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Category: THE BASICS OF UBI

  • The history of universal basic income: The concept of UBI has been debated for centuries

    By Katie Balevic

    See original post here.

    • The concept of universal basic income has a long history.
    • Figures like Martin Luther King Jr. and Richard Nixon supported versions of UBI.
    • Now, the US and other countries have experimented with active basic income programs.

    Over the last few years, as average Americans have wrestled with a growing wealth gap and rising prices, policymakers have been tossing around an audacious idea: What if we just give people money to help them?

    The concept of a universal basic income is pretty simple. To help support a population, the government gives it no-strings-attached funds to bolster their finances.

    Despite vigorous debate over UBI, some American cities and counties are now experimenting with guaranteed basic income, a pared-down version of UBI in which a subset of the population receives funds for a limited time period, usually about 12 to 18 months.

    In the cities and US states that have tried basic income programs, recipients have said it helped them secure better housing and jobs, improved their food security, and ultimately live healthier lives.

    A basic income, whether guaranteed or universal, may seem like a revolutionary concept, but it’s actually been debated in American politics for centuries, dating back to the nation’s founding.

    A concept as old as the nation itself

    In the 1790s, Thomas Paine, one of the country’s Founding Fathers, argued in favor of multiple lump sum payments similar to a modern UBI. One of the payments would have been dispersed when a person reached adulthood, paid for with funds from property taxes.

    In his pamphlet called “Agrarian Justice,” Paine said people were owed this money because private land ownership prevented them from hunting and farming freely. Paine suggested another series of payments for people at retirement age.

    One of Paine’s contemporaries, Thomas Spence, an English activist in the mid-19th century, called for payments that mirrored the modern idea of UBI much more directly: He suggested higher property taxes to support an unconditional cash income for the entire population.

    It took centuries, but Paine’s and Spence’s ideas hit the mainstream in the 20th and 21st centuries.

    Martin Luther King Jr. and Richard Nixon supported a basic income

    Martin Luther King Jr. promoted a basic income in the 1960s as a form of economic equality, noting that poverty impacts both white and Black Americans.

    “I am now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income,” King wrote in his 1967 book, “Where Do We Go from Here: Chaos or Community?”

    Two years later, President Richard Nixon issued a similar proclamation with some caveats that reflect modern-day objections, like the idea that direct cash payments will discourage recipients from working. He called it a “Family Assistance Plan.”

    “For a family of four now on welfare, with no outside income, the basic federal payment would be $1,600 a year,” Nixon said. “A guaranteed income would undermine the incentive to work; the family assistance plan that I propose increases the incentive to work. A guaranteed income establishes a right without any responsibilities; family assistance recognizes a need and establishes a responsibility.”

    Despite years of advocacy, Congress never passed Nixon’s plan. Instead, conservatives like President Ronald Reagan ushered in a new era of anti-welfare sentiment, though UBI and welfare differ in many ways.

    That didn’t stop states and cities from trying, however.

    Another program launched in the 1970s that shares the spirit of universal basic income is the Alaska Permanent Fund, which distributes lump sums of money to residents as annual dividends depending on the state’s oil revenue.

    While American politicians and public figures have scratched their heads on whether and how to implement basic income in the United States in modern times, other countries have made it work at varying scales.

    A number of countries have tried basic income programs. For instance, Canada launched a basic income experiment about 50 years ago that continues today. It helps youth transitioning out of foster care. Nations such as Finland, Italy, and Uganda, among others, have also implemented pilot programs in the past.

    Modern iterations of UBI

    Andrew Yang, an entrepreneur, revived the debate around a universal basic income when he ran for president in 2020. He proposed giving every adult $1,000 a month as part of what he called a “Freedom Dividend.” Yang’s candidacy ultimately fizzled, along with the basic income debate.

    After the success of pandemic-era stimulus checks, however, as well as interest from Silicon Valley leaders like Elon Musk and OpenAI CEO Sam Altman — who worry AI could make UBI necessary if humans lose their jobs en masse — basic income experiments are now popping up around the country.

    The Stanford Basic Income Lab says the United States now has the most active basic income programs in the world. The programs vary in scale, targeting hundreds to thousands of people. Altman backed one of the largest basic income programs ever. It spanned three states and targeted 3,000 people.

    More localized programs have also seen success. A Birmingham basic income program helped single mothers afford childcare, for instance, and a similar basic income program in New Mexico helped immigrant families pay their rent and secure work. A program in Los Angeles prompted local officials to try a basic income program for survivors of domestic violence.

    Basic income has also been on political ballots. A recent basic income proposal in Oregon would have given all state residents a $1,600 annual rebate by implementing a 3% tax on corporations in the state once they hit a certain revenue threshold. The opposition effort raised millions to fight the ballot measure, which was ultimately defeated in the November election.

    “Oregonians overwhelmingly believe that corporations should start paying their fair share in taxes and that today’s economy is rigged against us,” the organizers behind the proposal said after its election defeat. “We will continue to fight for a fairer and more just economy for Oregon.”

    While interest in a basic income is growing, so is political opposition. There have been legal challenges to basic income programs in Houston and San Francisco and legislation introduced in Iowa and elsewhere that would prevent local governments from launching basic income studies.

    And as President Donald Trump’s administration looks to reduce government spending, the possibility of a federal universal basic income is likely on hold.

    This post was originally published on Basic Income Today.

  • The Freedom From Want and Basic Income

    By Karl Widerquist

    See original post here.

    AUTHOR’S NOTE: this is an early draft of a section in a book I’m working on. I’m interested in any helpful feedback.

    – Karl Widerquist, Al Najada Hotel Apartments, January 24, 2025

                In 1941, Franklin Delano Roosevelt delivered his famous, “Four Freedoms Speech,” which came to be seen as America’s ambition for a post-war world. These four freedoms, he declared, should be guaranteed to everyone around the globe. His list included the familiar freedoms of religion and expression and two less-familiar concepts: the freedom from fear and the freedom from want. He defined freedom from fear as the freedom from the threat of violence and the freedom from want as a decent standard of living.[i]

                A few years later, without referencing Roosevelt’s speech, the United Nations’ “Universal Declaration of Human Rights” elaborated on what could be called the freedom from want, here conceived as a right rather than a liberty: “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services.”[ii]

                Neither Roosevelt’s speech nor the “Declaration” discussed why these freedoms are so important. I want to explain why these two liberties—most particularly the freedom from want but both in connection—should be understood as fundamental to the exercise virtually all of our other rights and freedoms. From that point, I’ll argue that UBI is the best way—in fact, the only truly effective way—to establish the freedom from want in the modern economy.

                Human beings are not game pieces. We are not theoretical abstractions. We are animals. And like all animals we have needs that must be met or we will suffer greatly and die. A person who lacks secure access to the goods they need to survive or to the resources with which they could produce those goods themselves is in a state of fear, duress, and desperation.

                The costs of poverty to physical and mental health and wellbeing are staggering and well-documented. But I don’t want to talk about the very poor just yet. I want to talk about how the fear that we could end up in a state of want affects all of us.

                When Roosevelt talked about the freedom from fear, he focused on the fear of violence, but we should think about it more widely and in conjunction with the freedom from want. Even if you’re not in a state of want at the moment, if the threat of economic destitution hangs over your head, you’re not really free from want. The fear of it will be in your thoughts and will affect your behavior.

                When our needs or the needs of our loved ones are under threat, we will be driven to do desperate things. Amartya Sen tells the story of Kader Mia, who left home during a riot when he knew people of his ethic group were being targeted. He was unfree to stay home because he needed to find work to feed his family. He was targeted and stabbed. He died in front of a very young Amartya Sen.[iii]

                Most people have not faced the level of acute desperation that Kader Mia did, but economic destitution has driven people to beg, to steal, to sell themselves into slavery, to prostitute their bodies, to accept exploitation, to endure sexual harassment, to risk their lives, or to sacrifice their long-term health for a decent living in the short term. The ever-present reality that the alternative to the labor market is economic destitution regularly drives many millions or, more likely, billions of people to accept lower wages and harsher working conditions than person who was genuinely free from want would reasonably accept. Observations like these lend Jean-Jaques Rousseau to argue, “[I]t is impossible to enslave a man without first putting him in a situation where he cannot do without another man.”

                Yet we live in a world where the vast majority of us spend our working lives with the fear of economic destitution constantly in the background. We pass homeless people and beggars on the streets, and we know that, if we failed to keep working, to keep money coming in, someday that would be us. Only the very wealthy, perhaps the top 1% or less, go through their entire working lives without the realistic possibility that they might end up destitute if they don’t keep working for bosses, clients, landlords, and banks.

                We might not think about it very much, but most of us, especially when we’re young, are only a few paychecks away from losing our homes. And that fact affects our behavior. We stay at jobs where we’re mistreated, underappreciated, and underpaid. We leave bad jobs, only when we’re confident we can find another quickly enough or when we have another option to cushion the blow. Education and retraining to improve our lives are dependent on fundraising, years of savings, or the ability to fit it in around our jobs. We accept extended hours when we might rather stick to the 40-hour work or negotiate a 30-workweek—if negotiation were possible for ordinary employees. We accept the mandated two weeks of vacation when we might rather have four weeks or more like people do in other countries.

                The fear of deprivation harms everyone who works for a living well up into the middle class. We, the 99%, accept a lot of crap that we wouldn’t accept if the fear of want wasn’t hanging over our heads. And accepting crap on the job is only way the lack of universal freedom from want negatively affects us all.

                Richard Wilkinson and Kate Pickett, in their book, the Sprit Level: Why More Equal Societies Almost Always Do Better, present an enormous amount of evidence showing that inequality negatively affects everyone, not just the people at the bottom. It is associated with reduced life expectancy, poorer educational outcomes, higher crime, higher incidences of mental health problems, increased drug abuse, greater obesity, more unhappy children, increased bullying behavior, more social distrust, more suspicion, reduced economic growth, and greater distrust of fellow citizens.[iv] I discussed the ramifications of Wilkinson and Pickett’s findings in an earlier book:

    According to Wilkinson and Pickett, the reason inequality affects everyone is that the more a society is divided into haves and have-nots, the more mental, physical, and economic capital everyone has to expend to protect or improve their position. Every child grows up with more stress and fear about their future. Everyone spends more on “positional goods” that help them move up or maintain their place in the hierarchy. These goods don’t just include showy luxuries; they also include social necessities, such as entrance into the top schools at all levels of education. In societies with low levels of inequality and in which good quality education is available to all, parents don’t stress over getting their children into an elite elementary school.
                Of course, people at the top do get some benefits from living in a highly inequal society, but at some point, the additional benefits come down to easier-and-easier access to more-and-more luxuries, no amount of which can make up for the physical and psychic cost of living in a fearful and antagonistic society.[v]

                In this way, the negative effects of economic deprivation reach even the most privileged of us. But it harms some of us a lot more than others. As I discussed in my earlier book:

    According to the Poor People’s Campaign, 250,000 Americans die of complications of poverty and inequality every year. Child poverty alone costs the United States more than $1 trillion per year in lost economic productivity, health, increased crime and incarceration. Hunger costs $178.8 billion per year in health care expenses and educational outcomes. These figures ignore nonmonetary human costs. How much money is the death of a human being worth? What is the monetary value of building a society in which no child is forced by financial necessity to experience periods of hunger, malnutrition, and homelessness?
                The Poor People’s Campaign also provides evidence of how hunger, food insecurity, homelessness, and housing insecurity scar children in ways that are costly to them and to society as a whole throughout their future lives. Children who grow up in poverty complete two fewer years of schooling than average for all children; they work less; and they end up in worse health throughout their lives. Children and teenagers who experience poverty and homelessness are more vulnerable to physical maltreatment and sexual exploitation. Infant and childhood mortality are closely correlated to poverty.[vi]

                We would all benefit if we free ourself from the fear of economic depression, and we can do it, as Martin Luther King, Jr. wrote in 1968, “I am now convinced that the simplest solution to poverty is to abolish it directly by a new widely discussed measure: the guaranteed income.”[vii] (“Guaranteed income” is a close cousin of UBI.[viii])

                For our purpose, the most important aspect of King’s words is the recognition that poverty is something that can be directly abolished. Poverty might seem like an intractable economic problem that many societies have tried over-and-over again to eliminate without success, but when you understand what poverty is, you can understand it in the way Nelson Mandela described, “Like slavery and apartheid, poverty is not natural. It is manmade, and it can be overcome and eradicated by the actions of human beings.”[ix] But as I will argue only a universal and unconditional program, like UBI, can do so.

                Poverty is the lack of the legal right to access the resources you need to survive and to live a decent life. It is not misuse of the money you have. People with money can live squalor, but they cannot live in poverty. Subsistence farmers, fishers, hunters and gatherers might not live well, but they do not experience the poverty propertyless people experience in a market economy. They do not experience what homeless people in the United States experience, when although they are perfectly capable of erecting a shelter, they have no place they can legally do it. They do not experience what people experienced during the Bengal famine when people starved to death in front of cake and pastry shops because they did not have money to buy food.[x]

                That poverty is a monetary phenomenon can be seen in the fact that every major famine in the last two centuries was caused not by a lack of food, but by a collapse of entitlements. Transportation lines that could be used to relieve food shortages have been used instead to move food out of famine areas because, when starving people have no money to buy food, the market sends food elsewhere.[xi] The cause of the Irish potato famine was not that people couldn’t eat potatoes, but that they had no potatoes to sell and no one wanted to buy their labor.

    These examples illustrate not only poverty but also market dependence. For most people in the world, the only means of survival is to buy goods in the market. Today, most of us have grown up dependent on the market. It seems so natural that our language doesn’t have a widely recognized term for it. But it is highly unnatural.

                In fact, market dependence is a very recent phenomenon created by the movement of peasants off the land during the colonial period. In early American history, most Americans were farmers who were capable of growing nearly everything they needed themselves. Before the arrival of White people in North America, few if any people north of the Rio Grande lacked the freedom from want. Few of them had any realistic fear that they would ever be unable to meet their basic needs for more than a day or two.[xii]

                No one disputes that the market has great advantages, but we could have established a market economy without taking away everyone’s freedom from want and the fear of it. We could reestablish the freedom from want by introducing a UBI high enough to live on.

                Despite what market propagandists say about low-income people “lacking opportunity” rather than “freedom,” the freedom from want is freedom. We are market dependent because aggressive governments seized land mostly from people who treated it as an equal-access commons and then made laws privatizing the Earth and its resources without making provisions to ensure access to the resources necessary to secure the freedom from want for everyone. If you have no money, wherever you go, someone will interfere with any attempt you make to use the Earth and its resources to meet your own needs. That is profound unfreedom in the most negative sense of the term.

                For those of us in the 99%, dependence on the market in general implies dependence on the labor market in particular. And labor market dependence implies that the freedom from want is never fully secure. The default position in our economy is homelessness. When you come of age, if you fail to work, fail to qualify for any government program, and fail to receive sufficient gifts of wealth from your family or anyone else, you will be destitute. Throughout your working life, as long as you fail to become independently wealthy, you will eventually return to that default if you, for whatever reason, stop working, fail to qualify for a sufficient government program, and fail to receive gifts.

                You might enter the labor market because you have great opportunities, but whether your opportunities are great or terrible, you will enter the labor market because the default position for someone who refuses is begging, eating out of dumpsters, and sleeping on the sidewalk. We do not need to be that cruel. A system where the fear of want cruelly hangs over the heads of the 99% as they enter and spend their lives in the labor market is a cruel system with no claim to call itself “free trade.”

                Labor market dependence neither follows from nor promotes freedom as we can see clearly from the discussion above. Yet, it is fact of life for most Americans for most of their lives.

                I don’t know how to eliminate market dependence in a world of 8 billion people, but I do know how to eliminate labor market dependence and the poverty and fear of economic destitution that are inherent to it. Introduce UBI: put a floor under everyone’s income large enough to meet their basic needs.

                If you’re serious about eliminating poverty and economic destitution, “abolish it directly” as Martin Luther King advised. More and more, progressives are coming to the realization that UBI is what we need to fight for. It’s no panacea, but it makes most of our other social and economic problems easier to solve. It makes things enormously better for the people who need it most, and helps people right up the scale.

    [i] Roosevelt, “President Franklin Roosevelt’s Annual Message (Four Freedoms) to Congress (1941).”

    [ii] United-Nations, “Universal Declaration of Human Rights.”

    [iii] Sen, Development as Freedom.

    [iv] Wilkinson and Pickett, The Spirit Level: Why More Equal Societies Almost Always Do Better.

    [v] Widerquist, Universal Basic Income: Essential Knowledge.

    [vi] Widerquist.

    [vii] King, Where Do We Go from Here : Chaos or Community?

    [viii] For the technical differences see Widerquist, Universal Basic Income: Essential Knowledge.

    [ix] https://www.theguardian.com/world/2005/feb/03/hearafrica05.development

    [x] Sen, Development as Freedom.

    [xi] Sen.

    [xii] Widerquist and McCall, The Prehistory of Private Property: Implications for Modern Political Theory; Widerquist and McCall, Prehistoric Myths in Modern Political Philosophy.

    This post was originally published on Basic Income Today.

  • Universal basic income: ‘The power to say no and the freedom to say yes’

    By Suzanne Rent

    See original post here.

    Scott Santens is the founder and CEO of the U.S.-based Income to Support All (ITSA) Foundation, and has been researching and advocating for Universal Basic Income (UBI) since 2013.

    In Nova Scotia, there seems to be an increased interest in UBI with groups like Basic Income Nova Scotia hosting annual conferences on the UBI concept. Last year’s conference included discussions on the P.E.I. Basic Income Report, which I wrote about here.

    Meanwhile, councils in Nova Scotia municipalities and towns, such as Yarmouth, have passed resolutions in support of basic income.

    On Tuesday, I interviewed Santens about his work researching UBI, his thoughts on a recent resurgence in the interest in and support for UBI, and what automation and AI means for UBI.

    This interview has been edited for length and clarity.

    Halifax Examiner (HE): Tell me how you got into studying and promoting UBI, because you’ve been working on this since 2013.  

    Scott Santens (SS): I got into it back in 2013 through the automation angle. This was actually prior to anyone really talking about automation. A big report that fall suggested about half of all jobs would be automated in the next 20 years.

    At the time when I got into it, no one was really talking automation at all. I was really interested to learn going through all this discussion, and then basic income popped up here and there. I was reading about that and started looking into it. I was just fascinated to learn that we had multiple [UBI] pilots around the world and it goes back to Richard Nixon and how we did some pilots in the U.S. in the 70s, and how even Nixon was pushing a version of it called the Family Assistance Plan (FAP) that passed the House [of Representatives] twice.

    Not only did the U.S. do [UBI] pilots, but Canada did a pilot in Manitoba in Dauphin (Mincome) and it just fascinated me to learn all about that history and the evidence behind it all that those pilots discovered.

    The more I looked into it, the more it made sense that it wasn’t only something for automation but actually just makes good sense. And it’s something that we should have done decades ago. It’s something that would have so many positive impacts if we were to do it.

    HE: When you talk about automation, you mean like AI or other forms of automation?

    SS: In current days, it’s mostly about AI and robots. I would argue that we’ve already been looking at that automation since the 70s, and that’s kind of the main impact, in general, of automation that people talk about how there won’t be any jobs.

    For the last decade, that’s really been the main impact is that there’s been a wage depression impact and a greater inequality increase. We’ve seen a lot of productivity growth through automation, through computers, and manufacturing and things like that. But most of that growth has gone mostly to the top.

    We just expect more of that. It’s not like there won’t be any more jobs. There will be lots of robots and AI potentially, but the impact will be people will just be getting paid less. The rich will get much, much richer and inequality will get much larger.

    HE: There seems to be a resurgence in the push for UBI here in Nova Scotia. A lot of municipalities in small towns have passed resolutions in support of UBI. Are you seeing that elsewhere in other jurisdictions through your work?

    SS: In the U.S., we’ve seen a lot of progress at the local level since the pandemic. We have over 150 pilots around the country taking different shapes, nothing that I would consider to be like a true universal basic income pilot, which would be an entire town or at least entire communities.

    HE: What do you think the reluctance is to UBI programs, though? As you said, there have been studies and pilots for UBI since the 70s, but it’s never really gotten any huge traction.

    SS: The top three kneejerk responses are, how do we pay for it, won’t people stop working, and won’t this cause inflation. Those are kind of the headspace arguments where people are thinking about the behavioural impact. They don’t understand how inflation works, and maybe they are thinking people are lazy. I think the read of it is just a coercive power kind of thing.

    HE: Have there been any pilots around the world that you thought were really impressive in terms of how UBI would work or that had all the right components?

    SS: I think one of the earliest ones was up there in Canada, in Dauphin [Manitoba] and that was because the entire town got UBI. There’s universal basic income and there’s negative income tax, and they can both achieve the same thing in the same way.

    There’s a lot to learn from that kind of [UBI] where an entire town gets it. There’s been one in India and in Namibia. Both of those were full universal pilots where the entire village or villages and every adult and child in a household [got it]. There’s a big difference between one person in some community getting unconditional cash and every member in a community getting unconditional cash.

    In the India pilot, one of the most successful people in that pilot started her own business with her first payment. She started to make loaves of bread to sell them to the village. And she did really well to the point where by the end of the pilot, she was earning four times as much as a basic income. If she had got a loan and got the exact same thing, would she have been as successful? Well, probably not, because she wouldn’t have [been] surrounded by customers. But the thing is, because the entire village got the basic income, then she was surrounded by people who had money and could actually pay for bread.

    That’s why you see this large impact on entrepreneurship in these pilots and also why you see crime reductions. I wouldn’t expect to see a crime reduction if a couple of people in a community got basic income.

    HE: We’ve written about this before, that there seems to be no reluctance, at least here, in Nova Scotia, in Canada, in giving certain people money and only for big splashy projects. But to give everyday people money is really frowned upon.

    SS: That’s the problem of the deserving and the undeserving. You’ve got your seniors and you’ve got people with disabilities, and you’ve got parents, especially single parents, not so much multiple parents. It’s expected that one of them should work.

    That’s a big challenge and I think that’s why automation kind of helps disrupt that. We also had kind of an inkling of this too during the pandemic. The massive unemployment wasn’t blamed on the people themselves. It wasn’t their fault. They didn’t do anything wrong. It was just very popular to give money to people. We had our stimulus cheques and unemployment and you had your CERB (Canada Emergency Response Benefit). It was just seen differently.

    Even with responses to where a disaster happens. Oh well, that’s fine to get any kind of rebuilding money or whatever. You didn’t do anything wrong. That was an act of God.

    I think automation could get at that, where if there’s enough of an issue where people are finding it hard to find jobs or they’re finding it hard to find jobs that pay well, they could be like, “well, what about me? I’m not doing anything wrong?” As soon as someone starts thinking about themselves, their need for help…I think that opens the door to this kind of rethinking of the deserving versus undeserving.

    HE: Those disaster responses and the responses to COVID prove that governments can, at least on the administrative side, pull these things together.

    SS: Absolutely. Social Security is the most efficient program here in the U.S. It’s got a 0.5% overhead and they send out payments every month. They’re very efficient at it. I would say if there’s one thing that government is good at it is cutting cheques. They’re very good at getting money to people. It’s all the others stuff that they may not be so good at, especially when you have to have administrators and bureaucrats checking boxes here, and testing people for that.

    When it came to the pandemic, we saw immediately, oh, this is a big problem. Tens of millions of people are unemployed here in the U.S. and then in very short order, they started sending money to people. And they didn’t raise taxes to do it. They just got the money out there. That was it. There’s nothing stopping a government who issues its own currency to actually just get money to people.

    HE: Are there any legitimate arguments against UBI?

    SS: I would say when it comes to the work argument, that’s not a valid argument. When you look at just the mountain of evidence about what happens, what’s been their response to unconditional universal income is maybe you’ll have some people working a little bit less, especially in particular groups. Let’s say those groups are usually seniors, those with disabilities, new parents, or students. Because the amount is universal, then you actually have more people to seek out jobs and they are able to do that work. But overall, you just don’t see any kind of big impact at all. It’s not a big increase, it’s not a big decrease. It’s a waste of money to apply conditions and means testing for the cash.

    You have two other main arguments. One of them is the cost. It’s a big cost, sure. Here in the U.S., the net cost of a poverty-level basic income would be about $1 trillion more per year. That’s a good amount of money. But it’s also important to understand it as an investment.

    We would expect to see less crime. We would expect to see better health. We wouldn’t be spending as much on the health care system. The Dauphin, Manitoba pilot saw about a 90% decrease in hospitalization. The other pilots where you see large decreases in ER usage, you see increases in preventative care. You see decades down the line, there would be a lot of better health outcomes.

    If those savings end up being more than a trillion dollars a year down the line, then I don’t see why the cost argument is a good argument either. Poverty isn’t free. Extreme insecurity and inequality aren’t free. All of these things have downstream impacts and are very expensive.

    The inflation argument, which people have started worrying about even more because of the pandemic, because obviously we saw this global inflation. A lot of it has been blamed on the pandemic stimulus various countries did. That one is tougher. There is definitely a concern about the way these things can be done. But the details matter when it comes to the inflation concern. When people worry that any amount of basic income done in any way would cause hyper-inflation, then no. That’s ridiculous. That’s not going to happen.

    If you’re talking about a poverty-level basic income, and you’re pairing it with increased taxes on those with higher incomes, corporations… then again, you’re going to have very low inflationary pressures. There could be some and you would see it in certain sectors. It’s not like people are going to start buying ten times as much food.

    When it comes to inflation, a lot of the arguments are about the economic capacity to meet demand. So, if demand goes up for a certain thing, then supply needs to catch up. If supply can’t go up, then there needs to be some price increases, and maybe that will just be temporary.

    You want to make sure that a country is producing enough goods and services to meet people’s basic needs. When it comes to luxury goods and stuff like that, those are limited supply and those prices might go up. I don’t think that’s a concern.

    HE: I’ve read a lot about UBI and written stories on UBI, certainly not nearly as much as you, but what I have learned is that most people use the money to make their lives better. But they have control over the way they use that money instead of being told how to use that money. So they might start a business or they might leave a partner who’s abusive or they put it aside for their children. Do you see that in your research, too?

    SS: I like to describe a basic income distinctly as the power to say no and the freedom to say yes. The power to say no is to your employer. Maybe they’re not paying enough. If you’re in a relationship with someone and the power to say no to them is the power to flee. You’ve seen that in experiments, plenty of times actually.

    In the U.S. in the 70s, one of the concerns that helped kill Nixon’s plan was that members of Congress were concerned that women would leave their husbands. That actually wasn’t true. It was a statistical error at the time, but they were freaking out about higher divorce rates. It was bad that they were freaking out about women leaving abusive husbands, but also it was just bad math at the time.

    When they looked back later, they found that even though women didn’t divorce their husbands at a higher rate, [UBI] did improve relationships. It was that ability and the freedom to leave that made the difference.

    That’s also the freedom to say yes. You can say yes to things you like. You can start up your own business. You can pursue unpaid work. You can switch from the labour market to unpaid care work at home.

    HE: What would you say to governments and skeptics of UBI?

    SS: It’s really difficult to get people to think differently about poverty. I know it’s only in specific circumstances like disasters and COVID where people thought that. I don’t think we can actually convince anyone otherwise until they’re in a drastic situation.

    Instead, I think that people need to think of basic income not as a welfare system, but as a dividend. I think AI really helps us see this in a different way. Where does AI come from? Public funding went into the R&D that made AI possible. Then, AI was fed massive amounts of data… and the data came from us. We created the data. Not only present day. It shouldn’t only be seen as our work and capital that went into making this possible, but also our ancestors. So [UBI] can also be seen as an inheritance. No one judges inheritances. Inheritance is fine. Everybody agrees that is fine. We should also look at it as inherited dividends. We should see ourselves as stockholders.

    There are other natural resources. Why aren’t we seeing ourselves as the owners of not only oil, but why aren’t we the owners of wind power, solar panels? We can look at this stuff differently and see ourselves as joint owners, and if we did that I think we would start to see things differently.

    This post was originally published on Basic Income Today.

  • Study Universal Basic Income at the University of Sydney

    By Gareth Bryant

    See original post here.

    In 2025, the the School of Social and Political Sciences (SSPS) at the University of Sydney will offer the first unit of study focused on Universal Basic Income (UBI) to be taught at a university in Australasia.

    This interdisciplinary unit critically examines UBI’s potential to tackle 21st-century challenges like inequality, economic insecurity, technological disruption and more frequent extreme weather events. It traces the historical, ethical, and political economic foundations of UBI from its origins in the French and American revolutions to contemporary trials, political campaigns and policy exemplars. Students will engage with a variety of research methods, including historical analysis, ethical argument, social scientific experiments, and computer-based microsimulations, to evaluate UBI’s potential merits and limitations.

    The unit will be taught by Dr Troy Henderson, with guest lectures by leading Australian and international UBI experts. Dr Henderson is a Senior Research Officer at the Mental Wealth Initiative and a former Lecturer in Political Economy at the University of Sydney. He is Co-Director of the Australian Basic Income Lab and Co-Editor of the international journal Basic Income Studies. His research interests include Basic Income, alternative workweek schedules, social policy reform, labour market economics and heterodox economic theory.

    In 2025, this unit will will be taught intensively across 4 days in May-June. It will be available to students enrolled in the Master of Political Economy, the Master of Public Policy, the Master of  Social Justice, the Executive Master of Public Administration, and other postgraduate coursework degrees via special permission. There are plans to offer the unit more widely in future years.

    —-

    Universal Basic Income (UBI) is a policy proposal to provide all citizens or residents with a regular, unconditional cash payment, irrespective of their income or employment status. Advocates praise UBI for its simplicity and universality, seeing it as a tool to address systemic economic inequalities and enhance freedom. By eliminating bureaucratic hurdles for eligibility, UBI aims to reduce poverty, enhance financial security, and enable individuals to focus on education, entrepreneurship, caregiving, or other pursuits without the fear of income instability or destitution. It is also seen by many as a solution to challenges like automation and job displacement by providing a guaranteed baseline income to mitigate the effects of economic disruptions.

    UBI has garnered support across a broad spectrum of thinkers, including libertarian economists, feminist scholars, Marxist sociologists, and social democrats, as well as artists, philanthropists and grassroots activists. However, its detractors are just as diverse. It is important to emphasise that UBI and its related ‘policy cousins’, such as Negative Income Tax (NIT) and Guaranteed Minimum Income (GMI), are understood and interpreted in vastly different ways by various individuals and groups.

    Critics of UBI question its affordability, arguing that implementing such a system would require massive government spending and much higher taxes. There is also concern that UBI might discourage work among low-income earners, reducing overall labour market participation, although research on this remains inconclusive. Critics further argue that universal payments may not be the most efficient and equitable use of resources, as high-income individuals would receive payments they do not need, and targeted welfare programs could deliver better outcomes for those who need it at a lower cost.

    This post was originally published on Basic Income Today.

  • Is universal basic income about to transform society?

    By Donna Ferguson

    See original post here.

    When Elinor O’Donovan found out she had been randomly selected to participate in a basic income pilot scheme, she couldn’t believe her luck. In return for a guaranteed salary of just over €1,400 (£1,200) a month from the Irish government, all the 27-year-old artist had to do was fill out a bi-annual questionnaire about her wellbeing and how she spends her time. “It was like winning the lottery. I was in such disbelief,” she says.

    The income, which she will receive until September 2025, has enabled her to give up temping and focus instead on her art. “It covers my living expenses, my rent, food and day-to-day stuff.”

    The concept of a guaranteed basic income might seem novel or neoteric, but it dates back to 1795, when the American founding father Thomas Paine suggested a “national fund” should pay every adult “rich or poor” a “ground rent” of £10 a year until the age of 50. Earth is “the common property of the human race”, he argued, so everyone has been collectively dispossessed by “the introduction of the system of landed property” and was entitled to compensation.

    Today, as artificial intelligence (AI) learns from the collective intellectual and creative output of humans and uses this to dispossess workers of their livelihoods, the idea of universal basic income (UBI) as a possible solution is gaining traction. “We are seeing the most disruptive force in history,” Tesla founder and X (formerly Twitter) owner Elon Musk said last year, before speculating: “There will come a point where no job is needed – you can have a job if you want one for personal satisfaction – but AI will do everything.”

    The counter argument is that although AI could replace a range of jobs, it will also create new roles (including oversight of AI decision making – known as “human in the loop”). Yet for many workers, the advance of AI continues to be alarming. In March, after analysing 22,000 tasks in the UK economy, covering every type of job, a model created by the Institute for Public Policy Research predicted that 59% of tasks currently done by humans – particularly women and young people – could be affected by AI in the next three to five years. In the worst-case scenario, this would trigger a “jobs apocalypse” where eight million people lose their jobs in the UK alone.

    UBI would provide a vital safety net. “Under capitalism, you need money to survive. It’s that simple,” says Dr Neil Howard, an international development social protection researcher at the University of Bath. He and his team have helped to develop basic income pilots around the world and, like Thomas Paine, he believes that a redistribution of the privatised resources of all human beings is inherently just. Howard likens the large language models of AI that rely on the aggregated collection of human knowledge to the enclosure of the commons, which began in the 1600s and privatised most of England’s common land. “The common wealth of the world and of humanity, should, by rights, belong to all of us,” says Howard. “It has been appropriated by the few – and that leads the many to either have to struggle to survive or simply not effectively do so. So there’s justice underpinning the claim of UBI.”

    Contrary to expectations, he says, “It wouldn’t necessarily lead to people doing less work – it would enable them to do better work or to invest their time in more socially useful activities.”

    This argument is backed up by a 2020 study conducted by researchers at Utrecht University in the Netherlands. It found that unemployed individuals who were previously in receipt of benefits increased their participation in the labour market after they were given a basic income for three years. Rather than opting for insecure work – taking any job they could get – to fulfil the conditions imposed upon them by the benefits system, they were more likely to find and accept a long-term, well-paid job. They also took on more work.

    “Humans need to do work that feels valuable, psychologically,” says Cleo Goodman, a UBI expert at the thinktank Autonomy. “It’s baked into us. It is complete nonsense to suggest that there’s a faction of society that just wants to sit around on the sofa all day, drinking beer and watching TV. We want to spend a fair amount of our time doing something that makes us proud.” She believes that everyone has the potential to find their “niche” – work they’re good at, that gives their lives meaning and purpose.

    For example, she believes that if UBI was available, people would do more creative and charitable work. “The kind of work that it’s now very difficult to make an income from is the kind of work that I think people would move to in droves. And I think that would be positive for society.”

    Humans need to do work that feels valuable, psychologically. It’s baked into us

    Cleo Goodman, Autonomy

    This is particularly true of care work and parenting, says Goodman. “People shouldn’t be punished for making those choices. Socially and economically, that work is valuable. But at the moment, economically, it’s not valued.”

    Salaries for work that is essential, but unattractive, would need to rise if a UBI scheme was introduced. “We’d have to recognise the people that are doing the work in the sewers and cleaning the streets, they’re doing incredibly important jobs that we should be grateful for,” says Goodman. “So they should be compensated in a fair way. I think more people would be happy to get their hands dirty if they were being paid fairly.”

    While no basic income scheme is now available in England, Autonomy is looking to change that. Goodman is fundraising to run a micropilot that would give 15 people in two areas – central Jarrow in South Tyneside and East Finchley in north London – £1,600 a month for two years, to observe the impact on their lives.

    The only basic income pilot currently running in the UK is a Welsh government scheme for 600 young care leavers. Each is receiving £1,600 a month (£1,280 after tax), for 18 months, so that researchers can evaluate the scheme’s benefits. An interim report suggests recipients feel “a greater sense of choice and control over the future”.

    In the US, where there are currently more than 100 UBI pilots being explored or delivered, researchers have seen similar results. One two-year pilot, In Her Hands, involving Black women in the state of Georgia, resulted in more women of colour returning to education.

    Cheeoni Hampton, 47, a disabled grandmother who left school young to have children, was one of them. “When I found the flyer under my door, I was sceptical,” she says from her home in Atlanta where, at one point in her life, she experienced homelessness. “Then I researched it a bit, and thought: ‘Maybe I can get a real career, instead of hopping from job to job.’”

    The income she is receiving – $850 [£673] a month until September – has enabled the former warehouse worker to take an online course and become a security guard, while simultaneously paying off debts. “A weight was lifted off my shoulders,” she says.

    Hampton moved out of her subsidised apartment and bought a low-cost home with a mortgage. She is now earning enough to meet all her bills without getting into debt. With a little extra money, she says, you can really do a lot. “It motivated me to go out and do better for myself. It changed my outlook on life.”

    In Cambridge, Massachusetts, former mayor Sumbul Siddiqui began a programme providing 2,000 low-income families with a guaranteed tax-free income of $500 [£395] a month, for 18 months. She is a member of Mayors for a Guaranteed Income, a coalition of 150 mayors in the US who are advocating for a nationwide guaranteed income scheme. Her scheme is costing the city $22m [£17m] but, she says, it was a “very easy” decision to make: “I think we have to do everything we can to provide financial stability and dignity to those who are the most vulnerable in our community.” She adds, “I think it’s important to say: ‘We recognise you could use help and assistance, and we trust you to figure out how best to use this money.”

    An earlier pilot Siddiqui ran in the city resulted in significant improvements in financial health for 130 families, along with higher rates of employment, more time and space for parenting and improved educational outcomes for children.

    In Cork, Elinor O’Donovan – who began receiving Ireland’s basic income for creative workers in 2022 – can now spend time doing a job that makes her feel fulfilled. “I made my first film last year, which was really huge for me, and I was able to pay other artists to work with me.”

    Across the Irish sea, the Scottish government and the mayors of Manchester, Liverpool and London have all publicly expressed enthusiasm for running basic income pilots in their areas. But so far, none have managed to do so.

    One of the biggest obstacles they face is that HMRC refuses to exempt participants from income tax, significantly increasing the gross amount that scheme providers must pay to provide each individual with a small but adequate net income. Participants also need to be financially compensated if other benefits are affected as a result of the pilot. That makes pilots in the UK more expensive than in other countries.

    “It’s an impasse,” says economist Prof Mike Danson, who has carried out research advocating for a basic income scheme in Scotland. “We know that, privately, some senior civil servants are in favour. But politicians are afraid of making that big step and trusting the population to do the right thing.”

    Research on the impact on participants of pilots in places with similar economies to the UK is so overwhelmingly positive that, he suggests, the resistance in government must be “ideological”. “So, until there’s quite a radical change in thinking in Westminster, nothing can change, really, anywhere in the UK.”

    But AI may be the impetus for this radical change in thinking, especially if massive job losses do occur. “One view is that basic income has to happen because, to continue, businesses need people to have money. People need an income they can spend on goods and services. So if you’re taking a lot of income out of the economy, with people losing their jobs, then that’s a problem,” says Danson.

    It’s not just economists who think a UBI scheme will be necessary in the future. Prof Geoffrey Hinton – a computer scientist generally regarded as “the godfather of AI” – is among those advocating for it. “I was consulted by people in Downing Street and I advised them that UBI was a good idea,” he told the BBC in May. He fears AI will destroy jobs and increase productivity: “It’s going to increase the gap between rich and poor,” he said.

    Darrell West, author of The Future of Work: AI, Robots and Automation, says that just as policy innovations were needed in Thomas Paine’s time to help people transition from an agrarian to an industrial economy, they are needed today, as we transition to an AI economy. “There’s a risk that AI is going to take a lot of jobs,” he says. “A basic income could help navigate that situation.”

    AI’s impact will be far-reaching, he predicts, affecting blue- and white-collar jobs. “It’s not just going to be entry-level people who are affected. And so we need to think about what this means for the economy, what it means for society as a whole. What are people going to do if robots and AI take a lot of the jobs?”

    Nell Watson, a futurist who focuses on AI ethics, has a more pessimistic view. She believes we are witnessing the dawn of an age of “AI companies”: corporate environments where very few – if any – humans are employed at all. Instead, at these companies, lots of different AI sub-personalities will work independently on different tasks, occasionally hiring humans for “bits and pieces of work”.

    These AI companies have the potential to be “enormously more efficient than human businesses”, driving almost everyone else out of business, “apart from a small selection of traditional old businesses that somehow stick in there because their traditional methods are appreciated”.

    Watson speculates that only jobs that require human interaction (like hospital chaplains and care workers) or involve complex physical tasks (like plasterers, plumbers and hairdressers) will need to be done by humans in the future. As a result, she thinks it could be AI companies, not governments, that end up paying people a basic income.

    AI companies, meanwhile, will have no salaries to pay. “Because there are no human beings in the loop, the profits and dividends of this company could be given to the needy. This could be a way of generating support income in a way that doesn’t need the state welfare. It’s fully compatible with capitalism. It’s just that the AI is doing it.”

    Howard is also optimistic that we will one day see a basic income scheme introduced in the UK: “We have lots of evidence – and people make it very clear – that the universality, the unconditionality, the automaticity of payments give people a sense of dignity. It manifests that they matter and that their experiences as human beings matter enough to be given this solid cash floor,” he says.

    “I think we need to be calling for basic income on the basis of a sense of shared morality, because economic insecurity is grim. It’s empirically damaging and it’s based on historical injustices that are translated into present inequalities. So there’s a very strong case for redistributive basic income right now, irrespective of whether or not the machines are coming.”

    This post was originally published on Basic Income Today.

  • Exploring Universal Basic Income and Its Implementation

    By RSF Staff

    See original post here.

    In recent years, economic inequality has increased along with housing costs, inflation and mass layoffs, all of which have significantly impacted the economic well-being of individuals worldwide. These have led to a plethora of negative outcomes including the rise of homelessness and the share of individuals who are burdened by the cost of living. 

    Government assistance programs like Housing Choice Vouchers, Medicaid and Supplemental Nutrition Assistance Programs have been around for decades. These programs have helped many Americans who face financial hardship, but some policy experts and advocates argue that these programs do not do enough. They offer targeted support for specific populations but oftentimes still do not reach the people who need it most. 

    As a result, policymakers and public figures worldwide have advocated for Universal Basic Income (UBI) programs including Twitter Founder Jack Dorsey, Leader of the Democratic Party of Korea Lee Jae Myung, and French politician and former French Presidential Candidate Benoît Hamon. 

    But what is UBI exactly and what does it look like?

    Understanding UBI 

    Universal Basic Income is a concept where individuals in a country or designated region receive regular cash payments as an unconditional source of income usually from the government or other institution. 

    There are a few key aspects of UBI: 

    • UBI is a recurring regular payment, not a one-time payment
    • The benefit is paid in cash and individuals can use it immediately, however they like
    • The payment is universal and paid to all citizens, with some restrictions depending on the proposal (e.g., citizens over 18)
    • Participation in the program is unconditional (e.g., does not involve a work requirement to earn cash benefits)
    • Payment is dispersed to individuals, rather than households

    UBI programs typically have several goals. Poverty alleviation is one of the biggest aims and because payments are made in cash, it directly addresses a wide range of financial issues for individuals who need assistance. Money transferred from UBI can also serve as a safety net and reliable source of income for families during medical emergencies, natural disasters, in between jobs or unexpected layoffs. 

    UBI in Practice: Pilot Programs Around the World

    Many UBI pilot programs and studies have been conducted around the world. In Kenya, a non-profit organization called GiveDirectly accepts cash donations and transfers it to families living in extreme poverty. Their program has reached over 1.5 million people who use the money on healthcare costs, livestock, educational costs, water, irrigation and agricultural systems and beyong. In India, a 2012 pilot study of over 15,000 individuals compared villages that received the equivalent of $4.40 USD for each adult and $2.20 for each child monthly with villages that did not. The researchers found that the extra cash was used for enhancing living conditions, food and nutrition purchases and education costs. Overall, villages that participated in the program experienced an improved quality of life compared to those who did not participate.

    Although there are several positive examples of UBI pilot programs, these programs are not truly “universal” because they were temporary and only included targeted populations. Several implementation challenges remained following these temporary programs including hesitancy from policy makers, economic concerns, cost and funding, and resistance from the general public. 

    The main argument against UBI funding is rooted in opposition to higher taxes. Understandably, people and businesses refuse to pay additional taxes if they believe that their money will be redistributed to other individuals, but UBI does not need to be funded by increased taxes. Rather, capturing value from land and resource rents and sharing the wealth created by collective resources is a viable solution. 

    UBI in Practice: Alaska’s Permanent Fund

    One of the best-known examples of a long-standing UBI program is Alaska’s Permanent Fund. Every resident of Alaska receives an annual cash payment that is funded through oil revenues harvested from the land. The permanent fund was established in 1976 and continues to operate to this day. It has grown to $79.6 billion dollars and in 2023, the annual dividend distributed to citizens was $1,312. 

    The Alaska Permanent Fund celebrates collective ownership of the land and allows all residents to benefit from Alaska’s natural resources. Data also suggests that the fund has mitigated income inequality on a state level.

    Economists point to Alaska’s Gini factor, a measure of income inequality, and note that it is lower than almost all other states (49th). Gregg Erickson, an economist and board member for the Robert Schalkenbach Foundation explained that Alaska’s Gini factor had been far lower than any other state until 2015, the year that Alaska reduced the dividend to pay for other state government costs. He warns that current trends in state finances may lead to further dividend cuts, which erode Alaska’s enviable level of income equality. 

    A Commonwealth Proposal in Canada

    In Canada, a group of UBI advocates who make up an organization called Common Wealth Canada propose that collecting value from Canada’s land and resources would create $241 billion dollars of wealth annually that could be distributed to Canadians. They propose that it is enough to provide each adult with up to $7,600 per year in dividends. 

    One key factor of Common Wealth’s proposal that signals promise is their funding plan. While Alaska’s Permanent Fund relies on oil revenue, a fundamentally finite natural resource, they propose that a UBI in Canada should be funded through land and resource rents. In this model, government-owned, public goods such as land, resources, or infrastructure could be rented to private corporations or individuals and the revenue earned would fund a UBI. This concept has also been referred to as “asset monetization” or “asset recycling”.

    For instance, government entities could lease unused or underutilized public assets and infrastructure such as vacant lots, buildings, parking facilities, or airports. Airports are often large revenue generators for cities and their value will only increase as demand for air travel continues to rise. About 98 percent of the 3,300 American airports tracked by the Federal Aviation Administration are owned by public entities. One study found that 31 of the U.S’s largest airports have a market value of $131 billion dollars and could generate billions of dollars to fund government programs if they were leased to private partners. 

    This model is not new. Resource rents recently funded public transportation and highway projects in Australia. In New South Wales, the government leased its electrical transmission system to a private partner and raised $2.19 billion dollars to renovate and expand the Sydney Metro System, light rail and several highways. 

    Frank De Jong, an environmental economist, sees a bright future in utilizing resource rents in America. He emphasized that the wealth generated through these assets currently rests in the hands of a monopoly, but recognizing their value as a common good means that everyone has a right to their share and deserves to benefit. 

    “The only way to permanently eliminate poverty is to 1) break the monopoly owners’ grip on the unearned increment 2) shift the tax burden off the productive economy and onto the speculative economy and 3) distribute the rental value of the commons to all equally as a citizens’ dividend or UBI,” said De Jong. 

    This post was originally published on Basic Income Today.

  • The Deep and Enduring History of Universal Basic Income

    By Karl Widerquist

    See original post here.

    Support for universal basic income (UBI) has grown so rapidly over the past few years that people might think the idea appeared out of nowhere. In fact, the idea has roots going back hundreds or even thousands of years, and activists have been floating similar ideas with gradually increasing frequency for more than a century.

    Since 1900, the concept of a basic income guarantee (BIG) has experienced three distinct waves of support, each larger than the last. The first, from 1910 to 1940, was followed by a down period in the 1940s and 1950s. A second and larger wave of support happened in the 1960s and 1970s, followed by another lull in most countries through about 2010. BIG’s third, most international, and by far largest wave of support began to take off in the early 2010s, and it has increased every year since then.

    Before the First Wave

    We could trace the beginnings of UBI into prehistory, because many have observed that “prehistoric” (in the sense of nonliterate) societies had two ways of doing things that might be considered forms of unconditional income.

    First, nomadic, hunting and gathering societies of less than 60 people have often been observed to treat all land as commons, meaning that everyone can forage on the land but no one can own it. A similar right to use land has existed in many small-scale agrarian communities right up to the enclosure movement, which was not complete in Europe until the 20th century and is not complete around the world today. The connection between common land and UBI is that both institutions allow every individual to have access to the resources they need to survive without conditions imposed by others.

    Second, most observed small-scale, nomadic, hunter-gatherer societies had strong obligations to share what they had with others. If someone camping with the group found more food than they and their immediate family could eat in one meal, they had to share it with everyone in the camp, including people who rarely or never brought back food for the community. The food shared around camp could be seen as a “basic” income.

    Some trace the beginning of UBI history to ancient Athens, which used revenue from a city-owned mine to support a small cash income for Athenian citizens.

    The modern definition of UBI stipulates the grant must be in cash, and because small-scale hunter-gatherer or agrarian communities do not have cash economies, they do not have UBIs. But these practices show how the values that motivate much of the modern UBI movement are not new to politics but have been recognized and practiced for a very long time.

    Some writers trace the beginning of UBI history to ancient Athens, which used revenue from a city-owned mine to support a small cash income for Athenian citizens. This institution sounds like a UBI, except that the meaning of citizen was very different in ancient Athens. Citizens were a small, elite portion of the population. Noncitizens, such as slaves, women, and free noncitizen males, were the bulk of the population and virtually all of its labor force. A UBI for the elite is no UBI at all.

    Proposals that begin to fit the modern definition of UBI begin in the 1790s with two writers, Thomas Paine and Thomas Spence. Paine’s famous pamphlet “Agrarian Justice” argued that because private ownership of the land had deprived people of the right to hunt, gather, fish, or farm on their own accord, they were owed compensation out of taxes on land rents. He suggested this compensation should be paid in the form of a large cash grant at maturity plus a regular cash pension at retirement age. That amounts to a stakeholder grant plus a citizens pension: nearly, but not quite, a UBI.

    From a similar starting point, Spence carried the argument through to a full UBI, calling for higher taxes on land and a regular, unconditional cash income for everyone. If anyone can be said to be the “inventor” of UBI, it is Thomas Spence, but his proposal remained obscure, and the idea had to be reinvented many times before it became widely known.

    Joseph Charlier, a Belgian utopian socialist author, reinvented the idea of UBI in 1848, suggesting the socialization of rent, with the proceeds to be redistributed in the form of a UBI.

    Henry George, a late 19th-century economist, set out to solve the problem of persistent poverty despite economic progress. He proposed taxing land value at the highest sustainable rate and using the proceeds for public purposes. At one point, he suggested that part of the proceeds could be distributed in cash to all citizens, but UBI was never a central part of his proposal.

    BIG proposals remained sparse until the early 1900s.

    The First Wave

    By the early 20th century, enough people were discussing BIG to constitute its first wave — or at least its first ripple — of support. The idea was still new enough that most advocates had little knowledge of each other, and they all tended to give their versions of the program a different name.

    In the United Kingdom, Bertrand Russell and Virginia Woolf both praised the idea in their writings without naming it. In 1918, Dennis and E. Mabel Milner started the short-lived State Bonus League, which briefly attempted to get a conversation started with pamphlets and other publications, including what was probably the first full-length book on UBI: Dennis Milner’s 1920 publication “Higher Production by a Bonus on National Output.”

    Several economists and social policy analysts, especially in Britain, discussed UBI, often under the name social dividend, in the 1930s and early 1940s. These included James Meade (economist and later Nobel laureate), Juliet Rhys-Williams (writer and politician), Abba Lerner (economist), Oskar Lange (economist), and G. D. H. Cole (political theorist, economist, and historian). It was apparently Cole who coined the term basic Income in 1935, although that term did not become standard for more than 50 years.

    Major C. H. Douglas (a British engineer) included UBI under the name national dividend in a wider package of proposed reforms he called social credit. His ideas were most prominent in Canada, where the Social Credit Party held power in two western provinces on and off between 1935 and 1991, but the party abandoned support for Douglas’s proposed dividend not long after it first took power.

    In 1934, Louisiana senator Huey Long debuted a Basic Income plan he called Share Our Wealth. He seems to have come up with the idea on his own; there is no evidence that he was influenced by the ideas spreading around the United Kingdom in those years. Long’s plan might have served as the basis for a presidential run in 1936 had he not been assassinated in 1935.

    Although some of these early advocates were highly respected people, they were unable to get any form of BIG onto the legislative agenda in this era. As World War II drew to a close, most Western democracies built up their welfare systems on a conditional model, typified by the British government’s famous Beveridge Report, which recommended fighting poverty, unemployment, and income inequality with a greatly expanded welfare system based on the conditional model. Discussion of BIG largely fell out of mainstream political discussion for nearly two decades.

    The Second Wave

    Discussion of BIG was kept alive between the first and second waves largely by economists who increasingly portrayed it as an interesting theoretical alternative to existing social policies.

    During the second wave, the phrases income guarantee and guaranteed income were often used without indicating whether the guarantee was a negative income tax (NIT) or a UBI. When specified, it was most often an NIT. However, the second wave was extremely important in directing international attention toward the idea of creating a world in which everyone would have an income above poverty level.

    The second wave took off in the early to mid-1960s, when at least three groups in the United States and Canada separately started promoting the idea at about the same time. First, feminists and welfare rights activists, including Martin Luther King Jr., mobilized people frustrated by inadequate and often demeaning conditional programs. The feminist and welfare rights movements for BIG were closely tied together because there was widespread belief that existing welfare programs were inadequate, punitive, and too closely tied to the belief that “typical” families were “headed” by a “male breadwinner” with a “housewife.” Feminists led a large grassroots effort to replace U.S. welfare programs with BIG, and it became an official demand of the British Women’s Liberation Movement by the 1970s.

    Some futurists saw a guaranteed income as a way to protect workers from disruptions to the labor market caused by the computer revolution.

    Second, futurists such as Robert Theobald and Buckminster Fuller saw a guaranteed income as a way to protect workers from disruptions to the labor market caused by the computer revolution. This effort foreshadowed the automation argument for UBI in the 2010s, but it dropped off considerably in the 1980s and 1990s.

    Third, several Nobel Prize–winning economists — including James Tobin, James Meade, Herbert Simon, James Buchannan, and Milton Friedman — and many other prominent economists began arguing that a guaranteed income would represent a more effective approach to poverty than existing policies. To them, BIG would have been an attempt to simplify and streamline the welfare system while also making it more comprehensive. The interest from economists made BIG a hot topic among policy wonks in Washington and Ottawa.

    The mainstream media started paying attention to NIT around the time Lyndon Johnson declared War on Poverty. Politicians and policy advisors began to take up the idea. The Canadian government released several favorable reports on guaranteed annual income in the 1970s. For a short time, many people saw some kind of BIG as inevitable and as the next step in social policy: a compromise that everyone could live with. People on the left viewed it as the final piece of the welfare system — a policy that would fill in the remaining cracks. Centrists, conservatives, and people from the burgeoning libertarian movement saw it as a way to make the social safety net more cost-effective and less intrusive.

    In 1971, the U.S. House of Representatives overwhelmingly passed a bill introducing a watered-down version of NIT. It missed becoming law by only 10 votes in the Senate. The next year, presidential nominees from both major parties endorsed a variety of similar proposals: Richard Nixon supported the watered-down NIT, and George McGovern briefly proposed a genuine UBI. The similarity of the two nominees’ positions probably made BIG less of an issue in the campaign than it would have been if one of them had opposed it.

    Although Nixon won the 1972 election, BIG never got another vote. It died partly because it had no groundswell of support outside the politically marginalized welfare rights movement. Its proponents in Congress made little effort to sell the proposal to the public at large. Many prominent guaranteed income supporters viewed Nixon’s version with skepticism, seeing it as too small with too many conditions to fit the model. In the absence of a wider movement for BIG, politicians paid little or no political cost for letting Nixon’s plan die and letting the idea fade from public discussion.

    Although the second wave was most visible in the United States and Canada, the discussion spilled over into Europe, even as the second wave waned in North America. A high-level government report in France focused on NIT in 1973. At about the same time, James Meade and others managed to draw attention to the idea in the United Kingdom. In 1977, Politieke Pariji Radicalen, a small party in the Netherlands, became the first party with representation in parliament to endorse UBI. The next year, Niels I. Meyer’s book “Revolt from the Centre” launched a substantial wave of support in Denmark.

    People often look back on the second wave of the BIG movement as a lost opportunity because no country introduced a full UBI or NIT, but the second wave had some major successes. The United States and Canada conducted the world’s first BIG implementation trials. The United States created or expanded several programs that can be seen as small steps in the direction of BIG, including food stamps, the EITC, and the Child Tax Credit. All these programs provide income supplements to low-income people. Although they have restrictions and conditions that UBI and NIT don’t, they represent steps toward BIG because they have fewer conditions than most traditional social policies and because they were proposed or expanded as compromise responses to the guaranteed income movement.

    In 1982, the State of Alaska introduced the Permanent Fund Dividend (PFD). The PFD provides yearly dividends, varying usually between $1,000 and $2,000 per year to Alaska residents. Despite being very small, Alaska’s PFD is the closest program yet to meeting the Basic Income Earth Network’s definition of UBI — falling short only by requiring people to fill out a form to verify that they meet the residency requirement.

    Not only did these policies help a lot of people, but their success also provides evidence that can help to push social programs slowly in the direction of universality. But by the late 1970s and early 1980s, politicians such as Ronald Reagan and Margaret Thatcher dramatically changed the conversation. They successfully vilified virtually all welfare recipients as frauds, no matter how well they might have satisfied programs’ need-based criteria. As a result, many people stopped talking about how to expand or improve the welfare system and started talking about whether and how much to cut it. In response, the left largely went on the defensive. Any suggestion that the existing system might be replaced by something better could at that time be seen as lending support to people who wanted to cut existing programs and replace them with nothing.

    In 1980, the United States and Canada canceled the last of their implementation trials. Canada stopped analyzing the data that it had spent years and millions of dollars collecting. For the next 30 years, with a few notable exceptions, mainstream politics in most countries included virtually no discussion of BIG.

    Between the Waves

    The 1980s, 1990s, and 2000s were downtime for BIG in world politics, but there were significant exceptions, when proposals briefly gathered attention in one place or another. These exceptions and the growth of academic interest in UBI were extremely important to building what became the third wave of the BIG movement. In 1982, a British parliamentary committee considered a UBI proposal. National waves of support happened in the Netherlands, Denmark, and postapartheid South Africa at various times. But for the most part, discussion of UBI took place outside the political mainstream.

    Proposals continued to come out in various circles, but they were more easily ignored in this period. For example, Leonard Greene, an aviation expert and successful entrepreneur, wrote two books and sponsored a demonstration project in which he gave a small UBI to several families, but he received little, if any, media response. When I had the pleasure of meeting him, he described his 10-year-old son’s reaction to UBI, “So what you’re saying is that income doesn’t have to start at zero.” I’ve used that phrase ever since.

    As one 10-year-old put it, “So what you’re saying is that income doesn’t have to start at zero.”

    One place the UBI discussion grew steadily in this period was in academic journals. In 1984, a group of Britons, led mostly by academics, formed the world’s first national UBI network, the Basic Income Research Group (now the Citizen’s Basic Income Trust). In 1986, a group of academic researchers established a group that was initially called the Basic Income European Network (BIEN). Philippe Van Parijs (a Belgian philosopher) and Guy Standing (a British economist) were the most active leaders of BIEN for the first 20 or 25 years of its existence.

    From the founding of BIEN to the present, UBI, rather than NIT, has dominated the BIG movement. However, in the last few years, the NIT model has come back. In some countries, the BIG discussion is dominated by NIT, usually under other names, such as guaranteed income.

    The academic debate grew substantially between the mid-1980s and the 2000s, especially in the fields of politics, philosophy, and sociology. By the mid-2000s, national groups existed in at least two dozen countries, including the United States, where the U.S. Basic Income Guarantee (USBIG) Network had been established in December 1999. Because so many UBI networks around the world wanted BIEN affiliation, the network changed its name to Basic Income Earth Network in 2004. Yet UBI stayed mostly outside the political mainstream.

    I became interested in UBI as a high school student in 1980, just as the second wave of discussion was dying down. I started writing about it professionally after finishing graduate school in 1996, when the idea seemed hopelessly out of the mainstream. For those of us taking part in UBI events in the late 1990s and early 2000s, it felt less like a movement and more like a discussion group.

    Even the activist contingent within BIEN and other networks concentrated more on discussion than action, believing (probably correctly) that they had to increase public awareness before they could gather the critical mass of support needed to make political action viable. Isolation from mainstream politics distracted supporters from how much their movement was growing. But as supporters would learn in retrospect, they were helping to lay the groundwork for a takeoff.

    The Third Wave

    Interest in UBI has grown enormously since 2010. The discussion crossed over into the mainstream international media by the mid-2010s. In some places, the crossover began earlier. Those of us who were volunteering at BIEN’s Basic Income News service noticed a substantial increase in media attention in late 2011 and early 2012, and media attention has grown steadily since. It is impossible to attribute the third wave of the UBI movement to any single source. It is the confluence of many widely dispersed actions and events, which I will try to sketch here as well as I can.

    The financial meltdown of 2008, the subsequent Great Recession, and the Arab Spring sparked a new climate of activism. Public attention turned to poverty, unemployment, and inequality. UBI supporters suddenly had a much more welcoming environment for activism.

    By 2008, a national wave of UBI support had begun to swell in Germany. Prominent people from across the political spectrum all began to push different UBI proposals in very public ways. That year, UBI activists in Germany, Switzerland, and Austria attracted the critical mass necessary for effective UBI activism and jointly organized the first International Basic Income Week. This event has taken place every year since and has spread around the world, now including actions as far away as Australia and South America.

    In 2008, the Namibian Basic Income Grant Coalition, funded mostly by private donations from the Lutheran Church, began a two-year pilot, giving a small Basic Income to every resident of a rural Namibian village. This project coincided with a smaller one in Brazil and was followed by a much larger one in India in 2010 (both also largely or entirely funded by private donations). These trials attracted substantial media attention both locally and internationally. They helped inspire the privately and publicly funded experiments later conducted around the world.

    Just as the Indian experiment faded from the headlines, European activists introduced UBI to the European mainstream media by pushing two citizens’ initiatives, one in Switzerland and one in the European Union, both of which attracted hundreds of thousands of signatures. The EU initiative recruited across Europe and collected signatures from every EU member state. The Swiss initiative collected enough signatures to trigger a national vote, which was held in 2015. Although neither initiative ultimately passed, they both built an infrastructure for UBI activism across Europe and attracted enormous international media attention, which in turn sparked additional activity and attracted more support.

    At about this time, journalists around the world started paying attention to UBI, greatly increasing its visibility. By 2015, a third wave was visible to people who were paying attention, and all subsequent activism for UBI owes something to the cumulative results of the actions up to that point.

    However, the chain of activism building on activism was only one of many sources of growth in the UBI movement. One of the movement’s most important strengths is its diversity: Support comes from many different places and from people who do not usually work together, follow similar strategies, or adhere to similar ideologies.

    By the time the UBI experiment was underway in Namibia, economists and sociologists had already begun reassessing the results of the 1970s NIT experiments in the United States and Canada, bringing renewed press attention to BIG and helping to spark new interest in the idea.

    Another source of momentum for UBI came from developing countries that had been streamlining and easing the conditions of eligibility for redistributive programs by creating what are now known as conditional cash transfers (CCTs). Although these programs were conditional, the results from easing conditions were so positive that they significantly bolstered support for further steps toward UBI, not only in lesser-developed countries of the Global South but all around the world. At least one CCT program, Brazil’s Bolsa Familia, inspired by the senator and UBI advocate Eduardo Suplicy, was introduced explicitly as a step toward UBI.

    Support comes from many different places and from people who do not usually work together, follow similar strategies, or adhere to similar ideologies.

    The third wave of the UBI movement is more identifiably left of center than the second wave, which involved many people who portrayed BIG as a compromise between left and right. But some right-of-center support has boosted the movement as well. For example, a group of philosophers and economists calling themselves Bleeding Heart Libertarians wrote a significant amount of pro-UBI literature in the 2010s.

    Mirroring the futurism discourse of the 1960s, new attention to the automation of labor and the related precariousness of employment brought many new adherents to UBI. As unemployment reached new highs during the Great Recession and job openings lagged behind the overall economic recovery, many people, especially in high-tech industries in the United States, began to worry that the pace of automation was threatening large segments of the labor force with high unemployment, low wages, and gig-economy precariousness. Labor leaders, activists, academics, and tech entrepreneurs have all proposed UBI in response, making automation-related labor market changes one of the prime drivers of recent interest in UBI, especially in the United States. Some entrepreneurs, such as Chris Hughes of Facebook and the late Götz Werner of the German drugstore chain DM, have put their money where their mouth is, supporting UBI research, activism, and experimentation, giving an unquestionable boost to the movement.

    Another way technology has affected the UBI debate is through cryptocurrencies (privately issued, all-electronic mediums of exchange). Some people see cryptocurrency as a way to bypass central banks entirely and provide users with a UBI in the newly created currency.

    Environmentalism has also played a major role in the growth of interest in UBI. Two of the most popular proposals for combating climate change are the tax-and-dividend and cap-and-dividend strategies, both of which involve setting a price on carbon emissions and distributing the revenue to all citizens — thereby creating at least a small UBI. Some environmentalists see UBI as a way to counteract the depletion of resources by giving people a way out of the cycle of work and consumption. These kinds of proposals have received support from both Republicans and Democrats.

    Growing interest in UBI, and to some extent tech industry money, have inspired a new round of UBI and UBI-related pilot projects in Finland, Kenya, Canada, the Netherlands, Germany, the United States, and many other places. UBI experiments are both a product and a driver of the current wave of support for UBI. This new round is characterized mostly by many small experiments rather than the few large experiments of the 1970s. Part of the reason is that many of the contemporary experiments are privately financed and therefore have to work on more limited budgets.

    One exception is GiveDirectly’s enormous project in Kenya. This nonprofit has raised enough funds to finance a UBI of 75 cents per day for 20,000 people for 12 years, in an area where many people live on a dollar per day or less. When complete, this study will be the largest and longest UBI experiment ever conducted.

    Between 2017 and 2020, UBI support got a large boost from Andrew Yang’s campaign for president of the United States. He was the first major-party candidate to endorse UBI since 1972, and the first ever to make UBI the centerpiece of their platform. For a political outsider, Yang did extremely well, qualifying for debates and recruiting a large network of supporters. Partly inspired by Yang, many candidates for lower offices also endorsed UBI in 2020 and 2022.

    U.S. activism for UBI took off in October 2019, when activists in New York organized a UBI march from Harlem to the South Bronx. Hundreds of people, including myself, participated in the New York march, while 30 cities around the world joined in with their own marches. The march was so successful that organizers decided to make it an annual event. The 2022 march took place on September 24 at the climax of Basic Income Week.

    Just as Yang suspended his campaign in 2020, UBI got yet another boost from an unexpected source. The COVID-19 outbreak and the related economic meltdown gave impetus for a temporary, emergency UBI. Suddenly mainstream politicians across the world were discussing UBI.

    UBI was particularly well suited to the COVID situation. It functions as a cushion for people who are unable to work either because of social distancing or because of the economic downturn, and at the very same time it functions as a bonus for the essential workers asked to remain on the job during a pandemic. In both ways, it helps reduce the severity of the recession by stimulating the economy from the bottom up. To some extent, these policies represented politicians catching up with activists who had been calling for quantitative easing for the people (rather than for bankers) since the start of the Great Recession in 2009.

    As late as perhaps 2015, it remained unclear whether the third wave would match the size and reach of the second. By 2019, the answer was obvious: Grassroots support and international media attention are more extensive than ever. The third wave represents the first truly global wave of UBI support. The first two did not extend much beyond the United States, Canada, and the United Kingdom, but the third wave involves major campaigns on all inhabited continents.

    The Pattern

    This look at the ups and downs of the UBI movement shows that UBI has tended to enter the mainstream conversation at times when people were concerned with and open to new approaches to address inequality, poverty, and unemployment. UBI has tended to recede from the mainstream conversation when public attention turned to other issues, or when other ways of addressing inequality became dominant. The first wave subsided when policymakers settled on the attempt to build a comprehensive welfare system on the conditional model. The second wave subsided (at least in the United States and Canada) not in the prosperous economy of the mid-1980s but in the troubling times of the late 1970s, when right-wing politicians convinced large numbers of people that redistributive programs should be cut instead of improved.

    The biggest danger to the third wave appears to be growing nationalism. If nationalist politicians can convince enough voters to blame immigrants and foreign competition for growing inequality, they can effectively distract people from mobilizing around better social policies.

    This post was originally published on Basic Income Today.

  • The health case for basic income

    By Elliott Johnson, Matthew Johnson, Daniel Nettle, Howard Reed, and Graham Stark

    See original post here.

    The idea of a universal basic income has had some prominence in recent years – with the Greens committed to phasing it in in their 2019 manifesto, and Labour pledging to trial it in their manifesto that year. It gained prominence again in 2020 when Covid started, with many MPs calling for it in response to the crisis. There is now a briefing on the idea in the House of Lords library.

    Can it work? We run Basic Income Health, a long-term interdisciplinary project based at Northumbria University to find out whether the policy is politically and financially feasible, looking at the link between health and income, and assessing Basic Income’s possible health, social and economic benefits.

    What is ‘basic income’?

    Basic Income would be a system of regular, secure, predictable payments to all the UK’s adult permanent residents to support their basic needs. Unlike most existing welfare systems, it would be largely unconditional – not ‘means-tested’ (dependent on low income), based on additional needs (such as those related to being disabled), or dependent on particular behaviour (such as being unemployed and looking for work).

    Health policy has often focused on improving healthy behaviour and increasing the efficiency of health services, but there is a lot of evidence now to show that health is socially determined. In other words, many conditions are strongly affected by factors such as income, wealth, education, social capital and opportunity. With a lot of emphasis now on prevention, some GPs have called for cash prescriptions, and a range of organisations, health bodies, community groups and politicians have called for trials of basic income.

    What we know

    Awareness of the social determinants of health has been increasing ever since the publication of the Black report in 1980 – with more recent publications including Fair Society, Healthy Lives (the ‘Marmot Review’) of 2010, and the Equality and Human Rights Commission’s evidence review of the impact of welfare reform and welfare-to-work programmes in 2018.

    There have also been systematic reviews of evidence on household income and children’s developmental outcomes, income changes and the mental health of working-age adults, and money and health. These have produced some widely differing findings, suggesting that income has little direct impact on health, that both influence the other almost equally, and that income is highly important in determining health – so there is clearly a need for further research.

    This project

    Our aim is to give policymakers evidence to use in developing and implementing pilots, trials and basic income schemes – and analysing large longitudinal datasets such as Understanding Society is a crucial part of that. The work includes examining relationships between income, financial security and a range of health measures, as well as microsimulation of distributional and health impacts on the basis of trends identified in the data.

    Findings so far

    Some of the key findings emerging from examination of UK datasets include:

    Using Understanding Society, we examined the relationship between socioeconomic status and mental health among 16- to 24-year-olds, and, using the Millennium Cohort Study and Next Steps, we have looked at the relationship between socioeconomic status and mental health among 14- and 17-year-olds and 25-year-olds. Together, these papers showed that being in a higher income group is linked to a lower likelihood of clinically significant depressive symptoms, while those living in the poorest households have a greater probability of mental health problems than the richest. Also, increases in income over the course of childhood and adolescence are associated with reduced symptoms of depression and anxiety.

    We have used the Family Resources Survey to microsimulate the distributional effects of Basic Income cash payments at different levels, and found that the policy would be affordable. Even a fiscally neutral starter scheme would take poverty levels for children and pensioners below their post-1961 low points. More generous schemes would achieve more, at greater cost – but, either way, it could all be done in the timeframe of one parliament.

    We then combined this analysis with the estimates from the Understanding Society analysis to microsimulate the impact of the distributional changes on anxiety and depression among 14-to-24-year-olds. This suggests that Basic income would have a significant impact as a preventive health measure. For example, based on depressive disorders, NHS and personal social service costs, the savings could be between £125 million and £1.03 billion if 50% of cases are diagnosed and treated.

    We have also found that Basic Income would be popular, using crowd-sourced data from ‘red wall’ constituencies.

    Finally, we’ve reviewed data sources including the Census, Understanding Survey, and the Crime Survey for England and Wales (and possible linkage between them) to show that any trials of Basic Income could be evaluated much more effectively in order to understand the health impact.

    TriplePC

    We have used these findings to create a unique tool: the Public Policy Preference Calculator, which allows policymakers, stakeholders and the public to understand the implications of welfare policies.

    Users choose a number of policy features – such as payment amounts, income tax rates, employment status, and means-testing – and see estimates of the effects on income distribution, life expectancy, and mental health. It also provides an estimate of the policy’s likely popularity, either for the whole population, or for population subgroups based on voting behaviour, gender, age, or financial situation.

    Policy recommendations

    We have written reports for Compass, Autonomy and the Royal Society of Arts which together set out a series of recommendations for policymakers including:

    • committing to trials of Basic Income
    • explaining the health and economic benefits to voters using narratives tailored to their circumstances
    • comprehensive and consistent evaluation of trials of Basic Income using measures that allow for comparison with longitudinal data
    • more microsimulation modelling to cover all age groups and major health conditions
    • working with researchers and stakeholders to formulate schemes and work out ways of funding Basic Income
    • bringing copyrighted evaluation measures into the public domain.

    Our research and reports have had endorsements from politicians such as Mark Drakeford, outgoing First Minister of Wales, and Andy Burnham, Mayor of Greater Manchester – and we hope that a trial will start soon in Jarrow, in north-east England, and East Finchley, in north London.

    Research is ongoing, and we are now using Understanding Society data to model the impact of Basic Income schemes on the whole adult population. We’re submitting papers soon, and I hope I can return to this platform with more news of the health case for Basic Income.

    This post was originally published on Basic Income Today.

  • Implementing a basic income means overcoming myths about the ‘undeserving poor’

    By Tracy Smith-Carrier

    See original post here.

    Newfoundland and Labrador recently announced plans to introduce a basic income for people aged 60-64 receiving social assistance. It is slated to roll out in April 2024 and will match existing federal seniors’ benefits.

    On Prince Edward Island, a recent report has outlined how the province could reduce poverty by adopting a basic income. Meanwhile in Ottawa, the Senate is considering developing a framework for a national basic income. Momentum behind a basic income is clearly growing in Canada.

    Still, some remain skeptical and reservations about basic income often come down to ideas about who truly deserves assistance.

    Treating poverty as an individual problem

    There are largely three explanations for poverty. First, the individual explanation points to personal failings or inadequacies (like laziness or lack of discipline) as key contributors.

    Second, the structural or systemic explanation considers the societal barriers that cause poverty: the lack of quality jobs, inequality, climate disruptions and economic and health crises, among other issues.

    Third, the fatalistic explanation suggests that how people fare in life really chalks up to fate (hence the “less fortunate” label), bad luck causes unfortunate events, like illness or loss, that trigger poverty.

    Of these, the second has the greatest weight — the causes of poverty are systemic.

    Canada’s social welfare architecture is modelled after the British and built on 16th-century poor law ideas. This legacy taught us to believe that poverty is a personal responsibility, with the onus on individuals to lift themselves out of it through discipline and hard work. Public assistance was purposefully designed to be punitive and stigmatizing so that people avoided it at all costs.

    The poor were divided into two camps: the deserving poor (the infirm, elderly or disabled) were provided assistance at home, whereas the “able-bodied” undeserving poor were provided food and lodging in exchange for work in gruelling workhouses, supposedly meant to instil a work ethic.

    Following two World Wars and a depression, though, society began to appreciate that people could become “poor” through no fault of their own and that an active government response was needed to foster a healthy and prosperous society.

    In the 1950s to 1970s, Canada introduced various income security programs. By the ‘70s and ’80s, however, some became worried about too much government spending and we reverted to the old ways of thinking about poverty again.

    Myths about poverty

    My research focuses on understanding the causes of poverty and debunking myths about why people become and remain “poor.”

    New ideas don’t always “sweep away the old” and myths about poverty linger, such as:

    Myth 1: Poverty stems from individual problems.

    Reality: Systemic barriers carry more weight in engendering poverty than individual factors. The cost of living crisis in Canada is being driven by inadequate income support programs, unaffordable housing and the lack of quality employment.

    Myth 2: Poor people are lazy, unmotivated and need incentives to work.

    Reality: People in poverty are working hard (often in multiple jobs) but aren’t getting any further ahead. It’s not a matter of inadequate motivation, but a fundamental lack of gainful work opportunities — jobs that pay wages people can live on and possibly raise families on.

    Myth 3: Poor people are all mentally ill and drug-addicted.

    Reality: Addictions are not “the sole property of the poor,” rather they traverse all socioeconomic levels. Poverty does create immense worries for those subjected to it, but research shows mental health and substance use issues improve through interventions, like basic income, that alleviate poverty. Poor environments (often featuring trauma and childhood adversity) generate mental illness and addictions; enriching environments diminish them.

    Myth 4: Poor people are criminals and prone to violence.

    Reality: Criminal behaviour and violence are not confined to people within a specific category or class, although the consequences of criminal behaviour can often differ. Wealthy people can afford high-powered lawyers who help them avoid prosecution and punishment. White-collar crime often receives little to no punishment.

    Meanwhile, low-income neighbourhoods are regularly subjected to surveillance and heightened police presence. And racism (both systemic and overt) has led to the over-representation of marginalized people in the criminal justice system.

    Myth 5: Poor people have different morals and values; they’re different from me.

    Reality: Assumptions of dubious morality again play into narratives of poverty being about individual problems, and exonerate the economic and political structures that reproduce poverty. Almost everyone (even the richest among us) affiliate with the “middle class” and its ideals. Differences among people have much more to do with access to power and resources, not morals and values.

    Myth 6: Poor people just need to be more resilient.

    Reality: Focusing on individual resilience suggests it is people who must be the ones to adapt and change, not the conditions they’re exposed to. Individual characteristics like emotional intelligence explain a measure of resiliency, but researchers are now embracing a contextual understanding of resilience that acknowledges how social structures often determine how resilient we can be. Supportive environments that provide access to resources and opportunities are more likely to produce resilient populations.

    Myth 7: Ending poverty isn’t affordable, and people can rely on charity.

    Reality: The system we’ve opted for now is hugely expensive. We pay dearly to address poverty’s symptoms, not its causes, and do so ineffectively.

    Cash transfers to individuals have great health and social benefits that can reduce the exorbitant costs of poverty. And charity just won’t cut it — people never get out of poverty by using charitable programs and there is a loss of dignity for those who use them.

    These myths are incredibly damaging and hinder us from advancing policy solutions proven to work. Cash-transfer programs, like basic income, have a solid evidence base, showing they’re effective.

    People don’t suddenly drop out of the workforce when they receive a basic income, nor are such programs too expensive to implement. We should be taxing super-rich corporations and individuals more to curb income inequality, known to be deadly for society.

    Let’s discard outdated thinking. Like Newfoundland and Labrador, the rest of Canada needs a basic income to help people cope with the cost of living crisis. Unlike misleading myths, the anguish of poverty is real.

    This post was originally published on Basic Income Today.

  • Universal Basic Income: A solution for a diverse country

    By Vibhor Mathur

    See original post here.

    The lack of access to disposable income is not just the result, but also a cause of great poverty and inequality. Recent experiences like the COVID-19 pandemic have brutally highlighted that traditional policy tools are inadequate in protecting the weakest sections of India. In this context, there are calls for universal basic income (UBI) to strengthen welfare architecture and unlock the nation’s latent demographic potential. UBI is a regular cash payment made individually to each member of a political community, without any means-testing, work requirements or conditionalities.

    India’s diversity has always thrown up unique governance challenges. A tribal woman in Assam, a young graduate in Delhi, a landless labourer in Maharashtra belonging to a marginalised caste and a homemaker in peri-urban Tamil Nadu all have such diverse and distinct needs that creation of uniform policies a near impossible task. The proposals put forward, thus, either fail to recognise the different needs and to provide efficient mechanisms of delivery, or worse, take a priori and ill-informed decisions on the needs of different groups. For instance, free buses are of no use to those who live in areas without public transport.

    Similarly, distribution of sewing machines to empower women misses the key step of asking them if tailoring is the path they want to pursue, or if employment is even the biggest challenge they are facing at the time. Narrowly defined and targeted policies for different groups create inefficient governance and perverse populist political incentives.

    Cash, as a universal medium of exchange, has the unique potential to provide to each person a basic economic floor and empower them to meet their needs as they deem fit. This is not to say that good quality and accessible government services are not essential. But the addition of a cash-based support allows for protecting those who can fall through the cracks and enhance people’s capacity to access better services. The basic income pilot in Hyderabad, WorkFREE, has seen increased health insurance coverage among participants. The Delhi pilot by Self-Employed Women’s Association (SEWA) saw people gaining access to better quality food and thus improving nutritional outcomes. Additionally, universality and unconditionality of the scheme would mean that the government does not need to spend time and resources in assessing eligibility of the potential beneficiaries, and poor and vulnerable people are freed from the burden of such paperwork. In a country with inadequate documentation and awareness, such a scheme provides the state the best chance of robust coverage.

    A basic income also provides the crucial security that can help people tide through crises like health shocks, loss of employment, seasonal or natural disasters, deaths or any extenuating circumstances. These thrust the already poor into extreme poverty, exploitation and endless debt traps. Cash transfer and basic income programmes from around the world show evidence of people being able to invest in better housing, healthcare, education and savings, reducing their reliance on credit and accessing further training or education, entrepreneurship, asset building or more decent work.

    A basic income proposal usually draws two criticisms. First, that beneficiaries will no longer have incentive to participate in the labour market. Second, that giving cash in the hands of the poor will lead to misuse on alcohol and drugs. But basic income pilots around the world have shown that an unconditional cash transfer has no negative effects on people’s desire to work. Even in the SEWA and WorkFREE pilots, many women have been able to negotiate themselves out of exploitative daily wage work and invest in small businesses. As for substance abuse, a meta review of data from around the world by Nobel Prize laureate Abhijit Banerjee and colleagues found that it in fact reduced among cash transfer recipients. Clearly, poverty is a cause of, rather than an inhibitor for, substance abuse among the poor.

    Automation, unemployment, climate crises, pandemics, declining female labour force participation and growing inequality are among the crises that make people, especially the underserved and marginalised, more vulnerable. UBI and better government services are perhaps the best way to provide control, benefits and freedom to the poorest and weakest sections.

    This post was originally published on Basic Income Today.

  • UBI vs. Negative Income Tax

    By Matt Zwolinski

    See original post here.

    We’ve now seen the similarities and differences between a UBI and a variety of existing benefit programs. How does a UBI compare to other common proposals for new redistributive programs? For example, you might have heard about the concept of a Negative Income Tax (NIT), which Milton Friedman popularized as a means of replacing existing welfare programs. An NIT sounds very different from a UBI because, well, it sounds like a tax, not a benefit! But as we’ll see, in most circumstances, the two are mathematically equivalent. Friedman’s coauthor (and spouse) Rose Friedman described the idea as follows:

    The basic idea of a negative income tax is simple . . . Under the current positive income tax you are permitted to receive a certain amount of income without paying any tax . . . This amount is composed of a number of elements— personal exemptions . . . standard deduction . . . [etc.] To simplify the discussion, let us use the simpler British term of “personal allowances” to refer to this basic amount.

    If your income exceeds your allowances, you pay a tax on the excess at rates that are graduated according to the size of the excess. Suppose your income is less than the allowances? Under the current system, those unused allowances in general are of no value. You simply pay no tax . . .

    With a negative income tax, you would receive from the government some fraction of the unused allowances . . . When your income was above allowances, you would pay tax, the amount depending on the tax rates charged on various amounts of income. When your income was below allowances, you would receive a subsidy, the amount depending on the subsidy rates attributed to various amounts of unused allowances.

    To illustrate, imagine a negative income tax with a personal allowance of $30,000 and a tax rate of 20% on all income above $30,000. Individuals with incomes below $30,000 will receive a payment that equals 20% of the difference between $30,000 and their pre- tax income. Thus:

    • Amy, who earns $0, receives a net transfer from the government equal to 20% of her unused $30,000 allowance, or $6,000 (20% × (0 – $30,000) = −$6,000; i.e., a subsidy of $6,000);

    • Bruno, who earns $30,000, owes nothing and is owed nothing; and

    • Chloe, who earns $60,000, pays a tax of 20% on all her income above $30,000, or $6,000 (20% × ($60,000 − $30,000) = $6,000).

    This is mathematically equivalent to a UBI coupled with a tax on non- UBI income. Imagine a UBI of $6,000 paid to all regardless of income coupled with a 20% tax on all other income, with no exemption amount. Thus:

    • Amy, who earns $0, receives a UBI payment of $6,000 but pays no tax, resulting in a net transfer from the government to Amy of $6,000;

    • Bruno, who earns $30,000, receives a UBI payment of $6,000 but pays tax of $6,000 (20% of $30,000), resulting in a net transfer of zero;

    • Chloe, who earns $60,000, receives a UBI payment of $6,000 but pays tax of $12,000 (20% of $60,000), resulting in a net transfer from Chloe to the government of $6,000.

    And both are mathematically equivalent to a UBI that explicitly phases out with income. Consider a UBI of $6,000 that phases out at a 20% rate starting with one’s first dollar of non- UBI income that is coupled with a 20% tax on non- UBI income over $30,000. Such a UBI fully phases out once income hits $30,000 (20% × $30,000 = $6,000). Thus:

    Amy, who earns $0, receives a UBI of $6,000 and pays no income tax, for a net transfer from the government of $6,000;

    • Bruno, who earns $30,000, receives no UBI (his UBI fully phases out) and pays no income tax, for a net transfer of zero; and

    • Chloe, who earns $60,000, receives no UBI (again, on account of the phaseout) and pays income tax of $6,000 (20% × ($60,000 – $30,000)), for a net transfer to the government of $6,000.

    The first example involves an NIT; the second involves a UBI that doesn’t explicitly phase out coupled with a tax on all non- UBI income; and the third involves a UBI that explicitly phases out with income and is coupled with a tax on non- UBI income over an exemption amount. But all result in the same net transfers between Amy, Bruno, Chloe, and the government.

    Three points about these examples. First, although they use a flat rate of 20%, the equivalence holds in tax systems that use graduated rate structures. Second, they envision individuals as the taxable unit, while the tax systems of the United States and a few European countries (such as France and Germany) generally use families. Nothing mandates, however, that an income tax system use the family instead of an individual as the taxable unit, and in fact, many OECD countries use the individual.

    Third, the examples assume that an income tax will fund a UBI. The sole circumstance in which an NIT and UBI are not economically equivalent is if a UBI is funded solely from sources other than taxes on income (or a base strongly correlated with income). Imagine a UBI funded solely by revenue from auctioning off the broadband spectrum. In such a case, Amy, Bruno, and Chloe each receive $6,000, regardless of their income, since the revenue from firms that purchase broadband spectrum is not correlated with their individual incomes. But as we discuss in chapter 12, almost every serious UBI proposal of any significant scope would require some, if not all, of its funding from increased taxes on income or a base like consumption that strongly correlates to income.

    Assuming that a UBI will be at least partially funded by income taxes, we can see that the key difference between a UBI and an NIT is one of optics. A UBI appears to be just that— universal— while an NIT is explicitly tied to one’s income. UBI proponents argue that universal framing is key to minimizing the stigma associated with poverty, and that a drawback of an NIT is that it— like traditional welfare programs— explicitly targets the poor. And it may be the case that such framing increases support among some members of the public, given the popularity of seemingly universal programs like Social Security and Medicare. But it may also reduce support in other quarters. NIT proponents argue that the superficial universality of a UBI undermines its political viability, due to the “Why are we paying a UBI to Jeff Bezos?” rejoinder.

    This post was originally published on Basic Income Today.

  • How Basic Income Will Impact Rent

    By Karl Widerquist

    See original post here.

    One fear about Universal Basic Income (UBI) is that it could cause rents to increase, partially or entirely diverting the benefit of UBI to landlords.

                The real estate market has a lot of underlying problems that need to be addressed on their own. Before I consider how we can address those problems, I’ll consider how UBI will affect real estate prices assuming those problems remain in place.

                You might think, UBI goes to everyone. Everyone has to buy or rent homes. Therefore, the price of all housing will increase. But that’s not how it works.

      Although UBI goes to everyone, it does not increase everyone’s income, because we have to increase taxes to counteract the inflationary pressure UBI introduces into the economy. Relatively low-income people are “net beneficiaries” of UBI—meaning that they receive more in UBI than they pay in taxes. Relatively high-income people are “net contributors” who pay more in taxes than they receive in UBI. There will be a substantial number of people in the middle whose tax increase is about the same size as the UBI they receive.

                UBI puts upward pressure on the cost of real estate in areas where net beneficiaries own or rent, but it puts downward pressure on the cost of real estate in areas where net contributors own or rent. That means that some of the benefits of UBI will be diverted to low-income landlords, and that’s a problem to be addressed. But it also means greater housing equality, less income-based housing segregation, and therefore less school segregation.

                As the difference between what low-income people and middle-income people can pay for housing declines, low-income people will have more access to better quality housing. You get what you pay for, or more practically, you get what you can afford to pay for. Homeless people and people at risk of homelessness will be the greatest beneficiaries because they will be reliably able to pay their rent every month, giving landlords a better incentive to rent to them.

                The taxes paid by net contributors put downward pressure on the value of their homes, but perhaps more importantly, it also puts downward pressure on the real estate they hold as investment property. As we have cut taxes over the last 50 years, wealthy people have put more and more of their investment money into both commercial and residential land, pushing up land values for everyone, making parking money in real estate attractive, even as low- and middle-income people are less able to afford to rent property. Taxes targeting the 1% will help reverse this trend, making housing and commercial real estate more affordable for everyone.

                These benefits do not eliminate the possibility that landlords will capture some of the benefits of UBI. To reverse that possibility, we need policies to address some of the underlying problems with the real estate market. These include changing the many unfair and inefficient real estate tax policies that greatly favor wealthy landowners. For example, landlords are allowed to claim a tax deduction for “depreciation” of an asset that does not depreciate. We should also change zoning laws to allow—or even to require—more dense, more walkable, more public-transit friendly neighborhoods and to get rid of the large parking lots and the unattractive empty lawns surrounding commercial parking lots in most American suburbs.

                Perhaps the most important thing that we can do to create more affordable housing is to shift taxation from income and real estate to land value. That is, taxes based on the locational value of land alone rather than on total real estate value, which includes buildings and other improvements to the land. It is not difficult for economists to separate the value of land from the value of improvements on it by comparing the price of vacant lots and built properties in the same neighborhood. The benefits of land value taxation are so great and so often discussed that I don’t need to go into them in detail in this short article, except to explain that they actually put downward pressure on real estate and rental prices rather than upward pressure as one might expect.

                When land value is untaxed or under-taxed, it often pays investors to park their money in vacant buildings and vacant lots, reselling them without improvement as the price goes up. If land value is highly taxed, while building and other improvements to real estate are not taxed, it pays investors to buy land only if they are going to put it to its highest value use, making more effective residential and commercial space available on the same (or even a smaller) amount of privately held land, especially if land taxes are accompanied by the zoning law reforms mentioned above.

                I’ve argued that despite the underlying problems in the real estate market, and the likelihood that landlords will capture some the benefits of UBI, they won’t be able to capture all of the benefits. UBI will do a lot of good for middle- and low-income renters and homeowners even if it is not accompanied by another other reform. And, if we introduce real estate market reforms along with UBI, we can ensure that virtually all the benefits of UBI go to people rather than landlords.
    – Karl Widerquist, Søciété Café, Msheireb, Doha, Qatar, September 8, 2023

    This post was originally published on Basic Income Today.

  • UBI Book Review: Citizen’s Basic Income: A Multidisciplinary Approach by Malcolm Torry

    By Stuart White 

    See original post here.

    In this book, Malcolm Torry explores what a range of different academic disciplines have to say about universal basic income (UBI — an income paid periodically to all resident individuals in a given territory with no test of means or willingness to work). After an introductory chapter to elaborate the idea of UBI, each chapter gives an overview of a relevant academic discipline and then discusses how the discipline casts light on the case for a UBI. The disciplines covered include history, ethics, economics, psychology and social psychology (which are given separate chapters), sociology, social policy, social administration, politics, political economy and law.

    Each chapter provides a very useful introduction to what a given academic discipline has to say about UBI. For the most part, the focus is on what each discipline can contribute to the case for a UBI. Thus, in the chapter on ethics, Torry draws out the way various ethical perspectives, including consequentialism and John Rawls’s theory of justice as fairness, can offer philosophical support for a UBI. In the chapter on economics, Torry uses income-leisure choice theory to show how a UBI can produce a gain in welfare for the low paid by reducing the effective marginal rate of taxation on labour income compared to a means-tested system of income support and potentially help facilitate a transition to an environmentally sustainable economy.

    The chapter on psychology draws in part on a text on UBI by Psychologists for Social Change which suggests a UBI could impact favourably on variables such as agency, security, connection, a sense of meaning, and trust and includes an in-depth discussion of how a UBI might reduce stress. The social psychology discussion reviews literatures on social norms and stigma. It acknowledges the challenge that conventional notions of “deservingness” pose to UBI but also points to a UBI’s benefits in terms of diminishing stigma and to the potential for public attitudes to evolve positively in the wake of a UBI reform. From a sociological perspective, Torry argues that UBI has advantages over means-tested welfare in the face of changes in family structure and in terms of increasing the power of women.

    Torry’s chapter on “social policy” focuses mainly on how a UBI might emerge from a real-world policy-making process. It includes an in-depth discussion of the various “feasibility” debates around UBI. Is it, for example, financially, administratively, or politically feasible? Drawing on material in this and other chapters, Torry defends the feasibility —or multiple feasibilities — of UBI while also acknowledging that the feasibility issue is likely a multiple, and therefore challenging, one. In a follow-up chapter, Torry focuses on the “social administration” aspect of social policy as a discipline, elaborating the argument that a UBI would be relatively easy and cheap to administer compared to means-tested benefits and other alternatives. These two chapters also provide valuable outlines of possible UBI schemes for the UK addressing issues of cost and practical implementation.

    Torry’s politics chapter explores the way UBI can fit with a range of political ideologies, from liberalism to socialism to conservatism, and with a number of core values, such as the reduction of poverty and inequality and “citizenship”. The chapter on political economy seeks to identify ways that UBI will increase economic growth, assuming this is desirable, for example through a stimulus to enterprise formation and innovation. The chapter on law discusses whether international human rights documents, such as the UN Declaration of Human Rights and the European Convention on Human Rights, give a legal basis for UBI. Torry argues that current UK benefits systems breach human rights standards and that a UBI would do much better. This and a number of other chapters, such as the politics chapter, also helpfully remind us that UBI needn’t be considered only as a national policy but that we can also imagine UBI as part of “multi-tiered” conceptions of citizenship, including a global UBI.

    The above is, of course, a far from complete summary, but I think it does draw out fairly the extent to which, as said, the emphasis is on what various academic disciplines can contribute to the case for UBI. The book certainly does not ignore some challenges that these disciplines raise for the UBI supporter, but perhaps there is more that could be drawn out here. For example, within my own specialism of political philosophy, I think there is more to be said on how Rawls’s theory of justice offers resources to argue against UBI. Torry notes how some have drawn policy conclusions distinct from UBI from Rawls’s theory, but it is striking that one of the leading academic political philosophers supportive of UBI, Philippe Van Parijs, has argued that Rawls’s theory —specifically, the so-called “difference principle”— is indeterminate on the matter until we have decided how to weight the various primary goods associated with this principle —in particular, income and leisure-time. (Rawls’s own comments are, in my judgement, more ambivalent on the matter than Torry suggests.)

    In addition, although the book covers a very broad range of material it arguably has gaps. For example, so far as I can see there is no significant discussion of UBI and racial injustice, although discussions of the ethics or sociology or politics of UBI offer contexts for this. As Juliana Uhuru Bidadanure has pointed out, this has been an omission in the wider UBI academic literature.

    Overall, academics, students and activists alike will find this book very helpful in seeing what various disciplines have to contribute to discussion of UBI. My advice is to approach the book in a constructively critical fashion, by asking, in each chapter, what more you think the disciplinary approach in question can contribute to both the case for and the case against UBI.

    The post UBI Book Review: Citizen’s Basic Income: A Multidisciplinary Approach by Malcolm Torry appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • The circle of obligation and the mandatory-participation “social contract” (Mandatory Participation on Trial, Part 12)

    By Karl Widerquist

    See original post here.

    Most of us, of course, don’t view ourselves as using the threat of homelessness to get people to accept bad jobs, low wages, and poor working conditions. The ideal of the conditional safety net is an imagined “social contract” with a circle of obligation in which everyone shares in the work and benefits of the joint project we call our economy. The implied contract for individuals is that everyone promises to work if they can; in return, they receive a fair wage if they can work and generous support if they can’t. People who take this view believe that just about everyone in need can prove they’re deserving in one of these two ways. Once we make them prove it, we’ll feel solidarity for them and provide generous, secure support: free from stigma and invulnerable to political attack. Virtually everyone will see the benefit of meeting the real but doable conditions.

                The conditional safety net has never fulfilled that promise, even for people who meet its conditions. Conditional programs have never eliminated poverty among those who work or those who meet virtually anyone’s definition of genuine need. It hasn’t protected recipients from stigma. It hasn’t protected programs from political attack. It puts the vast majority of individuals in the worst possible starting point in the market, making them vulnerable to low-wages, poor working conditions, harassment, and so on—always trying but never succeeding in making up for those vulnerabilities with regulation. It forever holds the threat of homelessness over the heads of workers to get them to keep doing the things more advantaged people demand. 

                Because potential workers have no reasonable alternative, the imaginary agreement is more of a “social ultimatum” than a “social contract,” and that’s part of the reason the conditional safety net has consistently failed to fulfill its promises. Social contract theorists like to pretend that democratic decisions are everyone’s decisions. They imagine everyone agreeing on a fair reward for a fair contribution. In reality, even if everyone participates in the decision-making process, the best a democracy can do is obtain the decision of a majority. Majorities tend to be made up of relatively advantaged people; ruling coalitions inherently become insiders; and no method can ensure that they will adequately appreciate the concerns of the less powerful. 

                UBI would be a new kind of check on our political process, conceding real, practical power to every single individual—no matter how disadvantaged, no matter how far from the center of power. Without this check on political power, the terms of the social ultimatum are solely in the hands of privileged people—property owners and political decisionmakers.

                Psychological theory and historical experience indicate that ruling coalitions suffer from self-serving bias like everyone else. Even in a perfect democracy, the ruling coalition might not have sufficient empathy for or understanding of outsiders and disadvantaged people to be capable of judging them. The farther you go from the centers of power, the more people’s lives deviate from decisionmakers’ expectations, the more their stories are untold, the more their situations are misunderstood, and the less weight their concerns are given. And our democracy is far from perfect. Our government is dominated by wealth and other forms of privilege.

                Many of the assumptions of the conditional system reflect the self-serving bias of this group. The ruling coalition has to believe that there are people who deserve poverty and homelessness and that the relatively advantaged people who make up the coalition have the right, responsibility, and capability to judge who deserves homelessness.

                The requirement of a fair contribution for a fair wage sounds good, but fairness is subjective. Whose opinion is most important—powerful decisionmakers or the people who have to live on those wages? I don’t think I am capable of deciding what is fair to people less advantaged than me. I, therefore, suggest a modest approach in which we admit the closest we can get to a “fair” wage is one that both the employer and employee agree on when both have the genuine power to say no. 

                Many specifics of the conditional system also reflect self-serving bias. For example, privileged people justify the participation requirement by arguing that jobs give people a sense of purpose. That’s a paternalistic rationalization and a poor reason to force people to take what often turn out to be dead-end jobs. If we respected disadvantaged people, we would free them to decide whether a job provides enough sense of purpose—along with pay and other rewards—to be worth taking.

                Probably the most important example of self-serving bias in the conditional welfare system is that the number one thing people are supposed to do to prove they are “deserving” or “truly needy” is to be willing, if able, to take a job. That is, they have to provide services for people who control more resources than they do.

                In reality, we have not created a circle of obligation but a hierarchy of obligation. Our labor obligation is to serve the whims of property owners, who have no reciprocal labor obligation. Nonwealthy people serve each other as a byproduct of secondary importance. You have to do something for the benefit of at least one landlord and one person who owns the inputs you need to make your daily bread. If you then want to do things for other people, that’s optional. Workers can make money by serving other workers, but their ability to reward you is proportional to how well they have served the people who own resources and capital.

                The self-serving assumptions built into our system are, in many ways, self-defeating for most of us. Our policies promote the values they display rather than the values they demand from others. The mandatory-participation requirement is supposed to promote unselfishness. People in need of help are supposed to learn the virtue of giving back when they receive, but the principle the authority promotes by its example is selfishness: never give unless you get something back.

                People in need in a mandatory-participation economy will rightly question whether the authority has their best interest at heart when the authority’s first question is, “What can you do for us?”

                People who have been through our conditional system have reason to think, “When I was in need, they made me work for them or prove I was unable. They gave me nothing. I will never give them anything.” The authority’s attempt to force others to be unselfish actually promotes selfishness for the simple reason that the authority behaves selfishly. If you really want to promote the unselfish desire to give back, you must share unselfishly and unconditionally. 

                Probably the most important way in which the self-serving assumptions of the mandatory-participation economy are ultimately self-defeating is that they’re really only good for employers who like paying low wages. Some middle-class people believe that mandatory participation is good for them because they participate, but as argued above, you don’t help workers by putting them in the position in which they can’t refuse to work. Our increasingly punitive mandatory-participation policies have led to greater inequality, lower middle-class incomes, greater workplace insecurity, greater stress, and so on. 

                Many people have imagined a workers’ revolution that cuts out property owners and establishes a true circle-of-obligation. As always, let me see the plan. Maybe it solves some of the problems I’ve mentioned, but no plan solves the insider-outsider problems inherent in politics. Wishful thinking about everyone becoming better people after the revolution won’t make the self-serving bias of people in power go away.

                This concern is beginning to take root on the left as well as in the center. As Katja Kipping says, the old left wanted to control the means of production; the new left wants to control their own lives. 

                Once you’ve introduced your plan for reform, it’s not up to you to tell oppressed people when they’re free: they’ll tell you. Whatever your plan to eliminate oppression is, if you have to force people to participate, you’re just another oppressor.

                One might respond that the reality behind the circle of obligation is that, sooner or later, people really do need each other. That is true, but that doesn’t mean anyone needs to force people to do things for each other. We have other tools. It’s better to give every individual the power to opt-out than to give advantaged people the power to force everyone in.

                A voluntary-participation society can’t ensure that everyone will work, but it can eliminate poverty and homelessness. It can reduce the fear and stressfulness of middle- and lower-class lives. It’s a kinder society. It invites you to do the things society recognizes as useful by offering you rewards, but it doesn’t force you to do what you’re told by hogging all the resources if you refuse. 

    The post The circle of obligation and the mandatory-participation “social contract” (Mandatory Participation on Trial, Part 12) appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • Universal basic dividend as a form of welfare

    By Craig Berry

    See original post here.

    Universal basic dividend (UBD) is a mechanism by which each member of a given society receives a regular payment, with no or very limited conditionality, typically based on recognising the value of common resources, or of public investment in the capitalist economy. This post explores the potential benefits and limitations of this idea, summarising the policy brief recently published by the UCL Institute for Innovation and Public Purpose.

    A brief history of welfare capitalism

    The idea of UBD is usually attributed to English-born American revolutionary, Thomas Paine. But this over-simplifies Paine’s legacy, to some extent. In his pamphlet Agrarian Justice, Paine envisaged a system whereby landowners were taxed at a higher rate (mainly through tax on inherited land), to compensate those without land rights — on the basis that land was a shared resource that ultimately belonged to everyone.

    This revenue would enable a dividend payment to all citizens. But it would also fund financial support for older people and disabled people who were unable to work.

    Paine was of course writing in the late eighteenth century, before the establishment of welfare states. Not only did he envisage a UBD-style system as an integral component of welfare provision, he also saw taxes on unearned privileges and rent-seeking, rather than on income from work, as its main source of financing.

    When welfare states began to emerge, however, after the industrial revolution, both of these possibilities had faded away. Instead, influenced by John Maynard Keynes’s views on the role of transfer payments in macroeconomic stability, capitalist economies chose to ask workers to fund their own welfare, reimagined as ‘social insurance’ (albeit with a greater or lesser degree of redistribution across different systems).

    There were many gaps in provision, mainly affecting those not contributing directly to the labour market. These gaps have gradually been filled in, partly in recognition of the inequalities and injustices they helped to create, yet welfare states have become even less universal as a result, with spending increasingly focused on means-tested benefits to lift the poorest just above poverty thresholds.

    UBD versus UBI

    The notion of UBD, in theory, is based on the notion that certain resources cannot be legitimately owned by private individuals or enterprises. And so any financial benefit arising from them must be shared, reflecting that these resources are being used (or exploited) by private entities under license from humanity (or a given population) as a whole.

    Renewed interest in UBD comes from two related but distinct sources. The first is the growing clamour for a Universal Basic Income (UBI), that is, a guaranteed and (ideally) unconditional transfer payment which would (in a fully-fledged version) allow individuals to meet their basic needs without being compelled to work.

    Some of Keynes’ contemporaries in Britain — most notably, the economist Barbara Wootton — had wanted the post-war welfare settlement to develop further, advocating the introduction of a system we would now think of as UBI to mitigate capitalism’s endemically inegalitarian outcomes. Wootton lamented the vulnerability of the Keynesian paradigm to questions of affordability, since welfare is about ‘distributing what we have amongst ourselves in a particular way, not for subtracting from (or adding to) what there is to distribute’ (Wootton cited in an excellent paper on her scholarship and activism by Carolina Alves and Danielle Guizzo).

    UBD is of course a form of UBI. The case for UBI generally rests upon the impact it would have: eliminating poverty, and more autonomy for individuals in the labour market. It would be funded, presumably, by general taxation (or, depending on where you stand on the debate around modern monetary theory, by money printing).

    Some have argued UBI can help to bolster political support for the welfare state, insofar as all citizens would benefit, irrespective of their economic circumstances. On the other hand, it seems likely that any move towards UBI would be opposed by some voters, in fear that it would create a class of ‘undeserving’ poor (or not quite poor) by softening the compulsion to work.

    By encompassing a link to specific funding sources (as discussed further below) it is possible that UBD would neutralise some of the political objections to UBI. And although UBI is intended to provide a no-strings-attached transfer, it is not difficult to imagine right-wing governments restricting eligibility for payments, or making them conditional upon certain behaviours. UBD would be less vulnerable to this, because receipt of the dividend would be grounded in the moral legitimacy of its funding source.

    UBD’s strength in this regard is also, however, its weakness. With a more limited funding source, UBD payments are likely to be much lower than the level at which UBI payments are typically envisaged, undermining the impact that UBD might have on alleviating poverty.

    It is essential that, if a UBD system is implemented, it is seen as a step towards a wider programme of poverty alleviation — whether or not this programme includes UBI — rather than itself a final destination.

    UBD as a form of climate action

    UBD has gained popularity recently through, secondly, its co-evolution with green or ecological thought. In contrast to the reasoning behind conventional UBI, the value of UBD arguably lies not simply in the impact that dividend payments may have, but also the sources of these payments.

    Many advocates follow Paine in identifying income and wealth derived from land as the key source of UBD financing. Natural resources could however be conceived more broadly, meaning a UBD system would be based upon the exploitation by private firms of any natural resource for the purpose of capitalist accumulation.

    The firms may be taxed at a higher rate, and/or be compelled to relinquish partial ownership of the enterprise to the public. The system would be justifiable on the basis that the resources in question are commonly owned by humanity (although some green thinkers would regard this as an anthropocentic perspective), but also, crucially, as a behavioural intervention designed to disincentivise resource exploitation which harms the natural environment.

    There are, however, two main problems with the behavioural change approach. First, if exploitation of natural resources is successfully disincentivised, it may undermine the financial basis of UBD — with environmental objectives achieved at the expense of social objectives.

    On the other hand, and secondly, even if addressing poverty or inequality is prioritised within UBD design, there is a danger that such efforts become reliant on harmful exploitation of nature — social objectives achieved at the expense of environmental objectives.

    The most significant UBD currently in operation, in Alaska in the United States, is instructive in this regard. The Alaska Permanent Fund is capitalised by royalties paid by oil extracting companies to the state government. The fund (which is invested on citizens’ behalf) is used to provide an annual payment to citizens of around $1500–2000.

    The system essentially co-opts Alaskan citizens into the perpetuation of environmentally destructive, extractivist practices — there is no evidence that it has disincentivised such practices to any extent. (Of course, the companies would be paying royalties irrespective of the dividend: the system merely determines what the state government does with royalty revenues.)

    The social foundations of capital

    There may be a wider economic logic behind UBD, beyond efforts to address climate change and resource depletion

    If the mechanisms for financing UBD are focused on unearned profits or rent-seeking practices — which help to sustain inequality, and do not genuinely contribute to the economy’s productive capacity — or on enabling the public to take an ownership stake in leading firms, then a UBD system may challenge prevailing accumulation practices

    There are two main ways in which to finance a UBD: taxation, and capital ownership. Taxation to finance a UBD could encompass a higher rate of tax on all or some large corporations, or new wealth or windfall taxes. It could be focused on land value, as Paine envisaged, or on access to natural resources such as oil and other minerals, as envisaged by green advocates of UBD.

    The other main set of proposals for financing a UBD are more specifically linked to dividends, that is, returns on capital. As Yanis Varoufakis argues:

    “A common myth, promoted by the rich, is that wealth is produced individually before it is collectivized by the state, through taxation. In fact, wealth was always produced collectively and privatized by those with the power to do it: the propertied class… There is thus a strong case that the commons have a right to a share of the capital stock, and associated dividends, reflecting society’s investment in corporations’ capital.”

    Varoufakis’s argument is reminiscent of Mariana Mazzucato’s in The Entrepreneurial State. Whereas Mazzucato recommended a public stake in firms which benefited directly from public investment, Varoufakis advocates a system whereby a percentage of the shares (i.e. capital stock) from every public offering is channelled into a Commons Capital Directory. The dividends that arise from share ownership would be transferred to citizens equally as a UBD. One of the main rationales for this system, according to Varoufakis, is that it would allow ordinary citizens to benefit even as large firms increase their profitability through the automation of labour processes.

    In my view, this is closer to Paine’s ideal than the purely environmental version of UBD. For Paine, land was the common resource that warranted recognition in the distribution of profits. For Varoufakis, two centuries on, the common resource is the public realm as a whole.

    Regular payments enabled by a UBD system could help to alleviate poverty, and strengthen labour’s autonomy. However, UBD payments would generally be lower and less frequent than UBI payments (because they would not be funded by general taxation), it is possible that payments would be one-off rather than regular, when a certain life-stage is reached.

    Interestingly, Paine’s system would not have provided for regular payments to most people, but rather seed capital for young adults. Nick O’Donovan and I explored this approach in our paper on ‘entrepreneurial egalitarianism’, as well as the possibility that capital would be available to all in certain circumstances — starting a business, taking on care responsibilities, etc. — but not necessarily distributed universally, at least until the system became more established. This could be managed via citizens’ wealth funds, so that all citizens have control over the revenues generated by a UBD system.

    UBD promises to deliver on some of the moral and material objectives of welfare, while enabling innovation in economic governance. Perhaps this breadth of ambition means it will struggle to be truly transformative. But large-scale transformation in economic governance rarely happens in one heave: UBD could be an important step forward.

    The post Universal basic dividend as a form of welfare appeared first on Basic Income Today.

    This post was originally published on Basic Income Today.

  • No Simple Policy – Designing a European Basic Income

    See original post here.

    The idea of a European universal basic income bears potential as a palpable way of delivering on the promise of ‘social Europe’. However, many proposals remain vague. We outline a concrete policy design for an EU-wide basic income to foster debates on how such a policy could look like in practice.

    By Dominic Afscharian, Viktoriia Muliavka, Marius S. Ostrowski, Lukáš Siegel

    Whenever Europe is hit by a crisis with obvious social implications, one idea pops up in public debates with clockwork regularity: Paying everyone a regular amount of money in the form of a universal basic income (UBI) to remedy the social repercussions of the crisis. Since Europe has certainly had no shortage of such shocks in recent decades, UBI debates have become a staple feature of the discourse on European social policy. However, these debates are characterised by a number of misconceptions, which we aim to tackle head-on through our policy proposal for a progressive European UBI (EUBI). At a glance, they are as follows:

    1. There is only one UBI
    2. UBI is a simple policy
    3. UBI is a silver bullet of social policy
    4. UBI must replace the welfare state
    5. UBI should be organised at the national level

    We argue that such misconceptions lead to a number of overgeneralisations, which ignore the fact that UBI is not fundamentally different from many other policies: its implications hinge on the concrete shape it takes. Policy design can make the difference between an EUBI being a tool of market-making or a disruptive mechanism of redistribution across the European Union. It can make an EUBI foster progressive ideas or cement conservative models of society. It can make the difference between a revolutionary utopia or a marginal reform. In short, policy design matters.

    Therefore, we attempt to provide a proposal of how to make the rather ambiguous idea of an EUBI concrete. We build on our in-depth 2021 open-access study ‘The European Basic Income – Delivering on Social Europe’ published by the Foundation for European Progressive Studies. It contains more background information on our theory, reasoning, and calculations. Throughout the following sections, we outline the key pillars of our proposal following some guiding questions: Who should receive a UBI? How much should a UBI provide? How should a UBI be distributed? And how is such a UBI to be funded?

    In answering these questions, we aim to be pragmatic as well as nuanced. Although our proposal might potentially upset those who favour more revolutionary, fully emancipatory UBI designs, it should nevertheless illustrate mechanisms whereby the general idea of a UBI can be moved a few steps closer to becoming feasible by doing away with some of the misconceptions mentioned above.

    The Borders of the Universe

    One of the main reasons UBI is often considered a ‘simple policy’ is the idea that it would be paid to everyone – after all, it is universal. However, defining the borders within which it is universal can dramatically change policy implications: Is UBI implemented locally, regionally, nationally, EU-wide, or perhaps even globally? Is it universal to all citizens or everyone who currently resides within the territory in question?

    Our proposal aims for a UBI across the whole EU. Thus, we opt for introducing an EUBI directly at the EU level, co-administered by the Commission and Parliament. This is crucial for our proposal as it would maximise the scheme’s ability to contribute to a palpable ‘social Europe’. As this implies, our proposal is in large parts motivated by considerations around EU integration. On top of this, past experiences with Eurosceptic narratives indicate that if a UBI were to be introduced solely at the national level within an EU that continues to embrace free movement, this might – rightly or wrongly – spark debates about welfare chauvinism.

    Furthermore, we propose paying the EUBI out directly to every adult long-term EU resident, albeit with adjustments regarding whether they are to receive this payout automatically. Starting at the respective national median income, the amount of EUBI paid out by default would be increasingly tapered off. Anyone would still have the right to claim their full EUBI, but the need for the wealthier to make such claims actively instead of receiving automated payments should act as a nudge to increase the scheme’s feasibility and address some concerns over justice. For minors, we further propose paying out a share of the full monthly basic income to their caregivers, with the rest being paid into a sovereign wealth fund. Acting as a starting capital, the accrued amount of money would then be paid out to the individuals in whose name it has been saved upon turning 18 years old. For adults dependent on care, we suggest that their EUBI be administered on trust by their caregivers – as is already the case under current ‘power of attorney’ arrangements.

    Modest Beginnings

    But how much exactly should the EUBI provide? Here, we propose a combination of modest beginnings and ambitious goals. We believe that one of the biggest hurdles to introducing any UBI consists in first establishing its basic principle. On that basis, we propose introducing the scheme at very low levels. To avoid disturbing labour markets or causing unexpected externalities, the EUBI would be first introduced at only a few euros per month which would slowly be raised under close supervision by interdisciplinary research groups. Eventually, the EUBI should cover the national at-risk-of-poverty thresholds at 60% of the national median, or 50% of the national mean income, whichever is higher. By implication, UBI levels would vary between EU member states.

    In order to take account of income differences between member states, we further propose what we call an ‘EUBI corridor’. Once fully implemented, no member state’s UBI level would fall below 20% of the EU-wide median income, and none would exceed 60%. This should ensure a combination of sufficiency, redistribution, and incentives for richer member states to encourage income growth in poorer member states. What is of fundamental importance is that an EUBI must not be used as cover to abolish national welfare states. Only purely monetary schemes that are in sum entirely covered by the EUBI might optionally be replaced. Otherwise, the scheme would risk increasing social hardship, and would rapidly be overburdened by unreasonable expectations about the level of redress for social problems it is capable of providing. It goes without saying that this condition is vital for progressive political actors to consider a UBI a viable social policy option.

    Distribution

    While levels of payments are important, the impact of an EUBI further depends on how distribution is carried out. As alluded to before, we emphasise the importance of paying out UBI directly in monetary form to individuals over the course of their entire lives, with the exception of children and people fundamentally dependent on care by others. This is intended to maximise the scheme’s emancipatory potential. We further opt for a regular interval of payments, preferably monthly, to allow for some flexibility in spending patterns while avoiding the risk that the EUBI’s security component becomes lost through high one-off payments.

    In order to increase the potential effect of the scheme on the palpable social dimension of the EU that citizens actually associate with European integration, payments should be explicitly marked as coming from the EU. However, this obviously does not rule out leveraging existing national welfare infrastructures in order to reach citizens with a minimum of extra bureaucratic hassle.

    Funding – More than just a Hurdle

    Another important component of designing an EUBI is funding. While this dimension usually dominates UBI debates through questions around the feasibility of the scheme, we argue that funding is central to an EUBI far beyond this consideration. In fact, funding is at least as important as output, as it can become a direct lever to control the impacts of the policy. A UBI funded entirely by taxes on labour income would have entirely different implications regarding redistribution, incentives, and economic effects than one fully funded from taxes on land value.

    To balance the many considerations at play, we propose spreading the funding of the scheme across many shoulders. Thus, a mix of revenue sources should be introduced gradually. At a first stage, the EU needs its own financial resources, introduced through an expanded fiscal capacity at the EU level. These would include a financial transaction tax, a CO2 tax, a green border tax, an extension of emission trading schemes, and a sovereign wealth fund. Following this, a diverse portfolio of further taxes could be added, consisting of an EU-level digital services tax, an EU-wide VAT, and contributions from national corporate taxation. At a final stage, EU-level taxes on luxury goods, high incomes, inheritances, wealth, and land value, along with a ‘robot tax’ could institutionalise direct solidarity and redistribution between EU citizens. Just as with the introduction of the scheme itself, we propose introducing revenue sources gradually. Linking both elements of the policy design, EUBI levels could be fully tied to increasing revenue sources at the beginning.

    In Embrace of Gradualism

    These are the most basic elements of our complete proposal, which hint at an underlying conflict within UBI debates. While the idea itself is often praised as a revolutionary, emancipatory concept, it runs into problems regarding its perceived feasibility. Thus, our proposal embraces gradualism: We acknowledge that a slow and careful introduction comes at the cost of immediate decommodification. However, we argue that looming conflicts over justice, feasibility, impacts, and the value of empirical trials can hardly be resolved by insisting on introducing a high-level, disruptive UBI right away. Implementing the most basic elements of the policy mechanism first would likely make it easier to reliably monitor the large-scale effects of a policy that remains associated with empirical uncertainties. Furthermore, this approach might make it easier to overcome procedural hurdles such as partisan opposition and institutional resistance within the EU. Crucially, the option of expanding the scheme in the long run remains in place.

    What should have become clear from our proposal is that there are countless ways to tweak the design of a UBI, and that a UBI is neither the simple policy nor the silver bullet some believe it to be. That said, we believe that our proposal represents a solid basis for moving the debate over UBI in the EU forward and making it more concrete, while pairing traditional elements of UBI proposals with some innovative tweaks in policy design.

    This post was originally published on Basic Income Today.

  • Opinion: Basic income wouldn’t lead to adults leaving their jobs and could lift millions of children into brighter futures

    By: Michael W. Howard 

    When the child tax credit, first established in 1997, was expanded for a year in 2021, it was a major political and social win for the country. At a time when the pandemic had worsened many families’ financial distress, the Biden administration’s decision not only added to the amount of the tax credit and converted the payment from a year-end lump sum to monthly payments; it also abandoned the work requirement for parents. This immediately affected one third of all children in the U.S., including 52 percent of Black children and 41 percent of Hispanic children, whose families were formerly excluded because the parents earned too little to qualify for the tax credit. The tax credit expansion lifted 3.7 million children out of poverty by December 2021 without significantly reducing parents’ work participation.

    Then in January 2022, the expanded tax credit expired, which plunged 3.7 million back into poverty, with higher percentage increases in poverty among Hispanic and Black children. The credit showed us that cash assistance could help families stay afloat and, contrary to some political beliefs, parents would not leave the labor system because of it. Even so, the failure to renew the expansion should not negate this important political milestone: Congress came within one vote of abandoning parental work requirements as a condition to get cash assistance for their families.

    The child tax credit expansion is one step toward a universal basic income that could eliminate poverty without increasing unemployment. There are 37.9 million people in poverty in the U.S., according to 2021 Census Bureau figures. Providing a government-funded monthly payment to every individual would broadly lift them out of poverty, while providing millions of children a better chance at a good education, improved health and higher future earnings. With 11.6 percent of people in the U.S. living at or under the poverty line, this payment would benefit millions and save hundreds of billions of dollars by reducing the social costs of poverty. The question becomes: Can we convince our elected officials that poverty is not a moral failing, but a social condition that can be addressed by establishing an income floor below which no one falls?

    A universal basic income, or UBI, is defined as “a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement,” according to the Basic Income Earth Network. The child tax credit isn’t quite the same, because it is only for families with children; it also phases out at higher income levels and essentially still forces people to prove they are “poor enough” to need help—a means test. A more ambitious bill approaching the idea of UBI introduced by Representatives Rashida Tlaib and Mondaire Jones, would eliminate the means test, thereby creating a universal child allowance. Universal benefits have several advantages over means-tested benefits. They avoid divisions between “us” and “them,” removing the stigma associated with targeted benefits. Uptake by the needy, a persistent problem with targeted benefits, is improved when stigma and bureaucratic hurdles are removed. Universal benefits tend to be more popular and hence are more politically secure and better funded. And universal benefits, dispensing with means testing, are easier to administer. The universal child allowance would enroll all children at birth so no child would be excluded.

    No country has yet introduced a universal basic income sufficient for essential needs. But in the U.S., Alaska has enacted its Permanent Fund Dividend, which is an annual cash payment, averaging around $1,600, that goes to every resident without means test or work requirement. It contributes to poverty reduction and has no negative effect on people’s willingness to work.

    In the U.S., a universal child allowance and Social Security for seniors would mean that the two most vulnerable age groups in our population would have near-universal and unconditional income guaranteed. But of course, extending a basic income to the remaining adults faces serious hurdles. First, no one expects children under the age of 18 to work, and keeping them in poverty is costly for everyone; according to one estimate, social benefits outweigh fiscal costs of universal child allowance by 8 to 1. But there is a widely held expectation that able-bodied adults should work for their income. Empirical evidence from the means-tested minimum income experiments of the 1970s in the U.S. and recent analysis of a similar experiment in Manitoba, among other research, support the idea that few people actually stop working when they are simultaneously receiving a guaranteed income. Such research also shows that those who stop working for wages do so for good reasons, such as finishing high school or taking care of young children, and that a modest guaranteed minimum income can enable people to work who otherwise could not. Even if a few people would take the cash without contributing to society, the benefits may substantially outweigh the costs.

    The norm that every abled person receiving cash payments should be seeking a job can also be challenged. First, holding a job is not the only form of work. Taking care of children and elders is work—work that is performed mostly by women without compensation. A basic income is a way of supporting and recognizing that work without intrusive state monitoring and reinforcement of gendered division of labor.

    Second, research by Belgian political theorists Philippe Van Parijs and Yannick Vanderborght reveals that a significant part of individual income, or the lack of income, results not from labor but rather from luck. This is obvious in the case of income from inherited wealth, but no less true of income connected to jobs in capital-intensive industries or income involving inherited knowledge and technology. On the negative side, many people with unrecognized disabilities fall between the cracks of targeted cash transfer systems. A basic income is one way to equalize such morally arbitrary luck. Universal basic income does not give people something for nothing so much as equalize everyone’s share of the luck. Fair giving and taking would then take place on the basis of a more equitable starting place.

    In addition to the belief that people will quit their jobs under a basic income, the idea faces another hurdle: apparent cost. A basic income of $1,000/month for every person in the U.S. would have a gross cost of about $4 trillion a year. A means-tested minimum income guarantee, which phases out as earned income increases above a threshold, could raise incomes by the same amount for perhaps one sixth of the gross cost of a basic income. However, the net cost to the taxpayers is no greater for basic income than for a means-tested minimum income, because the higher taxes some will pay are offset by the basic income they receive.

    To the extent that the mere fact of “churning”—money going out to everyone, only to be taken back in taxes from some—is an obstacle to political support, the means-tested guaranteed income may be the more politically feasible policy, but it would lose some of the advantages of universal programs.

    In the meantime, if a truly universal child allowance is eventually adopted, that could tip the scale in favor of a basic income further down the road.

    This post was originally published on Basic Income Today.

  • UBI – A highly relevant macroeconomic policy tool that most policymakers misunderstand

    By:  Swapnil Pawar

    Universal basic income has been discussed at length in recent debates in economics. The mistaken and yet generally widely agreed premise is that it is a dole of sorts. It seems like a welfare scheme of an overly ambitious nature. I propose that, far from being a dole, universal basic income is actually a lifeline to save modern mature economies from meeting the sorry fate implied due to the fundamental flaw in the capitalist organization. The likely medium term future of capitalist economies is of gradually falling real output as wealth concentration reaches extreme levels. This may lead to violent revolutions in the extreme or at least widespread misery and hardship in the average case. There is not much that can alter this course of economic evolution in post-industrial economies – save a lucky break on some breakthrough technology.

    Why the fatal flaw?

    Universal basic income strikes at the root of this fatal flaw. The reason the flaw becomes fatal is that the demand for financial profits and savings is structural and relatively constant while the supply of financial dissaving is uncertain. Universal basic income can generate a constant source of financial dissaving that does not require real investments and government deficits to bear the entire burden of funding the profits and savings demand. UBI can act as the balancing figure that makes up the gap between the demand for financial profits and savings and the supply of financial dissaving from real investments and fiscal deficits.

    What about inflation?

    The obvious concern with UBI is that it may be inflationary. However, this concern misses the point. If an economy is struggling with inflation, it is likely that it is operating at close to its capacity. UBI as suggested here is an antidote to underutilized capacity co-existing with unfulfilled consumption demand. If there is no spare capacity, the ‘recommended’ value of UBI will be zero, as is the case in this specific year and might remain so for the next couple of years.

    The amount of UBI can be adjusted to ensure that the total dissaving across real investments, government deficit and UBI is not a runaway number that can threaten to cause hyperinflation. Such targeting can be self-correcting during boom periods when real investments are strong – thus reducing the need for relying on UBI. During the slowdown, UBI can be increased to take care of falling incomes and consumption. Besides being good for the average person in the population, this also ensures that the vicious cycle of falling incomes leading to falling consumption leading to yet more reduction in income is avoided.

    Where do we fund it from?

    The second question often asked about UBI is – who is going to fund it? I propose that UBI need not come from the government’s regular finances. Hence, it need not add to the fiscal deficit. Given our claim above that UBI is a public good, in the sense that it avoids recessions and the corresponding hardship for the common public, UBI can be funded through fresh issuance of currency by the central bank. The amount of UBI can be credited into the bank accounts of the entire population by the central bank. This does amount to the issuance of new high-powered money (HPM) by the central bank. Conventional theorists of money multiplier may worry that a jump in HPM may cause a cascading jump in total ‘money supply’.

    What will happen to this newly issued HPM? Since it is going to the average folks, most of it will get spent and will find its way ultimately in the profits of firms. Hence, everyone is better off!

    Always on UBI?

    Will this lead to excessive investments? Once again, our very basis of suggesting UBI is to avoid the problems caused by a mismatch in sustained demand in financial profits/savings and low real investments. If indeed UBI-driven fall in yields leads to an increase in real investments, that is for the better. The proposed control on the amount of UBI as making up a relatively stable nominal GDP means the recommended UBI amount will start to drop as real investments pick up. Secondly, on a more pragmatic basis, the question facing many central banks through much of the last decade is not whether low interest rates will lead to excessive real investments but why there are not many real investments despite the rates being near zero for so long. Another way to think of UBI then is to see it as a tool in the policy arsenal to kickstart real investments if they don’t pick up even with near-zero interest rates. After all, UBI is likely to spur consumption, owing to its wide distribution – thus pushing up the attractiveness of investing in capacity expansion by firms.

    This post was originally published on Basic Income Today.

  • How universal basic income entered the political mainstream

    By: Colin Drury

    It’s near the end of the month, and all 2.1 million adults living here have just had – as they do every month – £995.85 paid into their bank accounts by the government.

    For this, they have done nothing. It is free money, no catch or conditions. Fill your boots. Spend it as you wish.

    “It sounds a radical concept, and it is,” says Matthew Johnson, professor of politics at Northumbria University.

    “But if you look at the detail, this could solve so many social problems that I think it can’t be dismissed anymore.”

    The idea of a universal basic income – where every person is effectively given an allowance by the state to cover basic living costs – is one that is fast entering the political mainstream. And one that Andy Burnham, the mayor of Greater Manchester, has now said he wants to see piloted in his region.

    “It would reduce poverty to almost unheard-of levels, address the inequality both between and within regions … and provide a foundation for our young people to secure good lives that support good mental health,” he wrote in a newly-published report co-authored by Johnson and funded by the left-of-centre Compass campaign group.

    Proponents say a UBI would lead to happier, healthier and more prosperous lives. Studies suggest it could wipe out deprivation, reduce NHS demand and encourage greater educational attainment. Because it would effectively replace the complexities of the current benefits system, some say it would engender a sense of social cohesion and equality: everybody gets something, and nobody (except in certain specific circumstances) gets any more.

    So, could it really happen? As the cost-of-living crisis continues to highlight how ineffective the UK’s current social security system is, might we be on the cusp of free money for all?

    When Professor Johnson began researching how popular a universal basic income would be with northern voters, he wasn’t sure it would have mass appeal.

    As Jeremy Corbyn found out when he promised free broadband ahead of the 2019 election, the British people are resolutely sceptical of a free lunch. They instinctively understand the bill is always in the post.

    Yet what Johnson and his co-authors discovered was overwhelming support for a UBI.

    As detailed in their Winning The Vote report, some 70-80 per cent of those questioned backed such a payment. The most popular proposal was the one imagined above, where everyone received almost £1,000 a month.

    Why so? Perhaps because there was an understanding that this wasn’t really free money.

    “People get that there would be increased tax contributions to help fund it,” explains Johnson. “But it is the simplification – and the fairness – of the system that holds the appeal.

    “What we have seen over 15 years of various crises going back to the financial crash – and certainly with the current cost of living crisis – is a realisation that the risk of destitution is far wider than it once seemed. You can have a good job and still have to choose between heating or eating. And, so, I think, voters feel that a generous UBI would offer real security to everyone, while also having at its heart this real sense of everyone getting the same.”

    Certainly, the benefits of such a system could be profound.

    According to an earlier research paper also co-authored by Johnson, an effective UBI could help lift so many people out of deprivation that poverty would fall to its lowest levels in 60 years. Even a more conservatively modelled estimate by the Institute for Social and Economic Research in 2021 suggested such a scheme could reduce hardship by 16 per cent. Tim Berners-Lee, the man who invented the internet, has suggested it is the best way he can think of to address inequality. Pope Francis said it a flat payment for all would “guarantee…dignity”.

    Crucially, it could also stimulate economic growth, improve educational outcomes, and generate cultural output. That’s because by giving people greater financial security, it opens up breathing space for them to explore entrepreneurial ideas, learn new skills, study new qualifications or partake in artistic endeavours.

    And, while opponents argue the bill would be eye-watering – cig packet maths show giving every English adult £995 would cost more than £40 billion a month – proponents say this would be good value.

    How so? Because evidence suggests that guaranteeing a person’s income leads to improved physical and mental health, while also reducing their likelihood of falling into crime.

    Ultimately, a UBI would – so the argument goes – save the country huge amounts of money by reducing the number of social ills that had to be dealt with downstream. It could, for instance, demolish the £118 billion spent on mental well-being provisions every year. By rendering redundant much of the work of the Department for Work and Pensions, it would also save huge amounts of its annual £200 billion budget.

    “We must not suggest it’s a silver bullet to all problems because there’s no such thing,” says Lena Swedlow, campaigns and projects officer with Compass. “But destitution lies at the heart of so many of these issues – whether that be health or education – and if we place this genuine income floor beneath people, it helps prevent that destitution in the first place.”

    Perhaps for all these reasons, political parties including the Lib Dems, Greens and Plaid Cymru have all now committed to trials. Several Labour ministers are said to like the idea in theory. In Wales, a two-year experiment has just begun where all young adults leaving care will be given £1,600 a month. In the North East, Jamie Driscoll, Labour’s North of Tyne mayor, has said that, similar to Burnham, he would like to host a trial in his region.

    “Every business I talk to tells me what they need for growth is not tax cuts, but more skilled workers,” he says in a swipe at prime minister Liz Truss. “And what UBI gives people is the freedom and agency to increase their skills, increase their employability and increase their earning potential.”

    Would he, as a political leader, accept £1,000 being pumped into his account every month? He would, he says, “because it’s connected to the tax system, so it is entirely fair for everyone”.

    He wouldn’t see it becoming potentially politically toxic to accept? “Only if people ask daft questions,” he replies.

    Daft questions or not, not everyone is convinced by the concept.

    Opponents say a universal payment would be unwieldy to administer and disincentivise people from looking for work. “On a philosophical level, I think it would encourage people not to seek employment,” says Russell Bernstein, the Conservative leader of Bury Council within Greater Manchester. “On an economic level, I think it would be far too expensive. There’s no logic to it I can see.”

    The Centre for Social Justice – the think tank founded by Iain Duncan Smith – has, meanwhile, argued that UBI would not be able to meet the complex support needs of many households. Because some people – disabled people, for instance – would still require extra financial assistance, large elements of the current welfare system would have to remain in place anyway, it points out.

    “Assuming the primary aim of UBI is to tackle poverty, there is little or no evidence to suggest it would achieve its aim,” says Matthew Patten, the centre’s political and communications director.

    More pertinently, perhaps, are trials that have been held in other parts of the world. While these have shown some positive outcomes – a two-year-long scheme in Finland suggested improved health and increased motivation to find work – not a single such trial has ever been continued or become permanent policy. “Many of the arguments in favour of UBI do not hold up in reality,” says Patten.

    This post was originally published on Basic Income Today.

  • How a guaranteed $600 per month is changing the lives of the formerly incarcerated

    By: Sarah Krueger

    Tydricka Lewis is appreciative of the $600 she’s given each month as part of Durham’s guaranteed basic income program.

    “It has impacted my life tremendously, making it more efficient for me to be a mother [in] a single parent home,” Lewis said. “I’m able to provide reliable decent transportation for my children.”

    Lewis, a mother to three children, acknowledged the money is even more necessary with recent inflation.

    On Thursday, nonprofit StepUp Durham provided data on how its guaranteed basic income program doing since launching in March.

    StepUp Durham provides $600 each month, with no strings attached, to 109 people who were formerly incarcerated.

    “None of the 109 have been reincarcerated,” said StepUp Durham Executive Director Syretta Hill.

    Hill said about 40% of people who come out of incarceration return within three years.

    “The fact that people are not returning to incarceration has a lot to do, I think, with having more money in their pockets to be able to take care of the things they need to take care of,” Hill said.

    Durham is one of only 50 U.S. cities with a guaranteed basic income program. Hill hopes the Durham program and others like it across the country will make the case for a federal policy.

    Hills said the participants are spending money on taking care of themselves, families, food, transportation and household needs.

    “The goal is to see what it means for individuals, who have historically lived on the margins, to get supplemental income,” Hill said.

    Lewis said she works 60 hours per week at two different jobs.

    “If people have the things that they need on an everyday basis, the world would be at much peace,” Lewis said.

    Hill said private donations have funded the StepUp Durham program.

    Durham Mayor Pro Tempore Mark-Anthony Middleton said the program pushes back on the critique that people weren’t going to spend money on necessities. He also was pleased no one in the program has been reincarcerated.

    “People that are economically stable, who aren’t worried about how they’re going to feed their children, make better neighbors,” Middleton said.

    Middleton said he would support spending city funds for the program. He also said he would push for the program to continue.

    “Here’s an initiative that’s not policing. It’s not ShotSpotter. It’s not hiring more cops,” Middleton said. “It goes directly to what we say the problem is: Lack of resources [and a] lack of opportunity.”

    Hill said she hopes guaranteed basic income will continue in Durham, even if it’s not run by StepUp Durham.

    “When we think about economic disparities, we know that women and people of color are often impacted by wealth gaps,” Hill said. “And so, we’re hoping that things like guaranteed income can really fill in the gaps.”

    Lewis said she’s been able to start her nonprofit New Generation Movement with the buffer of money from the guaranteed basic income. The nonprofit is a women’s mentorship group.

    “If we provide the residents or the citizens in our county with the things that they need, we would have a little bit more peace,” Lewis said. “I do believe the gun violence would end, tremendously.”

    This post was originally published on Basic Income Today.

  • Universal basic income and macro models: What can we learn?

    By: Geoff Crocker

    The macroeconomics of universal basic income (UBI) is insufficiently addressed, both in proposing and in evaluating UBI. The UBI/macroeconomy interface is bidirectional. Macroeconomic analysis generates a strong case for basic income, whilst basic income proposals have significant macroeconomic impact, and need to show macroeconomic sustainability. The redistribution of income proposed in microeconomic simulation models of UBI feeds into the aggregate consumption function of the macroeconomy, further driving production and investment functions with their onward effect on government expenditure, trade balances etc until a new dynamic macroeconomic equilibrium is reached.

    Only a comprehensive macroeconomic model can address these questions.

    The affordability of basic income proposals is the usual macroeconomic concern. Will higher existing taxes, and/or the introduction of new wealth, land, or ecological taxes be necessary to ‘pay for basic income’? Will basic income inevitably drive inflation or devaluation?

    A specific macroeconomic interpretation generates a case for basic income to fund consumer demand. The argument distinguishes between high-tech developed economies and low-income developing economies.

    In high-tech economies, technology implemented as automation reduces labour income in proportion to output. This is likely a priori, and also results from a thought experiment of a totally automated economy with neither labour nor wage, where goods and services could only be allocated by vouchers, equivalent to basic income. In this case, UBI would amount to 100% of GDP.

    A more nuanced argument is therefore that degrees of automation cause degrees of relative reduction in labour income, requiring degrees of basic income as a component of disposable consumer income. Research at the University of Bath Institute for Policy Research (IPR) confirms that technology empirically reduces the labour share in the economy. It is a valid alternative structural explanation of the 2007/8 economic crisis that inadequate consumer income led to the huge increase in unsustainable household debt.

    In developing economies, a similar but different Keynesian argument for basic income arises. Such economies are widely restricted to low debt/GDP ratios of 50-60%, in contrast to developed economies running debt/GDP ratios in excess of 100%, in Japan’s case reaching 265%. Traditional Keynesian fiscal stimulus operated through government capital expenditure working through the consumer income multiplier effect.

    A more direct Keynesian proposal would provide basic income to consumers to stimulate demand, and hence production and investment, to create sustainable non-inflationary growth. The application of this policy would need macroeconomic modelling in each country economy to test the response of the supply side, to ensure against inflation from excess demand, or devaluation from increased imports. Supply side production and investment policies could then integrate with the basic income policy.

    The challenge of macroeconomic affordability is ever present in basic income debates. Basic income proposals are costed, taxes are raised, and welfare benefits reduced to pay for the net UBI scheme cost. This assumes that government financial balances are the measure of affordability. But an alternative measure of affordability was advanced by Keynes in a 1942 BBC address in which he said, “Anything we can actually do, we can afford”. Ultimately, we can consume what we can produce.

    This shift from financial balances to real resource constraints requires a radical redefinition of the ontology of money in the economy. Orthodox thinking insists that money has inherent value, derived historically from gold reserves, or currently from the sale of government bonds and the assumption of government debt. It is clear that this is an artefact, and not necessarily the case.

    Governments can simply create money, as commercial banks currently do when making personal and business loans. Such money creation does not need to count as debt but must observe the constraint of output GDP to avoid inflation. Not only is this conceptually true, but it has been proved empirically by the widespread current practice of central banks holding a very large proportion of government debt, which, since the central bank is owned by the government, is not net debt at all. Currently, the UK Bank of England holds £875bn of UK government debt in this way. Academic papers by leading central bank economists such as Michael Kumhof also challenge the definition of money as debt.

    The question then arises of whether a substantial aggregate basic income can be funded by debt-free sovereign money. Research by Cambridge Econometrics assumed an injection of aggregate basic income funded by debt-free sovereign money into a multisectoral model of the UK economy. The result was a stable equilibrium, collapsing into neither inflation nor devaluation. The demand stimulus of basic income initially took up spare supply side capacity, and then fed into the investment function to yield non-inflationary growth.

    A further simulation of the model showed that basic income funded by debt-free sovereign money restored labour income lost by extensive future automation. A current outstanding proposal is to conduct similar modelling with a stock-flow-consistent model of the UK economy with a specific financial module to simulate money flows and balances.

    Basic income is therefore a sustainable, affordable, macroeconomic necessity.

  • In this age of chronic uncertainty, we need a basic income

    By: Guy Standing

    We in the UK are living in an age of chronic uncertainty, in which crises pile into one another, plunging millions of people deeper into insecurity, impoverishment, stress and illness. There was the financial crash of 2008, a decade of austerity, a series of six pandemics culminating in COVID-19 (with more to follow), and now the cost-of-living crisis as inflation mounts, possibly reaching an incredible 20% this winter.

    And then, of course, there’s the impending ecological disaster confronting the whole world, as climate change spirals out of control, bringing famine, droughts, flooding and more.

    Nassim Taleb coined the term ‘black swan’ to designate shocks that were rare, unpredictable and had devastating consequences. They are not rare now. But they are uncertain – in terms of when, where and why they occur and who will be adversely affected.

    There is something else, too. It looks as if a large proportion of the British population will be affected by such a shock. Millions of people are expected to suffer from fuel-related hardship this winter, bringing more deaths and ill-health. Natural disasters such as floods could hit numerous communities. Being in a job is not a guarantee that you will escape poverty or economic insecurity. You and I cannot be confident that we will not be among the victims.

    Three deductions should flow from this bleak scenario. First, feasible economic growth will not overcome the threats. Second, old policies are not valid for tackling the new crises. Third, we need to build societal resilience, a new income distribution system and a new social protection system. Targeting a minority would be futile and inequitable.

    The postwar welfare state was built on a presumption of full employment of men in full-time jobs earning family wages, in which there was a need for compensation for ‘contingency risks’ or ‘temporary interruptions of earnings power’. It was always sexist; women were barely mentioned. But the essence was ‘ex post’ compensation – that is, money after the event.

    This is inappropriate today, where the core challenge is chronic uncertainty, for which one cannot devise a social insurance system. What is needed is an ‘ex ante’ protection system – in other words, money that precedes the event – which gives everybody guaranteed basic security.

    But our politicians are failing to appreciate the nature of the challenge and are resorting to yesterday’s answers, to yesterday’s problems.

    Economic growth is not the answer

    The Tory and Labour leaders have both made overriding commitments to maximising economic growth. Keir Starmer says that the Labour motif for the next general election will be “growth, growth, growth”, and that he will only consider policy proposals from the shadow cabinet if they promote growth. Meanwhile, an adviser to several Tory chancellors says the new Conservative prime minister will commit to an “absolute priority” of maximising growth.

    This brings to mind Michael Gove’s characterisation that Liz Truss is taking a “holiday from reality”. Both the Conservatives and Labour are misdiagnosing the nature of the recurrent crises. Both are chasing the mirage of high-GDP growth, wishing away the awful ecological implications.

    Starmer says the free market has failed. But we do not have a free market. It is rentier capitalism, in which most income flows to the owners of property – financial, physical and intellectual. Economic growth has to be unrealistically high for the precariat and other low-income groups to gain anything. This is why real wages have stagnated over the past three decades, and why earnings have lagged behind GDP growth, the difference made up by rising debt.

    The income distribution system has broken down. Across all OECD countries, financialisation has accelerated, and is fuelling inflation for its benefit. As shown elsewhere, in the UK, financial assets of financial institutions have risen to more than 1,000% of GDP, with most finance used for speculative activity rather than productive investment.

    A rising share of income is going to capital, and more is going in rent, in excess profits. Within the shrinking share going to labour, more has gone to the top, again in forms of rent. The value of wealth has risen sharply relative to income, while wealth inequality is much greater than income inequality.

    All the time, the precariat grows. What should exercise progressive politicians is that, for a growing proportion of the population, income instability and insecurity have grown by more than is revealed by trends in average real wages.

    People lack income resilience. Millions are living on the edge of unsustainable debt. Raising the minimum wage (desirable as that is) will not solve that, nor will trying to be King Canute in banning flexible labour relations.

    So what are our politicians proposing in this context of chronic uncertainty, a broken income distribution system and a daunting ecological crisis? Ad-hoc window dressing that seems deliberately intended to avoid the reality that we have a transformation crisis on our hands.

    Tax cuts would benefit the relatively secure; price freezes would cost the public finances and distort markets; raising the minimum wage would bypass the precariat and those outside the labour market; and targeting more benefits to those on Universal Credit would merely bolster an unspeakably punitive and inequitable scheme.

    As William Beveridge wrote in his 1942 report, which led to the post-1945 welfare state, “It’s a time for revolutions, not for patching.” The strategy should be one of dismantling rentier capitalism and recycling rental incomes to everybody. Above all, the base of social protection should be the provision of ex-ante security. People – all of us – must know that, whatever the shock, we will have the wherewithal to survive and recover.

    The case for a basic income

    Politicians should be looking at ways of introducing a basic income for every UK usual legal resident. It would not replace all existing benefits, and would have to involve supplements for those with special needs. It would have to start at a modest level, but would be paid to each person, equally and individually, without means-testing or behavioural conditionality.

    Newly arrived legal migrants would have to wait for a period (which does not mean they should not be assisted by other means). And to overcome the objection that it should not be paid to the rich, tax rates could be adjusted to be more progressive.

    Experiments with basic income have shown it results in improved physical and mental health, less stress and more work.

    Before coming to how to pay for it, I want to emphasise the reasons for wanting a basic income for all. The fundamental justification is moral.

    First, it is a matter of common justice. Our income owes far more to the contributions of our ancestors than to anything we do ourselves. But as we cannot know whose ancestors created more or less, we should all have an equal ‘dividend’ on the public wealth. After all, if we allow the private inheritance of private wealth, there should be a public equivalent. Pope Francis has come round to that rationale in his support for basic income.

    It is also a matter of ecological justice: the rich cause most of the pollution, while the poor pay most of the costs, primarily in diminished health. A basic income would be a form of compensation for that.

    Second, it would enhance personal freedom, including community freedom. Although paid individually, that would not make it individualistic. Experiments, as summarised elsewhere, have shown that everybody having a basic income induces stronger feelings of social solidarity, altruism and tolerance.

    Third, it would enhance basic security, in a way that means-tested, conditional benefits cannot possibly do. Insecurity corrodes intelligence and induces stress and loss of the capacity to make rational decisions. We are experiencing a pandemic of stress and rising morbidity. None of the existing policy proposals would reduce that.

    Finally, there are instrumental reasons. Experiments with basic income around the world have shown it results in improved physical and mental health; less stress; more (not less) work; and enhanced social and economic status for women and people with disabilities.

    Basic income is not a panacea, but it should be part of a transformational strategy, complemented by putting public utilities – most notably water – back in public hands and by rent and energy price controls. Fiscal reform is required to fight against ecological decay while helping to overcome chronic uncertainty.

    Progressives should accept that taxes on income and consumption should be raised – because they are relatively low in this country, and because more revenue is needed to pay for our public services and, in particular, to reverse the privatisation of our precious NHS.

    Some people, including (previously) the Labour Party, have called for the provision of universal basic services rather than a basic income. As laid out in a 2019 report by University College London’s Institute of Global Prosperity, this would cover services such as housing, education, healthcare and transport.

    But this goes too far into state paternalism, and would not help with the nature of our current crisis. People need assured financial resources to overcome the economic uncertainty and lack of resilience.

    No government can know the particular needs of particular people, which means that subsidising some services over others would be both arbitrary and distortionary. What would ‘universal basic housing’ look like in Britain? One bedroom per person with a kitchenette and a toilet, with a bedroom tax for any extra room? What about food and clothing? Better to move towards enabling people to decide on their own ‘basic needs’.

    How to pay for it

    In addition to higher taxes on income to pay for services, we should think of the ‘commons’ – that is, all that inherently belongs to every citizen of the UK, beginning with the land, air, water and sea, and the minerals and energy beneath. Over the centuries, these have been taken from us illegitimately, without compensation to us or our ancestors. This includes all the land that has been enclosed, the forests and public spaces that are being privatised, the sea bed that is being auctioned off, and the oil and gas sold for windfall gains and given away in tax cuts for the wealthy. 

    This line of reasoning leads to the proposal that levies should be put on elements of the commons that we have lost, with the revenue put into a ‘commons capital fund’, which would be charged with making ecologically sustainable investments, from which ‘common dividends’ would be paid out equally to every citizen.

    The initial base for paying for a basic income would be conversion of the personal income tax allowance, which benefits higher-income earners and contradicts the view that in a good society everybody should be a taxpayer. If the revenue from that were put into the fund, it would provide enough for £48 a week for every adult. 

    Then add a 1% wealth tax. This is justifiable for many reasons. Wealth has risen from three times GDP in the 1970s to seven times now; wealth inequality is much greater than income inequality; and more than 60% of wealth is inherited and unearned. A 1% wealth tax would be sufficient to pay a modest basic income. 

    A lot more revenue could be raised by rolling back many of the 1,190 subsidies and tax breaks given mostly to wealthy people. 

    A modest land value tax, based on the size and value of land, is also justifiable on common justice grounds. Then add a carbon tax. It’s vital if we are to reduce greenhouse gas emissions and global warming, but will only be politically popular and feasible if all the revenue from it is recycled as part of common dividends. 

    Other levies could include a ‘frequent flyer levy’, and a ‘dirty fuel levy’ on all those cruise liners and container ships that keep their engines running all the time they’re in port, poisoning the atmosphere and causing widespread cancers.

    This is the basis of an income distribution system suited to this current era, with supplements for all those with extra needs. It’s an approach that would open up a vista of multiple forms of work, unpaid as well as paid, putting care at its centre. 

    Basic security would be regarded as a fundamental right, and personal freedom would be enhanced while precarity would be reduced; the precarity that comes from dependency on a discretionary state and undignified charity. At this moment of omni-crisis, we need to march in this direction.

    This post was originally published on Basic Income Today.

  • A Basic Income Grant in South Africa: What It’s All About

    By: Carilee Osborne

    See original article here.

    South Africa is one of the most unequal countries in the world, with extremely high rates of poverty and unemployment. Large numbers of people are excluded from the economy without the means to ensure that their basic needs are met. Recently there has been a lot of debate about the introduction of a Universal Basic Income Guarantee (UBIG) in South Africa and its potential to address poverty and ensure that all people have an adequate standard of living.

    But what the introduction of a basic income grant means and what it looks like is not always clear. In this three-part series from the Institute for Economic Justice (IEJ), we cover the basics of a basic income grant. This, our first article, covers the overview of what a (U)BIG is, what different types exist and what transformative potential it may have. Our second piece covers the debate in South Africa and our final piece focuses on how we could finance it.

    What is a (U)BIG ?

    A basic income guarantee is a commitment by government to ensure that everyone has a minimal level of income to meet their basic needs. This is done through a regular cash transfer or grant.

    Not all basic income guarantees are the same. A major point of difference is whether a guarantee is universal or targeted.

    A Universal Basic Income Guarantee is something that all people (usually within a certain age range, for instance: all adults or all working-age adults) qualify for, regardless of their income or employment status.

    A targeted basic income on the other hand is only paid out to those who meet some kind of qualifying criteria, usually that they are unemployed and/or have income below a certain level, typically referred to as a means-test threshold.

    In a targeted grant the level of this threshold is an important decision and determines the impact of the grant. If a threshold is set too low, for example, people who need the grant will not receive it. Advocates of a targeted grant argue that since only those who most need the grant receive it, this is the best use of scarce resources.

    With a universal grant, everyone qualifies for the grant regardless of their income. Advocates of a UBIG argue that this reduces the administrative burden on the state because government officials do not have to go through difficult and time-consuming assessments of whether an applicant qualifies or not. A universal grant would mean there is less chance that people who need the grant won’t receive it (due to something called “exclusion errors”). Research shows that targeted grants are difficult to administer, and always involve some level of accidental exclusion of rightful beneficiaries. Many previous recipients of, and current applicants for, the current R350 Social Relief of Distress (SRD) grant can attest to this.

    In addition to whether a grant is targeted or not and how any targeting is designed, the value of the grant is also an important design decision as it is important to ensure that the grant is set at a high enough level that it improves people’s life choices, rather than trapping them in poverty and dependency.

    What can a UBIG do?

    Many countries have introduced basic income support in some form, often to test its impact, and there is a lot of research that shows what the effects can be.

    • Basic income support can end hunger: Government estimates suggest that 18.3 million people in South Africa do not have enough income to meet their basic food needs, and more than half the population lives in poverty. A UBIG set at the value of the highest poverty line would, by definition, eliminate poverty and end hunger in South Africa.
    • Basic income support can improve health and education outcomes: Poverty produces unjust and costly social consequences, including poor health and barriers to education. This makes it harder for people to escape poverty, and can trap generations in a cycle of poverty. Extensive evidence shows that basic income support (if it is accompanied by public healthcare and education) can improve people’s nutrition, health, and education, and help them escape intergenerational poverty. Studies also show that income support reduces stress and improves people’s psychological well-being. Evidence from Alaska, Kenya and South Africa shows the impact of cash transfers on child nutrition and health outcomes. Other research points to the fact that cash transfers help keep young people in school for longer.
    • Basic income can help grow the economy: Critics of basic income support often think about grants as a financial drain on the state or the economy, but research shows they can play an important role in growth. This is partly because people spend the money they receive in local communities. Research also shows that basic income support helps people to join the formal labour market because it takes away the stress of trying to ensure basic needs are met and/or gives people the money to cover the costs of looking for a job. Finally, research shows that basic income can also help support people to build sustainable livelihoods through self-employment or starting businesses.
    • Basic income can help address gender inequality: Women perform the bulk of unpaid domestic and care work in the home, and are also disadvantaged in the labour market. This means they are more likely to be poor, and are also more likely to be dependent on men. Basic income support gives women more autonomy and independence, and can also reduce their vulnerability to gender-based violence.
    • Basic income can improve social cohesion: A UBIG is a fairer way of sharing the wealth in our society, and this can help to improve social solidarity, stability, and democratic participation. A basic income trial in Namibia led to a reduction in crime.

    What about South Africa?

    South Africa does not have any permanent income support for able-bodied people between the ages of 18 and 59.

    The Covid-19 SRD grant is a temporary measure which targets some people in this group but it has many limitations. There have been debates about the introduction of basic income support since the 1990s.

    In our next article we go into details about the history of the debate in South Africa and discuss what a UBIG in the country could look like. We argue that a UBIG can have transformative effects in South Africa helping to shift structural poverty, alleviate some of the impacts of deeply entrenched unemployment and end hunger in the country. Rather than being a drain on the economy, a UBIG can contribute to growth as more people spend money in their local communities and have the means to better their economic position.

  • A universal basic income campaign is part of a broader, long-term project of change

    By: Hein Marais

    See original article here.

    For a very large proportion of South Africans, paid work is neither a viable nor sufficient basis for a dignified life. Official unemployment, according to the so-called expanded rate, is over 46%, and close to one-third of people with paid work are not earning enough to afford basic living expenses. This is in a country battling three deadly pandemics — Aids, tuberculosis and Covid-19 — and already battered by climate change-triggered floods and droughts.

    Current economic and social policy models are failing to protect millions against hunger, destitution and desperation. Hence, the growing demand for a universal basic income.

    A growing alliance of grassroots and nongovernmental organisations, trade unions and research bodies are demanding that the state transform the emergency relief grants introduced earlier in the Covid-19 pandemic into a full-fledged universal basic income (UBI). They have produced careful costing estimates and outlined financing options to back that push.

    The ANC, too, might be considering a limited basic income guarantee.

    Poverty reduction and security

    Powerful evidence supports the expectation that a UBI, even if set at a low amount, will reduce poverty and offer some financial security to people earning low or no incomes.

    I discuss this in my new book, In the Balance: The Case for a Universal Basic Income in South Africa and Beyond.

    There is no evidence that it would lead to increased spending on “temptation” goods (alcohol, cigarettes, narcotics) or that it would merely subsidise idleness.

    More income for poor households should increase demand for basic goods and services, which can boost local production and jobs. If linked to other forward-looking strategies, a UBI can be part of a safety net for communities hard hit by climate change disasters. And it can become part of the support workers and communities will need as we transition to a low-carbon economic model.

    A UBI holds other, transformative promises as well.

    It can enable us to choose paid work more freely, rather than being forced to accept unsafe, badly paid jobs (under the threat of hunger and homelessness).

    It’s been likened to a kind of “permanent strike fund”, a reserve that can help us hold off on taking a job out of sheer desperation. This could benefit workplace organising and other efforts to improve wages and labour practices, especially at the low-income end of the labour market.

    Need shifts the battle lines

    As desperation and instability increase, it’s becoming clear across the board that new forms of social support are needed. Even a former Goldman Sachs chief has spoken in support of a basic income in South Africa. Instead of dogmatic opposition, the battle lines are shifting toward defining the purpose, design and scale of a basic income.

    So, we have to be clear about what we mean when we demand a UBI. Equally important is how we frame and promote it.

    A truly universal basic income will attract strong resistance from the business sector and sections of the state, notably the National Treasury. Achieving and defending it will require social and political forces that are strong enough to prevail against that opposition. And that will require reshaping the “common sense” we use when we define and weigh the claims we have on one another, the state and the commonwealth of our society.

    Framing the UBI demand

    In a society such as South Africa, the UBI demand evidently speaks to a near-desperate need. But how do we frame the demand? Is it an appeal for “charity”, for the state to “grant” assistance in extreme circumstances? Is it a demand rooted in the state’s duty to “guarantee all members of society the means of existence”, in French revolutionary Maximilien Robespierre’s words? Is it a claim arising from rights inscribed in a Constitution? Or is it a claim for what we are due, for a share of common wealth?

    A UBI is laden with challenging propositions about the responsibilities and entitlements that connect us in society. The demand upsets deeply held beliefs about the role and status of waged work in society, and about the hierarchies of worth and value we attach to different kinds of work (paid or not).

    The demand, therefore, pushes against prevailing economic and social orders.

    It challenges the idea that our dignity and fates are tied to the sale of our labour on whatever terms and price. It implies fresh ways of thinking about the roles and duties of the state, and about the claims that citizens can rightfully make on their state and on the commons.

    A radical perspective would frame a UBI as a dividend of the collectively produced wealth in society. This implies that the entirety of society is entitled to a rightful share of the total social product. A UBI then becomes an income that is paid to people as members of a society that collectively produces wealth.

    For the Greek economist Yanis Varoufakis, the framing steers the debate beyond arguments about who “deserves” assistance: society stakes a claim on the wealth drawn from it and “that claim becomes a dividend, an income stream that goes to everyone”.

    Seen in such terms, a UBI recognises implicitly that wealth is socially produced (by people’s labour, paid or not, and social institutions) and it is reliant on the commons (most obviously, non-human nature) and publicly funded infrastructure. The wealth is then privately appropriated.

    This understanding emphasises the collective character of a UBI, rather than seeing it merely as a multitude of separate payments to individuals. It is also in tune with powerful political traditions in South Africa.

    ‘Just dues’

    Framing a UBI as a “social dividend” seems especially appealing in a country where the economy has been built on systemic expropriation and exploitation spanning the colonial and apartheid eras, and continuing subsequently. Similarly, it can be seen in part as a form of “just dues” or remuneration for the unpaid work routinely performed by women.

    This profoundly changes the implications of the UBI demand and it implies a different relationship between the citizenry and the state. It becomes a demand to democratise the surplus — and that poses a political challenge to the small minority that commandeers the wealth produced in a society. It involves a sustained act of demand-making, rather than concession-seeking. This kind of UBI can become a wedge that helps disrupt the hierarchy of claims among capital, the citizenry and the state.

    The framing of the UBI demand will be at least as important as the achievement itself.

    Risk of backfiring or capture

    It’s crucial that progressives approach a UBI not as a stand-alone policy fix, but as part of a broader, long-term project of change and emancipation — because there are risks attached. Once in place, a UBI might become politically too costly to abandon, yet fiscally too expensive to sustain. In the absence of powerful progressive support, this could provide a pretext for cutting other social entitlements.

    Separated from a strong political and social movement of change, a UBI runs the risk of backfiring, of being captured and repurposed in ways that sustain exploitation, desperation, and inequality.

    Even when achieved, a UBI will remain a contested and politically unstable intervention. Ultimately, the impact and fate of a UBI will depend on how it links with other processes of economic, social and political change, which forces drive them, and whether those forces are capable of defending the desired changes. 

    ________________________________

    About the author: Hein Marais is the author of In the Balance: The Case for a Universal Basic Income in South Africa and Beyond, published by Witwatersrand University Press. The book is available in bookstores, online and as an open-access download.

  • Why Universal Basic Income Would Help Women Entrepreneurs Soar To New Heights

    See original post here.

    Have you ever been told “hard work will get you where you want to be”? 

    Anyone who belongs to an equity seeking group knows this isn’t true.

    Hard work is not enough to thrive in today’s society. Systems of power and oppression get in the way from equal prosperity. The stereotypical image of the “renegade entrepreneur” who sets up shop in their garage and becomes a multi-millionaire in short order is a myth.

    Many entrepreneurs, especially women, BIPOC, and other marginalized individuals have a small pot of savings they stretch thin to make it work.

    But there is a solution available. Universal basic income (UBI) aims to address this reality.

    For entrepreneurs like you, UBI could make it possible to start the business you’ve always wanted to and dreamed of. 

    It could make it possible to start your business without draining your RRSP account.

    It could make it possible to avoid bank loans and friends and family rounds.

    It could make a lot more possible.

    If Canada adopted a UBI, women would be better off.

    “Universal basic income (UBI) is a government program in which every adult citizen receives a set amount of money on a regular basis. The goals of a basic income system are to alleviate poverty and replace other need-based social programs that potentially require greater bureaucratic involvement.”1

    How much each person receives under a UBI plan depends on a number of factors such as GDP, inflation, and employment income. Beyond entrepreneurship, UBI can positively impact many individuals struggling with mental health, lack of access to funding, or hard economic times.

    As expert Evelyn Forget points out, “[basic income] is a promise that no matter what happens in your life, no matter what happens to the economy or to society, everyone will have access with enough money to live a dignified life.2

    It may sound like a lot of money up front – but the rewards from an economic and social perspective outweigh the costs. 

    A recent report by the Parliamentary Budget Office stated that UBI could cost Canada between $92B and $192B3. The $100B variance in the program cost would be determined on the type of universal income program. If everyone is given a standard income the cost of implementation would be closer to $192B whereas, if Canada implemented a needs based program, the cost figure would be closer to $92B.

    While this may sound like a lot – a huge benefit of UBI is that it replaces a large number of existing social programs we currently fund4. Whereas the implementation of UBI in Canada could grow the economy, become a self-sustained program and generate revenues totalling $109B in just five years.5

    UBI would give women the financial security to exercise their full potential.

    This means women, who often are more fearful of leaving their jobs, who have more care responsibilities and are paid unequally, would be able to access a stable income without worry.

    It gives women entrepreneurs one less thing to worry about, and the support they need to build their businesses. A strong and thriving women’s entrepreneurship sector has the capability to radically change the world as we know it.

    UBI is a revolutionary idea that could set the stage for change.

    ______________________________

    1 Investopedia. Universal Basic Income. https://www.investopedia.com/terms/b/basic-income.asp

    2  Forget, E. (2020). The basics of basic income. Planned Lifetime Advocacy Network. Retrieved from: https://plan.ca/2020/10/26/the-basics-of-basic-income-dr-evelyn-forget/

    3 MacQueen, A. (2020). Explainer: what is universal basic income?. Money Sense. Retrieved from: https://www.moneysense.ca/financial-literacy/explainer-what-is-universal-basic-income/

    4  Forget, E. (2021). Evelyn Forget: It’s time to transform our society with a basic income. Straight. Retrieved from: https://www.straight.com/news/evelyn-forget-its-time-to-transform-our-society-with-a-basic-income

    5 Canadian Centre for Economic Analysis. (2021). Basic income can speed up Canada’s recovery and grow the economy. Retrieved from:  https://www.ubiworks.ca/groweconomy

  • Treading water: Canadians need Universal Basic Income

    By: Bhavana Kaushik.

    See original post here.

    In a world with skyrocketing housing prices, wages that don’t reflect productivity, and rampant worker dissatisfaction, we need a way to bridge the gap between wages and the real cost of living. 

    Universal Basic Income (UBI), a program that provides citizens with regular income to help them meet their needs, fits the bill. In Canada, a UBI program could enhance the happiness, productivity, health, and overall financial well-being of citizens.

    After a pandemic that devastated our pocketbooks and amid rising prices, it’s time for Canadians to seriously consider UBI. 

    Before the pandemic hit, the Financial Consumer Agency of Canada conducted a survey to measure the financial well-being of 1,953 Canadians. Only 33% of respondents felt financially secure while 41% felt somewhat secure, 19% were struggling somewhat and 7% were struggling a lot. Thanks to COVID-19, inflation, and global supply chain shocks, Canadians are likely feeling even more financial pressure. UBI will reduce that pressure so Canadians can feel financially secure.

    One the benefits of UBI, we can move beyond speculation.

    A Finnish UBI study that compared recipients of UBI to a control group without the regular income supplement found that UBI recipients came away from the program with more favourable perceptions of their household’s financial well-being.

    As a result, seemingly unrelated aspects of their lives improved. Respondents felt they’d “experienced less mental strain, depression, sadness, and loneliness” over the course of the program. The UBI group also expressed better perceptions of their cognitive abilities, including “memory, learning, and ability to concentrate.” Without financial disaster around every corner, Finnish UBI recipients were able to enjoy improved mental health. 

    Despite UBI being supported by a shocking 75% of Canadians, as of 2019, some doubts persist. One persistent myth is the idea that, with UBI, no one will want to work. Some believe a steady stream of income will produce a population with no inclination to work. They couldn’t be further from the truth. That same Finnish study, and others like it, found that recipients of a regular income supplement weren’t just hanging around. Because of a newfound feeling of autonomy associated with less worry about their finances, recipients were more likely to engage in “voluntary work or informal care.” They didn’t withdraw; they engaged. 

    “Engagement” extends beyond informal work, too. A study on the effects of a UBI pilot program in Ontario found that receiving unconditional payments improved the participants’ well-being and boosted their likelihood of landing jobs. Not only did they keep working, but they also gained the confidence and financial security to seek out better jobs. 

    We can argue about how much to offer Canadians on a regular basis. We can argue about how often to dole our payments. But what we can’t argue about anymore is whether our current system of labour and pay is working for Canadians. UBI offers a potential bridge from our current state of toiling away for insufficient pay to a healthier, wealthier, and happier future for every Canadian.

    The post Treading water: Canadians need Universal Basic Income appeared first on Basic Income Today.

  • A Decent Level for All: Economic Justice and Universal Basic Income

    By: Tanner Matthews.

    See original post here.

    Demands for “economic justice” in public policy debates are emotionally powerful, imparting a profound sense of purpose and moral urgency to a cause. However, these appeals must be more than a mere rhetorical tactic. Clarity about ends is a prerequisite for choosing effective means.
    Of the three contrasting accounts of economic justice most commonly considered—economic egalitarianism, laissez-faire capitalism, and the “decent level view”—economic egalitarianism and laissez-faire each fall short in their own way. The decent level view constitutes the most plausible account of economic justice.

    Universal basic income is a potential means of implementing the decent-level view. Although dialogue and debate should continue, universal basic income could be a feasible vehicle for achieving economic justice in our society.

    What Is Wrong With Economic Egalitarianism?

    Economic egalitarianism is “the doctrine that it is desirable for everyone to have the same amounts of income and of wealth.”

    Economic egalitarianism is attractive to many people repulsed by the excesses of our economic status quo.

    They survey our society, where some are stuck in abject poverty while others are sitting on more wealth than they could possibly spend in a thousand lifetimes and correctly conclude that something has gone horribly awry. Still, they are mistaken to identify economic inequality as the root problem and an equal division of wealth as the remedy.

    If economic egalitarians were to reflect at length on what bothers them about the current system, I think most would come to see that inequality is not really the issue. Our economy generates astonishing wealth and abundance, yet many remain mired in poverty. This is a scandal.

    But it is not the inequality per se that makes it so disgraceful; rather it is our collective choice to permit poverty despite having at our disposal the resources to eradicate it.

    This line of argument gains support from the following thought experiment. Imagine a society where those at the bottom of the “economic ladder” were millionaires, while those at the top were billionaires. This society is economically unequal–possibly extremely economically unequal–but there is no economic injustice.

    As the philosopher Harry Frankfurt points out, “Economic equality is not…of particular moral importance. With respect to the distribution of economic assets, what is important…is not that everyone should have the same but that each should have enough. If everyone had enough, it would be of no moral consequence whether some had more than others.” Economic egalitarians are correct to see our current economic order as sick. But their focus on inequality misdiagnoses the true nature of the disease.

    The Limits of Laissez-Faire

    Laissez-faire capitalism equates economic justice with the results of free market processes left to their own devices.

    Laissez-faire capitalism holds that a just distribution of income and wealth is identical to whatever pattern the free market produces, even if this spells starvation for some and opulence for others. People deserve whatever they manage to earn in the market—no more and no less. And any government “meddling” with the market distribution of income is unjust.

    Laissez-faire capitalism holds great appeal for many Americans, particularly those who identify as libertarians. However, there are a number of significant problems with this view. To begin with, it fundamentally misunderstands the role of markets. Markets are merely a means to an end and not ends in themselves. When kept within their proper bounds, markets can make great contributions to prosperity and human flourishing. But they are not the barometer of justice. 

    Many people assume that markets necessarily give people what they deserve.

    The line of thinking goes something like this: Working hard and contributing to society makes one deserving of a high salary; the market rewards people who work hard and make important contributions to society with high salaries; therefore, the market distribution of wealth is just. But it is simply not true that the market always allocates rewards in this manner.

    Markets operate in accordance with the laws of supply and demand—not any innate tendency to recognize and reward merit. To see this one need only contrast the phenomenon of passive “windfall profits” with the backbreaking labor of the people who grow our food or compare the earnings of researchers developing life-saving vaccines with those of the Kardashian family.

    Moreover, the market is, in part, a government creation sustained by collective investment in roads, education, a legal system that enforces contracts, and other public goods.

    There would be no functioning free market in an unstable and insecure state of nature.

    Given that the very possibility of acquiring private wealth in the market depends on the social order that government secures, it is only right and proper that a portion of this wealth be subject to taxation and redistribution.

    Finally, laissez-faire capitalism leaves no room for what the philosopher Stephen Nathanson calls “human desert.” We should resist the idea that a decent standard of living must be “earned.” People are entitled to be treated in certain ways and to be provided with a certain level of resources simply because they are human beings with inherent dignity. The decent level view recognizes this truth; laissez-faire capitalism denies it.

    Fleshing Out the Decent Level View

    The decent level view does not seek economic equality and imposes no definite “ceiling” on the level of wealth and resources that individuals may attain. But neither does it accept the unfettered free market as the arbiter of economic justice. In the wealthiest nation in human history, there is a moral obligation to ensure a “decent level” of resources for all, a guaranteed “floor” below which no individual should be allowed to fall.

    It is important to clarify what I mean by a “decent level.” Some thinkers draw a distinction between absolute and relative poverty. “Absolute poverty” refers to circumstances in which people struggle to meet even their most basic human needs for food and shelter. “Relative poverty” describes circumstances in which people who may not be experiencing absolute poverty nevertheless “are deprived of the conditions of life which ordinarily define membership of society.”

    The decent level view calls for the elimination of both absolute and relative poverty. The concept of “dignity,” or what the economist and Nobel laureate Amartya Sen refers to as “self-respect,” is crucial here. We should make sure that everyone has not only food to eat and a roof over their heads but also the resources they need to flourish and fully participate in 21st century American life. The precise details can be worked out, but the aim is to provide to all a level of resources that qualifies as decent and dignified by current societal standards.

    The decent level is at once radical and conservative. It contemplates the end of poverty but keeps the underlying capitalist economy in place. If it were implemented, some would have more than others, but no one would be poor.

    Universal Basic Income: The Decent Level View in Action?

    According to Juliana Bidadanure, universal basic income (UBI) is “a cash payment granted to all members of a community on a regular basis, regardless of employment status or income level. It is meant to be individual, unconditional, universal and frequent.” We could wipe out absolute and relative poverty alike in a single stroke by simply paying people an annual income sufficient to be at a decent level.

    In contrast to our current tangle of means-tested benefits, eligibility for UBI would not be conditioned on adherence to a set of arbitrary criteria. The demeaning scrutiny of recipients’ personal lives associated with many of today’s welfare programs would disappear.

    At last, we would have a social safety net that treats people with dignity and respect. As a universal benefit available to all members of society, UBI would concretize the decent level view’s commitment to “human desert.” Instituting UBI could help us to transcend traditional distinctions between the “deserving” and “undeserving” poor that have shaped poverty policy for far too long.

    The advent of UBI would advance freedom and human dignity across multiple spheres. People would be empowered to turn down or resign from exploitative jobs. Individuals in abusive relationships would find it easier to leave, secure in the knowledge that the UBI will shield them from poverty.

    Responding to Criticisms of Universal Basic Income

    Many objections have been raised against UBI. Some argue that UBI would disincentivize work to a dangerous degree. With legions of people exiting the labor market and electing to live off their UBI payments, the economy will cease to generate the wealth needed to fund a UBI in the first place. Ironically, UBI will then have sowed the seeds of its own demise.

    It bears remembering, however, that while UBI would remove the fear of poverty as a motivation to work, it would not do away entirely with financial incentives. The promise of obtaining a standard of living better than a decent level would still be enticing to many people, as would the status and prestige associated with certain jobs.

    In addition, the objection might take an overly cynical view of why people work. Financial incentives play a role, but being part of a team, engaging in productive activity, and developing professional capacities carry intrinsic appeal for most of us. Some would no doubt opt out of the labor force if they knew they could rely on UBI to support themselves, but the objection may overestimate the frequency with which this would actually happen.

    Another objection insists that people simply should not get something for nothing. This is not so much a pragmatic concern that UBI would undermine itself as it is a moral conviction. Those who raise this objection are uncomfortable with the idea that people would receive an income without being expected to “make some reciprocal contribution to society.”

    However, many who claim to hold this belief fail to apply it consistently. People who choose to live off a substantial inheritance from their parents seem to violate the principle that “one should not get something for nothing” just as flagrantly as those who might choose to live off UBI payments, yet few have stepped forward to propose that we abolish inheritance.

    Besides, as philosopher Matt Zwolinski has observed, holding down a traditional job is not the only legitimate way to contribute to society. UBI would enable people to pursue parenting, caregiving, the arts, or volunteer work. The market does not typically compensate for these forms of labor, but they clearly “give back” to society in important ways. The decent level view provides a cogent interpretation of what “economic justice” requires, and UBI is a serious candidate for making the decent level view a reality

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  • Opinion: To sustain our current economic model we need to start paying citizens

    By: Rhiannon Picton-James.

    See original post here.

    A universal basic income, regardless of salary, savings and no strings attached. No repayments. It is being discussed by the government in Wales, after they just rolled out a £1,600 a month basic income for young people leaving the care system.

    The idea of it being available to everyone has been around for a while, but this new scheme has floated the idea of a basic income for everyone again. The exact figure on offer has not been decided.

    But what a great idea for the whole of the UK? With depressed wages, a cost of living crisis, and the number of women in the workforce the lowest it’s been in 30 years – now would be the time.

    The Conservatives aren’t keen. They argue that people will be less likely to find work. But it’s just not true. Having free money has never dampened anyones chances of making more of it, or being professionally successful. If that were true, we would worry more about the future of children of hedge funders, not council estate kids.

    Having a reliable source of income doesn’t hinder anybody. Most of the rich list are the products of generational wealth. But no one is saying: “We better stop inheritances – it wouldn’t be helpful for someone to have all this free money. It wouldn’t be fair to them! What if it stopped them getting a job?”

    Finland ran a two-year pilot, where they gave unemployed people an unconditional €560 (£490) a month. The study showed that it didn’t make people lazier or less likely to work, and that health and wellbeing improved  because people didn’t have to worry about their finances.

    The benefits would be huge. It would relieve stress, have a positive effect on wellbeing, and essentially, relieve the financial pressures so many of us are facing. Having money and resources, and not worrying about whether to “heat or eat” would help people in terms of health, wellbeing and productivity. We don’t need people to be actually, physically hungry to make them hungry for the job. We really need to shake this Victorian idea that the only reason people work is if they need the money to survive.

    I don’t think people have ever wanted jobs. But people do want to work. People want to be part of something, to belong to a community, and to work for it, to have purpose. It’s not just about money.

    Social life today shouldn’t look like it did in Victorian England. People working full time shouldn’t need to be using foodbanks, and grants to afford school uniforms for their children. Mothers shouldn’t be asking cashiers to stop scanning groceries because they’ve reached £50 too soon, and can’t afford their regular shop because the price of food has gone up.

    To sustain our current economic model, we need to start paying citizens. The biggest barrier is convincing working people that they deserve a basic income, and that no one should have to struggle.

    And, let’s not forget, it costs money to make money and women are finding themselves priced out of the job market thanks to the unsustainable cost of childcare. Women can’t afford to work. It’s more expensive to be poor and the Future Generations commissioner’s report showed that a weekly payment to everyone could cut poverty in half.

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  • Is Universal Basic Income Part of a Just Transition?

    By:  JOHN FEFFER

    See original post here.

    In the remote rural village of Dauphin, in the Canadian province of Manitoba, economists tried out an unusual experiment. In the 1970s, they persuaded the provincial government to give cash payments to poorer families to see if a guaranteed basic income could improve their outcomes. During the years of this “Mincome” experiment, families received a basic income of 16,000 Canadian dollars (or a top up to that amount). With 10,000 inhabitants, Dauphin was just big enough to be a good data set but not too big as to bankrupt the government.

    The results were startling, including a significant drop in hospitalizations and an improvement in high school graduation rates.

    After four years, however, money for the experiment dried up, and this early example of universal basic income (UBI) was nearly forgotten.

    Today, such UBI projects have become more commonplace. In the U.S. presidential race in 2020, Andrew Yang made his “freedom dividend” of $1,000 a month a centerpiece of his political campaign.

    Several pilot projects are up and running in California. In fact, at least 28 U.S. cities currently give out no-strings-attached cash on a regular basis (since the recipients are all low-income, these programs aren’t technically “universal”). In other countries, too, basic income projects have become more popular, including a new citizen’s basic income project in the Brazilian city of Maricá. Basic income programs were in place, briefly, in both Mongolia and Iran. Civil society organizations like the Latin American Network for Basic Income have pushed for change from below.

    Unlike the mid-1970s, universal basic income must contend with two sets of factors: the weight of old but institutionalized social welfare systems and the demands of new priorities, particularly environmental ones.

    “The old welfare systems are based on sustained economic development, on economic growth that creates jobs and fiscal resources,” points out economist Ruben Lo Vuolo, a member of the Centro Interdisciplinario de Estudios de Políticas Públicas in Argentina, at a recent discussion of UBI sponsored by the Ecosocial Pact of the South and Global Just Transition. “They are structured based on the fact that people will have jobs and contribute over the course of their lifetimes and the state will have fiscal resources to cover them. But now the state says that it can’t keep growing and can’t generate jobs as it did before. We’re seeing less growth than in 1950s or 1970s but more inequality and more carbon emissions. So, the basis of the social-welfare system has been seriously questioned by climate change.”

    This conflict between the logic of the social-welfare state and the imperative to reduce resource use means that “we have to stop thinking about a state that can repair damages and start thinking about one that prevents damages: a state that’s not so concerned about economic growth and then redistribution but redistribution itself,” Lo Vuolo continues.

    The social welfare state provides compensation to those who have lost their jobs, experienced a health emergency, or needed extra provisions to feed the family. Instead, a new eco-social state should be thinking of ways to prevent those negative outcomes in the first place.

    Key to this challenge of redistribution, of course, is the question of mechanism. Does the state rely on the market to meet basic needs or on other methods of assessing and then fulfilling those needs? One of the chief defects of the market is its focus on short-term outcomes. “With an economy based on market preferences, it is impossible to generate an intergenerational pact that takes on climate change,” Lo Vuolo adds. “If we continue on this path, future generations won’t have a healthy environment.”

    One of the chief preoccupations of a social-welfare state is to make sure that those who have sufficient resources don’t receive assistance. This has led to often complex systems of “means testing.”

    Universal basic income strategies, Lo Vuolo points out, flip this approach on its head. Instead of focusing so many human resources on ensuring that the well-off do not receive benefits, the universal character of UBI guarantees that no one who needs help is left out. A progressive tax policy, meanwhile, targets sectors where wealth is concentrated to address questions of “unfair distribution” as well as to finance the universal benefits. Such a “sustainable distribution” system has the additional benefit of suppressing consumption among the wealthy even as it boosts consumption among the most vulnerable sectors.

    A UBI strategy can’t work, however, if individuals have to pay for public goods like education and transportation. The reduction of a country’s carbon footprint, meanwhile, requires not only robust public systems at the national level but institutions at the global level that coordinate mitigation. However, the track record so far of compliance with global pacts to reduce carbon emissions has been dismal.

    The Stockton Example

    Stockton is a mid-sized city in California with a population of over 300,000 people. It is located about 85 miles east of San Francisco in the agriculture-rich Central Valley. In 2012, it also declared bankruptcy, the largest U.S. city to do so at the time. In response, the municipal government slashed public services. Unemployment spiked, and the lack of affordable housing led to a sharp increase in homelessness. One in four citizens lived below the poverty line.

    In 2017, Stockton chose to participate in an experiment very similar to the one that took place in Dauphin in the 1970s. The Stockton Economic Empowerment Demonstration (SEED), as its name suggests, emphasizes the choices people make and the agency they exercise in making those choices. To qualify to participate in SEED, you had to be a Stockton resident in a neighborhood that was at or below the city’s median income of about $46,000. Participants were selected randomly. One hundred and twenty-five people were given $500 a month for two years. The other participants in the program, by receiving nothing, constituted a control group.

    To determine the efficacy of the experiment, researchers asked three questions: how did the additional payment affect monthly income volatility, how did that volatility influence wellbeing, and how did guaranteed income improve participants’ ability to control their future?

    As SEED’s Research and Program Officer Erin Coltrera explains, the group that received the universal income had considerably less income volatility. “There is an oft-cited statistic that nearly half of US citizens would choose not to pay a $400 emergency expense with cash or cash equivalent,” she reports. “They might use debt instead. But this has long-term implications because it means that a $400 emergency will cost more over time.” With the additional $500 a month, SEED participants were more likely to be able to handle an emergency with cash.

    As in Dauphin, the Stockton experiment demonstrated clear improvements in mental health. Coltrera quotes one participant: “I had panic attacks and anxiety. I had to take a pill for it. I haven’t taken that in a while. I used to have to carry pills with me all the time.”

    The basic income made a particular difference for women performing unpaid care work. “The SEED money allowed them to prioritize themselves in ways they’d ignored, for instance to catch up on their medical care or to center themselves in their own narrative,” Coltrera explains.

    One criticism of basic income payments is that they discourage recipients from seeking employment. The SEED project demonstrated the opposite. At the beginning of the experiment, only 28 percent of recipients had fulltime employment. One year later, that number had grown to 40 percent.

    “Recipients were able to leverage the payment to improve their employment prospects,” Coltrera says. “The $500 allowed participants to reduce part-time work to finish training or coursework that then led to fulltime employment.” One recipient, for instance, had been eligible for a real estate license for a year but hadn’t been able to take the time off to complete the license. The $500 allowed the person to take the time off and complete their license, opening up employment and other economic opportunities.

    The money also provided people with more choice. They could choose to stop living with family, for instance, which meant freeing up time previously spent on unpaid care work. “Once basic needs are met,” Coltrera explains, “people could describe small and meaningful pathways to authentic trust, choice, and a sense of safety.”

    Critiques of UBI

    One of the major criticisms of universal basic income is that it encourages “parasitism.” If people receive money with no strings attached, they will become dependent on these handouts and stop working. “There is this logic that if you’re not receiving remuneration for some activity, then you’re not doing anything,” reports Ailynn Torres, a Cuban researcher with the Rosa Luxemburg Foundation based in Ecuador. As the Stockton case demonstrates, however, the payments didn’t reduce participation in the labor market. And the payments reach people who are otherwise overlooked by the social welfare system, such as those who engage in unpaid household work.

    Another critique of UBI is that it’s not a good way to fight poverty compared to targeted subsidies. On the other hand, the social welfare system that provides such subsidies carries substantial administrative costs. Such as system has often fostered clientelism and bureaucracy and created systemic dependency.

    A third critique, from the left, is that UBI is not anti-capitalist. “UBI is not a magic pill that will put an end to bad things in society,” Torres concedes. “But because it is universal and unconditional, it helps people without anything. It allows us to rethink different realities and explore the interdependence of rights. And what is more important than sustaining life? UBI is not utopian but a political program that has been shown to be feasible.”

    A final critique involves the overall cost of UBI. “We’ve seen debate on how to finance this,” Torres continues. “Critics say, ’It’s really expensive, we can’t finance it.’ But could you make it possible by eliminating local subsidies and bundling programs together, removing administrative costs and actually increasing benefits? Really, we should turn the question around. It’s not how much UBI costs. It’s how much does it cost not to have UBI.”

    Several countries in Latin America are looking into some version of UBI. Uruguay is exploring the financing of UBI through a personal wealth tax. Mexico, too, is looking at progressive tax reforms to cover a universal pension of the elderly and a basic income for children. Argentina instituted an Emergency Family Income program during the pandemic to sustain about 9 million people during the lockdown and economic downturn. According to one estimate, an extended UBI would cost 2.9 percent of Argentina’s GDP. Another estimate, for Brazil, suggests that one percent of GDP could cover the basic income for the poorest 30 percent of the population.

    Still, more research is necessary to show how UBI can strengthen community networks, how it can increase access to basic services including banks, and what kind of differential impact it has on different ethnic communities. Introducing more money into Amazonian indigenous communities, where livelihoods are relatively independent of capitalist market relations and people have long fought for the recognition of collective rights, might cause more harm than good, for example. Thus, in culturally diverse countries, especially around indigenous peoples, an intercultural adaptation of UBI according to the collective decisions of recipients might be in order.

    Amaia Perez Orozco, a feminist economist from Spain, believes that a UBI can be part of a package deal of socio-economic transformation.

    Much depends, however, on how it is financed and implemented. The challenge, she notes, is the broader context of ecological collapse, racial inequality, and the greater precarity of life under spreading mercantilization. “Can UBI play an emancipatory role in this context?” she asks.

    So, for instance, does a UBI provide people with money to pay for private health insurance or is the UBI embedded in a system of national health care? Does UBI contribute to greater national debt and thus dependency on global financial markets? Is UBI boosting unsustainable consumption and making the hoarding of resources worse? Will men, provided with a basic income, increase their care work or will UBIs reinforce gender divisions and others based on race class as the wealthier continue to externalize these jobs?

    On the other hand, if a UBI reduces material dependency for women, “it could open the way to new jobs, new opportunities for leisure, the option to leave violent relationships,” Ailynn Torres adds. “Women would have more opportunities to negotiate their work conditions.”

    The post Is Universal Basic Income Part of a Just Transition? appeared first on Basic Income Today.

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  • 4 Ways Universal Basic Income Could Change Canadian Health Care, According to Health Economists

    By: Rebecca Gao

    See original post here.

    When the federal government launched the Canada emergency response benefit (CERB) in the very early days of the pandemic, it renewed calls for a permanent framework for a national basic income program.

    Generally, “basic income” or “universal basic income” means a guaranteed livable income that’s provided to everyone in a specific population on a regular basis by the government. There’s debate over how exactly a basic income program should work: Who should be eligible (for example, would there be an income threshold?) how much money should be provided and how it should be funded. But the idea is that everyone has enough to live a modest life, with necessities like basic housing, food and transportation covered.

    There are plenty of dissenters who argue that a universal basic income would be “unfair” or dissuade people from working, or that it simply wouldn’t work. However, while the idea of a basic income is meant to combat poverty, it also has an outsized impact on health outcomes.

    “What we know is that [economic] shocks [like the pandemic] not only affect people’s health in the current period, but that they have important legacy effects,” says Audrey Laporte, a professor of health economics and the director of the Institute of Health Policy, Management and Evaluation at the University of Toronto.

    “If you look at the financial crisis of 2008, there is literature that shows that mental health suffered quite dramatically—and these effects linger. There is a link between what happens in the economy and what happens to people’s well-being, and government policy has a role to play in terms of how severe those consequences are going to be.”

    Here are 4 ways that a universal basic income program could impact health care in Canada.

    Mental health outcomes improve

    Turns out that money can, to a certain extent, buy happiness. “One of the key stressors in modern life is finances,” says Evelyn Forget, a professor of community health sciences at the University of Manitoba. Forget points to people who are working multiple jobs with no fixed shifts as an example of a population where mental health outcomes would improve with a UBI. “Trying to live that kind of life while trying to make sure that you can feed your kids, take care of your family and meet your obligations at work is an incredibly stressful way to live,” she says.

    “The idea of a basic income is like an insurance policy—a sort of peace of mind. If you do need to take some time off work, you can take time off work. You don’t need to work when you’re unable to just to put food on the table.”

    Previous basic income experiments, such as the Mincome (meaning minimum income) experiment in the 1970s in Manitoba, found that there was a decrease in mental health-related visits to doctors.

    People are more likely to seek out preventative health care

    According to Laporte, there’s an increase in the prevalence of chronic diseases when unemployment rates go up. “As good as our health care system is, it really is dealing with the problem once it’s already happened,” she says. “We want to focus on prevention, and I see [basic income programs] as a part of the prevention strategy.”

    During a 2017 basic income pilot program in Hamilton, Lindsay and Thunder Bay, Ontario, participants were found to be happier and healthier because of the extra money. They also found it easier to access prescription drugs and other forms of preventative health interventions, with the potential for more long-term health cost savings.

    One of the strongest determinants of health is income, says Forget. “One of the things that a basic income would do is make it possible for you to go to the doctor on a regular basis,” she says. So while certain parts of the health care system are being utilized more, like screenings and regular check-ups, people would be accessing recourses resources to stay healthier in the first place so they avoid emergency care.

    Hospitalizations may go down

    It’s not just mental health outcomes that improve. Hospitalizations also go down. Forget’s analysis of the 1970s’ Mincome experiment found less people were getting into accidents and injuring themselves as well.

    In the 2017 Ontario pilot, participants shared stories about how basic income helped them manage their chronic conditions, leading to an overall decrease in visits to the doctor and hospitals. One participant noted that they were able to save up for a mobility device, which drastically cut down the number of doctor visits.

    Nutrition and physical health may improve—leading to better health outcomes overall

    Having a livable income means being able to move out of an apartment that has black mould, for example. Or, being able to afford fresh food to feed yourself and your family. It also means having the ability to take time off work for leisure, or exercise, or spending time with loved ones—all of which improves mental and physical health. In the 2017 pilot, 85.2 percent of participants surveyed increased the amount of nutritious food consumed—and they were happy to be able to try new things at the grocery store. “If you’ve got a reasonable work-life balance, if you’ve got enough resources to live a reasonable life, it’s a whole lot easier to take a breath and say, ‘okay, now I’m going to pay attention to my diet,’ instead of ‘give me something to eat because my shift starts in 15 minutes,’ and that improves overall health,” says Forget.

    “When we give people a stable life, where we reduce the degree of uncertainty, this changes their life in that moment and opens up a whole different life path,” says Laporte.

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