Thursday, April 2, 2020

Free Survival

The Concise Case for a Guaranteed Basic Income in Canada

Installing a floor in a house with no ceiling.

Imagine you lived in a country where every permanent resident was guaranteed a basic income that provided for the barest essentials of life.  Don’t question where the money will come from – we’ll get to that in a moment.  Simply imagine that the poorest people in the land each received, say, $1000 every month, no questions asked.  How would that country be changed?

Now imagine a contrasting scenario, where you live in a country that has no universal single-payer health insurance.  (Canadians can easily observe such an example below our southern border.)  What would happen if you slipped and badly broke a bone, or got a viral infection during a global pandemic, or had a child who needed urgent care, and you could not afford to pay for a doctor or a hospital visit or an essential operation?  Would any Canadian ever want to go back to the days before 1962 when that was actually the case?

If you are still having trouble with imagining the first scenario, but are all in favour of universal healthcare, ask yourself why medical treatment should be free but essential survival should not be.  Canadians don’t apply to be accepted to a hospital when they are sick – they are simply taken in and treated.  So why should a homeless person get free food and shelter from their government when they are in a hospital, but not outside of one?  How did creating wealth for someone else (i.e. a job) become a prerequisite for life?

The Status Quo

Like most wealthy countries, Canada generally offers social assistance – welfare – to those who apply for it and meet the eligibility criteria.  We don’t like to see people starving on our streets.  In poorer countries, such people might turn exclusively to begging in order to survive.  As a society, we don’t tend to hold welfare recipients or beggars in very high regard.  For those of us not fortunate enough to inherit our wealth, we have to work to earn a living, and it’s a bit irksome to see welfare money (our tax dollars) going to those who seemingly don’t.

While being on welfare and begging can certainly have a similar feel and stigma, the differences between the two are not all one-sided.  Social assistance is perhaps more predictable and has a less visible indignity, but at least if one works harder at begging, one can potentially earn more money.  Most welfare programs, on the other hand, are set up such that if you attempt to better your lot by getting work, every dollar that you earn is subtracted from your assistance cheque.  That’s a tax rate of 100% on our lowest income earners.  Indeed, there are some scenarios in which one or more part-time minimum-wage jobs might actually take the overall household income below the welfare payment level, discouraging recipients from even trying.

A guaranteed basic income (GBI) is different.  It is a commitment from the Government of Canada that no-one will be denied the chance to live.  It would be available to every adult citizen and permanent resident, linked to their social insurance number (SIN), and paid every month.  Every Canadian would receive the same amount, regardless of what province they live in or how much they have earned in the past.  If a recipient earns more than a defined threshold in any given year, the excess could be taken back at tax time.  Anyone can opt in or out at any time.

The remainder of this work will be devoted to answering the following questions:

Has this ever been tried anywhere?

Absolutely.  Minimum income schemes are not just pipe dreams.  In the last 50 years there have been more than 30 such programs introduced on an experimental basis around the world – with very promising results.  In Canada, a pilot project in Dauphin, Manitoba was conducted in the mid-70s, and in three communities in Ontario (2017-19).  Around the same time, another guaranteed basic income program was tried in Finland.  Furthermore, at the time of writing, there is an all-party committee putting together the plan for a province-wide pilot program in Prince Edward Island, and a separate commission of inquiry looking at basic income programs for British Columbia.  We’ll examine some of their results in the responses to more questions below, but generally speaking, the outcomes have been overwhelmingly positive, and fiscally responsible.

What are the benefits of a GBI?

The straightforward benefits in terms of poverty reduction should be obvious.  If someone has a guaranteed basic income every month, regardless of other circumstances, at least they have a fighting chance.  Poverty is not caused by a moral failing, or a shortage of will, or a lack of character.  Poverty is not a mindset, or a choice, or laziness.  Poverty is caused by having insufficient funds.  Period.

Money doesn’t solve everything.  But the benefits of having a guaranteed basic income go far beyond the bank account and dinner table.  Where GBI pilot projects have been run, the improvements to social well-being were irrefutable.  Generally speaking, the physical and mental health outcomes of participants improved, education and graduation rates went up, and negative encounters with the law went down.

New mothers have more options; youth have more options; the homeless have more options; former inmates trying to rebuild their lives from scratch have more options; people stuck in dead-end jobs have more options.  Artists and entrepreneurs can survive while pursuing their dreams and making our world a better place.  While one person’s GBI might not pay the full rent in some cities, recipients can band together and pool their resources.

Those in need can get immediate assistance, with their dignity intact – no applications, no assessments, no ongoing administration.  When there is no longer a need for soup kitchens and food banks, charitable giving can then be redirected to other worthy causes.

The simplicity and summary benefits of a GBI have yet another significant benefit.  Most of us (certainly in prosperous nations with insurance safety nets) now live without the daily fear of being attacked by a predatory animal, or succumbing to a minor natural catastrophe, or being killed by a rival tribe group, or losing everything in a fire, or suffering a medical trauma.  What fear could nearly universally apply to anyone in today’s society (pandemics aside)?  Unemployment.  Losing it all.  Not having the money to live in the manner to which one has become accustomed.  Not having the savings to retire from a life of labour.  It’s a serious fear.  (Yes, there was the CoViD-19 pandemic.  And what did the Canadian government do?  Did its bail-out package save the people?  No.  It attempted to save pre-existing workers and the economy.  The concern was not feeding the population – it was saving the jobs!  Those who were already vulnerable got nothing.)  Knowing that there is a guaranteed secondary safety net, even if savings and friends are no longer able to help, means a huge stress point is alleviated for every single Canadian.

Speaking of pandemics, imagine what would have happened if a GBI program had already been in place when that global crisis occurred.  The back-up system would have been well-defined and ready to go.  The universal income amount could have been tweaked as necessary, and all non-essential workers could have immediately gone home to wait it out.

Wouldn’t people stop working?

A GBI is no free ride.  On the contrary, it provides the bare minimum needed for survival.  It just moves the starting line up for people trying to lift themselves out of abject poverty.  It’s also the backup safety system that many need for taking new risks and exploring new opportunities; getting the education that truly appeals to them; weathering a sudden personal disaster; taking the time to find a vocation that is a great fit for their talents and interests.  Humans do not want to be idle all their life.  They want to be productive and to contribute in meaningful ways.  If they are given the keys to the many doors of opportunity standing before them, they at least have a chance to start opening them and to better themselves.

A basic minimum income would not pay for a standard of living that anyone would choose for themselves.  If you want a nice place to live, internet access, a car, a cell phone, nice clothes, and all the other great things that many of us enjoy in Canada, you are absolutely going to need a job.  For example, if the GBI were $1000/month, nobody is going to choose to live on $12,000 per year.  (But it might just save your life if that’s all you had.)

This conclusion is borne out by the GBI pilot projects which consistently demonstrate that there was no inclination for participants to work less.  Notable exceptions were new parents who chose to spend longer periods out of the workforce to be with their babies, and youth who chose to further their education instead of taking the first job that they could find.  The collective benefits of both of those types of decisions are clear.

Moreover, as mentioned earlier, some of the present traditional social assistance programs do actually discourage people from working – especially those with dollar-for-dollar claw-backs.  A properly-designed GBI does not work that way, and would not have the same effect.  However, it does open up alternatives so that the most disadvantaged are not slaves to demeaning sweat labour just to survive another day.

What are the social costs of a GBI?

One very sad criticism of GBIs is that the money will simply be wasted by the recipients.  This is of course nonsense.  The people living at the bottom of our social pyramid are the ones most likely to know what they need to survive.  Indeed, they are probably in a better position to make those decisions than some government bureaucrat designing a social assistance program in a committee room somewhere.  The flexibility of a GBI gives people the dignity and options to make the choices that are right for their individual circumstances.

The other thing you will hear is that a GBI will simply be used to enable addictions such as alcohol, drugs, and gambling.  This kind of distorted thinking is ridiculously biased and narrow.  Addictive behaviours can be found at every income level of society.  These problems are by no means limited to the poor or marginalized people, nor would they be attributes of the vast majority of those that need financial assistance.  Our mental health system should be focussed on treating these addictions, wherever they show up in our communities, not on treating the despair and anguish of poverty.

Furthermore, studies show that even those with addictions do not view such income as something to spend on their unhealthy habits.  On the contrary, knowing that such an ongoing benefit could (and likely will) turn their life around, they take the opportunity to improve their well-being and live better lives.  Many addictive behaviours are born of despair for any hope for the future.  A GBI can supply that missing hope.

Another argument is that a GBI will make people dependent on the government for their survival.  This is far more likely an outcome of the existing welfare systems that pays supplements well below the poverty line, thereby keeping people in poverty.  Even for those rare cases where, for whatever reason, an individual is not able to capitalize on all of the benefits listed earlier and is forced to continue to rely on their GBI payments in order to live – is there really anything wrong with that?  Plenty of average citizens have exactly the same dependence on our universal healthcare system.  If you can’t fall back on the basic humanity of your country, what hope is there?

Where will the money come from?

While this might be the most obvious question to pose, I saved it until now because some of the responses to the earlier questions set the stage for this one.  The answer must also be prefaced with the fact that while we can fairly easily calculate the costs of a GBI program, there are likely to be even more indirect financial benefits than have already been confirmed by pilot programs.  This is because a GBI inspires profound longer-term changes to society itself as well as individual well-being.

To begin with, there is the money from existing programs that would no longer be needed.  A GBI can replace social assistance, income supplements, tax incentives, subsidies, and more.  These kinds of savings include not just their outputs but also the costs associated with managing their applications, assessments, and ongoing administration.  Under at least one proposed GBI implementation, these federal and provincial savings alone would cover 60% of the direct costs.

Then there are the secondary savings that have always gone hand-in-hand with real poverty reduction:  reduced healthcare costs, lower crime rates, reductions in serious family conflict, etc., all of which otherwise represent a significant burden on the government coffers.

Even after all of that, will a GBI be a net-zero cost program?  Probably not.  However, any net cost would arguably be an effective investment in universally raising the quality of life for every Canadian, whether getting the GBI or not, because of an overall improvement in the well-being of our communities.

Where else might the money come from?

Unsurprisingly, critics of GBI and similar programs immediately translate such proposals into a massive tax increase.  Why, they ask, should we be working hard and paying taxes so that it can be given away to the people at the bottom layer of society?  Since the implementation of a GBI might very well entail some changes to the distribution of the tax burden, those are valid questions to consider.

And yet, would it not make even more sense to ask why that same majority should be working hard and paying taxes, while some of the highest income earners in the land leverage complex tax loopholes, finagle trusts, hide income off-shore, and generally use their existing wealth to generate new wealth for themselves at a rate that most could not begin to imagine?  While it is extremely important for society to address poverty, it is equally important to address income inequity as those gaps widen ever further.  So yes, I think it safe to assume that the introduction of a universal GBI for Canadians is also going to involve some of the country’s wealthiest individuals and corporations paying taxes that more closely reflect their actual earnings.

That being said, it is also true that putting more money into the hands of more people also clearly leads to more economic growth.  If the poorest people in Canada can suddenly afford more food and other essentials, that buying power translates directly into a healthier economy.  That means more revenue overall to help pay for the GBI that made it all happen.  As prosperity grows, the demands on the GBI actually decrease.  (By contrast, under the status quo, poverty is self-replicating – it reinforces its own permanence.)

Isn’t a GBI total socialism?

Technically, no it isn’t and I’ll say why.  But before I do, dismissing an initiative that has the proven benefits outlined above, just because of its apparent political genre is the kind of closed-minded thinking that can hold back an entire nation.  Unfortunately, it is also the most common form of knee-jerk criticism when a GBI is debated in the general population.

Socialism, in the literal sense, is where the means of production, distribution, and exchange is owned and/or regulated by the community – none of which are really attributes of a GBI.  However, in common usage, the term “socialism” is often applied whenever the government is seen to be giving something away.  Universal healthcare, which the vast majority of Canadians support wholeheartedly, is closer to socialism, since the government does indeed define what healthcare is offered and control how it is delivered.

The existing social assistance programs are also closer to socialism than a GBI, since they are much more tightly regulated by the governments administering them.  It might surprise those on the right of the political spectrum to know that there is significant support among conservatives for GBI initiatives.  Even Milton Friedman, that great champion of neoclassic economics and libertarianism, was a supporter of minimum basic income programs (which he called a “negative income tax”).  Such programs appealed to him because it put the money and spending decisions in the hands of the people, not a central planning authority (and as such, were the opposite of socialism).  It is also worth noting that the recent three-year GBI pilot program introduced in Ontario in 2017 had the explicit support of all three major parties, and was in fact designed by a long-standing staunch Conservative, former senator Hugh Segal.

Why does anyone deserve a GBI?

There are several ethical arguments for a national GBI.  Here are a few:

Firstly, for the same reason that you deserve free healthcare.  In a country of so much abundance, the essentials of life should be provided to those with no other option.  A GBI offers survival with dignity, so that every person has a chance to become a contributing member of society.  The status quo does nothing to eradicate poverty – it simply keeps people there.  That is not the objective of society or humanity.  You might be lucky enough to not have to sleep on the street, but how does it feel to you when you see others forced to do that?  Everyone benefits when the lowest point of society is lifted.

Secondly, ask yourself:  What is the source of any other money in our present economy?  A large percentage of it comes from the real wealth of the nation – its natural resources, its sustainable energy sources, its collective technological know-how, and its broadly held culture and stories.  These are things that arguably every resident has equal claim to, so why shouldn’t everyone receive a dividend from this wealth?  Putting it another way, ask yourself why those few super-wealthy people who presently take significant wealth from such common national resources deserve to do so.

Thirdly, we must never forget that a GBI applies to everyone, regardless of upbringing, social status, or former income level.  It does not just rewrite the future prospects of our most vulnerable and disadvantaged populations; it also completely changes the way each and every one of us think about our own job security and our freedom to make choices that are right for us.  A GBI is there for everyone, and anyone can activate that safety net, if and when they need it.  This includes middle-income people with no savings fleeing domestic violence.  It includes victims of natural disasters or fraud who have lost everything.  It includes the disillusioned elite who need some time to redefine their life’s purpose.  It includes visionaries who choose voluntary simplicity and a life of volunteerism to help their fellow human beings.  A GBI changes the entire paradigm.

Where could this lead?

Already, a guaranteed basic income is a better solution for ‘current’ times.  It can be designed to provide a fiscally and socially responsible way to provide more effective help for those in need under the economic paradigm that we have lived under for decades.  But it can also be a total game changer, ushering in a whole new economic paradigm.

As we live today, survival is largely predicated on wages.  We exist in the relentless pursuit of money, a number-based value that has no concept of sufficiency.  More is always worth more.  The universal objective became the maximization of wealth, when the horrible truth is that wealth cannot be maximized – we can always earn more.  There is no maximum!  We devote our incredible life potential in pursuit of the impossible.  Furthermore, no matter what wondrous creativity we possess, it is held to have no value if it cannot be monetized.  “Not good enough – you need a real job.”  Where does this value distortion come from?

It comes from civilization’s present manifestation of the bottom layer of Maslow’s famous Hierarchy of Needs.  Physiological needs are the most basic of human requirements, and our modern framework says that to meet those we need money.  For many tens of thousands of years, this was never the case.  For our ancestors, just like for every other species on the planet, the essentials of life were supplied by the natural world.

When money became essential for life, its value was inextricable from survival.  We were taught from the earliest age that we were put on Earth to work non-stop so that we could eat.  Our education was entirely geared to preparing our money-earning potential because this is how we were going to spend the rest of waking lives: working.  At first, most of the work was productive to society and perhaps aligned with our collaborative instincts.  However, over time, work has become more of a life of earning money for those at the top of the pyramid – or worse, for faceless corporations that now rule over our societies.  The consumption of planetary resources is no longer for our survival – it takes place to create an economy with two different objectives: (1) to enrich those who already have far more than anyone could ever need, and (2) to create enough jobs so that the workers can all continue to work and afford to consume what is being created so that the cycle may continue.

We all fully understand that success takes work.  Happiness and productive lives require some effort.  But what if survival was free?  What if the ability to afford the essentials of life was something you never had to worry about?  Imagine the phenomenal freedom that such a societal evolution would release us into!  Why couldn’t our public revenue (especially corporate taxes) be used in that way?  Why shouldn’t they be?  Such a base line would buy all of us the precious time that we need to rethink our economies and our actions on this planet.  We could change the course of society without the constant paralysis caused by the law of job preservation trumping every other major change initiative.

It is very hard to predict what such a world would look like, but it is easy to see that it would be better than the obsessive and unsustainable pursuit of growth that we are stuck in now.  Perhaps guaranteed basic incomes would extend to become universal basic incomes, available to everyone, rich or poor.  Perhaps money would be entirely uncoupled from survival somehow.  Perhaps food and shelter would simply be given, and our economies would focus on science or the arts or healing our planet.  Who knows?


More reading:
Basic Income Canada Network
Basic Income Earth Network

4 comments:

  1. So, here is the comment I made earlier. Great presentation. Only question is what will it take to convince governments that this is the way to go, given how intimately tied into big business they are? Plus there are all those well paid lobbyists pushing in that same direction (old school). If a crisis like Covid-19 isn't enough to compel them to do the right thing, what will?

    ReplyDelete
    Replies
    1. I don't think big business is really a huge obstacle on this one, Harry. I suspect the issue is more one of partisan politics. Some of the benefits (and absence of problems) have to be continually proven by pilot programs.

      The problem in this country is premiers like Doug Ford, who shut down the Ontario trial (which was designed by a Conservative and approved by the Conservative party) when it was mere months away from completion. All that data, and no-one to now produce the reports.

      The PEI program that is presently being worked on would be excellent! An entire province perhaps adopting a GBI would be amazing (and 8 out of 27 MLAs being from the Green Party shows great support for such a scheme).

      To my mind, industry does not face any immediate threats from a GBI - I believe this is primarily a people education issue. I also believe it is a keystone battle for a lot of other positive things to follow, as alluded to in my final response above.

      As for the Fed's pandemic bail-out, a GBI was not in their toolkit - they went with what they know. Had they consulted humanitarian disaster experts, they would have been told that something closer to a GBI would have been vastly superior, simpler, and faster aid.

      Delete
  2. I'm curious to learn if pilots were successful, why did they not get more widely accepted or instituted? Another point: Society is only as strong as our most vulnerable, and our current form of societal valuation certainly seems to be firmly fixed in a monetary frame, so this kind of respect (not support) requires a great effort on everyone's part, to rethink how we value each other, heck, even value life. considering that elephants, whales, gorillas protect their weakest and most vulnerable instinctively, I have to wonder which is the more enlightened, wise species?? We have a lot to learn, re-imagine and action to turn things around. This planet would be a better place for all living beings if we looked beyond ourselves to give, share, respect, and take only what we truly need. UM....OM

    ReplyDelete
    Replies
    1. Hi Uta: Thanks for your thoughts!

      Pilot projects, in order to produce meaningful data, usually have to be run over multiple years. With our Canadian propensity to throw governments out after one term (as opposed to voting FOR anything), these pilots seem to be habitually tossed by the incoming government of an opposite party before they are done. (Premier Ford's action was particularly egregious, but then, undoing things (even his own things) appears to be a signature behaviour. Glad to see things are much better in the current crisis.)

      Questioning our reign as the most enlightened, wise species is certainly appropriate under the circumstances. If I was tasked to identify one human action that, more than any other, got us into this mess, it might be this:

      Yes, we had a self-proclaimed power reign over all other species, and we *might* have eventually matured enough to wield that power differently, but then we created a new species and placed it even *higher* on the food chain than ourselves:

      Corporations.

      We granted them the same rights as humans, but only endowed them with a very small, obsessive part of our value system - one which has no definition of sustainability. (See Corporate Greed post in this blog.) Then we made them immortal and able to grow to any size. (See https://www.linkedin.com/pulse/corporate-singularity-possible-andrew-welch/ for an interesting twist on that idea.) Then we modified our political systems so that the those with the most money ruled the day - an award that soon went to industry over individuals. Furthermore, we allowed corporations to spread over national borders so that their accountability was effectively to no-one. I do very much think of them as a separate species that is now above our own.

      The good news is that we could theoretically correct all of this with the stroke of a pen - unless we are too late even for that. The more frightening alternative is that we simply stop believing in the power of money. Once that belief is gone, corporations have nothing.

      Delete

[Dear Reader:  I would *love* to receive your comments, but NOTE: Blogger will only accept comments here if your browser's Third Party Cookie blocking is turned OFF (even if just temporarily).  Sorry!  Not my software...]