Basic income: the world's simplest plan to end poverty, explained

[OrbitalDawn]

http://www.vox.com/2014/9/8/6003359/basic-income-negative-income-tax-questions-explain

Happy Basic Income Day! Sure, May 1st may be better known as International Workers' Day, but some activists are trying to rebrand it. "Labor Day should not be about demanding ‘more jobs’ or higher wages," the official Basic Income Day website explains. "Labor Day should be about struggling for the emancipation from unnecessary labor, unchosen labor, exploited labor." And the way to get that emancipation, it argues, is through a basic income.

But wait — what is a "basic income" anyway? Here are the basics (get it?) of the idea, in eleven questions.

1) What is basic income?

"Basic income" is shorthand for a range of proposals that share the idea of giving everyone in a given polity a certain amount of money on a regular basis. A basic income comes with no categorical eligibility requirements; you don't have to be blind or disabled or unemployed to get it. Everyone gets the same amount by virtue of being a human with material needs that money can help address.

There are a number of different names this idea has gone by over the years. "Universal basic income" and "basic income guarantee" are used frequently. "Guaranteed minimum income" and "negative income tax" are generally used to refer to versions of the plan that also impose a tax that gradually eats up the cash transfer, as a means of reducing the cost of the policy. "Demogrant" was popular in the '70s, and "citizens' dividend" and "social wage" get used from time to time.

2) Who supports basic income?

[video=youtube;xtpgkX588nM]https://www.youtube.com/watch?v=xtpgkX588nM[/video]

Surprising people! Arguably the biggest popularizer of the idea in the 20th century was libertarian economist Milton Friedman, who specifically favored a negative income tax as a replacement for much of the welfare state. Many left-of-center economists, like James Tobin and John Kenneth Galbraith, were also on board. More recently, Emmanuel Saez and Jonathan Gruber, two of the most influential left-leaning economists currently working, argued that an ideal tax system would feature a "large demogrant."

Martin Luther King Jr. endorsed the idea in his book Where to Go From Here: Chaos or Community?, writing, "I am now convinced that the simplest approach will prove to be the most effective—the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income." Activists and scholars Richard Cloward and Frances Fox Piven authored an influential article in The Nation in 1966 which called for a national movement of the poor with the intended goal of achieving a basic income. More academically, left philosophers and intellectuals like Erik Olin Wright, Peter Frase, Carole Pateman, Antonio Negri, and Michael Hardt and in particular Philippe Van Parijs have written in favor of the idea.

But the idea still retains appeal on the right for the same reasons Friedman embraced it. Libertarian economist and National Review/Reason contributor Veronique de Rugy spoke up for the idea on Fox News and received a favorable hearing. Charles Murray of The Bell Curve fame wrote a whole book laying out a specific plan for a negative income tax to replace the existing welfare state.

3) Has a basic income been implemented anywhere?

Not exactly, but a lot of countries have generous cash transfer programs of one variety or another. In the United States, Social Security is more or less an age-limited basic income program which ties benefits to wages to make itself look like a pension program. Supplemental Security Income is a guaranteed minimum income scheme for the aged, blind, and disabled. Food stamps are a guaranteed minimum income distributed through food rather than cash. The Earned Income Tax Credit functions much like a negative income tax with a work requirement.

Most other developed countries, including the UK, France, and Germany, have similar income support systems with eligibility requirements of varying strictness. In the developing world and in particular Latin America, conditional cash transfer (CCT) schemes — wherein low-income families are given cash benefits with no use restrictions provided they fulfill certain conditions, like sending kids to school or getting vaccinated — have become popular over the past decade or so. The most famous program is Brazil's Bolsa Familia, but Mexico, Colombia, and plenty of other countries have similar programs, with meta-analyses showing the programs have significant positive effects on health and education outcomes. New York City even tried out a CCT, with evaluator MDRC finding positive results.

Formal basic income plans have been tried in small experiments. A whole series of experiments in various US cities testing out negative income tax plans were conducted in the 1970s, as was a much more ambitious trial in Manitoba, Canada. The results of the experiments are controversial, but included a modest reduction in hours worked as well as improvements in health outcomes and, naturally, an increase in incomes. A much more recent trial in Namibia also reported positive outcomes.

4) Wouldn't this destroy the economy?

A common concern with basic income proposals is the worry that they'd destroy incentives to work. If people no longer need to work to afford an apartment and food and other life necessities, then it stands to reason that the incentive one has to get a job — or to work a given number of hours on a job — would be reduced. Even if one doesn't want to live on whatever the given basic income is, they might go from working full-time to working part-time, making up the difference with the benefit. This is concerning to people both because most Americans have a strong belief that people ought to work for a living, and because reduced work effort means reduced production — in other words, an economic slowdown.

As noted above, a real basic income has never been implemented across a whole country, which makes macroeconomic effects hard to predict. But we do have some experimental evidence on the question of work effort, drawn from the negative income tax experiments in the US and Canada in the 1970s. Those studies found that work effort declined when a negative income tax was imposed, as predicted, but that the effect was quite small. Moreover, most of the reduction in work effort appeared to come from people taking longer stints of unemployment. That can be a bad thing, but it can also mean that people aren't settling for second-best jobs and holding out for ones that are better fits for them. That'd actually be good, economically. Additionally, the work effect reduction for young people appeared to come entirely from increased school attendance— also a desirable outcome.

Another factor is underreporting. Negative income taxes provide an incentive for beneficiaries to underreport their incomes so as to get a bigger benefit — and that's exactly what happened in the US negative income tax experiments. For the experiment in Gary, Indiana, when participants' reported incomes were cross-referenced with official government data on their earnings, the reduction in work effort went away entirely.

So it's reasonable to think there might be a reduction in work effort if a basic income were imposed. But the scale is likely to be modest, and the form that reduction in work effort takes could very well be good for the economy in the long run.

Rest in link.

 

[Arthur]

Loopy idea built on the deep injustice of forcibly taking some people's property and sharing it out to everyone. In principle it's no different from legalised mob rule where everyone gets to share in the booty. No hint of a flinch when he says this should be "imposed". In his view, pragmatism trumps justice.

 

[MrGray]

The fundamental flaw in this logic is that money equates to food, goods, services and housing. It doesn't. It is merely the arbitrary way to account for the value stored in these things. A thought experiment: if it was somehow declared that everyone on the planet would receive a basic income from tomorrow, would there suddenly be any more food, goods, services and housing in the world? Of course there wouldn't. All you would have achieved is the re-calibration of money.

 

[Bryn]

Point 4 doesn't address how the scheme would actually be paid for. The UK can barely afford their dole system, and that's around £60 per person per week and limited to 'jobseekers'.

 

[Nuke]

How about NO. How about you work and get paid and the amount you get paid depend on factors like quality of work, supply vs demand etc.

Moochers and looters everywhere.

 

[Ancalagon]

Look I'd love to get paid to sit on my bum all day, but I can't see why this is a social need. Why does this need to be done?

Let's make sure that someone who works a basic job (say a McDonald's worker) can afford food, a home, and healthcare.

But to say we should eradicate poverty for those too lazy to work - sorry, not my problem. If you don't want to be in poverty, get a job. Especially in a country like America or the UK, there really is no excuse.

 

[Bryn]

How about NO. How about you work and get paid and the amount you get paid depend on factors like quality of work, supply vs demand etc.

Moochers and looters everywhere.

While I'm as big an Ayn Rand fan as you seem to be, there is still the very large problem of abject poverty. The impoverished have little to no economic value and aren't in a position to contribute meaningfully to any economy. Even with an acceptable education system in place, its affect is severely limited when the students have much greater problems to deal with than studying for school, like finding their next meal, coping with a broken home, working to contribute to the household income etc.

Essentially, it's the children who suffer and its for their sake that a minimum standard of living should exist. Ideally, it shouldn't be possible to reproduce unless you can prove that you're able to provide for a child. All of SA's problems would fall away after a generation if we could develop and disperse an airborne 'fertility inhibitor' of some sort that could spread across the entire country, with a vaccine only administered to parents of suitable age and income. But that's not going to happen, and the potential problems outweigh the benefits, so we just have to deal with having a large number of looters and moochers.

 

[OrbitalDawn]

The fundamental flaw in this logic is that money equates to food, goods, services and housing. It doesn't. It is merely the arbitrary way to account for the value stored in these things. A thought experiment: if it was somehow declared that everyone on the planet would receive a basic income from tomorrow, would there suddenly be any more food, goods, services and housing in the world? Of course there wouldn't. All you would have achieved is the re-calibration of money.

Where does it argue that money = food, good, services and housing?

The argument is more that you need money for all those things, which is kind of obvious, but there you go.

Look I'd love to get paid to sit on my bum all day, but I can't see why this is a social need. Why does this need to be done?

You don't think poverty is a problem?

And please, stop this canard of 'getting paid to sit on your bum all day'. Would you really stop working (and give up the salary) for the meagre amount people get on welfare or these basic income grants?

Let's make sure that someone who works a basic job (say a McDonald's worker) can afford food, a home, and healthcare.

Half the people that work in the fast food industry in the USA have to rely on welfare to survive.

But to say we should eradicate poverty for those too lazy to work - sorry, not my problem.

Are you saying poverty is because of laziness? :wtf:

If you don't want to be in poverty, get a job. Especially in a country like America or the UK, there really is no excuse.

http://www.washingtonpost.com/blogs...illion-american-workers-are-still-in-poverty/

roughly 10.4 million counted as the "working poor," people who either had jobs or were looking for at least half the year, but still fell below the line.

So they have work, but they simply don't earn enough.

 

[OrbitalDawn]

Point 4 doesn't address how the scheme would actually be paid for. The UK can barely afford their dole system, and that's around £60 per person per week and limited to 'jobseekers'.

You (and everyone) should read the rest of the article.

Anyway, one of the benefits of the basic income grant is that it eliminates all the bureaucracy necessary for traditional welfare methods. You don't need to fund all the agencies and government entities that have to manage, distribute, regulate, check up on etc. all the welfare stuff. Food stamps, housing, childcare, medical costs etc. These things cost a boatload of money just to administer, and it's based on the idea that the government knows better than people what they need to spend their money on.

The Brazilian system, Bolsa Familia, is interesting.

http://en.wikipedia.org/wiki/Bolsa_Família

The program attempts to both reduce short-term poverty by direct cash transfers and fight long-term poverty by increasing human capital among the poor through conditional cash transfers. It also works to give free education to children who cannot afford to go to school to show the importance of education. The part of the program that is about direct welfare benefits could perhaps best be described as a basic income with some prerequisites. Families with children, to be eligible for the income, must ensure that their children attend school and have been vaccinated. The Bolsa Familia program has been mentioned as one factor contributing to the reduction of poverty in Brazil, which fell 27.7% during the first term in the Lula administration.

Bolsa Familia was also found to have been responsible for about 20% of the drop in inequality in Brazil since 2001, which is welcome in one of the most unequal countries on the planet. Research promoted by the World Bank shows a significant reduction in child labor exploitation among children benefited by the Bolsa Família program.

 

[Xarog]

Loopy idea built on the deep injustice of forcibly taking some people's property and sharing it out to everyone. In principle it's no different from legalised mob rule where everyone gets to share in the booty. No hint of a flinch when he says this should be "imposed". In his view, pragmatism trumps justice.

I can prove you 100% wrong in this view, Arthur.

You have no right to property. It is a fiction created by humanity and given substance by the force of religion.

 

[Mila]

Would that not end up as :
Everybody receives x amount and x amount equals 0 because it was devalued by giving everybody x.

In essence everything will just be much more expensive and o make up for the money that has no real value?

 

[Xarog]

Would that not end up as :
Everybody receives x amount and x amount equals 0 because it was devalued by giving everybody x.

In essence everything will just be much more expensive and o make up for the money that has no real value?

No, because the basic income grant is not the totality of the money supply. It is a fractional portion of the money supply and the rest of the money supply is used to denote real assets. It is likely that in the short term inflation would occur.

However, within the current system the basic income grant is not realistically possible anywhere on the planet. But this will not be readily apparent until the ultimate consequences our current monetary arrangement also becomes readily apparent.

 

[HavocXphere]

Basic income is going to happen...soon too. Its pretty much inevitable given current trends. Plus I think it'll work out really well.

...well at least in the societies where there is already a strong social system in place...systems that can't even carry a semi-stable public health system certainly won't be able to carry Basic income.

Loopy idea built on the deep injustice of forcibly taking some people's property and sharing it out to everyone.

Thats just it. Its not about forcibly taking anything. At some point society will realise its cheaper to give someone a bit of cash than deal with the fall-out & effects of a desperate person's actions on society.

I prefer a thoroughly capitalistic mindset too...but the cost vs benefit of basic income is looking better by the day & will only accelerate with automation & progress towards AI.

 

[Space_Chief]

Basic income is going to happen...soon too. Its pretty much inevitable given current trends. Plus I think it'll work out really well.

What trends?

Thats just it. Its not about forcibly taking anything. At some point society will realise its cheaper to give someone a bit of cash than deal with the fall-out & effects of a desperate person's actions on society.

But is it so. This is merely asserted over and over again, but is it so and for whom?

 

[Space_Chief]

You have no right to property. It is a fiction created by humanity and given substance by the force of religion.

If no-one has a right to property then no-one has a right to own any food, clothing, shelter etc. Or maybe you mean communal ownership of everything... that worked out great in the Soviet Union.

 

[Space_Chief]

Where does it argue that money = food, good, services and housing?

The argument is more that you need money for all those things, which is kind of obvious, but there you go.

Which is saying what garp is saying.

Some peasant has to actually fertilise the soil, plough it, plant potatoes and then harvest them. That's not nothing. You can't just give that away for free to everyone. All these pie-in-the-sky solutions look nice when emotively driven and shown to gamer ITs script kiddies but in practice they end up giving kolkhozes which work like cr-p. Thats what you'll have to do. Have the peasant work for free. So the others can get potatoes for free.

 

[Space_Chief]

If poverty could be eliminated thus, we'd have examples of it in practice, in history. We don't have such.

 

[HavocXphere]

What trends?

Here is one
http://mybroadband.co.za/vb/showthread.php/694518-Could-a-robot-do-your-job-Short-answer-yes

But is it so.

Not much of an argument you got there chief. Insisting that it is so does not make it so. Nor did I "merely assert" it...I provided capitalistically sound reasoning right after...you even quoted it.

 

[Arthur]

I can prove you 100% wrong in this view, Albereth.

You have no right to property. It is a fiction created by humanity and given substance by the force of religion.

Ah, thanks for that. You're well on your way to smoothing the path for tyranny and slavery.

By rejecting any moral basis for property, you've also rejected any possible argument that makes slavery wrong.

If I don't have first title to (ie own) my own body and the fruits of my labour them I am a slave at the whim of any gang or thug that happens to call themselves the government.

It is precisely because my right and title to my body and the product of my labour antecedes the state or anyone else's claim that i am able to enter into uncompelled commercial bargains with others. By destroying ownership you also destroy liberty.

Thanks for telling us that's where you stand.

 

[Xarog]

Ah, thanks for that. You're well on your way to smoothing the path for tyranny and slavery.

By rejecting any moral basis for property, you've also rejected any possible argument that makes slavery wrong.

If I don't have first title to (ie own) my own body and the fruits of my labour them I am a slave at the whim of any gang or thug that happens to call themselves the government.

It is precisely because my right and title to my body and the product of my labour antecedes the state or anyone else's claim that i am able to enter into uncompelled commercial bargains with others. By destroying ownership you also destroy liberty.

Thanks for telling us that's where you stand.

No Arthur, I'm not wrong.

You realise you thanked me twice? That "thanks" is just dripping with sarcasm, and you know what? I understand. I know it's an emotional reaction and not a logical one. And I know why, too.

You said in another thread that what I said made sense. I know with zero doubt whatsoever that at the time you agreed with my sentiments when I made those statements because they are 100% in agreement with libertarian ideology.

Which is to say I understand better than you will ever realise why libertarianism holds an emotional appeal for you. But that you yearn for the system to be perfect does not make it flawless in fact.

Your argument is mistaken because it presumes that one can achieve the fruits of one's labour in a vacuum of infinite time and space. This does not exist. Humans expressing themselves freely interact with other human beings and niether the actor nor the actee have total control over the outcome of the interaction. Therefore there will always be conflict and the ideal you hold will not erase this truth from existence. Therefore the freedom which you claim for yourself as an absolute inherent personal right (when in fact it's modern day representation in terms of economic activity is instead a group right because the distinction between personal and economic freedom is completely meaningless in any environment where any human being is alive), will by its very nature undermine the stability of the system you propose because as with the current paradigm your model is completely deaf to human distress.

No system designed to treat the human condition can expect to maintain cohesion if it is deaf to the very thing it proposes to attempt to solve.

Edit : P.S. Involuntary slavery is profoundly wrong.