[pf] Citizens' dividends from ownership of their country: UBI

[contains:
  ".. if we are to distribute income equitably in the world's modern high
productivity economies, the labour market ... just cannot do ..."
  ".. a debate about the Universal Basic Income (UBI) alternative"
  "The *Boston Review* lead article:
http://bostonreview.mit.edu/BR25.5/vanparijs.html is a very useful summary
of the UBI concept, written particularly for an uninitiated American
audience."
  ".. UBI is the idea that some amount of a nation's – or indeed of the
world's – economic cake should be distributed equally to at least every
adult tax resident of that nation. It's conceptually no different from the
principle that every shareholder of a company should be paid a share of the
profits, and that each person with equity should receive exactly the same
dividend as each other person with the same stake in that company. ...
  The most radical component of the UBI idea is that a basic income, like a
company dividend, is an unconditional payment. It is a payment that is not
dependent on some labour contribution. It is a form of public property
income rather than a payment for a service rendered."
  ".. a UBI need not be enough to live on without any other income ..."
  ".. it seems almost too radical to contemplate that everybody might be
entitled to at least some grovel-free unconditional income."

 --- Keith Rankin is a political economist and economic historian living in
Auckland, New Zealand ---  {see:
http://www.geocities.com/Athens/Academy/1223/KeithRankin.html#top }  D.]

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· From: http://pl.net/~keithr/rfarch2000_titles.html , you get to:

http://pl.net/~keithr/rfc2000C14ubiUSA.html
    which is:

Keith Rankin's Thursday Column

     Universal Basic Income: the new American debate
     15 December 2000

  At last there are signs in the United States that at least some
influential people realise that, if we are to distribute income equitably
in the world's modern high productivity economies, the labour market that
we take for granted just cannot do everything that is expected of it. The
Boston Review [ http://bostonreview.mit.edu/ ] of October/November 2000 has
featured, for the first time as far as I know in America, a debate about
the Universal Basic Income (UBI) alternative to our reliance on the labour
market as a means of distributing income. 

  The lead article – A Basic Income for All [
http://bostonreview.mit.edu/BR25.5/vanparijs.html ] – is by Europe's most
prominent UBI advocate, Philippe van Parijs, who holds the Hoover Chair of
Economic and Social Ethics at the Catholic University of Louvain in
Belgium. Philippe van Parijs' best known recent publication is his 1998
book, *Real Freedom for All*. He made his reputation as an advocate for a
universal basic income with articles in 1986, "A Capitalist Road to
Communism" and "Universal Grants versus Socialism" (*Theory and Society*
15, 1986) which trod on the toes of the then leading socialist
intelligentsia of Europe who were looking for a state-led labourist
solution to the enigmas of 1980s' capitalism. 

  The *Boston Review* article is a very useful summary of the UBI concept,
written particularly for an uninitiated American audience. Van Parijs'
article is followed by 15 replies by leading American and European
intellectuals, which are in turn followed by a response from a very
encouraged Van Parijs. 

  In Europe, the UBI alternative is promoted by the Basic Income European
Network [ http://www.etes.ucl.ac.be/BIEN/bien.html ], an organisation of
the 'libertarian left' that occupies a space on the political spectrum in
Europe that has been ignored in the United States and in those countries
(like New Zealand) which take their intellectual lead from the USA. To too
many here, the phrase 'libertarian left' seems too much like an oxymoron,
not worthy of further contemplation. 

  So what is a universal basic income (UBI)? It is the idea that some
amount of a nation's – or indeed of the world's – economic cake should be
distributed equally to at least every adult tax resident of that nation.
It's conceptually no different to the principle that every shareholder of a
company should be paid a share of the profits, and that each person with
equity should receive exactly the same dividend as each other person with
the same stake in that company. In the case of the New Zealand economy,
each resident adult would be considered an equal 'shareholder' in, if you
will, New Zealand Inc. 

  The most radical component of the UBI idea is that a basic income, like a
company dividend, is an unconditional payment. It is a payment that is not
dependent on some labour contribution. It is a form of public property
income rather than a payment for a service rendered. 

  While a UBI need not be enough to live on without any other income, most
UBI advocates look towards a future in which citizens of the developed
world will be able to choose to live, albeit modestly, solely on their
universal income. Their modest low impact lifestyles would offset the more
affluent lifestyles of those with significant private sources of income.
Naturally, therefore, it is the Greens who have been most willing to push
the UBI concept in New Zealand. 

  Is a UBI an arcadian pipedream? I guess that the answer is 'no and yes'.
No, it's quite realisable in any national economy under any budget
constraint. The size of a UBI payment must of course be set to fit that
budget constraint. So a UBI is possible in New Zealand, even under the
Fiscal Responsibility Act. However, so long as too many political, media
and other leaders with a stake in our present ways of doing things resist
the idea (much as they resisted electoral reform for many years), then it
seems almost too radical to contemplate that everybody might be entitled to
at least some grovel-free unconditional income. 

  Despite its marginalised status, the UBI tax-benefit system is already
very close to been realised in New Zealand. First, we do, through our
existing welfare arrangements, accept the concept of a guaranteed minimum
income. We do not consign long-term unemployed persons to a life without
income. With an explicit UBI, the first x dollars of a beneficiary's
benefit would be designated as a basic income. 

  In addition to benefits targeted to working-age New Zealanders, we pay
all persons over 65 a UBI called New Zealand Superannuation. NZ Super
remains the most efficient and sustainable solution to the problem of
retirement income. 

  Today we pay all employed persons a range of benefits and tax credits.
Some are obvious – Independent Family Tax Credits, Accommodation
Supplements – while others are less obvious. The most important of the less
obvious benefits we pay to workers is a discount on their income tax. For
example a person grossing $40,000 receives an annual discount of $5,130, on
account of the first $38,000 of their earnings being taxed at a lower rate
(19.5%). Under a formal UBI system, we would be more explicit in our
accounting. Such a person (and every other person) would be said to be
taxed at a flat rate of 33 percent while receiving a weekly UBI of $99
($5,130 per annum). In other words, for many, the introduction of a UBI
would be no more than an accounting exercise. 

  We are moving closer to a UBI in other ways too. For example, every
Auckland household is at present anticipating a dividend of $650 from the
Auckland Energy Consumers Trust, arising from the profits of
community-owned Vector, formerly Mercury Energy. (Unfortunately, like the
American presidency, this payment is forever going back to the courts as
various parties opposed to economic and/or political democracy try to
obfuscate the process.) We could pay direct UBI-like dividends out of all
of the profits of SOEs (state-owned enterprises) and LATEs (Local Authority
Trading Enterprises), much as Alaska does at present (as van Parijs notes)
through the Alaska Permanent Fund [ http://www.pfd.state.ak.us/ ]. 

  Even the much despised community wage is a step towards a UBI. By making
certain benefits nominally conditional on approved community service or
training, we have come to accept that people contributing to our society
outside of the market economy should be supported. We still have a long way
to go before such support is unconditional, but we are moving away from the
belief that our incomes should be determined solely through labour force
participation. 

  I have written perhaps more than anyone else in New Zealand about the
advantages of a universal basic income (see:
http://www.geocities.com/keith_rankin/KR_UBI.html ), including "A New
Fiscal Contract? Constructing a Universal Basic Income and a Social Wage"
published in the *Social Policy Journal of New Zealand* (1997). It was in
1991 that I coined the name 'universal basic income' for use in a paper
that I submitted to a symposium on basic income held that year at Waikato
University. 

  I met Philippe van Parijs and others in Vienna at the 1996 congress of
the Basic Income European Network, and used the UBI name which, by then,
others in New Zealand had also adopted (eg UBINZ [
http://www.geocities.com/ubinz ]). Since then he has become familiar with
my writing. I was thus particularly gratified to find from the *Boston
Review* forum on UBI that the European basic income movement has taken to
using the UBI name, and has merged many of my economic arguments with the
socio-political arguments that had earlier prevailed in Europe. 

  Now that the UBI concept has made a bridgehead into the United States,
and given that American intellectuals are more amenable to capitalist
arguments based on property rights than are those of many other countries,
we can expect a diminution of the scepticism and prejudgement that has
surrounded the concept in the past. It's an important debate, not least
because the United States is at present creating unheralded levels of
national wealth while failing completely, despite near-full employment, to
distribute that wealth in a way befitting the world's most productive
country. 

  The United States needs the UBI solution as much as the UBI movement
needs traction in the USA. Watch this space.

© 2000  Keith Rankin [mailto:Keith Rankin <keithr@pl.net>]

 published on Scoop at: http://www.scoop.co.nz/stories/HL0012/S00078.htm

 Thursday Column Archive (2000): http://pl.net/~keithr/thursday2000.html

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sent on by David.
(David MacClement) davd@ihug.co.nz 
http://www.geocities.com/davdd.geo/index.html#top
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