Monday, February 23, 2004

Report on the US Basic Income Guarantee (USBIG) Network Congress

This weekend I attended the Third Congress of the US Basic Income Guarantee (USBIG) Network, in Washington D.C. Last year I interviewed the organizer, Karl Widerquist, and have become increasingly convinced that the time has come for a BIG as a solution to the emerging jobloss recovery. The USBIG conference was very encouraging, showing that the idea is making headway in various ways around the world, and has a diverse network backing it in the U.S. But the idea still has a ways to go to claw its way back to being taken as seriously as it was thirty years ago, when legislation to establish universal basic income passed the US House of Representatives and was narrowly defeated in the Senate. Support then ranged from the Left to liberals like Daniel Patrick Moynihan to Milton Friedman and Richard Nixon. Today the idea seems like utopian socialism, and will have a hard time competing with rival policies like public sector employment or economic stimuli for private sector employment, unless the reality of jobs permanently lost to globalization and automation becomes very obvious.

The first speaker, Philip Wogaman, illustrated that long slog from 1970s optimism through welfare state retrenchment. Wogaman was Bill Clinton’s former pastor and author of Guaranteed Basic Income: The Moral Issues in the 1970s, written when the Nixon administration was toying with the idea of replacing welfare with Milton Freidman’s “negative income tax.” (With a negative income tax you pay increasing amounts above X annual income, and receive increasing amounts the farther you fall below X annual income.) He reflected on how gee whiz some of the reflections were in the 1960s, and yet how prophetic some of the speculations of futurists like Robert Theobald were about the looming effects of computers on employment. He thought the central question in the BIG debate is “Is it moral to give people things they haven’t earned?” He argues that we all receive things we haven’t earned, from childhood on. He points to the selectiveness of people who believe they earned everything they have, ignoring all the unearned advantages they have received (Republicans being people who think they earned everything they stole…). BIG is simply an extension of this recognition that we all stand on each other’s shoulders (a political concept that requires a non-Euclidean space, so its not that surprising that its taken a while to catch on.)

Then I moderated a panel with three very diverse papers by three economists. The first, by Louise Keely , was on the effects of race, class and gender on support for income redistribution. Turns out (75 pages of Greek later) that white men who aren’t poor are the least supportive of redistribution, and poor whites and people of color are the most supportive. White non-poor women are in between. The second paper, by Michael Lewis, was on the effect on income on taking time off from work to care for sick family members, with the suggestion that a basic income would make it easier to take time off (although paid, guaranteed family leave would make it easiest). The last paper, by David Wetzell, examined the weird zigzag effect that wages have on hours worked. For the affluent, higher wages motivate more hours of work per week. For the poor, lower wages oblige more hours of work per week. A basic income floor would straighten out this zigzag so that the poor wouldn’t be forced to work longer hours when their wages are cut.

Then we moved into a session with the conference chair, Karl Widerquist, myself and Marshall Brain. Widerquist spoke on the failure of John Maynard Keynes’ prediction in “Economic Possibilities for Our Grandchildren” that by now we would all be so fabulously wealthy we wouldn’t have to work. Karl suggested that, in fact, increasing wealth has resulted in increasing time spent working in the US. This is partly because we have to work longer to consume the new products that have been produced since the turn of the century. The other reason is that the wealth generated by new technology has been increasingly concentrated among the wealthy.
The mistake in Keynes’s prediction stems from the belief that more capital and technology inherently increases wages…what would happen to wages if capital became so productive that it could produce all goods with no aid from labor? Wages would become zero, and laborers would have no other means of survival but the charity of capital owners.
My paper, a version of which is forthcoming in Betterhumans, argued that the increasing productivity of capital relative to labor, i.e. automation, overturns economic models that assume that new jobs will be created to replace destroyed jobs. Finally Marshall Brain powerfully and very accessibly explained his perspective that half of all jobs will disappear in 50 years. One of the very interesting questions from the floor was how we might, and whether we should, assure equal access to the shrinking pool of remaining jobs. I said I didn’t think we would want to politically redistribute the remaining psychoanalysis and poetry jobs, but then upped the ante by noting how human enhancement technologies (drugs and gene mods for intelligence, special brain plugs) will guarantee that the wealthy have greater access to those jobs. The panel was warmly received, and the gospel the fully automated TechnoRapture appeared to be new to most participants.

Next we moved into a panel on creating a basic income guarantee in Iraq, by adopting Alaska’s program of distributing oil revenue dividends. Colin Powell and Paul Bremer have toyed with the idea as a way to jumpstart the Iraqi economy, pacify the restless, underemployed populace, and as a way to keep the oil revenues from being stolen by elites. Jay Hammond, a real character and the former Alaska governor who got the oil dividend program instituted there, spoke on that panel. He was supported by the Bushes in his independent campaign for office, and says he’s planning to go down to Texas to get Barbara and GHW to lean on W to pick back up the BIG idea for Iraq.

The US BIG conference was hosted as part of the Eastern Economic Association, so I attended the big talk by EEA’s outgoing president, Deirdre McCloskey. McCloskey spoke on her new book project “The Bourgeois Virtues,” and her talk was not only witty and erudite, but twice as impressive since she stutters and had lost her voice, and was wearing a mic that made her stutters sound like an airplane taking off. But she challenged the audience at the beginning by saying that as a little boy she had prayed every night that when she woke up she would be a girl and not stutter. She said she had got the first wish fulfilled (late in life), but not yet the second, so we could either deal or leave. Her talk basically argued that capitalism depends on people adopting a variety of virtues, while economics only recognizes the virtue of “prudence,” i.e. efficiency. She pointed out that Adam Smith had not held the fetishistic regard for rational self-interest as the sole value of capitalism that is often ascribed to him.

Saturday I attended a workshop on creating the right to a basic income. One of the speakers was Michele Tingling-Clemmons, a former recipient of public assistance, a former union activist, now with the National Welfare Rights Union and the DC Statehood Green Party. She laid out a clear Marxist analysis of structural unemployment, and made the point that raising the living standards of those at the bottom helps those in the middle, by keeping them from facing unfair competition from the desperate.

But the debate between the right to work/government-as-employer-of-last-resort advocates and the basic income advocates, which had started in a previous panel, ran throughout the conference. The advocates of expanded public employment argue rightly that there are fewer political hurdles to giving money to people in return for providing some kind of useful social work, most of which cannot yet be automated, rather than giving people money for nothing. Of course it is lot more expensive to set up a public works program to hire someone to put $25K in their pocket, as opposed to just sending them a check. And eventually most public sector employment will be made as redundant by automation as private sector jobs in agriculture, manufacturing and services. The audience pointed out that the two approaches are complementary rather than competitive: provide basic income as a minimum safety net, and public employment as a opportunity to earn more, and then pursuit of private sector employment as an opportunity to earn even more.

A third policy, the Caregiver Credit, received a lot of attention. It would expand the tax credit Americans receive for each dependent minor to a tax credit for all your dependents, including for your parents. Such a tax credit would begin to recognize the enormous amount of uncompensated work done caring for sick relatives, mostly by women. The proponents of BIG however noted that it didn’t perpetuate the fetishization of work, as government employment of last resort would, nor imply that people only deserve basic income if they are spending time doing socially useful things like caring for relatives. BIG is neutral about how people spent their time, although people discussed making it contingent on voting, or, as in one Brazilian program, on having your kids in school.

There was a good deal of debate about the ideal source of BIG revenues. There is a strong political argument for creating a BIG account from income from public resources, as in the Alaska oil revenue account, and the similar accounts proposed for Nigeria and Iraq. Similar sources of revenue might be auctions of, or taxes on, broadcast spectrum rights and pollution credits (being promoted by the US Sky Trust). But BIG payments would have a more direct redistributive effect if they were financed from progressive income taxes, although this would also make them more difficult to establish. There were a sizable contingent of people at the conference influenced by the theories of Henry George, an advocate of the fundamental importance of public ownership of land. For the Georgists, all the advantages of a BIG would be taken back since the owners of land will just raise rents. Others thought there would be more competition in housing markets, and that BIG would only substantially raise incomes for the minority who saw a net income gain from a BIG, making rent increases marginal.

The final questions were appropriately what the political prospects for BIG, or any substantial expansion of redistribution and economic entitlements were. The Greens are the only advocates of the idea in the US although the idea enjoys a much broader support outside of the US, especially in Europe. I suspect that BIG is an idea which will become immediately obvious when people think about a fully automated future, and adjust to the idea of sending humanity on vacation as a vision of the good society rather than full employment.