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Universal Basic Income 8 – update

In October, Dylan Matthews (US Occupy website) wrote about a forthcoming Basic Income pilot.

Next year, a random sample of the 300,000 residents of Stockton, California – the largest city in the U.S. to declare bankruptcy during the financial crisis – will get $500 per month with no strings attached. It’s the latest test of basic income, funded by the Economic Security Project, a pro-basic income advocacy and research group co-chaired by Facebook co-founder and former New Republic publisher Chris Hughes and activists Natalie Foster and Dorian Warren; Hughes provided the group’s initial funding.

Many of Silicon Valley’s tech entrepreneurs and investors see basic income, as a necessary way to support Americans if artificial intelligence and other automation advances lead to unemployment for vast swathes of the population, redistributing the wealth that Silicon Valley creates to poorer people and localities left behind.

Ontario, Canada, Finland, and the international charity GiveDirectly in Kenya have all launched basic income experiments of their own and Glasgow, Edinburgh, North Ayrshire and Fife in Scotland are jumping into the ring too. A list of ongoing and announced basic income pilots can be found on the BIEN website.

In 2011, a pilot BI project was launched in rural Madhya Pradesh through the Self Employed Women’s Association (SEWA), in collaboration with UNICEF.

See this excellent video account – well worth twelve minutes of your time. https://www.youtube.com/watch?v=UWW9XY27ocI

For 12 to 18 months, over 6,000 individuals received ‘basic income’. The grants were universal, unconditional, and were given to individuals, not the head of the household, to ensure that there is no harassment and ensuring financial inclusion of women, children and the elderly.

Two pilot studies were conducted under this project: in one, 8 villages received the basic income, while 12 similar villages didn’t. In the other, one tribal village received the income while another tribal village was taken as control group. The studies covered over 15,000 individuals in all.

The results of these pilots, published in the book Basic Income: A Transformative Policy for India. (2014, London: Bloomsbury, by Professor Guy Standing of BIEN who speaks in the video), showed many encouraging developments, debunking the myths that basic cash transfers in rural India would inevitably lead to a decrease in work or that money would be wasted in alcohol consumption and other pursuits:

o   Basic living conditions, starting with sanitation, better access to clean drinking water, improvements in cooking and lighting energy sources, improved significantly.

o   There was a major increase in food sufficiency, improved diets, better nutrition and reduction in seasonal illnesses.

o   Better health of children led to higher school attendance and improved performance. The basic income also facilitated spending on school uniforms, books and stationery.

o   The cash transfer facilitated small scale investments such as buying better raw materials and equipment, which resulted in a higher income.

o   There was also a shift, especially in the tribal village, from wage labour and bonded labour to owning farms and to other forms of self-employment.

o   Women’s empowerment was another outcome of the pilot studies: their participation in economic decision making in the household improved.

The basic income also enabled indebted villagers to pay back the money lenders and borrow less from them.

Readers who wish to know more about the Indian pilot may do so by using the links at the foot of this blog.

The Times reports that Nobel Prize-winning economist Professor Joseph Stiglitz, a member of the Scottish government’s council of economic advisers, had reservations about Basic Income, saying that it would be better to focus on targeting those who have particularly strong needs and on creating jobs while ensuring the most vulnerable were supported. But Nicola Sturgeon, the First Minister of Scotland, has vowed to press ahead with plans to explore such a policy, where welfare payments are replaced with a guaranteed income for everybody, and has offered government funding for research schemes.

https://www.guystanding.com/files/documents/Basic_Income_Pilots_in_India_note_for_inaugural.pdf

https://www.degrowth.info/en/2016/05/universal-basic-income-in-india-a-promising-experience/

https://www.theguardian.com/business/economics-blog/2014/dec/18/incomes-scheme-transforms-lives-poor

 

 

 

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Universal basic income (UBI): a more cheering perspective

Amazon has revealed its latest plan to automate American workers out of existence with its futuristic machine controlled grocery store.

According to a study by Ball State University’s Center for Business and Economic Research, the use of robots and other manufacturing efficiencies was responsible for 88% of the 7 million factory jobs lost in the United States since peak employment in 1979.

The Economic Security Project (ESP) – a coalition of over 100 technologists, investors, and activists – has announced that it is committing $10 million over the next two years to explore how a “universal basic income” (UBI) could ensure economic opportunities for all. Elon Musk, the iconic Silicon Valley futurist, predicts “There is a pretty good chance we end up with a universal basic income or something like that, due to automation.”

With political uncertainty across the Western world highlighting rising levels of economic inequality, many others across the political spectrum are considering adopting UBI in the future, giving everyone a guaranteed minimum payment. In the 21st century to date there have been pilot projects in America, Canada, Namibia, Uganda, Kenya, Brazil, Holland, Finland, Italy and Scotland, described briefly in Wikipedia.

UBI – one of three main economic reforms?

James Robertson shared news (scroll down to 4.The Practical Reforms) about a meeting of the North American Basic Income Guarantee Congress at which there was co-operation between supporters of two of the three main reforms in total money system reform – land value taxation and basic income. Alanna Hartzok, General Secretary of the International Union for Land Value Taxation, expressed a hope for future meetings at which supporters of all three policy proposals could discuss the relationship between reform of the money supply, introduction of land value taxation and the replacement of welfare payments by a citizen’s income.

UBI – life enhancing?

Just as Green parties everywhere have said for many years, Elon Musk expects that UBI will enhance life with ‘ownwork’: “People will have time to do other things, more complex things, more interesting things and certainly have more leisure time.” Others, however, believe that without the need to pay for rent and basic necessities, people will not be motivated to work and will not make good use of their basic income and free time. Cynics will – and do – dismiss ‘the happiness agenda’ (Layard, Norberg-Hodge) and the recent Landmark study which found that most human misery in the Western world is due to failed relationships or ill-health rather than money problems and poverty.

If accompanied by a more comprehensive education?

The findings indicate the need for a broader education, giving some concept of good marital and parental relationships, an understanding of the country’s social and taxation systems and the development of expertise (until the Plain English Campaign succeeds) in interpreting official forms and negotiating online applications.

Increasing apprenticeships and retraining for those who become redundant is worthwhile but far more input is needed. The Sure Start focus involving parents and children from the earliest days was working very well until funding was cut by the coalition government in 2011, instead of building on its success.

Harrow mothers campaigning after 4 Sure Start centres had been given notice to quit

There are now 1,240 fewer designated Sure Start centres than when David Cameron took office – a fall of 34 % according to figures obtained by the Labour Party in a Freedom of Information request. The North East and London have seen the biggest fall in numbers, with over 40% of centres closing. The closure rate is increasing countrywide and councils have listed other centres which may well have to go this year.

Compensating for the cost of UBI

A total audit would balance the expense of an enhanced Sure Start programme and the cost of UBI over time, by quantifying:

  • reduced expenditure on the NHS and prison service due to the improvement in mental and physical health
  • and lower expenditure on policing and social services due to less stressful household and neighbourhoods, diminishing the intake of legal and illegal drugs and reducing crime.

So, in the foreseeable future, will 3D printers and robots take care of the necessities? And will basic income lead people to begin to improve relationships with each other and the rest of the natural world?

 

 

 

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