The Case for Universal Income

The Cost of Living: Do We Need a Basic Income

Directed by Shayne Blackwell and Wayne Welsh

Film Review

This documentary examines various argument, pro and con, for a Universal (Unconditional) Basic Income.

Britain’s highest profile UBI advocates are journalist George Monbiot and the late anthropologist David Graeber. The main arguments they (and others) offer are

• Britain’s extremely high levels of extreme poverty and destitution, despite being the fifth richest country in the world.
• The systematic dismantling of Britain’s welfare system (over the last four decades).
• Growing food poverty levels among Britain’s working poor.
• An aggressive speculative property market,* a major driver of inequality.
• The need to free up working class Brits to perform work not considered “employment” (child and elder care, higher education, and voluntary work).
• The protection a UBI provides against exploitative treatment by employers (employers are forced to provide better working conditions when employees have the freedom to say no.
• Ongoing loss of jobs do to automation and offshoring and relocation of manufacturers overs.

Although the documentary was released prior to the 2020 COVID crisis, the economic crisis triggered by global lockdowns has only accentuated the dismal working conditions of the world’s working poor.

The main arguments used against UBI are that that it’s “too expensive” (meaning it would lead to higher taxes and/or debt); that would encourage laziness by removing the incentive to work); and that it would cause inflation.

David Graeber (author of the History of Debt) points out that that the “too expensive” argument stems from a misunderstanding of where money comes from in modern society. At present, in most countries other than China, governments allow private banks to issue 98% of the money in circulation as loans. This includes loans to government to cover budget deficits.

Graeber stresses that allowing banks to create and control our money supply is a political choice. There is nothing to stop government from issuing their own funds to cover their deficits (as both Lincoln and Roosevelt did).

Ironically (as becomes clear in the film), people who endorse the “laziness” argument assure us they would continue working despite receiving a UBI – it’s just other people who would quit working.

Prior experiments with UBI in Indian and African communities produced decreased a decrease, rather than increase, in inflation. The additional community income caused an increase in goods and services in the economy. This, in turn, tended to drive prices down.

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*A Universal (Unconditional) Basic Income is a system under which government provides regular, permanent cash payments to each citizen, regardless of their income or work status.

**In the UK, as in the US and New Zealand, the primary cause of housing inflation is a monetary system that allow banks to focus most of their money creation in the housing market (rather than the productive economy) without any effort to regulate the amount created.

Public library members can view the film free at Kanopy. Type Kanopy and the name of your library into your search engine.

 

Support Grows for Unconditional Basic Income

Money for Free

VPRO Backlight (2015)

Film Review

Money for Free is about Unconditional Basic Income (aka Universal Basic Income), a form of social security system in which all residents of a country, city or region receive an unconditional sum of money in addition to any other income they receive.

The documentary profiles Michael Bohmeyer, a German web developer who crowd funded a UBI (German residents can apply for it through his website), New York venture capitalist Albert Wenger (who helped fund Bohmeyer’s UBI),  and British economist Guy Standing. Standing has conducted UBI experiments in India and Namibia.

All three see a strong need for UBI in a globally economy that is rapidly shedding jobs and leaving millions of young people permanently unemployed.

At present Bohmeyer has raised 12,000 euros, which means eight people (chosen by lottery) receive his UBI.

Most opponents of UBI claim it will destroy people’s motivation to work. Standing’s experiments in India and Namibia show just the opposite. People who received a UBI in his pilot program increased their economic activity and eared income (as a result of improved nutrition and health).

The filmmakers also interview Alaska residents who receive a guaranteed income from a resource tax on the state’s oil industry.

France, Netherlands and Finland all have basic income pilot schemes in the pipeline. Switzerland will hold a referendum on UBI later this year.

They will also hold a referendum on whether to prohibit private banks from creating money

The Steady State Economy Movement

Enough is Enough

Rob Dietz and Dan O’Neill (2014)

Free PDF download at steadystate.org/

Book Review

Enough is Enough is the report of the world’s first Steady State Economy Conference in June 2010. The concept derives from Herman Daly’s 1977 book Steady State Economy, published five years after the Club of Rome’s infamous Limits to Growth.

The 2010 conference was organized around two basic premises: 1) that the drive for unlimited economic growth is making the planet uninhabitable and 2) that transformation to a steady state economy is essential if we’re to have any hope of preserving the human species.

Enough is Enough begins by outlining why unlimited growth is impossible on a finite planet with finite resources. It goes on to define a steady state economy as having four key features: it’s sustainable, it provides for fair distribution of resources, it provides for efficient allocation of resources (i.e. it doesn’t rely solely on the free market in situations where the market can’t allocate resources efficiently) and it provides a high quality of life for everyone.

The authors focus on four basic steps essential in the transformation from a growth-based to a steady state economy:

1. An agreement to limit resource use – renewable resources (eg forests, fisheries) are harvested no faster than they can regenerated and non-renewable resources (eg fossil fuels) are consumed no faster than the wastes they produce can be recycled. There are a number of possible policy tools for making this happen: an outright ban (similar to current fishing bans), ecological taxation (eg carbon taxes or oil extraction taxes similar to Alaska’s petroleum tax), cap and trade (sets an overall cap and auctions off permits to pollute or mine up to that cap) and cap and share (sets an overall cap and distributes free permits to pollute or mine among all citizens).

2. Population stabilization – through non-coercive population policies that balance immigration and emigration and provide incentives to reduce family size. Examples include increasing access to birth control and education and full equality for women.

3. Inequality is reduced through policies that encourage worker cooperatives, employee ownership, shareholder participation, gender balance in positions of power, a Universal Basic Income (see The Case for Unconditional Basic Income), a cap on pay differentials between workers and management and progressive taxation schemes.

4. Monetary reform – in addition to prohibiting banks from creating money out of thin air and transferring the power to create money to a public authority, there needs to be more promotion of local currencies to stimulate local economies.

5. New progress indicators – substituting something similar to the Human Progress Indicator (HPI), which measures environmental and human well being, for Gross Domestic Product (GDP), which merely measures money.

6. Commitment to full employment – we need to use automation to eliminate onerous and unemployment work, rather than eliminating jobs, as well as shortening the work week (in conjunction with a UBI) to enable more people to have jobs.

7. New attitudes towards business and production – we need to incentivize businesses to achieve “right” sized profits that are large enough to guarantee a company’s economy viability but not so large they exceed its ecological allowance.

8. Global cooperation over resource use – we need to agree all trading partners wind down growth simultaneously. Otherwise steady state economies could experience significant trade disadvantages.

9. New consumer behavior – we need to promote new values that emphasize the positive aspects of a steady state economy (community connectedness, friendship and creativity) over the competitive individualism, hedonism, status and achievement that are emphasized in a growth economy.

10. Engaging politicians and the media (which will be the hardest) – by doing more research and analysis of the steady state model, creating forums to engage the public, politicians, policy makers and academics and to working for small changes at the local community level.
Rob Dietz is the European director of the Center for the Advancement of the Steady State Economy (CASSE). More information about CASSE at http://steadystate.org/

In the video below O’Neill talks about their book.

 

The Case for Unconditional Basic Income (UBI)

Transitions for Society: Job Guarantee and Basic Income

Prosocial Progress foundation (2014)

Film Review

This 20 minute documentary attempts to address the structural unemployment that seems to have become a permanent feature of monopoly capitalism. According to the St Louis Federal Reserve, as of February 2015, only 62.8% of working age Americans have jobs – translating into a 36.2% unemployment rate. A substantial proportion of the jobless are young adults between 16 and 24. Who face more or less permanent exclusion from the economy.

The premise of the film is somewhat unusual. The filmmakers lay out the proposition that the political elite could save capitalism by enacting an unconditional basic income (UBI) for all citizens. However based on past history, they probably won’t. Instead of making the necessary reforms, they will allow human misery and social unrest to increase until the system is overthrown by popular revolt. They see a small chance one or more European countries could enact a UBI. A grassroots Swiss movement has successfully petitioned for a (binding) UBI referendum in 2016.

Martin Luther King’s Call for a UBI

Martin Luther King first called for a UBI in 1967 – in combination with a job guarantee. He maintained the US could easily afford such a program based on the massive automation-related productivity gains. He could not have predicted the financialization of the US economy that would occur in the 1970s, when Wall Street abandoned manufacturing to focus on selling financial products. Nor that this transformation would ensure that the benefits of higher productivity would accrue to the capitalist class, rather than workers.

A UBI, financed by progressive taxation, pays a fixed income to all citizens regardless of their employment or financial status. The most common argument against UBI is that it’s wrong to pay people for doing nothing. However as one interviewee points out, western governments presently pay billions in subsidies to corporations who provide no social benefit whatsoever. If we paid these subsidies to real people instead of corporations, society as a whole would gain gains by reducing the social costs of chronic unemployment and poverty.

How UBI Increases Productivity

Studies in third world countries show that guaranteeing income security causes people to increase their productivity by working more.

The most interesting section of the film describes a pilot program in Madhya Pradish India, in which all men, women and children were paid a UBI. After eighteen months, investigators found their was a clear reduction in illness (due to better nutrition and improved access to health care), a clear increase in the number of women farming their own land and a significant increase in school attendance.