Politics

Basic Income Is the Future; Basic Income Could Be the Present

The Epilogue to Basic Income correctly identifies that the cause for economic anxiety and stagnation is the “dictatorship of the market”. From this, UBI would inarguably set us free.


Basic Income: A Radical Proposal for a Free Society and a Sane Economy

Publisher: Harvard University Press
Author: Philippe Van Parjis, Yannick Vanderborght
Format: Hardcover
Publication date: 2017-03
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Freedom is the criterion against which the pros and cons for BUI are measured, and thus work in the abstract is by no means devalued in these arguments.
I. Your Brand Is Your Most Powerful Asset

One of Twitter’s better-pinned tweets I’ve seen comes from @edzitron who, in early 2014, speculated on what we as a planet could offer extraterrestrial life forms: “[[[hello earthling]]] [[[we are from the outer space]]] [[[do you have any innovative brands]]] [[[our planet needs brands]]]”. This is by no means an unreasonable request -- humans have long seen inane, horrendous, or just plain repetitive ideas embraced and worthwhile ones swept under the rug because of the power of branding. Falling in this latter category, argue professors Philppe Van Parijs and Yannick Vanderborght, of the University of Louvain and Université Saint-Louis, Brussels, respectively, is the increasingly vogue concept of universal basic income (UBI).

Their text Basic Income: A Radical Proposal for a Free Society and Sane Economy is a multidisciplinary affair; philosophy and political theory sit comfortably alongside primers on necessary and varied economic arguments, all bound together by the consistent, vital thread of historical context. What the field is lacking, and what is needed for the UBI movement to see initiative gain widespread, impactful traction, is marketing.

On just one page (albeit not selected at random), five terms that are floated within UBI debate circles are noted: “(genuine) domestic redistribution”, which benefits those with citizenship in a particular country; "conditional minimum-income", wherein recipients qualify by meeting certain criteria; “unconditional basic income”, defined in great detail across multiple pages, with a quick summation being that it is an individual, universal, and obligation-free cash payment with the amount being both fiscally “sustainable” and “generous enough for it to be plausible that it will make a big difference [to the recipient]” and '“citizen’s income” and “citizen’s wage, two terms for basic income conditional on citizenship and/or residency requirements. That, understandably, was a mouthful. Adding to the absurdity is that early in the book Van Parjis and Vanderborght note that nine different terms are “used to refer to the same concept”: basic income.

Though never directly addressing the linguistic jumble UBI advocates have found themselves in, the authors do allude to what will be understood as an optimistic notion: “people’s freedom is not simply defined by the set of options they have, but rather by the set of options they understand they have.” A hopeful example in this vein is a policy with much greater name recognition than UBI or any of its affiliates: universal health care, which is denoted in the Epilogue as one necessary component of a “utopia of a truly free society”.

The initial quote in the previous paragraph highlights the behavioral economics concept of framing, which has shown important results in the universal health care debate. A 17 April article in the Washington Post exemplifies this, noting, “Calling [single-payer] ‘Medicare for all’ generally elicits much stronger approval, while emphasizing the word ‘government’ tends to depress support.” When put into easily digestible terms, the esoteric concept of a single-payer health system lends itself to wider support. Similar logic can be applied for UBI; the major hurdle here, however, is that in the aforementioned swath of alike-but-not-the-same concepts, a consensus has not emerged amongst advocates across the globe. While Switzerland went full-steam-ahead and held a referendum on basic income in 2016 that ultimately failed, Van Parjis and Vanderborght note that hedging is common and just how close these deviations come to the complete proposal varies often from advocate to advocate.

II. Historians and Advocates

These advocates span centuries and political leanings, beginning with the tandem of Thomas More and Juan Luis Vives in the early 1500s who conceived of public assistance in the forms of guaranteed employment from the former and public assistance for the impoverished -- even those who “waste[d] their fortune in bad and stupid ways” -- in the latter’s De Subventione Pauperum (On the Relief of the Poor). It would be another two centuries before ideas resembling UBI “started making furtive appearances in Europe”, write Van Parjis and Vanderborght.

The first major advance came from famed pamphleteer Thomas Paine in his 1796 work Agrarian Justice. His proposal was that of a 15-pound-per-year payment to each person 21 years or older, as well as ten pounds per for each person over the age of 50, with all people reaching that age obtaining it in the future. Like Vives before him, Paine saw a distinctly Christian ethos justifying his proposal; in a later chapter, the authors give varying groups’ involvement in UBI and, along with the usual suspects of left and left-leaning political movements, Christians get their own section. This is because, as is explored throughout the book, UBI cannot be separated from its moral groundings. While economic speculation captures the heads of people considering UBI, the political challenge centers around convincing constituents’ hearts.

In the United States, the contemporary politician who has most closely come to advocating for UBI is California Democratic Congressman Ro Khanna. In an interview in the Atlantic, he spoke of his $1 trillion plan to expand the Earned Income Tax Credit (EITC) to reverse the shrinking of the American middle class, and he did so in notably moral terms: “We’re not divorcing [the EITC] from work, but we’re realizing two things. One that people are working hard and they’re not earning a middle-class wage. They’re not earning what they think they deserve for that work.”

Khanna represents the district containing Silicon Valley, where a Valley-backed entity, GiveDirectly, and its new UBI experiment in Kenya was the subject of a lengthy profile in the New York Times Magazine’s The Future of Work series. That this locale birthed both public and private gestures in the direction of UBI may be a coincidence, but nonetheless highlights one of two major critiques leveled against UBI: Who, people ask, will foot the bill?

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Van Parjis and Vanderborght the beginning of the chapter “Economically Sustainable? Funding, Experiments, and Transitions” to this question. They quickly brush off the protest that UBI funding will result in appreciable inflation, noting that the demographic factors in play, along with economic facets like the inelasticity of a good (i.e., when the change of price outpaces the change in quantity supplied), will determine the extent of the inflation, but that it is less worrisome than the combination-ethics-and-economics variable: incentivizing work.

The Protestant work ethic has long been an identifying aspect of American culture, and those with platforms to speak widely on topics such as UBI either explicitly or, more often, implicitly appeal to this when decrying the UBI as a straight-shot to idleness. The Brookings Institution noted as much in an article that featured the UBI-supporting argument that the labor market no longer pulls its weight in distributing wealth well amongst the working class, writing, “Right now, a basic income would represent a huge leap away from the existing American social contract.” It is why the majority of the governments that have seriously explored a UBI of some magnitude have been Western-style social democracies; that the liberal bastion of Hawaii recently passed legislation to study basic income is also unsurprising. But the authors, when not functioning primarily as historians of UBI, come at the issue from a libertarian bent -- freedom is the criterion against which the pros and cons are measured -- and thus work in the abstract is by no means devalued in the arguments.

Instead, UBI can be seen as a way to enhance the journey of labor. As they note, “A basic income that falls short of [living comfortably solely off that income alone] still makes it possible to take a job with lower or less certain earnings to reduce working time, to acquire further training or education, or to spend more time looking for the right job…” With funding for the arts on uncertain ground, would-be painters or playwrights could keep their pursuits alive with a basic income supplementing their work. This is but an argument appealing to aesthetics: the idea that we would all spend our time on the arts if we could. Rather, the more practical effect is that a UBI will have unglamorous theoretical results that will make a lasting, concrete impact on the lives of virtually all who receive it.

III. What to Expect When You’re Expecting a Universal Basic Income

These effects are mentioned throughout the book but do not take center stage; that, instead, is shared by the history of and theoretical arguments for UBI. It’s helpful to examine auxiliary literature produced about UBI’s effects to put tangible results in the hands of the reader.

For developing countries, a (by US GDP per capita standards) small UBI would have awesome impacts. Take the aforementioned New York Times feature -- after a GiveDirectly staffer laid out the particulars of the UBI for the village (the equivalent of $22 per month for each citizen for the next 12 years), it was plainly noted that “Just like that, with peals of ululation and children breaking into dance in front of the strangers, the whole village was lifted out of extreme poverty.” Two weeks earlier than that article, the Economist spoke of India’s interest in a UBI, and the numbers were just as positive: the equivalent of just $113 a year “would cut absolute poverty from 22% to less than 0.5%.”

Two Western social democracies -- Canada in the '70s, and Finland currently -- have implemented basic income experiments. Canada’s, nicknamed “Mincome”, occurred in Dauphin, Manitoba, where those falling in the lowest income bracket (less than $13,000 a year) with variables determining how much a family or individual would receive: $100 per month at the lowest, contingent on income from outside sources, and $5,800 per year at the maximum, for families with no other income sources. The experiment was designed in such a way that work was incentivized, with Evelyn Forget, a Canadian social scientist who researched the 1974-1979 experiment, telling Vice’s Motherboard, “If you work another hour, you get to keep 50 percent of the benefit you would have gotten anyway, so you are better off working than not.”

The article notes early on that “for that time [of the experiment], it seemed that the effects of poverty began to melt away. Doctor and hospital visits declined, mental health appeared to improve, and more teenagers completed high school.” In Finland’s current experiment, 2,000 citizens who were randomly selected from a pool of adults receiving unemployment benefits or a subsidized income receive $587 a month for two years, from January 2017 to January 2019. Though it’s early in the process, it has already been noted that, like Mincome, mental health amongst recipientshas improved.

IV. The Best Option Available?

With these aforementioned benefits encompassing both the financial and health aspects of life, it would be understandable to want to further catalyze basic income experiments in a host of nations, maybe even your community. And if the criterion of freedom, as used by Van Parjis and Vanderborght, is held as paramount, then a no-strings-attached cash payment is the best kind of aid; the kind of aid most commonly associated with welfare programs both international and domestic regard themselves narrowly with things, i.e., food benefits through SNAP (Supplemental Nutrition Assistance Program) in the United States or water pumps donated overseas, all of which have their uses confined within themselves. With UBI, what your aid is used for is entirely up to you.

Throughout the work, the authors stress this freedom as both ethical and economic justification for implementing a UBI, while addressing many common points of opposition to the proposal. One that does not appear prominently in the work but is worth highlighting on its own is the suggestion that a UBI is not the most effective in reducing poverty at its cost. This argument was illuminated by economist Berk Ozler, writing for the World Bank shortly after the New York Times’ Kenya article was released.

In his article, Ozler utilizes extensive data on forms of poverty-reduction strategies. Citing a contemporary study, UBI is compared with variations of proxy-means testing, a system in which a proxy need is calculated by using demographic information about the recipient(s) and general welfare statistics; this system, it is noted, is popular with governments and donor organizations in their poverty-reduction plans. Versus proxy-means testing, UBI is shown to reduce poverty by 14.5 percent, while the most successful proxy-means test would reduce it by 23 percent. Thus, to advocate for UBI, a holistic approach must be taken to bolster its most appealing aspects against parts in which it lags, like poverty reduction effectiveness relative to other models. This is where the gesture towards UBI as a conduit for utopia should be emphasized.

V. Utopia; Conclusion

Chris Jennings writes in Paradise Now, “No moment in history or place on the globe has been more crowded with utopian longing and utopian experimentation than the United States in the middle of the nineteenth century.” This slice of history was characterized by religious utopian experiments, making it entirely of its time. The utopian visions of our present day, however, are not overtly religious, but depending on which is advocated for, might not be completely terrestrial, either.

UBI is one that concerns itself with the well-being of humans on planet Earth and is regarded by Van Parjis and Vanderborght as a “sturdy floor” for its recipients. They do not reach for the stars with regards to their interpretation of utopia, saying that UBI is utopian because it has yet to exist and that it envisions a better world. This is obviously correct and succeeds in that it falls short of the tendency of utopian movements to set unreachable goals.

This, with regards to marketing, might be UBI’s best argument yet: that it can, in fact, be done. Van Parjis and Vanderborght, in Basic Income, have written a vital text for those already advocating for UBI but could brush up on its genealogy. Most importantly, advocates need to spend an equal amount of time working to win over the hearts and minds of those who have yet to sign on. Their argument for UBI is persuasive by not being ideologically dependent, and while they inject a libertarian standard of freedom as the measurement, the Epilogue correctly identifies that the cause for economic anxiety and stagnation is the “dictatorship of the market”. From this, UBI would inarguably set us free.

8

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