That may sound like a lot, but since every taxpayer would also be receiving an extra $12,000 in income, then everyone making under $66,000 would come out ahead to some degree. At the $66K breakeven point, an individual would be paying $12K in extra taxes to receive the $12K in dividends. You can plug $66K into this US income percentile calculator and see that this represents over 75% of all Americans who would receive more money under this policy than they would give in taxes to pay for it, thereby directly profiting at the same time as we strive to completely abolish extreme forms of poverty and homelessness. That in itself should make the American Dividend a no-brainer.

However, a uniform tax levy like this is far from the only source of funding at our disposal. We could fund a large part of the American Dividend in many other ways. Taxes on the use of resources can chip in quite a bit. Taxes on carbon, pollution, minerals, timber, land value, and other natural resources acknowledge that we all own the land in equal share and would simply require companies profiting from and often damaging our commonly-owned property to repay the costs we bear by permitting them to do so. This would also discourage abuse of resources and incentivize more ecologically sustainable innovation. Very small taxes on financial trades would both reduce harmful speculation currently performed on a massive scale by large institutions with black box algorithms –  encouraging long-term investment in its place – and it would acknowledge that we all own the financial system in this country and deserve a return from its continued function. Cutting tax exemptions that benefit the wealthy  almost exclusively — scrapping the social security tax cap, raising unearned income tax rates to at least the level that earned income bears, cutting the home mortgage deduction, and a host of other such measures — would fund a significant part of the dividend. These measures are long overdue in any case and would represent a strong step forward against the economic injustice in our current system. Finally, raising the income tax rates on those in the very top brackets would acknowledge the fact that these earners have attained their position not only through intelligence and merit, but also through the good fortune of living within a system that allows for a few to leverage their positions to reap enormous returns — a system of laws, infrastructure, and opportunity that has been built over the course of generations, a system that each of us owns in part and deserves a share of. Factor in these methods, and we could pay for much of the dividend. As an example, if we paid for a third of the dividend this way (an entirely feasible amount according to the economists with whom I’ve spoken), it would bring the necessary tax increase down to around 12% and the break-even point to everyone making under $100K. Plug that into the calculator and see for yourself that more than 88% of the country would directly and immediately profit from the American Dividend under this scenario. Someone out of a job or unable to work would receive the full $12,000. Someone making $50K would come out $6,000 ahead. Someone breaking even at $100K will know that they are part of a stable system that will protect them should their fortunes turn for the worse. So, while it will end extreme poverty as we know it, the American Dividend is clearly not just for the extremely poor. It is for all Americans.

What’s more, we haven’t even factored in the savings yet. When people are secure, healthcare costs fall, crime drops, and entire welfare programs can eventually be phased out. This pushes the break-even point even further upward. This is not yet even accounting for the benefits reaped from fueling innovation and entrepreneurialism. Also, unlike the failed policies of trickle-down economics under which much of the money this country makes lands in wealthy bank accounts and simply sits there, money given to the lower classes is generally spent immediately on necessities and better quality of life, equating to a massive boost in the overall economy as businesses gain new customers across the board. It would be presumptuous to predict the actual magnitude of these windfalls, but I would bet you the American Dividend, in very short order, would begin to pay for much of itself.

Bear in mind this is not a panacea, and we mustn’t perceive or promote it that way. The American Dividend will not immediately usher in a new Utopian Age, and there will still be some that need help, but it has the power to effectively end catastrophic poverty and homelessness. It will grant all Americans a real shot at the American Dream. It will mean a simpler governmental system, a change of social and cultural ethics, and a betterment of individual quality of life across the board. And we have the means to do it. All we need is the political will of the people to stand up and demand it.

Give it to Me Straight

So tell me, if this idea of an American Dividend can: 1) end homelessness and catastrophic poverty, 2) establish and reinforce basic human rights and security across the nation, 3) improve healthcare outcomes and reduce costs, 4) reduce crime, 5) encourage entrepreneurialism, 6) act as an economic stimulus, AND 7) result in an immediate net income gain for the vast majority of the population… tell me how can this idea not sell? How can it not sweep the nation? Tell me it’s not an issue of marketing savvy.

And tell me, now that you’ve seen my arguments about the wider economic implications, what would you do with your Dividend? Take a little time and play out the thought experiment. Now imagine what your brother, mother, sister, father, son, daughter, friend, neighbor, boss, coworker, employee, or passing acquaintance would do with it? What would each be able to contribute? What would your community look like? What would America look like?

It’s time for the American Dividend.

Check out our upcoming film, Bootstraps, at www.bootstrapsfilm.com


Let’s eliminate negative basic incomes

Let’s eliminate negative basic incomes

What is a negative basic income?

“A basic income is a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.” A negative basic income would be one where a periodic cash payment is unconditionally demanded from all on an individual basis, without means-testing or a work requirement. This is nothing but a per-head tax or a poll tax, a payment for existence, an equal amount taken from everyone, unconditionally.

The extreme unfairness is apparent. How can you take the same amount from the billionaire and the beggar? Not surprisingly, there have been very few pure poll taxes in history – most had a number of exclusions, especially for the poor. However, there is a different kind of per-head tax that is large, widespread, and right under our noses. This is when there is loss or diversion of the commons.

Let’s take a toy example to understand this. Imagine a tiny commons, 100 people who own a 1 kg slab of gold in common, inherited from the past. As they are worried about theft, they store it under the protection of the local deity. But it is a continual worry. The community decides to sell the gold, and to invest in a piece of land. They reason that at least the land can grow a crop, whereas the gold generates no income. As long as they maintain the fertility of the land, they can all share the crop. This would be the equivalent of a commons dividend or a cooperative dividend, essentially a Universal Basic Income for the community.

Now imagine that when they go to sell, they find the gold is simply stolen. Clearly it is a loss of 10 grams each (100 persons x 10 grams = 1,000 grams = 1 kg). This is nothing but a per-head imposition of the equivalent of 10 grams of gold. Since it is an inherited asset, the loss is suffered by all future generations as well. In a different sense, the loss is the opportunity to receive the commons dividend, the universal basic income in perpetuity.

We can extend this logic to diversion of either the capital (the value of the gold), or the income stream from the new asset (the land). If the government appropriates the value to finance infrastructure or health or education, it is still effectively financing these investments with a hidden per head tax.

This is even clearer in the instance of the fruit of the land and the commons dividend. If the government appropriates the entire crop, then it is identical to distributing a commons dividend as a basic income, and taxing it simultaneously to the exact same extent – the negative basic income.

This kind of underselling of the commons is widespread, particularly in minerals. To take a couple of examples, it has been estimated that the United Kingdom and Norway have extracted approximately equal amounts of oil from the North Sea. However, the United Kingdom received approximately GBP 400 billion less than Norway[1]. For a population of 64 million, this is a loss or a poll tax of GBP 6,250. Had this amount been saved, it could have financed a Citizen’s Dividend of GBP 250 in perpetuity, assuming a real return of 4%.

Another common problem is that the money received for the minerals is treated by the government as taxation revenue, not as the sale of the commons. Consequently, instead of creating a new asset, such as the land in the toy example, or more seriously, Future Generations Funds or Permanent Funds, the government simply spends the money as income. While this boosts the GDP figures, it is both the consumption of our inherited asset as well as the hidden imposition of a per head wealth tax. . Alaska only deposits 25% of its money from oil in to its Permanent Fund. The remaining 75% is treated as revenue in the state budget. This year, Alaska’s Permanent Fund Dividend was set at US$2,072. By extension, the remaining 75% that was spent through the budget could have financed an additional dividend of $6,216 per annum.

The Norway oil fund presently saves all receipts from minerals in the Norway Government Pension Fund. This is the single largest fund in the world, approximately USD 900 billion. However, instead of paying out a commons dividend or a Citizen’s Dividend, the money is appropriated into the budget. This is clearly equivalent to imposing a per head tax on all Norwegians. The 2016 budget estimates a transfer of NOK 208,994 million to the budget[2]. For a population of 5.084 million[3], that is a negative universal basic income of NOK 41,108, or approximately USD 4,863[4]. It is doubtful that any modern democracy can impose a per head tax of such a staggering amount.

The Goenchi Mati Movement, a people’s movement in Goa has adopted simple principles that they advocate for governing mining of the commons. In short, the principles are:

  1. We, the people of Goa, own the mineral in common. The state government is merely a trustee of natural resources for the people and especially future generations (Public Trust Doctrine).
  2. As we have inherited the minerals, we are simply custodians and must pass them on to future generations (Intergenerational Equity).
  3. Therefore, if we mine and we sell our mineral resources, we must ensure zero loss, ie. capture of the full economic rent (sale price minus cost of extraction, cost including reasonable profit for miner). Any loss is a loss to all of us and our future generations.
  4. All receipts from minerals must be saved in the Goenchi Mati Permanent Fund, as already implemented all over the globe. Like the minerals, the Permanent Fund will also be part of the commons. The Supreme Court has ordered the creation of a Permanent Fund for Goan iron ore and already Rs. 94 crores is deposited.
  5. Any real income (after inflation) from the Goenchi Mati Permanent Fund must only be distributed to all as a right of ownership, a Citizen’s Dividend. This is like the comunidade zonn, but paid to everyone.

We argue quite simply that any other structure would impose per head taxes, which is fundamentally regressive and obviously unfair. The principle of zero loss mining was clearly violated in the UK receiving GBP 400 billion less than Norway. The principle of saving all receipts from minerals is widely violated, largely due to the way governments account and report for this – windfall revenues instead of it being a capital receipt. And where permanent funds do exist, in most cases the government appropriates the income instead of distributing it as a commons dividend.

This problem is not confined to minerals. All over the world, the commons are being destroyed at a rapid rate. For example, the “Mickey Mouse extension” of copyright is also nothing but a transfer from the commons to the private sector, an imposition of a negative basic income.

It is time that activists for basic income seriously hunt out instances of negative basic income. Simply eliminating them could achieve many of the desired benefits of basic income, with a moral argument in favour, rather than the uphill battle of helicopter money.


About the author: Rahul Basu


[1] Did the UK Miss Out on £400 Billion Worth of Oil Revenue?, David Manley & Keith Myers, Natural Resource Governance Institute, 5 October 2015

[2] https://www.statsbudsjettet.no/Upload/Statsbudsjett_2016/dokumenter/pdf/budget2016.pdf

[3] https://www.google.co.in/search?q=population+of+norway&oq=population+of+no

[4] Google. 1 NOK = 0.12 USD, 41,108 NOK = 4,863.76 USD. 13 Dec 2016, 12 noon GMT

CHINA: Macao gives an annual state bonus to all citizens

CHINA: Macao gives an annual state bonus to all citizens

In order to share the fruits of economic development with the general public, the government of the Macao Special Administrative Region (SAR) in China has given an annual state bonus to its all citizens since 2008. This so-called “Wealth Partaking Scheme (WPS)” is mainly funded by the revenue of local lottery industry. Permanent residents received 5,000 patacas [US $627(1)] in 2008. This amount has risen continually up to 9,000 patacas [US $1,128] in recent years. Non-permanent residents receive 60% of the amount received by permanent residents.

In addition to the WPS state bonus, the Macao SAR government has injected more capital into all qualified Provident Fund Individual Accounts since 2010. Provident fund individual accounts are provided to Macao SAR residents of the age of 18, and they used to receive the “incentive basic fund” and “special allocation from budget surplus”.

The incentive basic fund is a one-time monetary payment of 10,000 patacas [US $1,253]. All owners of provident fund individual accounts are entitled to this payment during the first calendar year after they have reached the age of 22, provided that they have been permanent residents of the Macao SAR during the preceding calendar year (and stayed in the region for at least 183 days out of the year).

The special allocation from budget surplus is an extra fund injected into the qualified accounts annually after the incentive basic fund. This extra fund was 6,000 patacas [US $752] in 2010, and now it is 7,000 patacas [US $877].

In 2016, Macao citizens’ average monthly income is 15,000 patacas (US $1,880) and the minimum wage is about 6,000 patacas per month. More than half of Macanese think the above two polices are the most important contributions of SAR’s administrative program.

(1) – At August 2016 exchange rates.

More information at:
Governo da Região Administrativa Especial de Macau [Special Administrative Macao Regional Government], “Plano de Comparticipação Pecuniária no Desenvolvimento Económico do Ano 2016 [Wealth Partaking Scheme]”, 2016

Governo da Região Administrativa Especial de Macau [Special Administrative Macao Regional Government], “Fundo de Segurança Social [Social Security Fund]”, 2016

Karl Widerquist, “Macau: Government Distributes Temporary Basic Income”, Basic Income News, August 23rd, 2014

Karl Widerquist, “China: Macau residents to receive annual basic income”, Basic Income News, June 30th, 2015

Article reviewed by André Coelho and Kate McFarland.