September 22, 2014

Why basic income should be a key issue


1) What is basic income?

"Basic income" is shorthand for a range of proposals that share the idea of giving everyone in a given polity a certain amount of money on a regular basis. A basic income comes with no categorical eligibility requirements; you don't have to be blind or disabled or unemployed to get it. Everyone gets the same amount by virtue of being a human with material needs that money can help address.

There are a number of different names this idea has gone by over the years. "Universal basic income" and "basic income guarantee" are used frequently. "Guaranteed minimum income" and "negative income tax" are generally used to refer to versions of the plan that also impose a tax that gradually eats up the cash transfer, as a means of reducing the cost of the policy. "Demogrant" was popular in the '70s, and "citizens' dividend" and "social wage" get used from time to time.

2) Who supports basic income?

Surprising people! Arguably the biggest popularizer of the idea in the 20th century was libertarian economist Milton Friedman, who specifically favored a negative income tax as a replacement for much of the welfare state. Many left-of-center economists, like James Tobin and John Kenneth Galbraith, were also on board. More recently, Emmanuel Saez and Jonathan Gruber, two of the most influential left-leaning economists currently working, argued that an ideal tax system would feature a "large demogrant."

Martin Luther King Jr. endorsed the idea in his book Where to Go From Here: Chaos or Community?, writing, "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." Activists and scholars Richard Cloward and Frances Fox Piven authored an influential article in The Nation in 1966 which called for a national movement of the poor with the intended goal of achieving a basic income. More academically, left philosophers and intellectuals like Erik Olin Wright, Peter Frase, Carole Pateman, Antonio Negri, and Michael Hardt and in particular Philippe Van Parijs have written in favor of the idea.

3) Has a basic income been implemented anywhere?

Not exactly, but a lot of countries have generous cash transfer programs of one variety or another. In the United States, Social Security is more or less an age-limited basic income program which ties benefits to wages to make itself look like a pension program. Supplemental Security Income is a guaranteed minimum income scheme for the aged, blind, and disabled. Food stamps are a guaranteed minimum income distributed through food rather than cash. The Earned Income Tax Credit functions much like a negative income tax with a work requirement.

Most other developed countries, including the UKFrance, and Germany, have similar income support systems with eligibility requirements of varying strictness. In the developing world and in particular Latin America, conditional cash transfer (CCT) schemes — wherein low-income families are given cash benefits with no use restrictions provided they fulfill certain conditions, like sending kids to school or getting vaccinated — have become popular over the past decade or so. The most famous program is Brazil's Bolsa Familia, but MexicoColombia, and plenty of other countries have similar programs, with meta-analyses showing the programs have significant positive effects on health and education outcomes. New York City even tried out a CCT, with evaluator MDRC finding positive results.

Formal basic income plans have been tried in small experiments. A whole series of experiments in various US cities testing out negative income tax plans were conducted in the 1970s, as was a much more ambitious trial in Manitoba, Canada. The results of the experiments are controversial, but included a modest reduction in hours worked as well as improvements in health outcomes and, naturally, an increase in incomes. A much more recent trial in Namibia also reported positive outcomes.



Capt. America said...

The benefits of technology must be shared. There is really no choice here if the country is to survive, but for now a reduced work week would reduce the shock.

Also shut down immigration.

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