Posts Tagged ‘universal basic income’
“The solution to poverty is to abolish it directly”*…
The idea of a guaranteed flow of funds to allow anyone and everyone to meet basic needs– as we’re currently discussing it, a universal basic income– has been getting significant attention in recent decades. But as Karl Widerquist explains (in an excerpt from his recent book, Universal Basic Income). “UBI” dates back as a concept– and as a practice– many centuries…
Support for Universal Basic Income (UBI) has grown so rapidly over the past few years that people might think the idea appeared out of nowhere. In fact, the idea has roots going back hundreds or even thousands of years, and activists have been floating similar ideas with gradually increasing frequency for more than a century.
Since 1900, the concept of a basic income guarantee (BIG) has experienced three distinct waves of support, each larger than the last. The first, from 1910 to 1940, was followed by a down period in the 1940s and 1950s. A second and larger wave of support happened in the 1960s and 1970s, followed by another lull in most countries through about 2010. BIG’s third, most international, and by far largest wave of support began to take off in the early 2010s, and it has increased every year since then.
[But] We could trace the beginnings of UBI into prehistory, because many have observed that “prehistoric” (in the sense of nonliterate) societies had two ways of doing things that might be considered forms of unconditional income…
From pre-historic nomads, through ancient Athens, to Thomas Paine and then Henry George, Widerquist unspools the history of UBI, then walks through the “three waves” that began in the early 20th century, concluding with the current state of the debate: “The Deep and Enduring History of Universal Basic Income,” from @KarlWiderquist and @mitpress.
For more on the recent history of the UBI debate, see Widerquist’s essay, “Three Waves of Basic Income Support.”
And for a peak at the results of (small, incomplete, but encouraging) experiments in this direction, see: “Places across the U.S. are testing no-strings cash as part of the social safety net,” from @NPR.
* Dr. Martin Luther King, Jr.
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As we ponder poverty, we might send thoughtful birthday greeting to James Tobin; he was born on this date in 1918. An economist who contributed to the development of key ideas in the Keynesian economics of his generation, he made pioneering contributions to the study of investment, monetary and fiscal policy, and financial markets– for which he shared the Nobel Memorial Prize in Economic Sciences in 1981.
Outside academia, Tobin is probably best known for his suggestion of a tax on foreign exchange transactions, now known as the “Tobin tax,” designed to reduce speculation in the international currency markets, which he saw as dangerous and unproductive.
And relevantly to the piece above, Tobin, Paul Samuelson, John Kenneth Galbraith and another 1,200 economists signed a document in 1968 calling for the U. S. Congress to introduce that year a system of income guarantees and supplements– a UBI.
“The combination of economic inequality and economic segregation is deadly”*…
When we think of a social safety net, we tend to think about things like health care and environmental protection, social security, child care; lately here’s been lots of talk of Universal Basic Income. All of them are surely part of an answer. But if we want a social infrastructure that not only protects against personal and family challenges, but also creates personal and family opportunities, we need to look further– we need to look to something we might call Universal Basic Assets. The always-illuminating Rana Foroohar explains…
If American states are, as former US Supreme Court Justice Louis Brandeis once put it, the “laboratories of democracy,” then it’s worth watching closely what’s happening in California right now.
The threat of rising taxes and a “soak the rich” political atmosphere has led some wealthy Golden State residents, including a number of technology entrepreneurs, to leave for cheaper pastures such as Austin or Miami. This has, in turn, prompted worries of a larger migration that would have an impact not only on the state’s tax base, but on the growth and innovation that have made California the world’s fifth-largest economy.
It is an exceptionally fraught situation. While nobody these days has much sympathy for wealthy individuals or companies (witness the recent justified fury about the ProPublica leaks showing how little tax the wealthiest Americans pay), or really believes in trickle-down economics, the threat of tax and regulatory arbitrage by other states is real.
The good news is that California is applying some typically creative thinking to the problem. What if there was another way to harness company and citizen wealth for the benefit of all?
One such idea gaining popularity is what has been called “pre-distribution.” Unlike traditional methods of redistribution, in which the state taxes existing wealth and then uses it to bolster various projects and constituents, pre-distribution is all about harnessing capital the same way investors do, and then using the proceeds of the capital growth (which as we know far outpaces income growth) to fund the public sector…
It could help better align public and private incentives and rewards. The massive wealth accrued by leading companies is in part down to the strength of the public commons — good schools, decent infrastructure, basic research, and so on. As economists like Mariana Mazzucato frequently note, why should taxpayers pick up the bill for, say, laying high speed fibre without getting any of the commercial upside?
California Senate majority leader Robert Hertzberg, a Democrat… along with some very rich Californians like former Google chief executive Eric Schmidt and Snap founder Evan Spiegel, have proposed… something called “universal basic capital”. The idea is that seed contributions of equity from companies or philanthropists could be invested into a fund that would then be used by individual Californians for things like retirement security, healthcare and so on…
If pre-distribution works in the laboratory of California, I expect it will be adopted in some way at the federal level. The Obama administration actually tried to implement its own version of the CalSavers programme for the country as a whole, called myRA, but it failed in part because the funds were invested only in super safe low yielding Treasury bills at a time when the market as a whole was rising far faster. Even at this politically polarised moment, it’s an idea whose time may have come. Pre-distribution is supported by such unlikely bedfellows as hedge funder Ray Dalio and leftwing economist Joseph Stiglitz. Perhaps that’s because while it doesn’t fundamentally alter the market system, it does broaden share ownership: a mix of capitalism and socialism that is right for our time…
“Capital for the people — an idea whose time has come“: @RanaForoohar explains how California’s nascent experiments in Universal Basic Assets could be a model for the nation.
In thinking about national possibilities, your correspondent’s favorite rationale/approach is Cornell economic historian Louis Hyman‘s formulation (toward the end of) this post.
* “The combination of economic inequality and economic segregation is deadly. It reinforces the advantages of those at the top while exacerbating and perpetuating the disadvantages of those at the bottom. Taken together, they shape not just inequality of economic resources, but also a more permanent and dysfunctional inequality of opportunity.” – Richard Florida
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As we share and share alike, we might send grateful birthday greetings to the Electronic Frontier Foundation; it was founded by John Gilmore, John Perry Barlow, and Mitch Kapor on this date in 1990. Over the last 30 years, EFF has become the leading nonprofit defending digital privacy, free speech, and innovation.
Happy Birthday– and many more!
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