by Kate McFarland | Dec 15, 2016 | News
The idea of a universal basic income (UBI) is rising in popularity in India, where it is often seen as a way to streamline and expedite the distribution of aid to the poor, avoiding the corruption and wastefulness that plague current social welfare programs.
In a recent article for LiveMint, the economist Himanshu (Associate Professor at Jawaharlal Nehru University) contrasts this view of UBI with its perception in developed nations that enjoy mature welfare states, such as the Nordic countries. Himanshu contends that developing nations are more likely view UBI as substitute instead of a supplement to existing programs.
He goes on to argue that, contra extreme forms of the “substitution” view, even developing nations such as India should adopt UBI only if it is accompanied by other reforms aimed at improving and increasing the availability of public services:
Given the huge deficits in availability of public education and health facilities, UBI can only increase the demand for these services without increasing the access to these services. While dependence on private providers may fill the gap in the long run, it does not absolve the state from providing universal provision for these services.
Himanshu states that UBI can promote better social and human development outcomes only given “adequate provision of basic social services”.
The article is clear to differentiate the question of universal/targeted transfers from that of cash/in-kind transfers. Leakages and corruption, he says, are problems that accompany targeting, and they have been largely eliminated in states that have shifted to universal provision of services. Yet this leaves open the question of whether the universal benefits ought to be provided in-cash, in-kind, or both.
For more contributions to these debates, see the recent articles by Maitreesh Ghatak, Abhijit Banerjee, Pranab Bardhan, and Vijay Joshi. Some of these economists, like Himanshu, stress that a UBI must supplement, rather than replace, other social services. At the same time, the inefficiency of the present welfare system is a clear common theme in their work.
Reference
Himanshu (November 8, 2016) “Is India ready for universal basic income?” LiveMint.
Reviewed by Genevieve Shanahan
Photo: Free medical camp held in India CC BY-ND 2.0 Welfare party
by Kate McFarland | Dec 3, 2016 | News
Baijayant “Jay” Panda, a member of the lower house of the Indian Parliament (Lok Sabha), believes that India should consider a universal basic income (UBI) to replace its current social welfare programs.
Panda describes India’s current socials programs as “grossly inefficient, corruption-ridden, misdirected towards the better-off, and thus unable to achieve stated objectives”. These wasteful programs already need replaced. With this in mind, Panda argues that a UBI could be more affordable in India than in a high-income nation like the United States or Switzerland–citing economists such as Pranab Bardhan (University of California, Berkeley), Vijay Joshi (Oxford), and Maitreesh Ghatak (London School of Economics) for additional support. (One might additionally mention Abhijit V. Banerjee, an MIT economist and adviser for GiveDirectly’s basic income pilot.)
Jay Panda belongs to Biju Janata Dal (BJD), a centrist party in the state of Odisha. BJD holds 20 out of 545 seats in the Lok Sabha, having won 20 out of 21 seats for Odisha in the 2014 general election, and eight out of 245 in the upper house (Rajya Sabha). BJD is the dominant party in the Odisha legislature, where it holds 117 out of 147 seats. Panda is a member of the Parliamentary Standing Committee on Commerce and the Consultative Committee for the Ministry of Human Resource Development.
Earlier in 2016, Varun Gandhi, MP from India’s ruling Bharatiya Janata Party, endorsed basic income in an article for The Hindu.
More recently, India’s Chief Economic Adviser, Arvind Subramanian, has stated that the government will investigate UBI as part of the next annual Economic Survey of India.
Read More:
Baijayant ‘Jay’ Panda (Oct 27, 2016) “Cash To All Citizens: Universal Basic Income could actually work better in India than in rich countries” Times of India.
Reviewed by Genevieve Shanahan
Photo: Baijayant ‘Jay’ Panda speaks at Brookings panel, CC BY-NC-ND 2.0 Brookings Institution.
by Kate McFarland | Nov 24, 2016 | News
The Goenchi Mati Movement advocates for the reform of mining practices in the Indian state of Goa. Its proposals include the investment of all money from iron ore mining into a permanent fund, which would be used to finance a citizen’s dividend.
Similar to Alaska’s Permanent Fund Dividend, the fund’s income would be distributed equally to all citizens in the form of an unconditional cash grant, providing all Goans with a basic income.
Founded in 2014, the Goenchi Mati Movement (GMM) aspires to reform mining practices that it believes to deprive residents of Goa their deserved share of the natural resources in their homeland, while also rapidly depleting these resources and damaging the environment. Describing the state’s mining practices, the GMM’s Manifesto says, “The total loss was enormous: nearly twice the state revenues, or over 25% of per capita income, or thrice the poverty line. The loss was effectively a per head tax equally on everyone. A few have become rich from our children’s inheritance. This is clearly not a reasonable situation.”
While iron ore mining has a long history in Goa, it expanded rapidly during the mid-2000s, and quickly became plagued with malpractice and illegal activity. In September 2012, the Supreme Court of India temporarily suspended mining in the state while hearing a public interest litigation. In its final judgement in April 2014, the Supreme Court declared all mining activities to have been illegal, largely due to mining companies’ lack of valid leases and licenses.
The environmental action group The Goa Foundation submitted a series of letters to the government of Goa in 2014, wherein it demanded the recovery of losses due to illegal mining and a restructured mining system based on the Goenchi Mati Principles. However, the government did not respond and began renewing the leases of Goa’s iron ore mines near the end of the year. By early 2015, the government had renewed the leases of 88 mines.
The GMM Manifesto
The Goenchi Mati Movement has published a Manifesto that outlines its proposal, which centers on six core principles (bold typeface in original):
1. We, the people of Goa, own the minerals in common. The state government is merely a trustee of natural resources for the people and especially future generations.
2. As we have inherited the minerals, we are simply custodians and must pass them on to future generations.
3. Therefore, if we mine and we sell our mineral resources, we must ensure zero loss, i.e. 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 the money received from our 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 [about 3.8 million USD] 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. [The comunidades of Goa are traditional villages in which land is owned collectively. Comunidades pay an annual dividend, called the zonn, to residents.]
6. The implementation of these principles will be done in a transparent participatory process with the people of Goa.
The GMM launched its Manifesto at a press conference on Monday, November 21, and hopes soon to publish it in multiple languages, as well as to develop a variety of supplemental materials (e.g. animated explainer videos, video-based FAQs, and even songs and street theatre).
GMM’s Claude Alvares and Rahul Basu at press conference
The Permanent Fund and Dividend
As stated in the manifesto, an important first step towards the creation of a Goan iron ore permanent fund is already in place: in April 2014, the Supreme Court of India issued an order that mandated the establishment of such a fund, which presently holds Rs 94 crores (or about 3.8 million USD). Commenting on the significance of the permanent fund, Rahul Basu of the GMM states, “It is, to our knowledge, the first such permanent fund on intergenerational equity grounds to be ordered by judicial pronouncement. If it stands up to the legal challenges, which will then also clarify some aspects of the order, it can become a global legal precedent, which makes it potentially very powerful.” However, the Supreme Court’s order did not require that the permanent fund be used to finance a citizen’s dividend.
GMM Workspace
According to the Goenchi Mati Movement, the citizen’s dividend is a crucial component of the mining reforms for several reasons. First, it gives Goan citizens a stake in the minerals in their land, creating a stronger bond between the citizens and the commons (as one of GMM’s blog posts puts it).
Second, it leaves the government without money from the sale of the state’s minerals. In the absence of money from iron ore, the government might then be forced to tax its citizens to raise revenue. Following thinkers like Daron Acemoglu and James Robinson (the authors of Why Nations Fail), GMM argues that this change would promote good governance: “If the government wants to do all the various good things that need to be done, let them make a case to the people directly. If the people feel the government is good, they will agree to whatever new tax is imposed.”
Third, it compensates for what GMM sees as a bald injustice. As Basu describes it, any appropriation of parts of the commons–such as minerals and the land containing them–is effectively a “per head tax” or a “negative UBI” (that is, a practice that takes a share of resources away from every citizen).
Further reflecting on the moral significance of the dividend, Basu comments:
“Fundamentally, we are turning a lump sum mineral into a perpetual stream of Citizen’s Dividend. The Citizen’s Dividend today is given equally to everyone, achieving intragenerational equity. The perpetual nature of the Citizen’s Dividend achieves intergenerational equity. In a sense, each generation benefits to the extent of the real income. From this, we get to a practical example of the Golden Rule (the principle of treating others as one would wish to be treated oneself), but even across generations.”
GMM has been influenced by the model of Alaska’s Permanent Fund and Dividend, and also considers itself closely aligned in its thinking with Our Children’s Trust, an Oregon-based organization that promotes global action for the adoption of carbon tax and dividend policies.
Speaking about GMM, BIEN co-founder and honorary co-president Guy Standing said:
This is the optimum way of promoting community development while giving every man, woman and child a sense of basic security and pride in their community. It is enlightened, it is sensible, and it is eminently feasible.
Goan State Elections
With state elections to take place in early 2017, the Goenchi Mati Movement is urging Goans to vote only for politicians who will implement its Manifesto, and is currently devoting much of its attention to this political action.
As other sources confirm, mining policy is expected to be a central area of debate in the 2017 state elections. The Aam Aadmi Party (AAP), a relatively young party in Goa, promises sustainable mining practices, while meanwhile calling for a doubling of the mining cap. Meanwhile, environmental groups such as the Goa Foundation oppose the AAP’s plans, calling for greater restrictions.
The two major parties in India, the Bharatiya Janata Party (BJP) and the Indian National Congress, were in power during the controversial and illegal practices documented by the Goa Foundation — the Congress while the illegal mining practice themselves were occurring, and the BJP when the leases of the companies were renewed.
GMM states, “We urge whichever Government is elected in 2017 to immediately cancel the leases and reframe a fair and just mining policy for the people of Goa. We request the Public to join our campaign, fight for what is rightfully theirs and urge them to vote for those politicians that will change the system.”
GMM has produced a short video to emphasize this message:
Other Activities
Outside of direct political action, the Goenchi Mati Movement has been adopting other strategies to raise awareness of its vision. For example, on November 11, it sponsored an art show intended to promote reflection on the shared inheritance of the citizens of Goa. While this initial show was centered on paintings, GMM plans to host a second art show featuring cartoons, and third featuring photography.
Basu states, “Artists are at the leading edge of thinking, and they influence the masses in subtle and long term ways.”
Scenes from GMM’s Art Exhibit
Additionally, the Goa Foundation is engaging in litigation — a challenge to the structure of the Goan permanent fund (including the demand for citizen’s dividend), and a challenge to the 2014-15 lease renewals of the mines — and beginning to undertake academic research.
GMM Members at Create-a-Thon
BI-Related Reading from GMM
Rahul Basu and Deepak Narayanan (August 3, 2016) “Viewpoint: What can we learn from a campaign for zero-loss mining in Goa?” Citizen’s Income Trust.
Connects the activities of the Goenchi Mati Movement to the worldwide movement for basic income. Published on the blog of BIEN’s UK affiliate, the Citizen’s Income Trust.
Goenchi Mati (September 20, 2016) “Why should all mineral receipts be saved in the Permanent Fund?”
Argues that mineral receipts should be saved only in a permanent fund.
Goenchi Mati (October 28, 2016) “Why a Citizen’s Dividend? Why only a Citizen’s Dividend?”
Addresses the counterargument that some of the revenue of the iron ore permanent fund should go to the government instead of directly to the citizens.
Longer Video on the Goenchi Mati Movement (22:59)
Thanks to Rahul Basu for supplying information and photos, and for reviewing an earlier draft of this article.
Cover Image CC Frederick Noronha
by Kate McFarland | Nov 19, 2016 | News
Earlier in 2016, the economist Vijay Joshi, Emeritus Fellow at Oxford, published India’s Long Road to Prosperity, in which he argues in favor of a universal basic income in India.
More recently, Joshi summarized his position on UBI in a post at the Economic Times Blog, maintaining that the policy is advisable as a way to guarantee a minimum income floor for all Indians, while also allowing the country’s “dysfunctional” system of price of subsidies to be replaced. Joshi admits that basic income could be a difficult sell politically, but he calls it a “defeatist position” to fail to advocate for UBI for this reason.
Vijay Joshi (October 17, 2016) “Universal Basic Income is worth fighting for, even against the long odds in its implementation” The Economic Times Blog.
Photo CC BY-NC-ND 2.0 sandeepachetan.com
by Dave Clegg | Nov 16, 2016 | Opinion
The London-based Apolitical website’s article on basic income (BI) opens with “Money for nothing – it sounds like a utopia” and then looks at some examples of BI concepts that have already been applied around the world.
This phrase, “money for nothing” represents a commonly held bias that, when there is no commodity returned for the money, whether that commodity is a thing or someone’s labour, then there is no tangible value returned for the monies. This bias is widely held and promoted by many adherents of modern-day economic theories – a bias which too often dismisses, or simply ignores, the numerous personal and societal benefits that others have evaluated and documented as attributable to BI models.
The article does a fairly good job of maintaining its organizational claim of being “apolitical” in that it does not overtly favour any particular side in the issue. Yet that does not mean it has escaped the narrow-minded focus that so many politicians, their handlers, and media commentators alike have grudgingly adopted regarding the BI. In fact, the Apolitical article offers a wonderful example of the very limited ways in which the BI idea is being appraised, namely as simply a response to job automation and/or carrot-and-stick welfare programmes.
Apolitical does, occasionally make mention of the fundamental roots of a BI, roots that run far deeper than simply jobs and poverty. Yet to emphasize that a BI is simply about addressing poverty or unemployment is to overlook the very foundation of a BI – namely that such a policy is meant to be an expansion upon, and commitment to, something that should never be commodified, namely personal freedom. All other aspects of a BI flow from this fundamental premise. That is, if a nation and its people are sincerely committed to the idea of freedom itself.
The five points made by Apolitical in the above article are all legitimate and commonly discussed around the world. Yet the shallowness of these points is intricately tied to the same old penny-pinching issues that surround welfare, as well as the easy access to cheap human labour that employers have enjoyed for far too long.
Yes, a BI can help eliminate the stigma and overbearing bureaucracy associated with welfare programmes. It would also force employers to be truly competitive regarding employee wages and hours. However, the most valuable asset each and every person possesses is our time in this life. We should be the stewards of that time – not employers and not bureaucrats. It is the personal freedom provided by a BI that is truly important to everyone, not just the workforce and welfare recipients.
A BI would allow individuals to tend to family and personal concerns without the anxiety of how to survive without a “job” income during these times of personal need. For example, if a family member severely injured as the result of a car accident. The family of this person may be too young for jobs, or on very low income as they had been relying upon the injured family member for income and cannot afford a carer to help in these times. In this case, a BI would help tremendously. Some might say that they can seek a uber accident attorney Glendale or a personal injury lawyer in order to seek compensation and financial security. Indeed these cases can bring great compensation, but court cases can take time, what will the family do in the meantime? Again, a BI would allow individuals to tend to family and personal concerns should anything happen. There may be no greater freedom than to have the time and economic stability necessary to order our lives as we, ourselves, see fit, rather than as employers demand, as is becoming far too common these days.
Politicians are slowly coming to accept that individuals are the best stewards of their monies, not bean-counting governments who tend to value the beans over the people the beans are intended for.
Let us examine each of Apolitical’s five points to see how personal freedom is addressed here.
1. Governments are not thinking the same as tech optimists
Apolitical is right about this and politicians are notoriously slow to respond to social changes of any kind, never mind one of this magnitude. Yes, the tech optimists foresee an evolutionary step in human time management when robotics and automation take over the monotony and the drudgery of the repetitive and injury-prone tasks found in so many labour-intensive “jobs”. Of course, these robotic inventions will not come soon enough to stop so many of our hardworking population from getting injured. In the meantime, if you’ve been injured at work, you will likely be entitled to personal injury compensation. Hopefully, the workforce of tomorrow will mean fewer people will have to take legal action in the future. If at all an employee needs to take some legal action but do not know where to head out for the same, check for firms similar to Douglas Beam, P.A. We should create a new workforce that is far more reliable (never taking time off), disposable (without regrets or complaints), and economically more efficient than human beings.
From the technologist’s viewpoint, a BI becomes an essential aspect of employment and personal advancement because of the accelerating pace of technological advancement. Every new innovation requires that the humans who will be utilizing those innovations undergo time-consuming training and up-skilling. These advances can even lead to whole new careers for which a BI would be the springboard to pursue those educational and up-skilling goals. To tech experts, this is not “money for nothing” but instead an investment in the future of the nation, its economic infrastructure, its people and its economy.
But there is also a very real need to understand how a BI frees workers – especially those who only have labour, rather than any marketable skills or training, to sell – from the spectre of destitution and homelessness if they are unable to find work, or simply to feed and/or shelter themselves on the meager, subsistence wages offered today to unskilled labourers.
Of course, time management in this case refers only to the workplace. What is overlooked here is the personal freedom that a BI introduces into the optimist’s time management scheme. A BI would provide an individual with the economic freedom to then choose to acquire more skills or education, or to spend more time with family, or to take a much-needed break. This freedom is of great value to the individual, as well as their future prospects, but has little or no meaning to many economists.
Apolitical, however, does make a very good point about welfare reform. It is true that eradicating the expensive and needlessly patronizing welfare bureaucracies would entail huge cash savings for governments at national, provincial/state and municipal levels everywhere – savings that could be utilized far more efficiently and effectively when incorporated into a BI.
2. People already get money for nothing
Actually people get money from their government because they are deemed, by their government, to be in need and it is a government’s principal responsibility to succor to its citizens in times of need. While Apolitical talks about how “money for nothing already exists in the state pension” system, it ignores a number of other social safety net programmes such as health care, welfare, student loans, disability, make-work projects, employee subsidies, food banks, and shelters, to name a just a few of the most common.
Social safety net programmes always incur infrastructure and staffing costs associated with the policing and distribution of these monies. A BI removes the stigma associated with so many of these programmes via its universality but it cannot ignore the special needs associated with people such as the disabled, seniors, and the unemployed. Their special circumstances can easily entail more than simply a “free money” infusion involving things such as in home support, accessibility of public buildings, mobility aids, wheelchair-friendly streets and curbs, and emotional and mental supports to deal with chronic and acute complications, to name just a few.
Apolitical also mentions the Alaska Fund, a decades old statewide “free money” programme that, today, is surrounded by much controversy, with some demanding the money be used, instead, to fund state social programmes while others are happy for the money to be put directly into the hands of the people themselves.
This is a very good example of how the assets of a community – its resources, both natural and human – are the heart and soul of its economy. However, the Alaska Fund’s greatest feature is that it offers good, sound support for the premise that some of the wealth flowing from a community’s resources should be returned to the people that comprise the community.
The debate here is not whether “free money” should be distributed to the citizenry, but rather how much and in what manner.
3. The schemes in the developing world aren’t really analogous
Apolitical is absolutely right to point out that the drastically modified BI programmes implemented in Namibia, India, and Brazil cannot be directly applied in more developed areas. These programmes are largely a response to severe destitution and poverty in those countries, while here in North America the BI is framed as a response to automation and welfare inequities.
However, Apolitical does recognize that there is a self-empowerment and entrepreneurial spirit that blossoms within the poorest individuals in the above-mentioned countries once they have been freed to make their own choices of how best to utilize their time and abilities to address their own needs and interests.
These observations correlate well with Canada’s own Dauphin Manitoba Mincome BI programme, which ran for five years. Mincome was well monitored and documented at a variety of levels and interests. Documentation that highlighted the many personal advantages derived from a BI. These advantages included the reduction of both individual and family stress levels, greater ability to cope with family issues and, most importantly, noticeable improvements in children’s health and growth due to better nutrition which lead to higher learning evaluations. While some people did indeed leave the workforce, they did so to upgrade their education and skills, to attend to personal and family issues, or simply to take a much needed break.
All of these findings amount to huge social and personal savings that invariably strengthen and improve communities, yet, once again, they are not benefits that economists are able to quantify or put a monetary value on and are too often deemed to be without value.
4. It actually all comes down to incentives
Here Apolitical addresses the commonly held fear that a BI would act as a disincentive to “working,” as if “paid employment” should be every person’s preoccupation rather than the management of their lives. However, Apolitical cites Hugh Segal, a Canadian senator who has been a long-time advocate for BI programmes and who laments the very real disincentives to improving one’s life that have been built into Canada’s social programmes. This is why Senator Segal has long applauded the personal empowerment that a BI could provide to all Canadians.
It is here that Apolitical acknowledges Sam Altman of Y Combinator – a US private investment firm – who sees a BI as the seed money necessary to provide the personal freedom allowing individuals to be economically empowered to address the rapidly changing education and training demands of a technologically driven economy. Of course, Altman seems far more interested in employing a BI to address the demands of technology and its impact upon production and the workforce than in actually addressing personal freedom per se.
Apolitical is absolutely right to acknowledge that BI differs from existing, welfare-style social programmes and highlights the divide as between those who insist upon “incentives” used coercively to promote job seeking and those who support the “freedom to choose” as incentive enough for anyone.
5. It’s not utopia or bust
Apolitical wisely concludes that, if supporters of a BI succeed, “…they will establish the principle that you can simply give people money and trust them to use it in a way beneficial to themselves and, indirectly, to society.” This is a sentiment long-shared by those who advocate for BI and wonderfully demonstrates that this sentiment is central to personal freedom and the creation of an empowered population. For Apolitical and the rest of us only time will tell.
