Penny U

Penny U

Monday, November 30, 2015

A minimum basic income?

A discussion at Penny U

7:00 p.m., Friday, December 4, 2015
Town Hall Seattle, downstairs cafe

Late last year, a video was posted on Penny U’s blog telling of a Swiss proposal to guarantee every citizen a minimum yearly income, regardless of other wealth or employment. A similar idea came up again at the end of Robert Reich’s talk at Town Hall earlier this fall. Below, I posted a short piece, “Guaranteed Income and Unrigging the System,” highlighting this aspect of Reich’s talk.

Reich proposes it as a way to counteract the widening gap between those with extreme wealth and power and those without, a condition that threatens, he says, not only our economy but our democracy. He suggests that this minimum might be funded through a “citizen’s bequest,” that would, in his words, “distribute the gains from technological advances in such a way that nearly everyone would have the means to benefit from them.”

Variations on this idea are not new. In the final chapters of his book, Reich mentions both Thomas Paine in Agrarian Justice, 1797 and conservative economist F.A. Hayek  in 1979 as precedents. The last question posed to Reich at Town Hall quoted Martin Luther King, who, in the last years of his life, advocated for a guaranteed income as the solution to poverty. But the debate is far from settled.

We will discuss aspects of this debate at Penny U beginning with these questions:

    Assuming that rules could be changed and funding found, is a guaranteed minimum income even a good idea?  

      It would support the leisure and “freedom from pressing economic cares,” that economist John Maynard Keynes predicted in 1928 that we would achieve by 2028. It could provide a decent living for the workers with a “calling” who are now unpaid, mentioned in my essay, “Unpaid, in Spite of Their Value.” It could allow today’s overworked workers to live fuller lives. But would people use their time well or are we inherently lazy, with tendencies toward free-loading?

     If it’s a good idea, how would such a mechanism be put in place?

      Reich contends that, first, the existing system would have to be unrigged, and, to do that, a knowledgeable  “countervailing power” would have to emerge among the “vast majority.” Is that possible? What would it look like? Is it beginning to exist already? How would it gain momentum?

     If it’s a good idea and the rules could be changed, how would it be funded? 

      Robert Reich proposes a citizen’s bequest. Jaron Lanier has proposed that big companies using your data – Amazon, Google, Facebook, etc. – should pay a tiny royalty whenever they use it; it’s valuable data, it’s yours, and the small amounts would add up. We could learn from Alaska’s experiment with the oil dividend that it gives all its citizens. And others propose that funds for this purpose could be freed up by eliminating our whole welfare system. Which of these idea are most useful or likely? What other good ideas are out there?

On Friday, after short opening introductions and a little background, we’ll break into small groups around cafe tables for individual conversations that allow everyone to participate.

If you’re in the area, please join us! 

Guaranteed Income and Unrigging the System

Robert Reich at Town Hall Seattle, October 2015

The very last questioner in the Q & A following Robert Reich’s talk at Town Hall Seattle this past October, challenged him with the words of Martin Luther King in a 1966 Leadership retreat, which were essentially these: “There is something wrong with capitalism. It is time for America to move toward a democratic socialism. I believe in the right of a guaranteed minimum income.” 
The solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.*            – Martin Luther King
In response, Reich handed the questioner a copy of his book, Saving Capitalism for the Many, Not the Few. Then he said, “The last two chapters in that book make the case for a universal basic income.” While he argued that “isms” are not helpful, he went on to say, “We need to ask the fundamental question, which is: Is this system working for all of us, giving us all a fair shot? Or is the system biased in some very important structural ways. And if it’s biased, how exactly do we unrig that system?”

Reich believes our current system is rigged. Earlier, in his more formal talk, Reich maintained that to “unrig” it, the system’s rules must change. “You can’t have a market without government,” he said, because the market needs rules. It needs rules around property, contracts, monopoly, bankruptcy, enforcement, and more. The market can’t function without these mechanisms. The rules change over time, and, right now, the rules are being changed to serve the few not the many. The changes are a major cause of inequality and of the declining income of the poor and middle-class. “Wide-spread prosperity isn’t just a moral good, it’s an economic good as well.” The low and middle-classes don’t have enough purchasing power to generate a healthy economy. And he added, “Wall Street isn’t the job generator; the middle class is.”

Other forces have picked up steam over the past 35 years and also work against a system for the many. Reich outlined some of them briefly at Town Hall and discusses them in his new book, Saving Capitalism for the Many, Not the Few: globalism and the outsourcing of labor that accompanies it for one, and labor-replacing technologies for another. But both his talk and his book focus on the increasing failure of the rules, on what in the rules needs to change, and on how the changes could be made.
The vast majority must regain influence over how the market is organized.  – Robert Reich
Over the same 35 years, large corporations and banks, along with wealthy individuals, have been able to get changes in the rules to benefit themselves. And this feeds on itself, he added. “As income and wealth have concentrated at the top, political power has moved there as well.” We need to “lift the curtain” on how the rules of the “free market” are being set and learn how government rules are allowing money to flow upward, from the bottom to the top. One of Reich’s reasons for optimism today is a belief that “if the smaller players understood this dynamic,” they could ally themselves and form a new countervailing power. “The vast majority must regain influence over how the market is organized.”

In addition to understanding how the rules are being changed, the vast majority comprising this countervailing force will need some good new ideas. His book describes a range ideas for policies that need to change, including reform of our campaign finance system to get money out of politics, ways corporations could be reinvented, and possible additions and revisions to the tax code. And he proposes what he calls a “citizen’s bequest,” a way to “redistribute the profits from [new and] marvelous labor-saving inventions so we’ll have the money to buy the free time they provide,” to quote his blog post on Labor Day this year, “Labor Day2028.” That is, as he envisions it, it could be a way to fund the provision of a basic minimum income.

In the end, his final questioner at Town Hall gave Reich what he’d hoped for, “an opportunity to summarize with great exhortation.” He closed with this:

We believe in a system that works for all of us. We don’t believe in an aristocracy. We don’t believe there should be people called ‘the working poor,’ who are working full time and are still poor. We don’t believe there should be non-working rich. We don’t believe in pure equality – that’s silly – but we believe in a system where everyone has a chance, a real chance, to make it, and everyone moves upward as the economy improves. We believe there is a moral core to this system, whatever you want to call it.

And then he read the final paragraph in his book:

The vast majority of the nation’s citizens do have the power to alter the rules of the market to meet their needs. But to exercise that power, they must understand what is happening and where their interests lie, and they must join together. We have done so before. If history is any guide and common sense has any sway, we will do so again.


* Martin Luther King discusses “the treatment of poverty” toward the end of his last book, Where Do We Go From Here: Chaos or Community? (1967). As part of this, he wrote: “The solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.”

You can view a video of Reich's talk at Town Hall here.