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.
Billionaires’ commitment to lifting a growing underclass out of poverty is just a bedtime story that helps the super-wealthy sleep. These champion a scheme whose prime result will be their profit.
After reflections on automation, Helen Razer says sarcastically: “UBI is a policy gift that Musk and so many others in the C-suites of Silicon Valley offer us as part of their vision of a sustainable economic future.
UBI, says Facebook’s Zuckerberg and eBay’s Omidyar, is the patch for the economic problems of everyday people”.
Some points made in her article:
“It’s just peachy for him and his businesses, as it means his consumers will have more income to spend on his goods. (Not that he cares about money, of course. It’s all about innovation!) . . .” – the mildest of the snide expressions punctuating the article
UBI is ‘something they wish to impose on states and nations – on us . . . a hack that may well benefit its Silicon Valley advocates in the short-term, but compound income and social inequality for the rest of us for decades”.
The idea that an identical sum is paid by the state to all citizens as a right and not as a form of welfare or reward is one, we’re told, whose time has come: “This thing stands a real chance of being passed into national economic policy”.
Helen points out that UBI now has fans from the left, the right, and, in the form of Canadian prime minister (‘and poster-boy for photogenic progressivism’) Justin Trudeau, the absolute center . . . The fact that this prescription can come from both former George W. Bush speechwriter David Frum and former Greek finance minister Yanis Varoufakis stands to some as proof of its inherent theoretical strength. If an “erratic Marxist,” a neoconservative, and the guy who wants to send us all to Mars can agree, then partisan consensus for policy enactment is likely. It looks like a centrist solution.
She believes that UBI inserted into our current economic software is likely to raise prices on many everyday goods: “There is no way to guarantee that landlords or merchants will not raise prices to reflect the moderate gain in income. If you’re already well-to-do, a price increase in the residential rental market or at the supermarket is of no great consequence to you. On low earners, it’s likely to have a significant effect”. And ends:
“UBI evokes a sort of realist utopia. It is certain, for a time, to safeguard the interests of a powerful few. But in the long-term, it is likely to diminish the purchasing power of the many. A true social dividend would not be a small state stipend whose terms are set by the billionaires of Silicon Valley”.
WMNEG’s Jeremy Heighway, on receiving this link, commented on Helen Razer’s approach, ‘belittling‘ Musk and ends: “As it stands, I would much rather talk to Musk than Razer about issues of what I once coined “perishable work and lasting work”, in which the effects of work are at very different timescales for different professions. Bus drivers and builders may both be under threat from deep AI and 3-D robotic printing, respectively, snatching away jobs but presumably still leaving profitable companies and owners in place, but it seems to me that we haven’t even looked at how differently these jobs could be viewed in current concepts of sustainability, the structuring of societies, etc”.