Letter on Basic Income Delivered to President Obama in Brazil 

While in Brazil this past weekend, President Obama was personally handed the following letter (below) from the US Basic Income Guarantee Network by Brazilian Senator Eduardo Suplicy, in support of a basic income.

The basic income is a progressive public policy that calls for a guaranteed annual income to be provided to all adults as a human right. As Bertrand Russell put it in 1918, "a certain small income, sufficient for necessities, should be secured for all, whether they work or not."

Popular in the US in the 1930s during Louisiana Governor Huey Long's "Share the Wealth" campaign (which helped lead to the creation of Social Security), and as "guaranteed annual income" in the 1960s with the support of Dr. Martin Luther King Jr. and prominent economists such as John Kenneth Galbraith, the basic income is now making a comeback as the Great Recession lingers and economic inequality continues to grow.

Brazil has passed a law to introduce a basic income on a step-by-step basis, starting with the Bolsa Familia program, which provides income to poor families that can prove their children are attending school. The program was profiled in a New York Times story in January entitled To Beat Back Poverty, Pay the Poor.

Sen. Suplicy is a tireless proponent of the basic income and author of the legislation in Brazil. Suplicy met with President Obama in Brazil on Saturday and spoke with the president about the basic income and presented the following letter.

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Karl Widerquist, Georgetown University-Qatar
Co-Chair (along with Ingrid Van Niekerk), the Basic Income Earth Network
Newsletter editor, the U.S. Basic Income Guarantee Network

March 18, 2011

Barack Obama
President of the United States of America

Dear Mr. President,

I am writing you on the occasion of your visit to Brazil—the first country in the world to approve a law authorizing the phase-in of a full Unconditional Basic Income to the whole population. The law (n. 10,835/2004) was passed by consensus of all parties in the National Congress and sanctioned by President Luiz Inácio Lula da Silva on January 8, 2004. According to the law, Basic Income will be introduced step-by-step, starting with those most in need, through the Bolsa Família Program.

Basic Income is the simple idea of a small, government-ensured income for all citizens. It exists today only in one place: the State of Alaska. For the last 28 years Alaska has distributed a dividend, financed out of oil revenues, to every man, woman, and child in the state. Alaska’s “Permanent Fund Dividend” usually varies between $1000 and $2000 per person per year. It has become one of the most popular state government programs in the United States. It has helped to give Alaska the highest economic equality and the lowest poverty rate of any state in the United States.

Many opportunities exist to introduce a similar program at the federal level. The Cap-and-Dividend and Tax-and-Dividend approaches to global warming include a small Basic Income. The inclusion of this dividend can help counter the argument (used against the Cap-and-Trade approach) that taxes on carbon emissions will hurt average American families.

While in Brazil, you will have the opportunity to exchange ideas about Basic Income with President Dilma Rousseff and the author of the law that created the Bolsa Família, Senator Eduardo Matarazzo Suplicy. He can discuss how the Bolsa Família might be expanded into a true Basic Income and how it might help to attain the main aim of President Rousseff to eradicate absolute poverty and to promote more equality and justice.

I believe that you can improve on the success of the Bolsa Família and the Alaska Dividend by moving toward a Basic Income in the United States. The University of Alaska-Anchorage will hold a workshop entitled “Exporting the Alaska Model” on April 22, 2011. Several researchers will discuss how programs of this type can be introduced and improved. I invite you to send a member of your team to participate in that workshop.

Sincerely,

Karl Widerquist

The U.S. Basic Income Guarantee Network Committee:
Michael Howard (chair), University of Maine; Eri Noguchi, Columbia University; Michael Lewis, Hunter College; Almaz Zelleke, New School; Steven Shafarman, Income Security Institute; Al Sheahen, Author; Fred Block, University of California-Davis; Dan O’Sullivan, RiseUpEconomics.org; Karl Widerquist, Georgetown University-Qatar; Jason Burke Murphy, Elms College.
 

The Basic Income Earth Network Executive Committee:
Ingrid Van Niekerk (co-chair), Economic Policy Research Institute, South Africa; Karl Widerquist (co-chair) Georgetown University-Qatar; David Casassas, Universitat Autònoma de Barcelona, Spain; Almaz Zelleke; The New School, USA; Yannick Vanderborght, Facultés universitaires Saint Louis in Brussels, Belgium; Louise Haagh, University of York, United Kingdom; James Mulvale, University of Regina, Canada; Dorothee Schulte-Basta, BIEN-Germany; Pablo Yanes, Secretary of Social Development, Mexico City, Mexico; Andrea Fumagalli, University of Pavia, BIN-Italia, Italy. Honorary co-presidents: Eduardo Suplicy, the Brazilian Senate; Guy Standing, the University of Bath; Claus Offe, Hertie School of Governance, Germany. Chair of the International Advisory Board: Philippe Van Parijs, Université catholique de Louvain, Belgium.

Work Sucks, and There’s Not Enough of It

This holiday season, millions of out-of-work Americans and their families will be screwed by the Republican Grinches. Without an unemployment check, they will either be unable to find a job and have to go without, or they will find a job that is most likely much worse than the one they had before. Worse pay, worse working conditions, worse hours.

After months and months of hoping to find a job, many will come face to face with the sad reality that those of us with jobs know all too well: work sucks.

Work sucks, and there’s not enough of it to go around. It’s like the Woody Allen joke: the old lady at a restaurant complains "the food here is terrible," and her friend says "yeah, and such small portions."

I won’t go into all the ways that work sucks—that’s already been done much better than I could ever hope to. Let’s just highlight the issue of time. We seem to be going backwards from the 40 hour work week that unions helped win. Most people work more than 40 hours, whether at one stressful job or two or three part-time jobs. More than half of our waking hours are spent at work. And that doesn’t count the time and money we spend commuting to and from work.

The real joke is that we live in a world where we all desperately need these jobs that suck, but they don’t need us. More than 8 million jobs were lost in the Great Recession, and many businesses have learned how to do more with less staff. Productivity is way up, and jobs are still down. This problem is only going to get worse as the 21st century goes on. Advances in technology and continuing globalization will mean less jobs and more competition among millions for the remaining jobs.

What’s the progressive solution to this jobs crisis? Either we somehow force corporations to go against their bottom line and create millions of good jobs; or the government steps in and takes responsibility for creating the millions upon millions of jobs needed to sustain an economy that works for everyone; or we change the equation and decide that jobs shouldn’t be our only source of income.

As hard as it is to imagine a massive jobs program that would be big enough to make a difference, there’s also the problem of creating a two-tiered employment system: one tier of good quality, middle class jobs (mostly government jobs), and a lower tier of private sector, increasingly part-time, low-wage, independent contractor jobs.

And it does nothing to address the problem that no politician dares speak of: work sucks.

A more efficient way to spend the trillions of dollars it would take to provide full employment would be to simply give that money directly to the people, cutting out the middle men.

If we create an independent source of income that people can rely on to cover at least their basic human needs, then people would have the economic security and freedom to work as much or as little as they like.

Work would suck so much less if we didn’t need it quite so badly. If we all had a trust fund that we could count on for a guaranteed monthly income of, say $1,000, then it would be possible to work 20 hours a week and still make ends meet.

Working people would then have some leverage when dealing with their employers: a sort of national strike fund. We’d need jobs less, and they’d need us more.

Sounds too good to be true, right? How much would it cost? How would we pay for this? There are 3 ways to pay for it, but first let’s just step back and acknowledge that this would be a major re-working of our economy. The cost of reducing poverty and economic inequality and changing work as we know it will not be cheap. But it will be well worth it.

There are several papers that are posted on the website of the US Basic Income Guarantee Network that include detailed proposals, including one by author Al Sheahen that puts the price tag at roughly $1.9 trillion annually for a basic income of $10,000 a year for adults and $2,000 for children. I’d envision a basic income of $12,000 a year for people who have worked and paid taxes for a set amount of time, like 3 or 5 years. But for argument’s sake, let’s say that a basic income would cost about $2 trillion a year.

Where on earth are we going to come up with $2 trillion when our national budget is about $3.5 trillion? Again, we need to keep in mind what we are getting for our $3.5 trillion now, and what we would get with a basic income. There are three main ways to pay for a basic income.

First, we need to have the rich pay their fair share in taxes. It’s time for a millionaire’s tax, which the Senate is now considering (but Obama may have already sold them down the river). We also need a CEO tax, which would be a surtax on income over $10 million. We need to end the loophole that allows hedge fund managers to pay less in taxes than their secretaries. We need to tax carbon pollution, track down offshore tax havens, close corporate tax loopholes, increase the estate tax, etc.

Alaska has a tax on oil revenue that it puts in a Permanent Fund that gives a dividend of a few thousand dollars annually to every man, woman and child in the state. It can do that just on taxes on the state’s oil revenue; imagine what we can do nationally by taxing all oil, gas, and coal revenue.

In general, we need to rely less and less on taxing the income of working people, and more on taxing wealth in all its forms. We need to get creative about it, too. The financial industry is sucking up so much capital that should instead be in the hands of working people. Let’s tax financial transactions.

How about taxing advertising? We all hate commercials; they would go down easier if every time we had to watch/hear one, some money would be going to a basic income. We’d then be able to tax global corporations indirectly. Let’s face it: we’ve become a nation of consumers, not producers. Let’s use that to our advantage by using our leverage as the most sought-after market in the world.

Moving from "free" trade to fair trade would also increase revenue from global corporations. I could go on and on, but you get the idea.

The second way to pay for a basic income is to cut spending on other things, mostly the military and a spate of all-or-nothing, 20th Century government programs that would be replaced by a basic income. That includes unemployment, food stamps, housing programs, welfare to work, etc. This would also include eliminating corporate welfare that has been disguised as "job creation."

The third way to fund a basic income would be through deficit spending. It was good enough for Reagan in the 80’s as we built up our military and cut taxes for the rich, and for Bush in the Zero’s as we fought two wars and cut taxes for the rich. Despite all the anxiety over our budget deficit, progressive economists agree that we can sustain an even higher level of debt without worry. The question is, what are we going into debt for? For tax cuts for the rich and military spending, or to put a major dent in poverty and economic inequality and provide a real solution to the jobs crisis?

A combination of new taxes, spending cuts, and deficit spending would together provide the funding we need to provide a basic income to all. The real question is whether we can build a movement and the political will for economic freedom and security for all.

Give the (oil, gas, lithium) revenues directly to the people

An interesting story this morning on NPR about an idea to make sure the people in Afghanistan and Africa benefit from lithium, oil, and other natural resources that have been found there: give the revenues directly to the people.

From the NPR piece:

Afghanistan's big deposits of lithium, copper and gold have some economists worried. As we noted earlier this week, the discovery of natural resources often leads to conflict and corruption, which in turn hurt economic growth.
But a handful of economists are pushing an idea they say could break the natural resource curse.
Take all money that comes in from foreign companies — for lithium in Afghanistan, oil in Nigeria, natural gas in Bolivia — and give it to the citizens. Literally have a government official sit down with piles of cash, maybe with some international oversight, and divvy it up.

A similar program has been successful in Alaska, where the state's oil revenues are put into a "Permanent Fund" which pays out a dividend to the state's residents each year. It has helped make Alaska the state with the most economic equality in the nation.

This is a great idea for people in third-world nations where big foreign corporations are digging up the land to support the western way of life and our need for gasoline, cell phones, and laptops.

But it's also a great idea for re-balancing the American economy and providing real social justice. We could create such a fund nationally in the US, with all the oil companies paying into it. Let's include natural gas, coal, and nuclear as well.

Then let's create a CEO surtax on those making more that $5 million a year, and put that money into the fund. And close the loophole that allows hedge fund managers to pay less in taxes than their secretaries, and put that money in there. Crack down on the offshore tax havens, corporate welfare, etc.

I'm sure there are plenty of other ways to make the rich pay their fair share into this fund. Let's get creative with this. Since we've become more of a nation of consumers than producers, maybe a small tax on advertising. That would add up quickly, and bring in revenue from foreign companies like Lexus and BMW and Sony that will gladly pay a small fee to gain access to American consumers.

While we're at it, end the wars and put that money in there too. And eventually, throw in the money that we are currently spending on welfare, food stamps, unemployment, housing programs, and other bureaucratic, 20th Century social programs. Just give money directly to the people.

Consider it a trust fund for working people. Maybe have people pay into it for 5 years or so before they can get a monthly check, so they will have to earn it.

We have enough resources and wealth for everyone, but our economy isn't structured rationally, and usually benefits mostly the people at the top, where wealth tends to pool. Creating a trust fund for working people gives us the best of both worlds: all of the freedom and entrepreneurship of capitalism that allows people to use their talents to become rich, with a basic level of economic security for regular workers.

Imagine a world where, if you work hard and pay your taxes for five years, you get a basic income, a monthly check or direct deposit from the trust fund for working people. Enough to at least cover the most basic of human needs, maybe $1,000 a month to start with. You are free to continue to work and earn money; just like those rich kids, your trust find provides you with income each month that you can count on.

Consider it a permanent stimulus program that will help small businesses, as people have more spending money. That would mean more jobs, alleviating the high levels of unemployment in a sustainable way, not like the temporary jobs created by last year's stimulus package. It could lead to an economy that works for everyone, not just the people at the top.

It could also subtly change work as we know it. We would have an independent source of income, above and beyond what we earn at work. Work then becomes less of an all-or-nothing situation. We could afford to work a little less and spend more time with family and friends. Or take some classes and develop our talents without all the pressure of having to make a living doing just one thing. Think of all the frustrated artists and poets and musicians freed up from having to work 40 hours a week doing something that has nothing to do with their true talents and passions.

A movement is building for a basic income for all. The Basic Earth Income Network has groups in Germany, Italy, Brazil, South Africa, Ireland, Canada, and many other nations. The US Basic Income Guarantee Network (USBIG) has an annual conference where academics and activists gather to discuss policy, theory, and action.