HOW TO CALCULATE YOUR RESOURCE WEALTH
http://www.europeanenergyreview.eu/index.php?id=1101
http://books.google.com/books?id=yk5NI69ZO9sC
http://www.usbig.net/links.html

‘CITIZEN’S DIVIDEND’
http://www.thomaspaine.org/Archives/agjst.html
http://en.wikipedia.org/wiki/Citizen’s_dividend

Citizen’s dividend or citizen’s income is a proposed state policy based upon the principle that the natural world is the common property of all persons (see Georgism). It is proposed that all citizens receive regular payments (dividends) from revenue raised by the state through leasing or selling natural resources for private use. In the United States, the idea can be traced back to Thomas Paine’s essay, Agrarian Justice[1], which is also considered one of the earliest proposals for a social security system in the United States. Thomas Paine best summarized his view by stating that “Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds.”

This concept is a form of basic income, where the Citizen’s Dividend depends upon the value of natural resources or what could be titled as “common goods” like seignorage, the electro-magnetic spectrum, the industrial use of air (CO2 production), etc. The State of Alaska dispenses a form of citizen’s dividend in its Permanent Fund Dividend, which holds investments initially seeded by the state’s revenue from mineral resources, particularly petroleum. In 2005, every eligible Alaskan resident (including their children) received a check for $845.76. Over the 24-year history of the fund, it has paid out a total of $24,775.45 to every resident.

BASIC INCOME
http://en.wikipedia.org/wiki/Basic_Income
http://en.wikipedia.org/wiki/Georgism
http://www.basicincome.org/bien/aboutbasicincome.html
http://www.basicincome.org/bien/papers.html
http://www.multinationalmonitor.org/mm2009/052009/interview-widerquist.html

MM: What are the origins of the concept?
Widerquist: Some people trace the idea back as far as ancient Greece. The idea started appearing gradually in different times and places in the modern era. Thomas Paine mentioned something like it in his pamphlet “Agrarian Justice” in the 1790s. Bertrand Russell articulated the idea in 1915. Economists started talking about the idea in the 1940s. The idea gathered a great deal of attention in the United States in the 1960s and 1970s, when people began to think of it in very diverse ways: as the scientific solution to poverty, as a streamlined yet more effective alternative to the welfare state or as a way to empower the least advantaged people. At one point, it seemed like the inevitable next step in social policy. People as diverse as Martin Luther King and Richard Nixon endorsed it. Groups as diverse as chambers of commerce and grassroots welfare rights campaigners endorsed it. But the diversity of its appeal was matched by the diversity of its opposition. A watered-down version of it called “the Family Assistance Plan” passed narrowly in the House of Representatives in 1972, but was defeated in the Senate by a coalition of people who thought it went too far and people who didn’t think it went far enough. Interest in the idea dropped off in the United States in the late 1970s, but then interest began to grow in Europe. The academic debate has continued to grow ever since and it has translated into popular movements in places as diverse as Ireland, Namibia, Finland, Brazil, South Africa, Belgium, Germany and Italy.

MM: Are there examples of policies being enacted? How have they turned out?
Widerquist: Yes, there are a few small things around the world and one big example in Alaska. Brazil recently voted to combine several of its anti-poverty programs into a program called the Bolsa Familia, which is supposed to be the first step. A private NGO is currently conducting a pilot project in Namibia with great success. The Alaska Permanent Fund (APF) has been in place for 25 years. The “basic” in basic income guarantee is meant to indicate that it is enough to cover your basic needs. The APF isn’t that large, but it is one of the most popular government programs in the United States today. They had a referendum proposing to get rid of it a few years ago, and people voted something like 85 percent in favor of keeping it. Few government programs have that kind of support. The APF is another outgrowth of the NIT movement in the United States in the 1970s. Jay Hammond was governor when the Trans-Alaska Oil Pipeline was proposed. He had learned about BIG during the NIT debate, and he saw the opportunity to connect the two. Usually when businesses want to take publicly owned natural resources and make them into private property, they just pay off the right politicians and they get the resources free or at a nominal fee. But Hammond decided that this oil belonged to all the people of Alaska, and if the corporations wanted to buy it, they had to pay into a fund that would pay a yearly dividend to every citizen in Alaska. The APF dividend varies year-to-year depending on the fund’s returns. It’s usually somewhere between $1,000 and $2,000. Last year the dividend was a record high of $3,200. Of course, $3,200 isn’t enough to meet anybody’s basic needs, but it can make a huge difference for people at the margins. Suppose you’re a single parent with four children living on an Indian reservation somewhere in Alaska. Last year’s APF Dividend was worth $16,000 to you and your family. You can’t live on that all year, but imagine the difference it makes. You might worry that people who get a check from resource revenues might be more accepting of resource exploitation. But other factors, I believe, more than counteract any such effect. Remember that today companies are taking control of natural resources all over the planet and paying no compensation at all to the rest of humanity. If you want people to do less of something, taxation is a very good way to start. If you tax resource extraction, you not only discourage people from doing too much of it, you also establish the precedent that natural resources belong to everyone — not just to the first corporation to get permission from the government. That precedent would be enormously valuable to the environmental movement.

STEP ONE : LOCATE RESOURCES
http://www.npr.org/blogs/money/2010/06/14/127834173/will-afghanistan-fall-victim-to-the-resource-curse
http://www.npr.org/blogs/money/2010/06/17/127915306/one-way-to-break-the-natural-resource-curse-give-the-money-away

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. That system would create a strong incentive for the people to keep on eye on what the government’s doing, says Todd Moss of the Center for Global Development. “If you received $500 last year, and this year it’s only $400, you’re going to ask some pretty hard questions,” he says.

But there are a few key barriers to putting the plan into action. The first is logistics. Lots of resource-rich countries don’t have national databases, clear census records or strong banking systems. That makes it tough to hand out billions of dollars to millions of people, year after year. The second is the fact that money is power. A government that’s getting lots of money by selling natural resources may be reluctant to share the wealth. Arvind Subramanian, an economist with the Peterson Institute, recently traveled to Nigeria to pitch the idea of giving oil revenues directly to the people. The government wasn’t interested. “If the current guy in power does not want to give up power, my idea has no hope of succeeding,” Subramanian said.

‘SAUDI ARABIA of LITHIUM’
http://earth2tech.com/2010/06/14/who-wants-afghanistans-lithium-chinas-electric-vehicle-players/
http://afghanistan.cr.usgs.gov/flash_tile.php?cat=NRL%20Aerial%20Photography%20preliminary%20Data
http://afghanistan.cr.usgs.gov/airborne.php
http://www.usgs.gov/newsroom/article.asp?ID=1819
http://www.bgs.ac.uk/downloads/browse.cfm?sec=7&cat=83
http://www.bgs.ac.uk/afghanminerals/raremetal.htm
http://www.bgs.ac.uk/AfghanMinerals/links.htm
http://www.independent.co.uk/news/world/asia/afghanistans-resources-could-make-it-the-richest-mining-region-on-earth-2000507.html
Afghanistan’s resources could make it the richest mining region on earth
by Kim Sengupta / 15 June 2010

Afghanistan, often dismissed in the West as an impoverished and failed state, is sitting on $1 trillion of untapped minerals, according to new calculations from surveys conducted jointly by the Pentagon and the US Geological Survey. The sheer size of the deposits – including copper, gold, iron and cobalt as well as vast amounts of lithium, a key component in batteries of Western lifestyle staples such as laptops and BlackBerrys – holds out the possibility that Afghanistan, ravaged by decades of conflict, might become one of the most important and lucrative centres of mining in the world. President Hamid Karzai’s spokesman, Waheed Omar, said last night: “I think it’s very, very big news for the people of Afghanistan and we hope it will bring the Afghan people together for a cause that will benefit everyone.” In Washington, Pentagon spokesman Colonel David Lapan, told reporters that the economic value of the deposits may be even higher. “There’s … an indication that even the £1 trn figure underestimates what the true potential might be,” he said. According to a Pentagon memo, seen by The New York Times, Afghanistan could become the “Saudi Arabia of lithium”, with one location in Ghazni province showing the potential to compete with Bolivia, which, until now, held half the known world reserves.

Developing a mining industry would, of course, be a long-haul process. It would, though, be a massive boost to a country with a gross domestic product of only about $12bn and where the fledgling legitimate commercial sector has been fatally undermined by billions of dollars generated by the world’s biggest opium crop. “There is stunning potential here,” General David Petraeus, the US commander in overall charge of the Afghan war, told the US newspaper. “There are lots of ifs, of course, but I think potentially it is hugely significant.” Stan Coats, former Principal Geologist at the British Geographical Survey, who carried out exploration work in Afghanistan for four years, also injected a note of caution. “Considerably more work needs to be carried out before it can be properly called an economic deposit that can be extracted at a profit,” he told The Independent. “Much more ground exploration, including drilling, needs to be carried out to prove that these are viable deposits which can be worked.” But, he added, despite the worsening security situation, some regions were safe enough “so there is a lot of scope for further work”.

The discovery of the minerals is likely to trigger a commercial form of the “Great Game” for access to energy resources. The Chinese have already won the right to develop the Aynak copper mine in Logar province in the north, and American and European companies have complained about allegedly underhand methods used by Beijing to get contracts. The existence of the minerals will also raise questions about the real purpose of foreign involvement in the Afghan conflict. Just as many people in Iraq held that the US and British-led invasion of their country was in order to control the oil wealth, Afghans can often be heard griping that the West is after its “hidden” natural treasures. The fact US military officials were on the exploration teams, and the Pentagon was writing mineral memos might feed that cynicism and also motivate the Taliban into fighting more ferociously to keep control of potentially lucrative areas.

Western diplomats were also warning last night that the flow of money from the minerals is likely to fuel endemic corruption in a country where public figures, including Ahmed Wali Karzai, the President’s brother, have been accused of making fortunes from the narcotics trade. The Ministry of Mines and Industry, which will control the production of lithium and other natural resources, has been repeatedly associated with malpractice. Last year US officials accused the minister in charge at the time when the Aynak copper mine rights were given to the Chinese, Mohammed Ibrahim Adel, of taking a $30m bribe. He denied the charge but was sacked by President Karzai. But last night Jawad Omar, a senior official at the ministry, insisted: “The natural resources of Afghanistan will play a magnificent role in Afghanistan’s economic growth. The past five decades have shown that every time new research takes place, it shows our natural reserves are far more than what was previously found. This is a cause for rejoicing, nothing to worry about.”

According to The New York Times, the US Geological Survey flew sorties to map Afghanistan’s mineral resources in 2007, using an old British bomber equipped with instruments that offered a 3-D profile of deposits below the surface. It was when a Pentagon task force – charged with formulating business development programmes and helping the Afghan government develop relationships with international firms – came upon the geological data in 2009, that the process of calculating the economic values began. “This really is part and parcel of General [Stanley] McChrystal’s counter-insurgency strategy,” Colonel Lapan said yesterday. “This is that whole economic arm that we talk about but gets very little attention.”

‘DISCOVERY’
http://www.state.gov/secretary/rm/2010/05/141825.htm
http://www.defense.gov/transcripts/transcript.aspx?transcriptid=4643
http://www.nytimes.com/2010/06/15/world/asia/15afghan.html?ref=global-home
http://blog.foreignpolicy.com/posts/2010/06/14/more_on_afghanistans_mineral_riches
http://ricks.foreignpolicy.com/posts/2010/06/14/minerals_in_afghanistan_mais_oui
by John Stuart Blackton

The ” discovery” of Afghanistan’s minerals will sound pretty silly to old timers. When I was living in Kabul in the early 1970’s the USG, the Russians, the World Bank, the UN and others were all highly focused on the wide range of Afghan mineral deposts. The Russian geological service was all over the North in the 60’s and 70’s. Cheap ways of moving the ore to ocean ports has always been the limiting factor. The Russians were looking at a northern rail corridor. Take a look at this little bibliography of Afghan mineral assessments. This one is mostly Russian, but pre-dates the DoD/USG “discovery” period by 30 years. In my day we did a joint USG/Iranian study of a potential rail line from Afghanistan to several of the Iranian rail hubs. This was predicated on mineral exploitation in a way that would thwart the Russian’s northern rail corridor plans. In the early 70’s the USG had an old FDR New-Deal planner/economist/brains-truster – Bob Nathan – working with the Afghan Ministry of Plan to work out a fifty year mineral exploitation program. When the Russians took over they picked up Bob’s plans and extended them. So this is anything but a “new discovery”. Low cost, long haul transport infrastructure remains the constraint.

{John Stuart Blackton, who has shaken more Helmand River sand out of his shorts than most Americans in Afghanistan have walked on, provides some background. By the way, before running USAID in Afghanistan, John attended Stephens College of Delhi-as did Pakistan’s Gen. Zia.}

STEP TWO : DETERMINE TRUE COSTS
http://reclaimdemocracy.org/corporate_welfare/
http://en.wikipedia.org/wiki/General_Mining_Act_of_1872
http://www.seattlepi.com/specials/mining/26875_mine11.shtml
The General Mining Act of 1872
by Robert McClure & Andrew Schneider / June 11, 2001

Gold, silver, platinum and other precious metals for free. Land for $5 an acre or less. That’s the deal mining companies get from the U.S. government when miners turn their explosives and earthmovers toward public land in the West. It’s pretty much the same deal miners have had for 129 years, ever since Congress approved the General Mining Law in 1872. Modern mining methods have left the West pockmarked by huge craters, some so large that they are visible from space. Whole mountainsides are ground to dust and doused with cyanide, teasing out enough gold for a single wedding ring from several tons of rock and soil. And tens of thousands of abandoned mines scar the landscape, many emitting an orange-red, acid-laced runoff called “yellow boy.” These mines have poisoned more than 16,000 miles of Western streams. When a mine goes bankrupt, taxpayers sometimes get stuck with the costs of cleaning up the mess — more than $275 million for three mines alone in Colorado, South Dakota and Montana that closed in the 1990s. Under terms of the antiquated law, miners cart away everything from gold to kitty litter from public lands — minerals worth about $11 billion in the last eight years alone. Not only does the U.S. Treasury get nothing, Congress has granted miners a tax break worth an estimated $823 million in the coming decade. Over the years, public lands the size of Connecticut have been made private under terms of the 1872 law, all for $2.50 to $5 an acre, though not all of it has been used for mining. Some claims became ski resorts, housing subdivisions, hotels and even a brothel, in Nye County, Nev.

Congress has acted over the years to rein in some abuses allowed under the act, but problems persist, and the debate over the future of Western lands continues. New mining regulations designed to protect taxpayers and the environment went into effect just hours before George W. Bush became president — and he soon moved to get rid of them. A watered-down version of the rules or a full suspension is expected next month. The controversy over the new regulations for administering the old law is just one more battle in a land-use war that has raged for generations. It’s a complex subject, rich in history. But the issues boil down to three broad areas of disagreement: To what degree mining harms the environment, whether the jobs it produces are worth the damage, and whether the public interest is being subverted by the miners and their friends in Washington, D.C.

Opening the West
Complaints about a taxpayer rip-off started just about as soon as miners arrived in the vast American West. Trying to establish order amid the chaos of the California gold rush in 1848, an Army colonel named Mason sent a dispatch to headquarters warning: “(T)he government is entitled to rents for this land, and immediate steps should be devised to collect them, for the longer it is delayed the more difficult it will become.” Nearly two decades later, Congress adopted the Lode Law of 1866 — a troubled bill that won passage because it was attached to unrelated legislation. The 1866 law, updated in 1870 and in 1872, probably wasn’t what Colonel Mason had in mind. It simply legitimized what miners were already doing: Find a bit of federal land that appears to contain gold, silver or other “hard-rock” minerals, pound stakes at its corners to warn off others, dig, and — if you guessed right — cash in.

Like the better-known Homestead Act, which offered free land to anyone willing to farm it, the mining law was intended as an incentive to those willing to push West and settle the frontier. That frontier was closed long ago, but the mining law remains on the books and very much in use — even where mining would harm an increasingly settled region. The new mining regulations targeted for repeal by the Bush administration give the government the right to reject a proposed mine if it would cause “substantial irreparable harm.” Currently, federal officials must administer a law they say promotes mining as the best use of millions of acres of federal land, even in sensitive places such as Top Of The World, Ariz., a wide spot in the road 70 miles from Phoenix. There, a Canadian company called Cambior wants to dig copper where wild boars roam and the hedgehog cactus blooms brilliant red in the spring. The sulfuric acid, trucks, noise and dust from a 24-hour-a-day mine would be plopped down just upstream from a lush, tree-shaded canyon — a rarity there.

Cambior, which also ran a mine in Guyana where 300 million gallons of a cyanide-bearing solution spilled, wants to dig three pits covering nearly a square mile, reaching a depth of 600 feet. The hundreds of millions of tons of earth removed would be piled into heaps covering an additional square mile-plus. The ore, the material that bears copper, would be doused with 400 tons of sulfuric acid per day. To do this, the company would reroute more than two miles of streams, some through channels constructed of a concretelike material. The Canadian firm and its subsidiary, Carlota Copper Co., will pay no more than $1,700 for the public portion of the land it would mine. The company expects to mine some 478,000 tons of copper worth about $728 million at current prices. Even a federal lawyer trying to defend the government’s approval of the mine had to admit, “The circumstances here include a proposed project that is so invasive to the forest that it would never be considered, much less approved, were it not for the mining law of 1872.” And a federal judge handling a suit by environmentalists who tried to stop the project ruled that the mining law trumps their concerns. “Because mining has been accorded a special place in the national laws related to public land, the development of mineral resources in the national forests may not be prohibited or unreasonably circumscribed,” U.S. District Judge Paul Rosenblatt wrote. “The Forest Service consequently has no authority to categorically reject an otherwise reasonable mining plan of operations.”

Bob Walish, manager of the Cambior project, said it is misleading to consider only the $5 per acre the company will pay the government. He said the company spent about $61 million prospecting, obtaining permits and fighting lawsuits. Echoing the industry’s supporters in Congress, Walish said the government should follow through with the intent of the mining law — to privatize land in the West. More than half of some states are still owned by the government, he noted. “The debate in our mind isn’t that we’re stealing this from the public,” he said. “It’s ‘Why is there (still) all this public land?'” Stephen D’Esposito, president of the Mineral Policy Center, an environmental group dedicated to mine-law reform, points to Top Of The World and places like it when asked what’s wrong with the 1872 law. “It’s time for a new deal that keeps our water clean, protects our public lands from destructive mineral development, eliminates corporate subsidies and gives the taxpayer a fair return,” D’Esposito said. “What’s needed are three common-sense reforms: the right of the public to say ‘no’ when mining isn’t the best use of our public lands; a requirement that mining companies pay to clean up their messes as a cost of doing business; and a provision that mining companies pay taxpayers a fair price for mining on public lands.”

An economic savior
Though less of an economic force than in the past, mining remains an economic savior of some rural areas in the West, where more than 100 hard-rock mines are operating. And those who run the international corporations that have replaced the pick-and-shovel prospectors of the 1800s say the public still benefits from their hard work and willingness to risk a fortune to develop mines that might not return one. They point out that mining still pays better than most jobs in the rural West, and they note that mining firms and their employees pay taxes, too. And society gets something it can’t live without, they argue: metals. U.S. manufacturers get about half their metals from right here at home. “Mining makes our civilization…. Everything you do today depends on mining,” Rep. Jim Gibbons, R-Nev., a former mining geologist, said at a recent congressional hearing. Before another hearing, Gibbons said that efforts to crack down on mining companies “may relegate us to a Third World status.”

The miners say they are regulated enough. The government already has put about 165 million acres off-limits, and on an additional 182 million acres, the U.S. Forest Service or the Bureau of Land Management can reject mining permits. That leaves about 350 million acres of the West open to mining. And miners note that the law doesn’t excuse companies from having to abide by more-recent federal laws such as the Clean Water Act and the National Environmental Policy Act. “We can’t mine in parks. We can’t mine in sensitive areas,” said Jack Gerard, president of the National Mining Association. “The government every day makes public lands/public policy decisions.”

Yet exercising this power can be expensive. In 1995, President Clinton proposed a ban on mining in an area near Yellowstone National Park. A Canadian firm, Crown Butte Mines Inc., already had applied to privatize some land in the area and planned to use land already patented — that is, converted to private property by others who paid a small fee. The government had to pay $65 million to stop the mine. The money went to Battle Mountain Gold, which had bought Crown Butte. Battle Mountain Gold wants to open Washington state’s first major open-pit gold mine, the Crown Jewel project in Okanogan County. The 1872 Mining Law has been under fire for decades, but the industry has been able to head off countless attempts at reform. One of its bedrock arguments is that overhauling the law would risk national security. “Destroying the mining law will risk the lives of our sons and daughters, for many will surely die in battle on some foreign shore because of it,” said Richard Lawson, a retired four-star Air Force general who until recently headed the National Mining Association. “Without the protection of the mining law, America cannot get the minerals it must have to remain free and secure, and we will go to war to get those precious metals.” But some Western communities pay a high price for this freedom.

Superfund sites abound
Signs near Spokane carry an ominous warning: “This health advisory is posted to alert you to the presence of elevated levels of lead and arsenic in soils along the shorelines and beaches of the upper Spokane River…. Swallowing or breathing loose shoreline soils may be an increased health risk to people, especially infants, small children and pregnant women.” The signs, posted by the Spokane Regional Health District, warn that children shouldn’t play in muddy soils along the river and should be closely supervised to ensure that they don’t put dirt in their mouths. Toxic goop is spilling into Washington fully 50 miles downstream from the Silver Valley, where North Idaho miners dug silver, lead and other metals from the earth for more than a century. The Spokane flows from Coeur d’Alene Lake, which the Environmental Protection Agency says holds some 70 million tons of mining waste — enough to cover a football field 4.7 miles high. And rivers all across the West are tainted by old mines, including the Columbia and the Okanogan in Washington.

The U.S. Environmental Protection Agency’s roster of the nation’s worst industrial contamination hot spots, the so-called Superfund list, includes more than 25 mines, a handful still active. Cleaning them up will cost billions of dollars. Whole towns in Montana and Idaho have been swallowed by Superfund sites, their stream banks and hillsides denuded of plants. In Idaho’s Silver Valley, the source of the mine waste in the Spokane River, tests show that one in six children under age 6 have enough lead in their bodies to affect learning and other functions. While much of the damage done by mining in the West happened decades ago, environmental problems continue: Near Deadwood, S.D., a small Canadian firm went bankrupt and left taxpayers a $40 million cleanup bill. At Montana’s Fort Belknap Indian Reservation, another bankrupt Canadian company stuck taxpayers with an estimated $33 million in cleanup costs. In southern Colorado, yet another bankrupt Canadian concern created a mess that will cost more than $200 million to clean up, while 17 miles of the Alamosa River were left devoid of fish and most other creatures for about eight years. In central Idaho, Hecla Mining Co.’s Grouse Creek mine, hailed as a marvel of modern mining when it opened in 1994, has slowly leaked cyanide into the ground and into a nearby creek. Near San Luis, Colo., Battle Mountain Gold’s self-proclaimed “environmentally friendly” mine experienced a large and unexpected buildup of cyanide within a year of opening. Near Whitehall, Mont., the Golden Sunlight mine, run by Placer Dome, a Canadian company, contaminated wells of two nearby ranchers. There’s a big difference between mines envisioned by Congress in 1872 and those operating today. Modern mines are far bigger, and many employ deadly cyanide to leach precious metals from rock. The leaching technique was used in small measure by miners in the early 1900s to draw gold and copper out of ore so low in mineral content that large-scale operators would have tossed it out as waste.

In the old days, leaching was done by misting cyanide over a barrel or large vat filled with crushed ore. The cyanide dissolved microscopic specks of gold from the rock, much as water dissolves sugar. As gold soared to $850 an ounce in the early 1980s, mining companies brought back the leaching technique in a big way, wringing more gold from long-closed mines and developing new ones where the ore had been considered too poor to bother. Miners still mix cyanide and water and slowly trickle it over piles of ore, but the piles are much bigger. Now they blast away entire mountains of rock, pile the ore in heaps the size of a football field and apply a river of cyanide, leaving behind hills of tailings and waste rock. Environmentalists cringe at the technique, not just because of the hazard of an accidental cyanide release, but also because of a long-term risk related to exposure of rock to the weather. The ore is often high in sulfides, and water passing through the rock and soil creates sulfuric acid, which in turn leaches poisonous heavy metals into runoff water, with iron in the rock turning streams an orange-red.

Forest Service, BLM decide
Environmental Protection Agency officials estimate that 40 percent of Western watersheds are affected by mining pollution. And sometimes EPA officials have advised against allowing a mine to open. But the EPA’s concerns are sometimes ignored since the ultimate go-ahead comes from the Forest Service or the BLM. The Grouse Creek mine in central Idaho, for example, won Forest Service approval even though the EPA warned that a strikingly beautiful high-elevation wetland valley would be destroyed. “Let the fun begin!!!!!” Forest Service mining engineer Pete Peters wrote in jest to a supervisor as he tried to figure out how to manage millions of gallons of muddy runoff water at the mine. Today, Peters acknowledges that he was unprepared for the enormity of his task of regulating the mine. “There’s no textbook. You have to hope you can stay ahead of it,” he said. “It was like nothing I’d ever dealt with.” The mine, leaking cyanide, closed after three years without making a profit. Signs posted by a nearby creek for a time warned, “Caution — do not drink this water.”

Mining industry officials acknowledge that there have been environmental problems, even with modern mines. But they say that the industry generally does a good job of policing itself, and that state regulators also keep an eye on miners. “The mining industry is not perfect, and mining has risks and it has impacts,” said Laura Skaer, director of the Northwest Mining Association. “Over the years, the industry has developed the practices and the techniques, coupled with regulations, to mitigate those impacts. It doesn’t mean there aren’t going to be accidents; that there isn’t going to be an occasional bad actor.” Accidents started to happen as soon as the Summitville mine opened in southwestern Colorado. Within six days, cyanide was leaking. The mine operator, Galactic Resources Ltd. of Canada, later went broke.

Galactic was one of a series of small mining companies, often financed through the loosely regulated Vancouver Stock Exchange, that rose to prominence during the mining boom before crashing in bankruptcy. Like other Canadian companies, it was allowed to mine on U.S. federal land even though Congress in 1872 specifically limited the privileges of the General Mining Law to “citizens of the United States and those who have declared their intention to become such.” The reason: In 1898, the U.S. Supreme Court ruled that corporations have the same legal rights as people. So today, a Toronto-headquartered firm such as Barrick Gold Corp. can set up a subsidiary in Nevada and privatize nearly 1,950 acres for less than $10,000. Last year, Barrick hauled away nearly 2.5 million ounces of gold worth more than $600 million on the open market. “We have concluded, and the U.S. has concluded and many countries around the world have concluded that it is in their interest to provide an incentive to cause people to search for a mineral that otherwise isn’t know to exist in that ground,” said Pat Garver, Barrick’s head lawyer. Yet another Canadian firm, with offices in Spokane, Pegasus Gold, left three failing mines in Montana, including one that will cost taxpayers $33 million to clean up. Most Pegasus staff members kept working for the company as it reorganized, continuing to operate more profitable mines. Some even got bonuses.

Nothing for U.S. taxpayers
Not all critics of the 1872 law call for reform because of environmental damage. Some are galled by the fact that the law, breaking with tradition, allows miners to dig a fortune from public land without giving a share to the American citizens who own it. Europe’s royal families demanded a portion of all minerals taken from their New World colonies. And in the 18th century, Congress passed a law requiring a third of the profits from mines on federal lands go to the Treasury. “Even the early miners in the West followed local mineral laws modified from German and British traditions which required a portion of the minerals to be returned to the community,” said Carol Russell, mining specialist in the EPA’s Denver office. “However, it appears that in the rush of the gold rush, royalties were forgotten, and haven’t surfaced yet.” In 1920, Congress removed oil, natural gas and other minerals that could be used for fuel from the 1872 Mining Law. Instead, the government would lease the rights. And in 1977, Congress decreed that miners of coal on federal land would have to pay a royalty of 8 to 12.5 percent, and clean up after themselves. The government in the past decade has collected $11.08 billion from companies taking coal, oil, and natural gas, plus $35.8 billion in rents, bonuses, royalties and escrow payments for offshore oil and gas reserves.

Still, hard-rock miners pay nothing for the gold, silver, platinum, copper and other minerals they get. Walish, the manager of Cambior’s Top of the World project, joins many in the mining industry in warning, “If massive royalties are put on federal land, you’re going to see a lot less mining.” Critics are even more agitated about the mining companies’ ability to transform public land into private land for no more than $5 an acre — close to the fair market value for ranch and farmland in the West in 1872. Since 1964, more than 289,000 acres have been privatized, or patented, for mines. Congress has temporarily prevented additional land from being privatized, but applications already in the pipeline are eligible to continue with the process. About 73,000 acres could eventually be privatized this way. In 1872, Congress sold the land cheap because it wanted the West to be settled. That’s why a typical claim of 20 acres cost $100 — about three months’ rent in a Seattle boardinghouse. Now, critics ask, why should the government continue to sell public land for a pittance when the frontier is closed, and the West largely settled?

‘Why are they tearing it up?’
Years ago, a young man growing up in northern Arizona was surprised to see a big hole being scooped from the flanks of the picturesque San Francisco Peaks near his home. The mountains are considered sacred by the Hopi, the Navajo and 11 other tribes. “They started ripping the side of this mountain open, and I remember asking early on: ‘Who owns this land? And why are they tearing it up and carting it away?'” he recalled. Decades later, “it’s expanded into a gigantic scar on these sacred mountains. … One of the most unspeakably beautiful places in the Southwest is being carted away, truckload by truckload.”

The man is Bruce Babbitt, former Arizona governor and Interior secretary in the Clinton administration. For eight years, Babbitt administered the 1872 Mining Law. Babbitt hates the 1872 Mining Law. What was being mined near Flagstaff was pumice, a light volcanic rock. Today most of it is used to give denim that soft, “stone-washed” look. “It’s not like it’s being mined for some metal that’s necessary,” Babbitt said in an interview before leaving office. “It’s being mined to make blue jeans look old. It’s just a scandalous commentary on the Mining Law of 1872.” (The Los Angeles Times reported last week that Babbitt is helping The Hearst Corp., owner of the Seattle Post-Intelligencer, broker a deal worth $200 million or more that will determine the fate of Hearst’s seaside ranch at San Simeon in central California.)

Babbitt never forgot the San Francisco Peaks, and last year the government agreed that federal taxpayers would give the mine’s operators $1 million to stop digging. He also worked hard to overhaul the law that allowed them to do it in the first place, calling it “a license to steal.” His case was bolstered by the General Accounting Office, the investigative arm of Congress, which issued numerous reports critical of the 1872 law, saying it “runs counter to other national resource policies” while allowing valuable land to be sold at nominal amounts. Facing stiff opposition from a Republican-controlled Congress, Democrat Babbitt switched gears in early 1997, pushing for more modest reforms through a rewrite of his agency’s own rules for administering the law.

Opponents in Congress moved to block even that reform. They ordered Babbitt to stall the rewrite of the rules until a panel appointed by the National Academy of Sciences could study the issue and report back. The NAS panel concluded that mine regulations “are generally well coordinated, although some changes are necessary.” It listed seven “regulatory gaps,” including “financial risks to the public and environmental risks to the land” because companies sometimes post inadequate bonds to pay for reclamation after mining ends. Likewise, the EPA’s inspector general concluded that “critical gaps” in bonding programs “could result in environmental problems and sizable cleanup costs for the federal taxpayers.”

These criticisms stemmed from a system that allowed local Forest Service and BLM officials to negotiate a financial guarantee with a mining company to cover cleanup costs. Those “guarantees” can prove uncollectible after a bankruptcy. Cleanup bonds posted by some miners were often inadequate to cover the true cost of fixing the environmental damage associated with huge modern mines. They also assumed the company would save money by doing much of the work itself, while bankrupt firms often simply abandon mines. Babbitt went further than the NAS panel suggested, though. The new regulations set minimum environmental standards for mines and, for the first time, gave federal land managers authority to deny a mining permit if it would cause “substantial irreparable harm … that cannot be effectively mitigated.”

As for reclamation bonds, the new rules assume a worst-case scenario: The company goes bankrupt, and the government has to take over. Some forms of bonds that have proven difficult to collect were forbidden. The rules were published in the Federal Register in November, and went into effect at 12:01 a.m. on Jan. 20 — just hours before George W. Bush was sworn in as president. The mining industry has characterized the rules as “burdensome, complex, counterproductive … onerous and misguided regulations rushed through during the waning days of the Clinton administration.” Jack Gerard of the National Mining Association said that “the Clinton administration took a sledgehammer to deal with a mosquito.”

Among those to challenge the rules in court were his association and the state of Nevada, home of most of America’s gold mines. Environmentalists, too, have been critical of the new regulations. Alan Septoff, legislative director of the Mineral Policy Center, said miners are still allowed to harm the environment, so long as they “effectively mitigate” the damage elsewhere. “Even though the stronger mining rule is monumentally better than the old rule, that’s a testament to the inadequacy of the old rule,” Septoff said. In March, Babbitt’s successor as U.S. Interior secretary, Gale Norton, ordered a reconsideration of the rules. Next month, the BLM is expected to issue a watered-down version of Babbitt’s rules or revert to old regulations adopted in the Carter administration. At the EPA, this prospect causes concern — particularly if rules on cleanup bonds are to be weakened. “The vast majority of these (mining Superfund) sites were historic sites, but in recent years we’re finding sites that are inadequately bonded, and the government is getting saddled with the cleanup costs,” said Nick Ceto, mining coordinator at the EPA’s Seattle office. “There are others that are coming up.”

STEP THREE : RATE FISCAL COMPETENCE
http://online.wsj.com/article/SB124580461065744913.html
http://reclaimdemocracy.org/corporate_welfare/
http://www.doingbusiness.org/economyrankings/
http://www.nytimes.com/2010/06/13/world/asia/13intel.html
http://online.wsj.com/article/SB10001424052748704905604575027673196231564.html
Afghanistan to Delay Awarding Concessions for Mineral Deposits
by Matthew Rosenberg / January 27, 2010

Afghanistan plans to delay awarding concessions for a major iron ore deposit and sizeable oil and gas reserves as part of a broader effort to stamp out corruption, the country’s finance minister said. The move by Afghanistan could upend the plans of Total SA, Swiss-based Addax Petroleum Corp. and Canada-based Nations Petroleum Co., all of which were among the seven finalists selected last year for oil and gas blocks in the country’s northwest. Of particular concern, said Finance Minister Omar Zakhilwal in an interview Tuesday, is a major iron ore deposit in central Afghanistan that last year attracted bids from smaller Chinese and Indian companies. “We’ve put a hold onto to the bidding process; it will have to be re-bid,” he said.

Mr. Zakhilwal would not directly say whether he believed bidding for any of the projects – the iron ore deposit, the oil and gas reserves and scores of other smaller mineral deposits — had been marred by bribery, kickbacks or other forms of corruption. He spoke in general terms about the need to root out corruption and ensure Afghanistan gets the best deals when bringing in foreign firms to exploit its natural wealth. Afghanistan is rich in minerals and gemstones, with huge copper and iron ore deposits and reserves of emerald and rubies. Exploiting those reserves could help provide the country with much of the money it needs to wean itself from the massive infusions of foreign aid on which it new depends.

Putting the Afghan economy in order is one of the major issues to be addressed at a conference Thursday in London on Afghanistan’s future. Foreign ministers from 56 countries along with representatives from the United Nations and other international organizations involved in stabilizing Afghanistan are to attend, and European diplomats have in recent days said they are keen to hear Mr. Zakhilwal’s economic plans for the coming years. Mining could be a major economic contributor. But the Mines Ministry has long been considered among Afghanistan’s most corrupt government departments, and Western officials have repeatedly expressed reservations about the Afghan government awarding concessions for the country’s major mineral deposits, fearful that corrupt officials would hand contracts to bidders who pay the biggest bribes — not who are best suited to actually do the work. Mr. Zakhilwal said those concerns are shared by many inside the Afghan government, too. “I was among those who have been opposed to opening up new bids,” he said. “It was not just the issue of corruption – but that is a real issue. We also need to do a review of how contracts are awarded, what lessons we’ve learned, what kind of transparency is needed to make the next best step.” Mr. Zakhiwal that process is now underway with the appointment of a new minister, Wahidullah Sharani.

Still, he said there was no evidence of corruption in the awarding of the one major concession given out in recent years, a copper mine being set up by two Chinese firms, China Metallurgical Group and Jiangxi Copper Group. That project attracted bids from all over the world, and there have been persistent reports of bribes being paid to secure it. Mr. Zakhilwal termed those reports “rumors” and held up the deal – under which the companies agreed to build schools, clinics, markets, mosques and a power plant — as a model for how Afghanistan could award future concessions.

STEP FOUR : DISTRIBUTE
http://globalpolicy.org/home/211-development/48036-a-basic-income-program-in-otjivero.html
http://www.bignam.org/page5.html
History and background of the pilot project

At the end of 2006, the understanding in the BIG Coalition grew that the BIG campaign needs to be taken a step further by starting a pilot project of the BIG in Namibia. The background is that a pilot project might be able to concretely show that a BIG can work and will indeed have the predicted positive effects on poverty alleviation and economic development. Spearheaded by Bishop Kameeta this idea has been inspired by the concrete (or from a theological perspective “prophetic”) examples, like e.g. English medium schools or township clinics during the apartheid era. In fact, also more recently, this has happened with a project run by the Treatment Action Campaign and ‘Doctors without borders’ and the provincial government in Cape Town. They started a treatment project in a township in Cape Town at a time when it was said that a rollout of Antiretroviral (ARV) therapy is good but certainly not practical in a developing country. The pilot project was successful and has subsequently changed the opinion on ARV rollouts in developing countries. The BIG Coalition argues that while it is the ultimate goal to lobby Government to take up its responsibility to implement such a grant, the Coalition should lead by example. The BIG Coalition fundraised in order to pay a Basic Income Grant in one community. Thereby it set an example of redistributive justice through concrete action to help the poor, and to document what income security means in terms of poverty reduction and economic development. The BIG Coalition hence at the end of 2006 to implement a BIG pilot project. The BIG pilot project started in January 2008 and was the first of its kind, to concretely pilot an unconditionally universal income security project in a developing country. The BIG Coalition implemented a BIG in one Namibian community, namely Otjivero – Omitara settlement (about 1,000 people, some 100 km to the east of Windhoek) for a limited period of time (2 years, from January 2008–to December 2009) to practically prove that income security indeed works and that it has the desired effects.

EQUALLY
http://www.citizenpolicies.org/articles/worldpeace.html
http://www.citizenpolicies.org/articles/iraq.html
http://www.nytimes.com/2003/09/10/world/struggle-for-iraq-iraq-s-wealth-popular-idea-give-oil-money-people-rather-than.html
A Popular Idea: Give Oil Money to the People Rather Than the Despots
by John Tierney / September 10, 2003

Few Iraqis have heard of the ”resource curse,” the scholarly term for the economic and political miseries of countries with abundant natural resources. But in Tayeran Square, where hundreds of unemployed men sit on the sidewalk each morning hoping for a day’s work, they know how the curse works. ”Our country’s oil should have made us rich, but Saddam spent it all on his wars and his palaces,” said Sattar Abdula, who has not had a steady job in years. He proposed a simple solution instantly endorsed by the other men on the sidewalk: ”Divide the money equally. Give each Iraqi his share on the first day of every month.”

That is essentially the same idea in vogue among liberal foreign aid experts, conservative economists and a diverse group of political leaders in America and Iraq. The notion of diverting oil wealth directly to citizens, perhaps through annual payments like Alaska’s, has become that political rarity: a wonky idea with mass appeal, from the laborers in Tayeran Square to Iraq’s leaders. American officials have projected that a properly functioning oil industry in Iraq will generate $15 billion to $20 billion a year, enough to give every Iraqi adult roughly $1,000, which is half the annual salary of a middle-class worker.

No one suggests dispensing all of the money — and some say the government cannot afford to give up any of it — but there have been proposals to dispense a quarter or more. Leaders of the American occupying force have endorsed the oil-to-the-people concept and said recently that they plan to discuss it soon with the Iraqi Governing Council. The concept is also popular with some Kurdish politicians in the north and Shiite Muslim politicians in the south, who have complained for decades of being shortchanged by politicians in Baghdad. ”Giving the money directly to the people is a splendid idea,” said one member of the Governing Council, Abdul Zahra Othman Muhammad, a Shiite from Basra who leads the Islamic Dawa party. ”In the past the oil revenue was used to promote dictatorship and discriminate against people outside the capital. We need to start being fair to people in the provinces.”

When oil wealth is controlled by politicians in the capital, one result tends to be the resource curse documented in the last decade in academic works with titles like ”The Paradox of Plenty,” ”Does Oil Hinder Democracy?” and ”Does Mother Nature Corrupt?” Among the many researchers have been Jeffrey Sachs of Columbia University and Paul Collier of Oxford University, both economists, and Michael L. Ross, a political scientist at the University of California at Los Angeles. The studies have shown that resource-rich countries in the Middle East, Africa and Latin America are exceptionally prone to authoritarian rule, slow economic growth and high rates of poverty, corruption and violent conflict.

Besides financing large armies to fight ruinous wars with neighbors, as in Iraq and Iran, oil wealth sometimes leads to civil wars over the sharing of the proceeds, as in Sudan and Congo. ”Governments tend to use mineral revenues differently from the revenues they get from taxpayers,” said Dr. Ross, who found an inverse relationship between natural resources and democracy. ”They spend more of it on corruption, the military and patronage, and less of it on basic public services. Oil-rich governments don’t need to tax their citizens, and taxation forces governments to become more representative and more effective.”

On April 9, the day Saddam Hussein’s statue was toppled in Firdos Square, a plan to end Iraq’s resource curse was published by Steven C. Clemons, executive vice president of the New America Foundation, a centrist research group. He proposed using 40 percent of Iraq’s oil revenue to create a permanent trust fund like the one in Alaska, which has been accumulating oil revenue for two decades. That capital is invested and each year a share of the income is distributed — more than $1,500 to each Alaskan in recent years. ”A fund like Alaska’s is the best way to prevent one kleptocracy from succeeding another in Iraq,” Mr. Clemons said. ”It would go a long way to curbing the cynical belief that Americans want Iraqi oil for themselves, and it would give more Iraqis a stake in the success of their new country. It would be the equivalent of redistributing land to Japanese farmers after World War II, which was the single most important democratizing reform during the American occupation.”

In America, Mr. Clemons’s idea was quickly embraced by many foreign aid experts, editorial writers, Bush administration officials and politicians of both parties. Some experts, though, have faulted the trust fund, saying it would be expensive to administer and would pay out small dividends at first, perhaps only $20 per Iraqi adult, until more capital was amassed. As an alternative, some have suggested skipping the individual payments in the early years and dedicating the money to economic development or social programs. Money could be invested in a long-term pension program, as Norway does with some of its oil revenue. Another alternative would be to make bigger payments up front by giving the money directly to citizens instead of putting it into a trust fund. Thomas I. Palley, an economist at the Open Society Institute, proposed dividing a quarter of the oil revenue each year among all adults in Iraq. That could amount to $250 per adult, assuming that the administration’s hopes for oil production prove accurate.

Oil companies would not be directly affected by an oil fund, since they would be paying the same taxes and fees no matter what the government did with the money. But they could benefit indirectly if citizens eager for higher payments pressed the government to increase production and open the books to outside auditors. ”The oil industry likes working in countries with dedicated oil funds and transparent accounting, because there’s less loose money to corrupt the government,” said Robin West, chairman of PFC Energy, an American consulting firm to the oil industry. ”Corruption is bad for business,” Mr. West said, ”because it creates instability. In places like Alaska and Norway, people support the oil industry because they see the benefits. In places like Nigeria, they see all this wealth that doesn’t benefit them, and they start seizing oil terminals.” Iraq’s civilian administrator, L. Paul Bremer III, has praised the idea of sharing ”Iraq’s blessings among its people,” and suggested that the Governing Council consider some kind of oil fund. Iraqi politicians, of course, have no trouble understanding the appeal of handing out checks to voters.

The chief argument against an oil fund is that Iraq’s government cannot afford to part with any oil revenue for the foreseeable future. It faces a large budget deficit this year, and sabotage to the oil industry has reduced oil production far below projections. ”There isn’t that much money now, and we need every penny for rebuilding the country,” said Adnan Pachachi, a member of the Governing Council and former foreign minister of Iraq. ”Giving away money would be politically popular,” he said, ”but we should not gain popularity at the expense of the long-range interests of the country. By giving away the money you may sacrifice building more schools and hospitals.”

Some have suggested letting the government keep all of the revenue until oil production increases well beyond current levels, then putting the extra money into a fund. But the oil-to-the-people advocates say that now is the time to at least establish the framework for the fund, before a permanent government gets addicted to the revenue. If experience is any guide, that government would probably not be devoting the money to schools and hospitals. ”There is a direct proportional relationship between bad government and oil revenue,” said Ahmad Chalabi, the current chairman of the Governing Council and the leader of the Iraqi National Congress. ”If the government performs well or badly it doesn’t matter, because the oil revenue continues to flow. The government will use the oil revenue to cover up mistakes.”

Mr. Chalabi pointed to a precedent: a trust fund that existed in Iraq during the 1950’s, when part of the oil revenue went not to the government’s budget but to a development fund whose disbursements were directed by Iraqi and foreign overseers. ”The fund worked very well,” he said. ”Iraq’s economy in the 1950’s and 1960’s was relatively good.” Back then, Mr. Chalabi said, oil revenue was a relative pittance, adding up to less than $10 billion in the four decades preceding the Baath Party’s rise to power in the late 1960’s. But then came the resource curse. During a single decade, the 1980’s, Iraq’s oil revenue amounted to more than $100 billion. ”What happened to it?” Mr. Chalabi asked. ”Iraq was a much better country in every aspect before it got that money.”

LIKE THEY DO IN ALASKA
http://www.apfc.org/home/Content/dividend/dividend.cfm
http://www.apfc.org/home/Content/aboutAPFC/lawIndex.cfm
http://www.pfd.alaska.gov/faqs/index.aspx
http://www.adn.com/2010/06/10/1317732/plan-puts-energy-future-in-alaskan.html
http://iraqdividend.com/alaska_dividend/
Hammond advocates dividend for Iraq
by Sam Bishop / February 22, 2004

Former Alaska Gov. Jay Hammond said Saturday that President George Bush should make an Alaska-like dividend for Iraqis a central element of his re-election campaign. Hammond made the remark after delivering a history and defense of the Alaska Permanent Fund dividend to the annual conference of the U.S. Basic Income Guarantee Network. The organization wants governments to offer all citizens, regardless of their own means, enough money to live. It says the Alaska dividend, which Hammond helped create while governor, is “the only example of an existing basic income guarantee in the world today.” Hammond, 81, warmed up the audience of about 100 at the Capitol Hyatt Hotel by reflecting on the U.S. BIG Network’s warm praise and on other accolades received in recent years. Honors have recently come from such diverse sources as sportsmen, environmentalists and developers, he marveled. After recently receiving an honor from his old nemesis, the Teamsters Union, he said he wondered “what can I expect next … an award for my contributions to public morality, co-sponsored by Jerry Falwell and Larry Flynt?” Hammond has been on a sort of moral crusade recently as he has perceived a growing threat to the dividend program. Earlier this month Hammond crashed the Conference of Alaskans, a 55-member group Gov. Frank Murkowski convened to talk about the permanent fund’s future, and diverted the participants into a discussion of income taxes as well. Saturday, Hammond recited a detailed history of his dividend advocacy, starting with his attempts in the 1960s as mayor of the Bristol Bay Borough to capture some of the salmon dollars that “hemorrhaged” out of that region. He reviewed his advocacy of a pre-permanent fund idea called “Alaska Inc.” in the mid-1970s as a Republican governor, then used the current Alaska dividend debate as a segue into the international arena.

“Without a permanent fund dividend program,” Hammond said. “Alaska will face the same fate as Nigeria.” There, the World Bank estimates that $296 billion flowed in and out of the government’s treasury during its oil boom, “leaving them worse off than they were before,” Hammond said. The Economist magazine appropriately called such mismanaged oil wealth, “the devil’s excrement,” Hammond said. The pattern has been repeated around the globe where countries have come into an oil windfall, he said. “Absent something like our dividend program and ensuing public interest, those windfalls simply inflated a grab bag for special interests. Once deflated, the average citizen was left holding that empty bag,” Hammond said. “Iraq is but the latest example.” He noted that Alaska Sen. Ted Stevens, at his request, proposed to President Bush that the U.S. push for an Alaska-style dividend program after the Iraq war. “Ted, incidentally, wrote me back after that and said ‘I talked to the president. He’s very much interested. Stay tuned,'” Hammond said.

He said he hasn’t heard much since, but intends to seek an audience with the president to push the idea. Hammond noted that he met the president’s father, former President George Bush, years ago in Alaska before the elder Bush was well known nationally. The elder Bush helped with his fund-raising and even wrote a blurb for his autobiography, Hammond noted. “I owe George Junior at least this–to convey to him how he could make this the centerpiece of his national campaign, thereby hopefully propelling the other candidates into the same arena to compete to see who can do more to propel or promote the concept in Third World countries, Iraq or wherever,” Hammond said. “If George Bush is out front, I think he’ll capture a lot of attention. I think his opposition certainly are not going to oppose it. “What better way to induce a capitalistic, democratic mindset among Iraqis? Far better than a few privileged kleptocrats living in opulent splendor while others grovel in squalor,” Hammond said.

To give some credentials to the idea, Hammond quoted 2002 Nobel-laureate in economics Vernon Smith, a professor from George Mason University in Arlington, Va., who spent much of 2003 at the University of Alaska Anchorage. “This is the time and Iraq is the place to create an economic system embodying the revolutionary principle that people’s assets belong directly to the people and can be managed to further individual benefits and free choice without intermediate government ownership,” Hammond quoted Smith as saying. Brazilian Sen. Eduardo Suplicy, who also spoke at the U.S. BIG Network conference, read a portion of a letter he wrote recently to the U.S. administrator in Iraq, Paul Bremer, also advocating an Alaska-style dividend plan. The idea has been endorsed by a variety of people, including a top United Nations official killed in a bombing last summer, Suplicy said.

In Iraq, the economist Smith recommended following Alaska’s precedent but avoiding Alaska’s mistakes, Hammond noted. Those mistakes were two-fold: Not putting all public resource wealth into the fund, and not reserving the income solely for dividends unless approved by a vote of the people. “Since this is precisely what I wanted but failed to do first with Bristol Bay Inc. with fish and later with oil and Alaska Inc., I find that comment vindicating,” Hammond said. “The following, however, I find truly rapturous. “Beware of giving governments drawing rights on the value of public assets,” Hammond quoted Smith as saying. “Public resources should belong directly to the public through mechanisms such as Alaska’s permanent fund … It is a model governments all over the world would be well-advised to copy.”

In questions after his speech, though, Hammond sensed that he and some of his association audience members may differ on a fundamental. Hammond’s pro-dividend philosophy rests upon the public ownership of the resources feeding the Alaska Permanent Fund. So when asked whether he thought an income tax should also be used to bolster the dividend, he balked. “People resent having their hard-earned income taken from them and redistributed,” he said. He said he sympathizes with that idea and on that score may differ from the ideas advocated by the U.S. BIG Network, he said. “Our program doesn’t contemplate taking income made by the public.” So what happens to those residents of places in the world unlucky enough to have neither “salmon nor oil,” another member of the audience asked. Hammond said he didn’t really know. He said he had recently been intrigued by proposals to auction rights to pollute the air, as a publicly owned resource, and distribute the proceeds as dividends.

ENDORSED by MARTIN LUTHER KING Jr, BERTRAND RUSSELL, MILTON FRIEDMAN…
http://www.progress.org/dividend/cdking.html
http://www.commercialappeal.com/news/2010/jan/18/king-focused-on-ending-poverty/
‘Guaranteed income’ plan finds support
by Bartholomew Sullivan / January 18, 2010

Dr. Martin Luther King Jr. wrote: “I am now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.”

Dr. Martin Luther King Jr. had another dream: the guaranteed income. Those careful about his legacy say the $120 million monument to him that’s finally nearing construction on the National Mall is all well and good. But as the nation commemorates King’s 81st birthday today, they say he should best be remembered for his career-long focus on the poor. A year before his 1968 death in Memphis, in his “Where Do We Go From Here: Chaos or Community,” King wrote: “I am now convinced that the simplest solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.”

The idea was to guarantee that no one lived in poverty by having the government provide a financial floor, pegged to median — not low — incomes, beneath which no one could fall. King talked about the psychological benefits of a widespread sense of “economic security.” Economists John Kenneth Galbraith, Paul Samuelson and Milton Friedman endorsed the idea of guaranteed incomes, as did Lyndon Johnson’s Labor Secretary and later New York Sen. Daniel P. Moynihan. Advocating the proposal was the official debate resolution for public high schools in 1973. It was a mainstream idea that has since faded from view.

But a movement to spur a guaranteed income plan is reawakening in academic and anti-poverty circles as the nation looks at 15.3 million people seeking work and the prospect of large-scale and long-term unemployment. The Basic Income Guarantee movement (USBIG.net) is based on the belief that increased mechanization and labor efficiencies, coupled with the export of industrial and manufacturing jobs to low-wage countries, means there just isn’t enough work available. Once robots can understand speech, even more jobs in the service industries will disappear, they say.

And yet people will still need to live even without work. Advocates say a redistribution of some anti-poverty program funding for direct subsidization of adequate incomes would solve the poverty problem while stimulating consumption. University of Tennessee-Knoxville sociology professor Harry F. Dahms, a member of the U.S. Basic Income Guarantee Network, said when he talks about the idea in the South “audiences seem rather baffled, first, that such an idea even exists.” Their second response is surprise “that some people would entertain it seriously.”

In a class on social justice and public policy, Dahms, originally from Germany, discusses guaranteed incomes as a way for the work force to take advantage of growing efficiencies by having more people work fewer hours. In Memphis, efforts to enact a living wage for Shelby County and city employees and contractors were a step in the direction of raising the income bar. But Rebekah Jordan Gienapp, director of the Workers Interfaith Network, said King called for raising the minimum wage to a level that could raise working people out of poverty. She noted that, adjusted for inflation, it’s lower now than in 1968.

Tennessee and Mississippi don’t have state minimum wage laws and the minimum in Arkansas is lower than the current federal minimum wage of $7.25 per hour. “What does that tell us about how we’ve really, in a lot of ways, moved backwards since the civil rights movement in some of these economic ways?” she asks. “Particularly on Dr. King’s birthday, he tends to be held up as just someone who advocated diversity or integration, but his message was much broader and more radical than that …”

Supporters of a guaranteed income acknowledge the solution sounds radical but point to the subsidy every citizen of Alaska receives each year from the state’s oil revenue. The share-the-wealth program in one of the most Republican-leaning states is so popular that efforts to repeal it have failed. Congress actually considered a slimmed-down variant of a guaranteed income plan when U.S. Rep. Bob Filner, D-Calif., proposed the Tax Cuts for the Rest of Us Act in 2006 in response to Bush tax cuts for upper-income taxpayers. It would have made the standard income tax deduction into a refundable tax credit.

BASICS
http://www.bepress.com/bis/
http://www.statemaster.com/encyclopedia/Guaranteed-minimum-income
Basic income
Main article: Basic income
A basic income is granted independent of other income (including salaries) and wealth, with no other requirement than citizenship. This is a special case of GMI, based on additional ideologies and/or goals. While most modern countries have some form of guaranteed minimum income, a basic income is rare.

Examples of implementation
Portugal is by far the closest a country has come to actually having fully implemented such a system. This is because the Portuguese government made a guaranteed minimum income a legally enshrined right for the entire population in 1997. The policy remains at present. However, the country’s income security policy is rather residualist, with an amount guaranteed well below the poverty line, and other income security policies such as the minimum wage are thus still in place as a consequence. The system also forces participants to attend social integration sessions.

The U.S. State of Alaska has a system which guarantees each citizen a share of the state’s oil revenues (see Alaska Permanent Fund Dividend). The city of Dauphin, Manitoba, Canada had an experimental guaranteed annual income program (“Mincome”) in the 1970s.[1] Many other countries have political parties that advocate such a system, such as the Green Party of Canada, Green Party of England and Wales, the Canadian Action Party, the Anarchist Pogo Party of Germany, the Danish Minority Party, Vivant (Belgium), both the Scottish Green Party and recently the Scottish National Party, and the New Zealand Democratic Party.

In 1972, members of the American Democratic Party wrote a proposal for a GMI into their official platform. However, that particular plank, along with numerous others, was removed following the landslide defeat of Senator George McGovern, the party’s candidate in that year’s presidential election. One proposed method of offsetting the cost to the Treasury of this tax expenditure lies in its coupling with a flat tax, a type of federal income tax in which all taxpayers are subject to a single tax rate. The current model of progressive income taxes used throughout the western world could be eliminated, but the system would still be progressive, since those at the lower end of the wage scale would pay less in taxes than they would receive in guaranteed income. For the most wealthy members of society the few thousand dollars of the guaranteed income would only make a small dent in the taxes they have to pay. Also, the USA has the Earned income tax credit for low-income taxpayers. The citizen’s dividend is a similar concept, but the payment made to individuals is based upon the revenues that the government can collect from leasing and selling natural resources (such a dividend in fact exists in the state of Alaska).

Advocates
Modern advocates include Hans-Werner Sinn (Germany) and Ayşe Buğra (Turkey). Other advocates are winners of the Nobel Prize in Economics, including Paul Samuelson, James Tobin, Herbert Simon, Friedrich Hayek, James Meade, Robert Solow, and, depending on how one regards his negative income tax proposal, Milton Friedman. In his final book Where Do We Go From Here: Chaos or Community? (1967) Martin Luther King Jr. wrote[2] “I am now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” – from the chapter entitled “Where We Are Going”

Funding
Many different sources of funding have been suggested for a guaranteed minimum income:
Income taxes
Sales taxes
Capital gains taxes
Inheritance taxes
Wealth taxes, e.g. property tax
Luxury taxes
Elimination of current income support programs and tax deductions
Repayment of the grant at death or retirement
Land and natural resource taxes
Pollution taxes
Fees from government created monopolies (such as the broadcast spectrum and utilities)
Collective resource ownership
Universal stock ownership
A National Mutual Fund
Money creation or seignorage
Tariffs, the lottery, or sin taxes
Technology Taxes
Tobin Tax

UNIVERSAL BASIC INCOME (UBI)
http://www.globalincome.org/English/Earth-Dividend.html
http://www.cceia.org/resources/ethics_online/0019.html
http://ipsnews.net/news.asp?idnews=46179
http://www.basicincome.qut.edu.au/aboutbi/history.jsp
http://ubi.wairaka.net/
http://plato.stanford.edu/entries/social-minimum/
http://dieoff.org/page152.htm
http://www.bostonreview.net/BR25.5/vanparijs.html
by Philippe Van Parijs

Entering the new millennium, I submit for discussion a proposal for the improvement of the human condition: namely, that everyone should be paid a universal basic income (UBI), at a level sufficient for subsistence. In a world in which a child under five dies of malnutrition every two seconds, and close to a third of the planet’s population lives in a state of “extreme poverty” that often proves fatal, the global enactment of such a basic income proposal may seem wildly utopian. Readers may suspect it to be impossible even in the wealthiest of OECD nations.

Yet, in those nations, productivity, wealth, and national incomes have advanced sufficiently far to support an adequate UBI. And if enacted, a basic income would serve as a powerful instrument of social justice: it would promote real freedom for all by providing the material resources that people need to pursue their aims. At the same time, it would help to solve the policy dilemmas of poverty and unemployment, and serve ideals associated with both the feminist and green movements. So I will argue.

I am convinced, along with many others in Europe, that–far from being utopian–a UBI makes common sense in the current context of the European Union.1 As Brazilian senator Eduardo Suplicy has argued, it is also relevant to less-developed countries–not only because it helps keep alive the remote promise of a high level of social solidarity without the perversity of high unemployment, but also because it can inspire and guide more modest immediate reforms.2 And if a UBI makes sense in Europe and in less developed countries, why should it not make equally good (or perhaps better) sense in North America?3 After all, the United States is the only country in the world in which a UBI is already in place: in 1999, the Alaska Permanent Fund paid each person of whatever age who had been living in Alaska for at least one year an annual UBI of $1,680. This payment admittedly falls far short of subsistence, but it has nonetheless become far from negligible two decades after its inception. Moreover, there was a public debate about UBI in the United States long before it started in Europe. In 1967, Nobel economist James Tobin published the first technical article on the subject, and a few years later, he convinced George McGovern to promote a UBI, then called “demogrant,” in his 1972 presidential campaign.4

To be sure, after this short public life the UBI has sunk into near-oblivion in North America. For good reasons? I believe not. There are many relevant differences between the United States and the European Union in terms of labor markets, educational systems, and ethnic make-up. But none of them makes the UBI intrinsically less appropriate for the United States than for the European Union. More important are the significant differences in the balance of political forces. In the United States, far more than in Europe, the political viability of a proposal is deeply affected by how much it caters to the tastes of wealthy campaign donors. This is bound to be a serious additional handicap for any proposal that aims to expand options for, and empower, the least wealthy. But let’s not turn necessity into virtue, and sacrifice justice in the name of increased political feasibility. When fighting to reduce the impact of economic inequalities on the political agenda, it is essential, in the United States as elsewhere, to propose, explore, and advocate ideas that are ethically compelling and make economic sense, even when their political feasibility remains uncertain. Sobered, cautioned, and strengthened by Europe’s debate of the last two decades, here is my modest contribution to this task.

UBI Defined
By universal basic income I mean an income paid by a government, at a uniform level and at regular intervals, to each adult member of society. The grant is paid, and its level is fixed, irrespective of whether the person is rich or poor, lives alone or with others, is willing to work or not. In most versions–certainly in mine–it is granted not only to citizens, but to all permanent residents. The UBI is called “basic” because it is something on which a person can safely count, a material foundation on which a life can firmly rest. Any other income–whether in cash or in kind, from work or savings, from the market or the state–can lawfully be added to it. On the other hand, nothing in the definition of UBI, as it is here understood, connects it to some notion of “basic needs.” A UBI, as defined, can fall short of or exceed what is regarded as necessary to a decent existence.

I favor the highest sustainable such income, and believe that all the richer countries can now afford to pay a basic income above subsistence. But advocates of a UBI do not need to press for a basic income at this level right away. In fact, the easiest and safest way forward, though details may differ considerably from one country to another, is likely to consist of enacting a UBI first at a level below subsistence, and then increasing it over time.

The idea of the UBI is at least 150 years old. Its two earliest known formulations were inspired by Charles Fourier, the prolific French utopian socialist. In 1848, while Karl Marx was finishing off the Communist Manifesto around the corner, the Brussels-based Fourierist author Joseph Charlier published Solution of the Social Problem, in which he argued for a “territorial dividend” owed to each citizen by virtue of our equal ownership of the nation’s territory. The following year, John Stuart Mill published a new edition of his Principles of Political Economy, which contains a sympathetic presentation of Fourierism (“the most skillfully combined, and with the greatest foresight of objections, of all the forms of Socialism”) rephrased so as to yield an unambiguous UBI proposal: “In the distribution, a certain minimum is first assigned for the subsistence of every member of the community, whether capable or not of labour. The remainder of the produce is shared in certain proportions, to be determined beforehand, among the three elements, Labour, Capital, and Talent.”5

Under various labels–”state bonus,” “national dividend,” “social dividend,” “citizen’s wage,” “citizen’s income,” “universal grant,” “basic income,” etc.–the idea of a UBI was repeatedly taken up in intellectual circles throughout the twentieth century. It was seriously discussed by left-wing academics such as G. D. H. Cole and James Meade in England between the World Wars and, via Abba Lerner, it seems to have inspired Milton Friedman’s proposal for a “negative income tax.”6 But only since the late-1970s has the idea gained real political currency in a number of European countries, starting with the Netherlands and Denmark. A number of political parties, usually green or “left-liberal” (in the European sense), have now made it part of their official party program.

UBI and Existing Programs
To appreciate the significance of this interest and support, it is important to understand how a UBI differs from existing benefit schemes. It obviously differs from traditional social-insurance based income-maintenance institutions (such as Social Security), whose benefits are restricted to wage workers who have contributed enough out of their past earnings to become eligible. But it also differs from Western European or North American conditional minimum-income schemes (such as welfare).

Many, indeed most West European countries introduced some form of guaranteed minimum-income scheme at some point after World War II.7 But these schemes remain conditional: to receive an income grant a beneficiary must meet more or less stringent variants of the following three requirements: if she is able to work, she must be willing to accept a suitable job, or to undergo suitable training, if offered; she must pass a means test, in the sense that she is only entitled to the benefit if there are grounds to believe that she has no access to a sufficient income from other sources; and her household situation must meet certain criteria–it matters, for example, whether she lives on her own, with a person who has a job, with a jobless person, etc. By contrast, a UBI does not require satisfaction of any of these conditions.

Advocates of a UBI may, but generally do not, propose it as a full substitute for existing conditional transfers. Most supporters want to keep–possibly in simplified forms and necessarily at reduced levels–publicly organized social insurance and disability compensation schemes that would supplement the unconditional income while remaining subjected to the usual conditions. Indeed, if a government implemented an unconditional income that was too small to cover basic needs–which, as I previously noted, would almost certainly be the case at first–UBI advocates would not want to eliminate the existing conditional minimum-income schemes, but only to readjust their levels.

In the context of Europe’s most developed welfare states, for example, one might imagine the immediate introduction of universal child benefits and a strictly individual, noncontributory basic pension as full substitutes for existing means-tested benefit schemes for the young and the elderly. Indeed, some of these countries already have such age- restricted UBIs for the young and the elderly. Contributory retirement insurance schemes, whether obligatory or optional, would top up the basic pension.

As for the working-age population, advocates of a universal minimum income could, in the short term, settle for a “partial” (less-than-subsistence) but strictly individual UBI, initially pitched at, say, half the current guaranteed minimum income for a single person. In US terms, that would be about $250 per month, or $3,000 a year. For households whose net earnings are insufficient to reach the socially defined subsistence level, this unconditional and individual floor would be supplemented by means-tested benefits, differentiated according to household size and subjected, as they are now, to some work requirements.

UBI and Some Alternatives
While the UBI is different from traditional income maintenance schemes, it also differs from a number of other innovative proposals that have attracted recent attention. Perhaps closest to a UBI are various negative income tax (NIT) proposals.8

NIT
Though the details vary, the basic idea of a negative income tax is to grant each citizen a basic income, but in the form of a refundable tax credit. From the personal tax liability of each household, one subtracts the sum of the basic incomes of its members. If the difference is positive, a tax needs to be paid. If it is negative, a benefit (or negative tax) is paid by the government to the household. In principle, one can achieve exactly the same distribution of post-tax-and-transfer income among households with a UBI or with an NIT. Indeed, the NIT might be cheaper to run, since it avoids the to-and-fro that results from paying a basic income to those with a substantial income and then taxing it back.

Still, a UBI has three major advantages over an NIT. First, any NIT scheme would have the desired effects on poverty only if it was supplemented by a system of advance payments sufficient to keep people from starving before their tax forms are examined at the end of the fiscal year. But from what we know of social welfare programs, ignorance or confusion is bound to prevent some people from getting access to such advance payments. The higher rate of take-up that is bound to be associated with a UBI scheme matters greatly to anyone who wants to fight poverty.

Second, although an NIT could in principle be individualized, it operates most naturally and is usually proposed at the household level. As a result, even if the inter-household distribution of income were exactly the same under an NIT and the corresponding UBI, the intra-household distribution will be far less unequal under the UBI. In particular, under current circumstances, the income that directly accrues to women will be considerably higher under the UBI than the NIT, since the latter tends to ascribe to the household’s higher earner at least part of the tax credit of the low- or non-earning partner.

Third, a UBI can be expected to deal far better than an NIT with an important aspect of the “unemployment trap” that is stressed by social workers but generally overlooked by economists. Whether it makes any sense for an unemployed person to look for or accept a job does not only depend on the difference between income at work and out of work. What deters people from getting out to work is often the reasonable fear of uncertainty. While they try a new job, or just after they lose one, the regular flow of benefits is often interrupted. The risk of administrative time lags– especially among people who may have a limited knowledge of their entitlements and the fear of going into debt, or for people who are likely to have no savings to fall back on–may make sticking to benefits the wisest option. Unlike an NIT, a UBI provides a firm basis of income that keeps flowing whether one is in or out of work. And it is therefore far better suited to handle this aspect of the poverty trap.

The Stakeholder Society
UBI also differs from the lump-sum grant, or “stake,” that Thomas Paine and Orestes Brownson–and, more recently, Bruce Ackerman and Anne Alstott–have suggested be universally awarded to citizens at their maturity in a refashioned “stakeholder society.”9 Ackerman and Alstott propose that, upon reaching age 21, every citizen, rich or poor, should be awarded a lump-sum stake of $80,000. This money can be used in any way its recipient wishes–from investing in the stock market or paying for college fees to blowing it all in a wild night of gambling. The stake is not conditioned on recipients being “deserving,” or having shown any interest in contributing to society. Funding would be provided by a 2 percent wealth tax, which could be gradually replaced over time (assuming a fair proportion of recipients ended their lives with enough assets) by a lump-sum estate tax of $80,000 (in effect requiring the recipient to pay back the stake).

I am not opposed to a wealth or estate tax, nor do I think it is a bad idea to give everyone a little stake to get going with their adult life. Moreover, giving a large stake at the beginning of adult life might be regarded as formally equivalent–with some freedom added–to giving an equivalent amount as a life-long unconditional income. After all, if the stake is assumed to be paid back at the end of a person’s life, as it is in the Ackerman/Alstott proposal, the equivalent annual amount is simply the stake multiplied by the real rate of interest, say an amount in the (very modest) order of $2,000 annually, or hardly more than Alaska’s dividend. If instead people are entitled to consume their stake through life–and who would stop them?–the equivalent annual income would be significantly higher.

Whatever the level, given the choice between an initial endowment and an equivalent life-long UBI, we should go for the latter. Endowments are rife with opportunities for waste, especially among those less well equipped by birth and background to make use of the opportunity the stake supplies. To achieve, on an ongoing basis, the goal of some baseline income maintenance, it would therefore be necessary to keep a means-tested welfare system, and we would be essentially back to our starting point–the need and desirability of a UBI as an alternative to current provisions.

Justice
The main argument for UBI is founded on a view of justice. Social justice, I believe, requires that our institutions be designed to best secure real freedom to all.10 Such a real-libertarian conception of justice combines two ideas. First, the members of society should be formally free, with a well-enforced structure of property rights that includes the ownership of each by herself. What matters to a real libertarian, however, is not only the protection of individual rights, but assurances of the real value of those rights: we need to be concerned not only with liberty, but, in John Rawls’s phrase, with the “worth of liberty.” At first approximation, the worth or real value of a person’s liberty depends on the resources the person has at her command to make use of her liberty. So it is therefore necessary that the distribution of opportunity–understood as access to the means that people need for doing what they might want to do–be designed to offer the greatest possible real opportunity to those with least opportunities, subject to everyone’s formal freedom being respected.

This notion of a just, free society needs to be specified and clarified in many respects.11 But in the eyes of anyone who finds it attractive, there cannot but be a strong presumption in favor of UBI. A cash grant to all, no questions asked, no strings attached, at the highest sustainable level, can hardly fail to advance that ideal. Or if it does not, the burden of argument lies squarely on the side of the challengers.

Jobs and Growth
A second way to make the case for UBI is more policy-oriented. A UBI might be seen as a way to solve the apparent dilemma between a European-style combination of limited poverty and high unemployment and an American-style combination of low unemployment and widespread poverty. The argument can be spelled out, very schematically, as follows.

For over two decades, most West European countries have been experiencing massive unemployment. Even at the peak of the jobs cycle, millions of Europeans are vainly seeking work. How can this problem be tackled? For a while, the received wisdom was to deal with massive unemployment by speeding up the rate of growth. But considering the speed with which technological progress was eliminating jobs, it became apparent that a fantastic rate of growth would be necessary even to keep employment stable, let alone to reduce the number of unemployed. For environmental and other reasons, such a rate of growth would not be desirable. An alternative strategy was to consider a substantial reduction in workers’ earnings. By reducing the relative cost of labor, technology could be redirected in such a way that fewer jobs were sacrificed. A more modest and therefore sustainable growth rate might then be able to stabilize and gradually reduce present levels of unemployment. But this could only be achieved at the cost of imposing an unacceptable standard of living on a large part of the population, all the more so because a reduction in wages would require a parallel reduction in unemployment benefits and other replacement incomes, so as to preserve work incentives.

If we reject both accelerated growth and reduced earnings, must we also give up on full employment? Yes, if by full employment we mean a situation in which virtually everyone who wants a full-time job can obtain one that is both affordable for the employer without any subsidy and affordable for the worker without any additional benefit. But perhaps not, if we are willing to redefine full employment by either shortening the working week, paying subsidies to employers, or paying subsidies to employees.

A first option, particularly fashionable in France at the moment, consists in a social redefinition of “full time”–that is, a reduction in maximum working time, typically in the form of a reduction in the standard length of the working week. The underlying idea is to ration jobs: because there are not enough jobs for everyone who would like one, let us not allow a subset to appropriate them all.

On closer scrutiny, however, this strategy is less helpful than it might seem. If the aim is to reduce unemployment, the reduction in the work week must be dramatic enough to more than offset the rate of productivity growth. If this dramatic reduction is matched by a proportional fall in earnings, the lowest wages will then fall–unacceptably–below the social minimum. If, instead, total earnings are maintained at the same level, if only for the less well paid, labor costs will rise. The effect on unemployment will then be reduced, if not reversed, as the pressure to eliminate the less skilled jobs through mechanization is stepped up. In other words, a dramatic reduction in working time looks bound to be detrimental to the least qualified jobs–either because it kills the supply (they pay less than replacement incomes) or because it kills the demand (they cost firms a lot more per hour than they used to).

It does not follow that the reduction of the standard working week can play no role in a strategy for reducing unemployment without increasing poverty. But to avoid the dilemma thus sketched, it needs to be coupled with explicit or implicit subsidies to low-paid jobs. For example, a reduction of the standard working week did play a role in the so-called “Dutch miracle”–the fact that, in the last decade or so, jobs expanded much faster in the Netherlands than elsewhere in Europe. But this was mainly as a result of the standard working week falling below firms’ usual operating time and thereby triggering a restructuring of work organization that involved far more part-time jobs. But these jobs could not have developed without the large implicit subsidies they enjoy, in the Netherlands, by virtue of a universal basic pension, universal child benefits, and a universal health care system.

Any strategy for reducing unemployment without increasing poverty depends, then, on some variety of the active welfare state–that is, a welfare state that does not subsidize passivity (the unemployed, the retired, the disabled, etc.) but systematically and permanently (if modestly) subsidizes productive activities. Such subsidies can take many different forms. At one extreme, they can take the form of general subsidies to employers at a level that is gradually reduced as the hourly wage rate increases. Edmund Phelps has advocated a scheme of this sort, restricted to full-time workers, for the United States.12 In Europe, this approach usually takes the form of proposals to abolish employers’ social security contributions on the lower earnings while maintaining the workers’ entitlements to the same level of benefits.

At the other extreme we find the UBI, which can also be understood as a subsidy, but one paid to the employee (or potential employee), thereby giving her the option of accepting a job with a lower hourly wage or with shorter hours than she otherwise could. In between, there are a large number of other schemes, such as the US Earned Income Tax Credit and various benefit programs restricted to people actually working or actively looking for full-time work.

A general employment subsidy and a UBI are very similar in terms of the underlying economic analysis and, in part, in what they aim to achieve. For example, both address head-on the dilemma mentioned in connection with reductions in work time: they make it possible for the least skilled to be employed at a lower cost to their employer, without thereby impoverishing workers.

The two approaches are, however, fundamentally different in one respect. With employer subsidies, the pressure to take up employment is kept intact, possibly even increased; with a UBI, that pressure is reduced. This is not because permanent idleness becomes an attractive option: even a large UBI cannot be expected to secure a comfortable standard of living on its own. Instead, a UBI makes it easier to take a break between two jobs, reduce working time, make room for more training, take up self-employment, or to join a cooperative. And with a UBI, workers will only take a job if they find it suitably attractive, while employer subsidies make unattractive, low-productivity jobs more economically viable. If the motive in combating unemployment is not some sort of work fetishism–an obsession with keeping everyone busy–but rather a concern to give every person the possibility of taking up gainful employment in which she can find recognition and accomplishment, then the UBI is to be preferred.

Feminist and Green Concerns
A third piece of the argument for a UBI takes particular note of its contribution to realizing the promise of the feminist and green movements. The contribution to the first should be obvious. Given the sexist division of labor in the household and the special “caring” functions that women disproportionately bear, their labor market participation, and range of choice in jobs, is far more constrained than those of men. Both in terms of direct impact on the inter-individual distribution of income and the longer-term impact on job options, a UBI is therefore bound to benefit women far more than men. Some of them, no doubt, will use the greater material freedom UBI provides to reduce their paid working time and thereby lighten the “double shift” at certain periods of their lives. But who can sincerely believe that working subject to the dictates of a boss for forty hours a week is a path to liberation? Moreover, it is not only against the tyranny of bosses that a UBI supplies some protection, but also against the tyranny of husbands and bureaucrats. It provides a modest but secure basis on which the more vulnerable can stand, as marriages collapse or administrative discretion is misused.

To discuss the connection between UBI and the green movement, it is useful to view the latter as an alliance of two components. Very schematically, the environmental component’s central concern is with the pollution generated by industrial society. Its central objective is the establishment of a society that can be sustained by its physical environment. The green-alternative component’s central concern, on the other hand, is with the alienation generated by industrial society. Its central objective is to establish a society in which people spend a great deal of their time on “autonomous” activities, ruled by neither the market nor the state. For both components, there is something very attractive in the idea of a UBI.

The environmentalists’ chief foe is productivism, the obsessive pursuit of economic growth. And one of the most powerful justifications for fast growth, in particular among the working class and its organizations, is the fight against unemployment. The UBI, as argued above, is a coherent strategy for tackling unemployment without relying on faster growth. The availability of such a strategy undermines the broad productivist coalition and thereby improves the prospects for realizing environmentalist objectives in a world in which pollution (even in the widest sense) is not the only thing most people care about.

Green-alternatives should also be attracted to basic income proposals, for a UBI can be viewed as a general subsidy financed by the market and state spheres to the benefit of the autonomous sphere. This is in part because the UBI gives everyone some real freedom–as opposed to a sheer right–to withdraw from paid employment in order to perform autonomous activities, such as grass-roots militancy or unpaid care work. But part of the impact also consists in giving the least well endowed greater power to turn down jobs that they do not find sufficiently fulfilling, and in thereby creating incentives to design and offer less alienated employment.

Some Objections
Suppose everything I have said thus far is persuasive: that the UBI, if it could be instituted, would be a natural and attractive way of ensuring a fair distribution of real freedom, fighting unemployment without increasing poverty, and promoting the central goals of both the feminist and the green movements. What are the objections?

Perhaps the most common is that a UBI would cost too much. Such a statement is of course meaningless if the amount and the scale is left unspecified. At a level of $150 per month and per person, a UBI is obviously affordable in some places, since this is the monthly equivalent of what every Alaskan receives as an annual dividend. Could one afford a UBI closer to the poverty line? By simply multiplying the poverty threshold for a one-person household by the population of a country, one soon reaches scary amounts–often well in excess of the current level of total government expenditure.

But these calculations are misleading. A wide range of existing benefits can be abolished or reduced once a UBI is in place. And for most people of working age, the basic income and the increased taxes (most likely in the form of an abolition of exemptions and of low tax rates for the lowest income brackets) required to pay for it will largely offset each other. In a country such as the United States, which has developed a reasonably effective revenue collection system, what matters is not the gross cost but its distributive impact–which could easily work out the same for a UBI or an NIT.

Estimates of the net budgetary cost of various UBI and NIT schemes have been made both in Europe and the United States.13 Obviously, the more comprehensive and generous existing means-tested minimum-income schemes are, the more limited the net cost of a UBI scheme at a given level. But the net cost is also heavily affected by two other factors. Does the scheme aim to achieve an effective rate of taxation (and hence of disincentive to work) at the lower end of the distribution of earnings no higher than the tax rates higher up? And does it give the same amount to each member of a couple as to a single person? If the answer is positive on both counts, a scheme that purports to lift every household out of poverty has a very high net cost, and would therefore generate major shifts in the income distribution, not only from richer to poorer households, but also from single people to couples.14 This does not mean that it is “unaffordable,” but that a gradual approach is required if sudden sharp falls in the disposable incomes of some households are to be avoided. A basic income or negative income tax at the household level is one possible option. A strictly individual, but “partial” basic income, with means-tested income supplements for single adult households, is another.

A second frequent objection is that a UBI would have perverse labor supply effects. (In fact, some American income maintenance experiments in the 1970s showed such effects.) The first response should be: “So what?” Boosting the labor supply is no aim in itself. No one can reasonably want an overworked, hyperactive society. Give people of all classes the opportunity to reduce their working time or even take a complete break from work in order to look after their children or elderly relatives. You will not only save on prisons and hospitals. You will also improve the human capital of the next generation. A modest UBI is a simple and effective instrument in the service of keeping a socially and economically sound balance between the supply of paid labor and the rest of our lives.

It is of the greatest importance that our tax-and-transfer systems not trap the least skilled, or those whose options are limited for some other reason, in a situation of idleness and dependency. But it is precisely awareness of this risk that has been the most powerful factor in arousing public interest for a UBI in those European countries in which a substantial means-tested guaranteed minimum income had been operating for some time. It would be absurd to deny that such schemes depress in undesirable ways workers’ willingness to accept low-paid jobs and stick with them, and therefore also employers’ interest in designing and offering such jobs. But reducing the level or security of income support, on the pattern of the United States 1996 welfare reform, is not the only possible response. Reducing the various dimensions of the unemployment trap by turning means-tested schemes into universal ones is another. Between these two routes, there cannot be much doubt about what is to be preferred by people committed to combining a sound economy and a fair society–as opposed to boosting labor supply to the maximum.

A third objection is moral rather than simply pragmatic. A UBI, it is often said, gives the undeserving poor something for nothing. According to one version of this objection, a UBI conflicts with the fundamental principle of reciprocity: the idea that people who receive benefits should respond in kind by making contributions. Precisely because it is unconditional, it assigns benefits even to those who make no social contribution–who spend their mornings bickering with their partner, surf off Malibu in the afternoon, and smoke pot all night.

One might respond by simply asking: How many would actually choose this life? How many, compared to the countless people who spend most of their days doing socially useful but unpaid work? Everything we know suggests that nearly all people seek to make some contribution. And many of us believe that it would be positively awful to try to turn all socially useful contributions into waged employment. On this background, even the principle “To each according to her contribution” justifies a modest UBI as part of its best feasible institutional implementation.

But a more fundamental reply is available. True, a UBI is undeserved good news for the idle surfer. But this good news is ethically indistinguishable from the undeserved luck that massively affects the present distribution of wealth, income, and leisure. Our race, gender, and citizenship, how educated and wealthy we are, how gifted in math and how fluent in English, how handsome and even how ambitious, are overwhelmingly a function of who our parents happened to be and of other equally arbitrary contingencies. Not even the most narcissistic self-made man could think that he fixed the parental dice in advance of entering this world. Such gifts of luck are unavoidable and, if they are fairly distributed, unobjectionable. A minimum condition for a fair distribution is that everyone should be guaranteed a modest share of these undeserved gifts.15 Nothing could achieve this more securely than a UBI.

Such a moral argument will not be sufficient in reshaping the politically possible. But it may well prove crucial. Without needing to deny the importance of work and the role of personal responsibility, it will save us from being over-impressed by a fashionable political rhetoric that justifies bending the least advantaged more firmly under the yoke. It will make us even more confident about the rightness of a universal basic income than about the rightness of universal suffrage. It will make us even more comfortable about everyone being entitled to an income, even the lazy, than about everyone being entitled to a vote, even the incompetent.

{Philippe Van Parijs directs the Hoover Chair of Economic and Social Ethics at the Catholic University of Louvain.}

1. Many academics and activists who share this view have joined the Basic Income European Network (BIEN). Founded in 1986, BIEN holds its eighth congress in Berlin in October 2000. It publishes an electronic newsletter (bien@etes.ucl.ac.be), and maintains a Web site that carries a comprehensive annotated bibliography in all EU languages (http://www.etes.ucl.ac. be/BIEN/bien.html). For a recent set of relevant European essays, see Loek Groot and Robert Jan van der Veen, eds., Basic Income on the Agenda: Policy Objectives and Political Chances (Amsterdam: Amsterdam University Press, 2000).
2. Federal senator for the huge state of Sao Paulo and member of the opposition Workers Party (PT), Suplicy has advocated an ambitious guaranteed minimum income scheme, a version of which was approved by Brazil’s Senate in 1991.
3. Two North American UBI networks were set up earlier this year: the United States Basic Income Guarantee Network, c/o Dr Karl Widerquist, The Jerome Levy Economics Institute of Bard College, Annandale-on-Hudson, NY 12504-5000, USA (http://www.usbig.net); and Basic Income/Canada, c/o Prof. Sally Lerner, Department of Environment and Resource Studies, University of Waterloo, Waterloo, Ontario, Canada N2L 3G1 (http://www. fes.uwaterloo.ca/Research/FW).
4. See James Tobin, Joseph A. Pechman, and Peter M. Mieszkowski, “Is a Negative Income Tax Practical?” Yale Law Journal 77 (1967): 1-27. See also a recent conversation with Tobin in BIEN’s newsletter (“James Tobin, the Demogrant and the Future of U.S. Social Policy,” in Basic Income 29 (Spring 1998), available on BIEN’s web site).
5. See Joseph Charlier, Solution du problème social ou constitution humanitaire (Bruxelles: Chez tous les libraires du Royaume, 1848); John Stuart Mill, Principles of Political Economy, 2nd ed. [1849] (New York: Augustus Kelley, 1987).
6. See the exchange between Eduardo Suplicy and Milton Friedman in Basic Income 34 (June 2000).
7. The latest countries to introduce a guaranteed minimum income at national level were France (in 1988) and Portugal (in 1997). Out of the European Union’s fifteen member states, only Italy and Greece have no such scheme.
8. In the United States, one recent proposal of this type has been made in Fred Block and Jeff Manza, “Could We End Poverty in a Postindustrial Society? The Case for a Progressive Negative Income Tax,” Politics and Society 25 (December 1997): 473-511.
9. Bruce Ackerman and Anne Alstott, The Stakeholder Society (New Haven: Yale University Press, 1999). Their proposal is a sophisticated and updated version of a proposal made by Thomas Paine to the French Directoire. See “Agrarian Justice” [1796], in The Life and Major Writings of Thomas Paine, P. F. Foner, ed., (Secaucus, N.J.: Citadel Press, 1974), pp. 605-623. A similar program was proposed, independently, by the New England liberal, and later arch-conservative, Orestes Brownson in the Boston Quarterly Review of October 1840. If the American people are committed to the principle of “equal chances,” he argued, then they should make sure that each person receives, on maturity, an equal share of the “general inheritance.”
10. For a more detailed discussion, see Philippe Van Parijs, Real Freedom for All (New York: Oxford University Press, 1995).
11. One can think of alternative normative foundations. For example, under some empirical assumptions a UBI is also arguably part of the package that Rawls’s difference principle would justify. See, for example, Walter Schaller, “Rawls, the Difference Principle, and Economic Inequality,” in Pacific Philosophical Quarterly 79 (1998) 368-91; Philippe Van Parijs, “Difference Principles,” in The Cambridge Companion to John Rawls, Samuel Freeman ed., (Cambridge: Cambridge University Press, forthcoming). Alternatively, one might view a UBI as a partial embodiment of the Marxian principle of distribution according to needs. See Robert J. van der Veen and Philippe Van Parijs, “A Capitalist Road to Communism,” Theory and Society 15 (1986) 635-55.
12. See Edmund S. Phelps, Rewarding Work (Cambridge, Mass.: Harvard University Press, 1997).
13. In the US case, for example, the fiscally equivalent negative-income-tax scheme proposed by Block and Manza, which would raise all base incomes to at least 90 percent of the poverty line (and those of poor families well above that), would, in mid-1990s dollars, cost about $60 billion annually.
14. To fund this net cost, the personal income tax is obviously not the only possible source. In some European proposals, at least part of the funding comes from ecological, energy, or land taxes; from a tax on value; from non-inflationary money creation; or possibly even from Tobin taxes on international financial transactions (although it is generally recognized that the funding of a basic income in rich countries would not exactly be a priority in the allocation of whatever revenues may be collected from this source). But none of these sources could realistically enable us to dispense with personal income taxation as the basic source of funding. Nor do they avoid generating a net cost in terms of real disposable income for some households, and thereby raising an issue of “affordability.”
15. Along the same lines, Herbert A. Simon observes “that any causal analysis explaining why American GDP is about $25,000 per capita would show that at least 2/3 is due to the happy accident that the income recipient was born in the U.S.” He adds, “I am not so naive as to believe that my 70% tax [required to fund a UBI of $8,000 p.a. with a flat tax] is politically viable in the United States at present, but looking toward the future, it is none too soon to find answers to the arguments of those who think they have a solid moral right to retain all the wealth they earn.’” See Simon’s letter to the organizers of BIEN’s seventh congress in Basic Income 28 (Spring 1998).

MANITOBA
http://www.cbc.ca/canada/manitoba/story/2010/03/25/mb-poverty-experiment.html
1970s’ Manitoba poverty experiment called a success / March 25, 2010

A controversial government experiment in the 1970s in which some households in a Manitoba town were given a minimum level of income improved the community’s overall health, a professor at the University of Manitoba says. A controversial government experiment in the 1970s in which some households in a Manitoba town were given a minimum level of income improved the community’s overall health, a professor at the University of Manitoba says. From 1974 through 1978, about 30 per cent of the population of Dauphin was provided with a “mincome,” as the guaranteed level of income came to be called. “We found that, overall, hospitalizations in Dauphin declined relative to the control group,” said Evelyn Forget, professor of community health science at the University of Manitoba. “We also looked at accidents and injuries, and they also declined. You can argue that accident and injury hospitalizations are strongly related to poverty.”

The goal of the program, which cost $17 million, was to find out whether a guaranteed income would improve health and community life. If a household’s income dropped below a certain amount, the program would top it up to an income equivalent to the welfare rates at the time. The participants who worked had their supplement reduced 50 cents for every dollar they earned in an attempt to encourage people in the program to look for work. Forget has spent three years comparing the administrative health care records of Dauphin’s citizens between 1974 and 1978 with those of a control group of people living in similar Manitoba communities at that time. She said her research suggests that people appear to live healthier lives when they don’t have to worry about poverty. “Hospitalizations for mental health issues were down significantly,” she said, adding that teenagers stayed in school longer as a result of the initiative.

The initiative, which started in 1974, was terminated in 1978 as political support for the experiment faded. “Politically, there was a concern that if you began a guaranteed annual income, people would stop working and start having large families,” Forget said. Ron Hikel, the executive director of the Mincome project, is delighted Forget is taking a fresh look at the project’s impact. “As somebody who devoted three or four years of his life to making this happen, I was disappointed that the data were warehoused,” Hikel said. Forget has not yet been given access to the 2,000 boxes of data collected by the original Mincome researchers, which contain copies of questionnaires participants filled out and, she believes, transcripts of interviews with the families who took part. Hikel, who is now legislative director for U.S. Rep. Eric Massa, said Forget’s research is immensely relevant in Canada and the United States. He said he intends to use her analysis as part of the current health-care debate. “It has to do with the impact that larger social conditions have on one’s health condition and the need for health care,” Hikel said.

MONGOLIA
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aWm8u8kb0R5E
Mongolia Fund to Manage $30 Billion Mining Jackpot
by Bloomberg News / September 11, 2009

The Mongolian government will set up a sovereign wealth fund using mining royalties and tax revenue, and distribute part of the income to citizens to alleviate poverty, said Finance Minister Sangajav Bayartsogt. The fund, to be run by professional managers from 2013, will disburse part of its annual income to every Mongolian in cash or non-cash securities to let them own stakes in the country’s mining wealth, Bayartsogt said. Initial capital will be drawn from Ivanhoe Mines Ltd.’s $4 billion Oyu Tolgoi copper- gold mine project, estimated to generate $30 billion in tax revenue over 50 years, he said. “We’re drafting the idea to implement the proposal, and we’re studying examples like the Alaskan Permanent Fund,” Bayartsogt said in a Sept. 9 interview in the capital Ulaanbaatar, declining to specify the size of the proposed fund. Mongolia, whose 2.7 million citizens depend on mining and agriculture for half the nation’s 2008 economic output, is banking on Oyu Tolgoi and about 6,000 other mineral deposit sites to lift average annual income, which at $1,680 per person last year was ranked 151st in the world by the World Bank. “If the government can pull this off, we can expect lasting stability and growth in Mongolia, because this fund can help stabilize the economy and help fend off the boom and burst of the commodity-price cycles,” said Erdenedalai Choinkhor, an economist at Frontier Securities Co. in Ulaanbaatar.

Oil, Gas Money
The $40 billion Alaska Permanent Fund, created in 1976 with state revenue from oil production, has constitutionally protected capital that can’t be spent. Most of its earnings are reinvested, and a dividend is returned each year to eligible Alaskans. The fund reported a $6.3 million loss in 2001 after buying 685,600 shares in Enron Corp. Norway’s sovereign wealth fund, the 2.47 trillion-krone ($410 billion) Government Pension Fund – Global, derives money from taxes on oil and gas and ownership of petroleum fields. The oil and gas money is invested abroad to avoid stoking domestic inflation. Mongolia also wants to diversify the economy’s reliance on animal husbandry and mining to avoid the so-called Dutch Disease, where a commodity boom sucks in foreign exchange, raises the currency’s value and makes manufacturing less competitive. “If mining is booming, the rest of the sectors will slow down because people are expecting to receive work and revenue from mining,” Bayartsogt said. “We will use revenue from mining to develop the processing industry, invest in outsourcing, education, science and technology to move up the value chain and transform the economy.”

Transforming Mongolia
Bayartsogt’s Democratic Party and the opposition Mongolian People’s Revolutionary Party pledged during May general elections to distribute as much as $6 billion, or up to 1.5 million tugriks ($1,060) for every citizen, from the country’s mining wealth. To fulfill the election pledge, the government may use a $250 million pre-payment from Oyu Tolgoi to seed its distribution program, Bayartsogt said. The final accord to develop the Oyu Tolgoi deposits may be signed this month, Minister of Minerals and Energy Dashdorj Zorigt said this week. “The transformational power of the Oyu Tolgoi mine cannot be understated,” said Peter Morrow, chief executive officer of the Khan Bank in Ulaanbaatar. Investments in Oyu Tolgoi are projected at almost 80 percent of Mongolia’s $5 billion economy, he said.

Oyu Tolgoi Deposits
Oyu Tolgoi may hold as much as 32 million tons of copper and 1,200 tons of gold, according to government estimates. Annual output when the mines are excavated may top 450,000 tons of copper with 330,000 ounces of gold, Zorigt said. “The ordinary people are expecting something” to be distributed to them as soon as Oyu Tolgoi is signed, Bayartsogt said. “The expectation is too high. Economics is always connected to politics.” The Oyu Tolgoi deposits, discovered by Ivanhoe in 2003, have gone through a sometimes tumultuous development process. Mongolia’s government on Aug. 25 passed laws allowing companies to carry forward their losses for eight years, build private roads and let Oyu Tolgoi developers use water they find on their land. The parliament will also repeal from Jan. 1, 2011, a 68 percent windfall profit tax on copper and gold. The nation’s 6,000 known mineral deposit sites include reserves of coal, uranium, silver, zinc and molybdenum. “It’s the beginning, an experiment in how to structure a large mining-exploration agreement with the world,” said Terence Ortslan, managing director of TSO & Associates, a Montreal, Canada-based research firm focusing on mining. “Five years from now, Oyu Tolgoi will be in operation, and other projects will be under way.”

BRAZIL
http://www.cpj.ca/en/blog/chandra/basic-income-brazil
Basic income in Brazil
By Chandra Pasma / July 14th, 2009

While Alaska is the only place in the world with an ongoing basic income program, they are not the only jurisdiction to have shown interest. Brazil actually has a law mandating the progressive institution of a basic income program. The law was introduced by Senator Eduardo Suplicy of the Brazilian Workers’ Party in 2001. He had previously introduced a bill to create a Negative Income Tax model of a guaranteed livable income, but that bill failed to pass. This second bill called for a universal basic income program to be progressively instituted, beginning with those most in need. The bill was approved by the Senate in 2002 and by the Chamber of Deputies in 2003. It was signed into law by President Lula da Silva in 2004. The bill leaves implementation in the hands of the President. No progress has been made toward implementing a basic income since then.

However, Brazil does have an interesting, albeit conditional, income security program for the poorest Brazilians. The Bolsa Familia, or Family Grant, was created in 2003 by merging 4 existing cash transfer programs. It could be used as a stepping stone to a basic income program, even though it was not created with that intention. The Bolsa Familia is paid to 11 million of Brazil’s poorest families, which means that the money reaches 46 million people. It has contributed to a reduction in inequality, although it is not the only factor. Brazil, one of the most unequal countries in the world, has made astonishing progress in reducing inequality since 2001. In the last five years, the incomes of the poorest Brazilians have risen 22%, compared to only 4.9% for the richest Brazilians. The program has also had a significant positive effect on the number of children in school, while decreasing the number of children in child labour.

The program has two aspects. Extremely poor families, those with a monthly per capita income of 60 reais or less (R$2 is equal to approximately US$1), receive a basic benefit of R$62 per month. They also receive variable benefits for their children, R$20 per month per child for their first three children, plus R$30 per month per 16 or 17 year old, to a maximum of two. Meanwhile, poor families – those with a monthly per capita income of R$120 or less, receive only the variable benefits for their children. The grants are based on a number of conditions. Children must be in school, attending at least 85% of school days, and they must receive all of their immunizations. Pregnant women must receive pre-natal care. The program currently includes 85% of Brazil’s poorest families. Some are excluded because they repeatedly failed to meet the conditions, while other poor families struggle with the issue of identification. This is one of the reasons why Senator Suplicy is still campaigning tirelessly to see the Bolsa Familia turned into a true basic income program.

Earlier this year, President Lula announced that an additional 1.3 million families will be added to the program in response to the recession. Senator Suplicy is also hoping to start a basic income pilot project, similar to Namibia’s, in Brazil. The project would begin next July, when the Basic Income Earth Network’s biannual conference takes place in Brazil. President Lula has already accepted an invitation to speak on the opening day of the conference.

INTEVIEW with BRAZILIAN SENATOR EDUARDO SUPLICY
http://www.widerquist.com/karl/Suplicy-Interview.htm

Senator Suplicy may be the highest-ranking political figure in the world to dedicate himself to promote the basic income guarantee. A U.S.-trained economist, he was elected to the Brazilian Senate in 1990, and he has been promoting the basic income guarantee at the national level ever since. He will be the keynote speaker at the First Congress of the U.S. Basic Income Guarantee Network. Last month, I asked him a few questions about his quest to introduce BIG in Brazil. –Karl Widerquist

1. YOU DID YOUR TRAINING AS AN ECONOMIST AT A TIME WHEN THE NEGATIVE INCOME TAX WAS EXPERIENCING A VOGUE WITHIN OUR PROFESSION. WERE ECONOMISTS SUCH AS JAMES TOBIN, JOHN KENNETH GALBRAITH, MILTON FREEDMAN, AND HERBERT SIMON INFLUENTIAL IN THE DEVELOPMENT OF YOUR IDEAS ON THE BASIC INCOME GUARANTEE? WERE YOU INFLUENCED BY THE EARLIER WRITERS SUCH BERTRAND RUSSELL, THOMAS PAINE, COURNOT, AND OTHERS?

After completing my bachelor’s degree (1964) in Business Administration, at the Fundação Getúlio Vargas, in São Paulo, Brazil, and after working with my father for a year or more, I decided to become a Professor of Economics at that same institution were I had studied, and so I decided to work on my Master’s (1966-68) and on my Ph.D in Economics (1970-73) at Michigan State University, with a period of 15 months (1971-1972) of graduate studies at Stanford University. It was my main purpose to understand the mechanisms of the economic system and why were we having so much inequalities and poverty in Brazil. Since I lived in a family with deep sense of fraternity and Christian values, I wanted to know why were there so many conflicts and injustices beyond the walls of my house. I wanted to know the characteristics of the socialism and the capitalism system, and if it would be possible to build a system were we could at the same time eradicate poverty, promote more equality, efficiency and freedom. I had learn from the history of the main scientists such as Galileo Galilei, Nicolau Copernico and Albert Einstein that one should always search for the truth, because willing to know the truth is part of the human nature. The first time I remember to be presented to the negative income tax concept was in my Economic Theory course about the Price System, with Doctor John Moroney, using as a reference the text Microeconomics by Charles Fergunson. I also became acquainted with Capitalism and Freedom (1962) by Milton Friedman and the articles by James Tobin on the topic. Abba Lerner was also teaching at Michigan State University, and I remember José David Langier, a Brazilian Ph.D. student at MSU during the late sixties that was very found of him. After all, Lerner was one of the first to propose a negative income tax in a lump some tax form, that is, a fixed sum to all, in The Economics of Control (1944). I also started to read the books and conferences of John Kenneth Galbraith that once gave a lecture at MSU. During the late sixties and early seventies I also followed with much interest the Civil Rights movement, the speeches of Martin Luther King Jr., the Black Panthers, Angela Davis, the presidential candidates such as Eugene J. McCarty, Robert F. Kennedy, George Mc Govern, Richard Nixon, and others. I remember that in my preliminary exam in Economic Theory I developed a model were we would have all the conditions of efficiency in the economy but that at the same time people would be persuaded to offer conditions of survival with dignity to everyone in the society. At that time I was not acquainted with the writings of Thomas Paine, Bertrand Russell, August Cournot and so many others about whom I refer in my book Renda de Cidadania. A Saída é pela Porta. Cortez Editora e Editora Fundação Perseu Abramo, 2002, São Paulo, or Citizen’s Income. The Exit is Through the Door. During the seventies I interacted with some Brazilian economists that had an interest on the negative income tax concept such as Antonio Maria da Silveira, Edmar Lisboa Bacha and Roberto Mangabeira Unger. When I was elected a Federal Representative of the Worker’s Party, during the eighties, with Paul Singer and others economists, we started to say that it would be important that we defend the concept of a guaranteed income to all Brazilians. It was only when I was elected a Senator in 1990, that I decided to present a legislative proposal to institute a Guaranteed Minimum Income Program through a Negative Income Tax to all adults with 25 years or more with monthly income below US$ 150. They would have the right to receive a complement of income that would be 30% or up to 50% of the difference between that some and his or her level of income. On December 16, 1991, after a long debate, all parties decided to approve that proposal, including the PSDB lead by the present President of Brazil, Fernando Henrique Cardoso. During that day, Senator Cardoso said that the proposal was a realistic utopia. The initiative went to the Chamber of Deputies, where it received a favorable report in the Finance Committee. It is waiting for its approval until today. Some important developments occurred since there were economists such as José Márcio Camargo and Cristovam Buarque, Governor of the Federal District, as well as Mayor José Roberto Magalhães of Campinas, that started to defend the idea of a guaranteed income to poor families as long as they have children in school age that are really going to school. Programs along these lines developed all over the country and are now object of the efforts of the Federal, State and Municipal governments. By the end of 2002, almost all municipalities of Brazil, with the support of the Federal Government will have implemented a guaranteed minimum income program related to educational opportunities, named also as Bolsa-Escola program. The monetary values for families with monthly income below R$90 (US$37.2) or half the minimum wage per capita, however, R$15 (US$6.2), R$30 (US$12.4) or R$45 (US$18.6) if the family has one, two, three or more children up to 14 years of age going to school, are very modest.

2. THE NAME OF THE BIG NETWORK IN BRAZIL, THE BASIC INCOME EARTH NETWORK-BRAZIL (BIEN-BRAZIL), IS CLEARLY BASED ON THE BASIC INCOME EUROPEAN NETWORK (BIEN). WHAT IS YOUR RELATIONSHIP WITH BIEN AND HOW HAS YOUR THINKING BEEN INFLUENCED BY CONTEMPORARY EUROPEAN BIG SUPPORTERS SUCH AS CLAUS OFFE, PHILIPPE VAN PARIJS, GUY STANDING, TONY ATKINSON, SEAN HEALY, AND OTHERS?

It was in 1992 that I became acquainted with the concept of an unconditional basic income, talking with some economists that recommended Arguing for a Basic Income: Ethical Foundations for a Radical Reform (London, Verso, 1992), edited by Philippe Van Parijs. My first reaction was that we should first be guaranteeing a minimum income to those who have little or nothing. More and more, since then, I started to interact with the members of BIEN, the Basic Income European Network. I decided to participate in theirs International Congress in London (1994), Vien (1996) and Berlin (2000). Although I had planned to be there, I was not able to go to the Amsterdam Congress (1998) because I had to be campaigning for my reelection to the Senate. I was reelected Senator for the 1999-2006 term. It is true that I was much influenced by Philippe Van Parijs, Claus Offe, Guy Standing, Tony Atkinson, Sean Healy, Walter Van Trier and so many others that have participated in those congresses and seminars over the subject. Today I am also convinced that the basic income is a common sense solution. Accordingly I presented a new legislative initiative in the Brazilian Senate, on December 4, 2001, saying that from 2005 on, a citizen’s income will be instituted to all Brazilians that live in Brazil as well to all foreigners who are living for at least five years in this country, no matter his or her socioeconomic condition. The citizen’s income will be equal to all, paid in monetary terms. Its value will be determined by the Federal Government taking into account the vital needs of each one, the level of economic development and the budget capacity of the nation. If the initiative is approved by the National Congress, in the October elections of 2004 a popular referendum will be called to confirm the approval of the proposal.

3. WHEN YOU ASKED MILTON FREEDMAN TO EVALUATE BASIC INCOME (BI) AS AN ALTERNATIVE TO THE NEGATIVE INCOME TAX (NIT), HE REPLIED IT “IS NOT AN ALTERNATIVE TO A NEGATIVE INCOME TAX. IT IS SIMPLY ANOTHER WAY TO INTRODUCE A NEGATIVE INCOME TAX.” WITHIN THOSE WHO FAVOR SOME KIND OF BASIC INCOME GUARANTEE, NIT SUPPORTERS TEND TO BELIEVE BI AND NIT HAVE THE SAME EFFECTS AND THAT NIT SHOULD BE FAVORED BECAUSE OF ITS SIMPLICITY, BUT BASIC INCOME SUPPORTERS TEND TO BELIEVE THE TWO HAVE DIFFERENT EFFECTS, AND THAT BI SHOULD BE FAVORED BECAUSE IT CAN DELIVER MORE SECURITY. WHICH OF THE TWO DO YOU BELIEVE IS BETTER AND WHY?

I can understand that the basic income is another way to introduce a negative income tax, as Milton Friedman has replied. But I believe that we would have some advantages if we may have the determination and courage to cut some steps and move forward as soon as possible to the basic income. I can visualize that more and more people will know about their right that will be really universal without a complex bureaucracy that would otherwise be asking all the details about how much each person has gained in the formal as well in the informal market. To have a basic income will be regarded as a right similar to the one that any Brazilian has to walk, play and swim in any of the beaches of our country. Of course the Internal Revenue Service would still have to collect taxes from those with reasonably high incomes to help finance the citizen’s income. Its existence and its fairness, in my view, will help the creation of an attitude of good will from the contributors in favor of a more just and civilized society.

4. YOU HAVE MADE EFFORTS TO MAKE THE BASIC INCOME GUARANTEE AN ISSUE IN THIS YEAR’S PRESIDENTIAL ELECTION IN BRAZIL. WHAT STRATEGIES HAVE YOU TRIED AND HOW HAS BIG AFFECTED THE POLITICAL DIALOGUE?

On the 17 of March, 2002, for the first time in the Brazilian History, a political party, the Worker’s Party, will provide the opportunity to all its affiliates, more than 800 thousand in our case, to choose among two different alternatives, Luiz Inácio Lula da Silva, our Honour President and myself, who is going to be the presidential candidate. It is already defined in our Outlines for a Government Plan, approved by the National Encounter of the Partido dos Trabalhadores, PT, held in Recife last December 2002, and that is common for both candidates, the following text:
“It is relevant, in this picture, the institution of a minimum income, related to education, such as in the Bolsa Escola programs, all over the national territory, as an ingredient of complementing the family income. The Bolsa Escola national program of Fernando Henrique Cardoso Government – in spite of the increase of the resources that previously were allocated, in which the PT had important role – is still too timid with respect to the size of the benefits and is based on a limited, incomplete and stagnated vision of the social exclusion problem. The minimum income that we propose, articulated with the social inclusion program, should be viewed as a step towards the implementation – when the social conditions are existent – of a citizen’s basic income as a right of all the Brazilian population.”
It was in the meetings of the economists of the PT along 2001 that I have made efforts for them to include the vision that we should be in favor of a basic citizen’s income as soon as possible. As you may see, the idea was accepted. During the Recife Encounter before 560 delegates I have used the word for 20 minutes to explain this evolution. Right now, with the publication of my book, I am traveling to many cities in several regions of Brazil saying that if I am the chosen candidate I will give high priority to this point.
Let me explain that Lula is a very strong candidate who has been our presidential candidate in 1989, 1994 and 1998, when he got very good results as the second most elected. For more than a year he is leading the polls with 26 to 34% of the national preference. It won’t be easy for me to win, although I do not discard the possibility of a surprise. But I have been telling my friend Lula, for whom I have much respect, and the party, that more important than I becoming the president is that the one who does will really put in practice the ideas that I have been defending.

5. WHAT ARE THE PROSPECTS FOR A NATIONAL REFERENDUM ON BIG IN BRAZIL?

The Brazilian Constitution says in its Article 14, that the popular sovereignty will be exercised by universal election as well by plebiscite, referendum and popular initiative. Article 49 says that the National Congress may authorize the referendum. That is why the legislative initiative that I presented last December proposes a referendum to be held in October 2004. I believe that the citizen’s basic income will be much more accepted if discussed in depth by the whole population.

6. WILL BRAZIL BE THE FIRST COUNTRY TO INTRODUCE A FULL-SIZED BIG?

Brazil was one of the last nations to abolish slavery in 1888. It will be proper if Brazil becomes one of the first nations to introduce a basic income.

7. ONE COULD ARGUE THAT IT IS EASIER TO INTRODUCE BIG IN DEVELOPING NATIONS, LIKE BRAZIL, BECAUSE THE STANDARD OF LIVING IS LOW, AND ONLY A SMALL AMOUNT OF REDISTRIBUTION WOULD GREATLY INCREASE ECONOMIC SECURITY. ON THE OTHER HAND, ONE COULD ARGUE THAT IT IS MORE DIFFICULT TO ADOPT BIG IN DEVELOPING NATIONS BECAUSE THEY HAVE GREATER NEED FOR INFRASTRUCTURE IMPROVEMENTS AND OTHER PROJECTS THAT COMPETE FOR EXTREMELY SCARCE GOVERNMENT REVENUES. WHAT DO YOU BELIEVE ARE THE RELATIVE PROSPECTS FOR THE TECHNICAL FEASIBILITY OF BIG IN DEVELOPED AND DEVELOPING NATIONS?

It will be a very difficult task to persuade people both in developed as well in developing nations to introduce a basic income. Every time that I have had the opportunity to explain the concept and its fundamentals in my lectures all over Brazil, in general the proposal is accepted by most people as a good solution. It is important to have the support of institutions such as the labor unions, religious associations, entrepreneurial entities, civil organizations and so on. It is very encouraging the movement in favor of a basic income that has been developing in South Africa with the support of the Alliance for Children’s Entitlement to Social Security, Black Sasc, Child Health Policy Institute, Congress of South African Trade Unions, Development Resources Centre, ESST, Gender Advocacy Programme, Community Law Centre (UWC), Southern African Catholic Bishop’s Conference, South African Council of Churches, South African NGO Coalition and Treatment Action Campaign. South Africa and Brazil are both developing industrialized nations that with respect to income distribution are among the most unequal in the World. Therefore, it is important that the theme is being debated with much interest in both nations.

8. BY SOME ACCOUNTS, BRAZIL HAS THE HIGHEST ECONOMIC INEQUALITY IN THE WORLD. CLEARLY, THIS POINTS TO THE NEED FOR A BASIC INCOME GUARANTEE; HOW DOES IT AFFECT THE POLITICAL FEASIBILITY OF BIG?

According to the 2001 Report about the Human Development Index of the United Nations only Swaziland (60.9 in 1994), Nicarágua and South Africa present Inequality Gini Coefficients higher than those of Brazil (59.1 in 1997). According to the 2000/2001 World Bank Development Report, Brazil is third among the nations with most unequal distribution of income, with a Gini Coefficient of 60.0, in 1996, coming after Sierra Lioa (62.9 in 1989) and Central African Republic (61.3 in 1993). In 1999, the one percent richest got 13.9% of the National Income, a higher proportion than the 13.5% obtained by the 50% poorest of the Brazilian population. Under these circumstances, to guarantee a basic income to the whole population becomes most relevant.

9. WHAT POLITICAL AND ECONOMIC STRENGTHS AND WEAKNESSES TOWARD THE IMPLEMENTATION OF BIG DOES BRAZIL HAVE RELATIVE TO OTHER SOUTH AMERICAN COUNTRIES?

The integration of the South American countries must be seen mainly from the point of view of the human being, that differs from the point of view of the owners of capital. The more the social and economic rights of people in countries of the same region are similar the better are the chances of a healthy integration. It was very difficult for Argentina to maintain a fixed parity exchange rate system for a long time whereas Brazil, since 1999, had started a more flexible exchange system. Since February 2002 a more homogeneous form of dealing with the exchange system will help the integration of the economies. If Brazil implements a basic income as a citizen’s right it is most likely that Argentina and other South American countries will start studying how to apply it in their nations. It is interesting to know that a growing number of economists, social scientists and members of the parliaments in several Latin American countries are debating the issue, mainly in Argentina, Colombia and Brazil. See, for example Vuolo, Rubén Lo (org.) (1995). Contra la exclusión. La propuesta del ingresso ciudadano. Buenos Aires, CIEPPP/Mino y Dávila. It will be important to study the effects in the labor market of each nation of the introduction of the basic income. It is my view that it will make the economies consistently more efficiently and competitive, at the same time that will be presenting a higher degree of equity. In Latin America, we should be aware that when in the United States the government introduced in 1975 the EITC, that was significantly expanded in 1993, the Earned Income Tax Credit, a partial negative income tax, has made the American economy relatively more competitive than without that instrument. The American Society had decided to pay an additional amount to all workers receiving less than certain level, making their firms more competitive than in the absence of that instrument of economic policy.

10. FROM THE U.S. PERSPECTIVE, SOUTH AMERICAN COUNTRIES SEEM TO EXPERIENCE REGULAR CURRENCY CRISES, SUCH AS THE CURRENT ONE IN ARGENTINA. IS THERE A CONTINUING FEAR OF A SIMILAR CRISIS IN BRAZIL, AND HOW DOES THIS AFFECT THE FEASIBILITY OF BIG IN BRAZIL? MORE GENERALLY, DO YOU BELIEVE THAT DEVELOPING NATIONS CAN IMPLEMENT BIG GIVEN THE CURRENT INTERNATIONAL FINANCIAL SYSTEM OR WILL THEY REQUIRE SOME CHANGE IN POLICY FROM DEVELOPED NATIONS SUCH AS DEBT FORGIVENESS OR CURRENCY SUPPORT IN THE EVENT OF CRISIS?

It is true that the South American economies are having to dedicate a large portion of their resources to pay for the services of their debt. The Brazilian public sector, for example, including the municipalities, the states and the Union, paid respectively, in 1999 and 2000, R$86billions (US$35.5 billion) and R$70 billions (US$ 28.9 billion) of interest on internal and external debt. Suppose we were to pay a quite modest basic income to start with of R$40 (US$16.5) per month or R$480 (US$198.3) per year to all 170 million Brazilians. This would sum up to R$80.6 billions (US$33 billions). Since our 2002 Gross Domestic Product will be around R$1.3 trillion (US$537.1 billions) and our Federal Annual Revenue around R$350 billions (US$144.6 billions), to use R$80.6 billions (US$33 billions) to pay a modest citizen’s income to all Brazilians is a huge sum considering that there are so many other urgent needs. When we compare, however, that the Brazilians are also paying an equivalent amount of interest to the owners of titles of the public internal and external debt, it is reasonable to think that a dialogue with them should take into account the principles of justice and equity. When priorities are defined in very clear and transparent terms, greater respect among all parts, including creditors, tend to prevail.

11. BRAZIL RECENTLY INTRODUCED A SMALL CONDITIONAL INCOME GUARANTEE FOR FAMILIES WITH SCHOOL-AGE CHILDREN WHO REMAIN IN SCHOOL. HOW SUCCESSFUL HAS THIS EFFORT BEEN (COMBINED WITH PREEXISTING POLICIES) IN RELIEVING POVERTY IN BRAZIL? …IS IT A MAJOR STEP TOWARD AN UNCONDITIONAL BASIC INCOME GUARANTEE?

The small conditional guarantee for families with school-age children who remain in school has been spreading to reach around 6 million families or 11 million children in this first semester of 2002. In some municipalities such as São Paulo, the benefit is more substantial, due to a more generous municipal law: the families with monthly income below R$90 (US$37.2) or half the minimum wage per capita with children up to 14 years of age going to school have the right to receive a complement of income that is a proportion (2/3) of the difference between R$90 (US$37.2) x number of members of the family and the family income. There are also other designs. In general the results have been considered positive, although there are strong recommendations to improve the value of that modest benefit. I believe that those programs are an important step towards the implementation of a basic income.

12 BRAZIL IS ONE OF THE FEW NATIONS IN THE WORLD THAT STILL HAS HUNTER-GATHERER COMMUNITIES. WOULD A BIG DISRUPT THE TRADITIONAL WAY OF LIFE IN THESE COMMUNITIES? AND IF SO, SHOULD THEY BE EXCLUDED—PERHAPS IN EXCHANGE FOR LAND RIGHTS?

The idea of a citizen’s basic income has much to do with the values of solidarity that have characterized the Indian communities since their origin. It also has to do with the values of the black communities in their struggle against slavery. All communities in Brazil, no matter how far from the cities, need some money for their defense, health assistance, education, housing improvement and so many things. Their members will have the same citizen right as any other Brazilian. They will be able to choose whether to use their respective basic income in a more individual or in a more communal way.

13. POLITICALLY, DO YOU BELIEVE IT IS BETTER TO START WITH A PARTIAL INCOME GUARANTEE, SUCH AS THE ALASKA DIVIDEND, WHICH GUARANTEES A LEVEL OF INCOME BUT NOT ENOUGH TO COVER AN INDIVIDUAL’S BASIC NEEDS, OR IS IT BETTER TO PROMOTE A FULL BIG WHICH COULD IN ONE STROKE REPLACE ALMOST EVERY PROGRAM IN THE WELFARE STATE?

I spent seven days in Alaska in 1995 asking the people all over the places about the Alaska Permanent Fund dividend system. I was quite impressed that although in 1976 the result of the referendum was 76.000 yes to 38.000 no, or almost 2 to 1, nowadays almost everyone is quite enthusiastic about the system. A few with very high income told me that the dividend did not make great difference to them. But they did not oppose the idea. I believe that the Alaska example is nice because it has permitted that people is accompanying the pros and cons of the system, allowing the annual dividend to gradually reach the point of being equal to the survival needs of a person in Alaska. It would be very difficult to start in Brazil with a full BIG.
I believe that we may start with a modest amount such as R$40 (US$16.5) per month per capita, on R$480 (US$198.3) per year. In a family of six, this would mean R$240 (US$99.2) per month. If the husband and wife knows that for the next 12 months they will be able to count for sure with that amount, that in the following years this amount will increase with the nation’s economic growth, this will make a tremendous difference for their condition of life, freedom and dignity. In a few years the monthly amount per capita will more than double as it happen in Alaska.

14. BRAZIL, LIKE ALASKA, IS HAS RELATIVELY ABUNDANT NATURAL RESOURCES. DO YOU BELIEVE A BIG FINANCED BY NATURAL RESOURCE TAXES WOULD BE SUCCESSFUL IN BRAZIL? I MUST CONFESS THAT WHEN I HEARD OF PRESIDENT BUSH’S PLAN TO EXPAND OIL DRILLING ON ALASKA’S NORTH COST, MY SECOND THOUGHT WAS THAT IT WOULD AT LEAST BE GOOD FOR THE ALASKA DIVIDEND. DOES AN ECO-TAX-FINANCED BIG RISK CREATING GREATER POPULAR SUPPORT FURTHER DESTRUCTION OF NATURAL RESOURCES?

A basic income in Brazil may be financed by a combination of both national resource taxes as well as taxes on all kinds of wealth that are created in society, taking also into account a principle of progressivity, that is, that those that have greater wealth and income should contribute relativity more.

15. MORE GENERALLY, WHAT METHOD OF FINANCING BIG WOULD BE MOST DESIRABLE FOR BRAZIL, AND HOW WOULD THAT DIFFER FROM FINANCING ONE IN THE UNITED STATES?

In 1999 I presented in the Senate a legislative initiative proposing the creation of Citizen’s Brazilian Fund that would have the purpose of financing a citizen’s guaranteed minimum income. The main sources of this fund would be:
I. Resources consigned in the General Budget of the Country.
II. 50% of the resources received in cash, bonds and credits including the ones, which are originated from specific agreements in the scope of the National Program of Privatization.
III. 50% of the resources originated from the concession of public services and public works, as well as from permit or authorization of public services.
IV. 50% of the resources originated from activities foreseen by the 1st paragraph of art. 176 of the federal constitution *
V. 50% of the resources originated from the contracts states or private enterprises, the development of the activities foreseen by the items I to VI of the art. 177 of the federal constitution**
VI. 50% of the resources originated from real estate that belongs to the country assets.
VII. Other properties, rights and assets of the country as well as credits and transferring operations, which are awarded to them.
VIII, Income of any nature issued as payment resulted from application of assets that belong to the citizenship program.
IX. Donations in cash, values, real state and other properties received by them.
Sole paragraph: The balances checked at the end of each fiscal year will be obligatorily transferred to citizenship program of the following year.
* These resources are originated from the exploitation of mines and the potential of hydraulic energy.
** These resources are originated from the research, exploitation, importation, and transportation of the petroleum and natural gas
This legislative initiative has been approved in February 2000 by the Justice Commission of the Senate.
I believe that we should always take into account that the nation’s natural resources should not be used only for the maximum benefit of the present generation, but with a balanced view of befitting future generations and always taking care for not allowing the predatory depletion of the nation’s natural resources.

16. IN THE UNITED STATES, THE BASIC INCOME GUARANTEE MOST COMMONLY RUNS INTO OPPOSITION FROM THOSE WHO BELIEVE THAT EVERY INDIVIDUAL HAS THE RESPONSIBILITY TO WORK—MEANING IN THE PAID LABOR MARKET. IS THIS A STRONG FEELING IN BRAZIL AND HOW DO YOU BELIEVE THE MOVEMENT FOR BIG CAN OVERCOME THIS KIND OF OPPOSITION?

This is a question that is always present in the discussions about the basic income. It’s important to distinguish the basic income guaranteed form the income that someone gets from his on her work effort. The basic income, as so well explained by Thomas Paine in Agrarian Justice (1795) must be seen as a right, that every individual has to participate in the wealth of a nation.

The Brazilian Constitution, as well as that of other nations, recognizes the right of private property. It recognizes that the proprietors of farms, factories, banks, real state, bonds and stocks may receive their income in the form of profits, rents or interest. Without the obligation of doing any work. If we guarantee the right of capital owner’s to receive their income without any labor effort, why should we not extend the same right to receive a modest income sufficient for his or her basic needs to everyone, rich and poor? When I explain this argument, that we may find in Bertrand Russell’s Proposed Roads to Freedom: (1918) normally all audiences agree that the citizen’s on basic income makes much sense.

IRAQ
http://www.adn.com/2008/08/09/488420/pfd-rebate-pack-a-punch.html
A Basic Income to Democratize and Pacify Iraq
by Eduardo Matarazzo Suplicy

Last March, 2007, when Ibrahim al-Jaafari, the ex-Prime Minister of Iraq (02/23/05-05/20/2006) visited Brazil, I had the opportunity to have a conversation with him in Brasília as well as in São Paulo. I told him that in April 2003, shortly before the Brazilian Sergio Vieira de Mello was nominated as the United Nations representative in Iraq, I had written to Mr. de Mello suggesting that the Iraqis could consider following the example of the Alaska Permanent Fund Dividend system, a pioneer and successful example of a Citizen’s Basic Income. Because of the country’s huge oil reserves, Iraq could follow this path. I explained him how Sergio Vieira de Mello wrote back to me on April 30, 2003, saying that he considered the proposition a very positive one and that he would take it to the administrative authorities of Iraq. On June 23 of that year, in the Reconciliation Summit of A’mman, Ambassador J. Paul Bremer III who was responsible for administering Iraq after the fall of Saddam Hussein, said that Iraqis could follow the Alaskan example so that all of them could feel as having a stake in the wealth of the nation. On August 1st, Vieira de Mello called me from Baghdad saying that the proposal was being positively considered and that the World Bank mission had deemed it to be viable. Unfortunately he was a victim together with 21 more persons in the attack of the UN Office in Baghdad on August 19 of that year. Ibrahim al-Jaafari today is a member of the National Assembly of Iraq and leader of Islamic Dawa Party, the main political party of the United Iraqi Alliance coalition that supports the government. He is a Shiite and was previously one of the two vice-presidents of Iraq under the Iraqi Interim Government in 2004. I also told him that the Brazilian National Congress had approved the Law 10.835 that institutes an unconditional Citizen’s Basic Income, sanctioned by President Luiz Inácio Lula da Silva in January 8, 2004. The law says that it will be established step-by-step, under the Executive Power’s criteria, starting with those most in need, as the present Bolsa Família Program does, until the day when everyone in Brazil will have that right. As the proponent of the bill, and Co-Chair of the Basic Income Earth Network, BIEN, since 2004, I had been ready to go to Iraq to explain to their government and parliament how this instrument could contribute to the democratization and pacification of the Nation. Other economists and political thinkers such as Steve Clemons, Guy Standing, Steven Schafarmam and the ex-Governor of Alaska, Jay Hammond, had also made the same proposal.

As a result, last April I received an official invitation from the President of the Iraqi National Assembly to visit Baghdad. I considered going in April and later in July. But the Brazilian Foreign Minister Celso Amorim and his Executive Secretary, Ambassador Samuel Pinheiro Guimarães made an appeal to me to postpone my trip because it would be too risky. If something happened to me it would cause a serious problem for the Brazilian government. Even in the so-called “Green Area” of Baghdad, under control of state-of-the-art security forces, the situation was not considered to be safe. In fact, on the same day of their recommendation, the United Nations Secretary-General, Ban Ki-moon, was forcefully shaken by an explosion that took place 50 meters away from him, which killed several people in that building, also inside the Green Area. I agreed that I should go when conditions of security would be improved.

Last October, the Brazilian Ambassador to Iraq, Bernardo de Azevedo Brito, -who, for security concerns, works out of A’mman, Jordan- told me that he just returned from a three-day trip to Baghdad, and that the overall situation had improved significantly. Therefore he was ready to accompany me for an official visit to Iraq for three days in January 2008. I would have the support of the Brazilian government who would secure the services of a private British security firm from our arrival to Baghdad International Airport and throughout our whole stay, up to our departure back to A’mman.

I was convinced that this would be one of my most significant trips of my 66 year’s life. Of course my family, my colleagues at work, and friends were worried.  Yet I explained them that I was so convinced that Iraq could effectively implement a Citizen’s Basic Income unconditionally to all 30 million inhabitants in order to pacify this nation after so many years of wars, violence and deaths, that it would be worthwhile embracing the challenge and being there. I felt honored by the invitation made by the Speaker of the Iraqi Council of Representatives, Mahmoud Dawud al-Mashhadani, – elected on April 22, 2006 to the speakership, receiving 159 votes against 97 spoilt and 10 abstentions as part of the Sunni Arab-led Iraqi Accord Front list-, to enlighten to them how they have all the conditions to introduce this instrument of economic policy.

Two of my countrymen were on the same trip since Brazil: Nawfal Assa Mossa Alssabak, vice-president of the Brazil-Iraq Chamber of Commerce and Industry, born in Iraq but since the early eighties living in Brazil, where he got married and has 3 sons and one daughter, who served as an interpreter in several occasions, and Sergio Kalili, an independent journalist who filmed 7 hours worth of all the important events of the trip. From A’mman to Baghdad, the Brazilian Ambassador was also accompanied by two members of the Brazilian Embassy’s staff, Safana Sallooum and Valdir Guimarães. As soon as we arrived in the airport of Baghdad at around 10 am of January 16, we were surrounded by six security people with semi-automatic machine guns who were to guide us, attentively screening throughout all taking place in the big airport hall. We were instructed to wear a 15-kg flak jacket and a helmet, to yield us on the way from the airport until Baghdad’s green zone. I had earlier granted the Brazilian Ministry of Foreign Affairs that I would not venture outside the agreed-on Green Area. Once there, we were all accommodated at the security company’s compound. Each very basic dormitory was protected from potential mortar fire by piled-up sandbags sitting by the windows as well as above the roof. After leaving our reduced luggage there, we embarked straight into a very efficient and productive agenda of meetings.

One thing impressed very much during this visit.  Mr. Alssabak, member of the Brazil-Iraq Chamber of Commerce and Industry, had been born in Baghdad, was raised and came of age in the city, and was returning for the first time to his hometown after so many years living abroad.  Despite well-traveled and versed in so many cities in Europe, the US, and Latin America, he earlier had confessed to me that he still considered Baghdad the most beautiful capital in the world.  Now, his disappointment was blatant in his face.  He could no longer recognize his surroundings: in every avenue and street (especially in the Green Area which I saw, but from what I heard a scene that repeats itself in many parts of Baghdad) there are concrete walls of about 3-5 meters height, sometimes crowned with barbwire, shouldering both sides of many avenues. It is impossible from the road to actually see the buildings behind the walls, and upon arrival to a building, there is always a large steel door, which opens regrettably to the presence of security guards, especially when those buildings pertain to official activities.  I understood that as a sign of how divided Iraq is today.  What came to my mind is that in a such separated society, the Iraqis are having to spend so much money to build walls and security instruments that for sure won’t be of any need when the principle of justice and solidarity would become a reality in this nation.

The first meeting was with the Special Representative of the Secretary-General of the United Nations to Iraq, Staffan de Mistura, a Swedish-Italian who is the successor of Sergio Vieira de Mello. I told him that just before I left São Paulo, Carolina Larriera, Sergio’s widow who was in the Canal Hotel working at the UN headquarters a few meters from him on August 19, 2003 when a truck exploded with a bomb that killed him, told me that she was very moved in knowing that someone was continuing to defend the proposal that he had embraced. She had asked me to take a small bag of Brazilian soil to sprinkle in the Canal Hotel were he died. Regrettably, this was outside the Green Area. De Mistura told us about how much all the UN staff admired so much Sergio’s efforts for peace. He took us to the tribute plaque set-up in his memory. There I left a copy of my book: The Citizen’s Basic Income. The Answer is Blowin’ the Wind (L&PM 2006). To all Irakian authorities that I met in this travel I gave a copy of the Woodrow Wilson International Center for Scholars English publication (March 2007) of this book, as well as its translation into Arab made by Mr. Walthik Hindo, of the Brazil-Iraq Chamber of Commerce and Industry, to whom I am grateful.

The second meeting was with the President of the Consulting Commission to the Prime Minister, Thamir A. Ghadhban, who was also ex-Minister of Oil. I explained to him how Iraq could follow Alaska’s example in conditions even better than Brazil’s who had recently approved a Law to implement an incremental Citizen’s Basic Income. He gave me even more reasons. He stated that Iraq had surpassed Saudi Arabia and is now the first country in the world in terms of known oil reserves. From the top 12 places in the world where higher quantities of oil are found, 9 are in Iraq, he emphasized.

The third meeting was with the Minister of Planning, Ali Ghalib Baban, a key man in elaborating policies for the future, according to Ambassador Brito. In our one-hour conversation, I explained about the rationality of an unconditional basic income, its fundamentals and how economists, philosophers and social scientists in a very wide spectrum today are in favor of it, as well about how Alaska had decided to separate 50% of the royalties coming out of the exploitation of natural resources to build a fund that pertain to all inhabitants. Since the early eighties those resources have been applied in US bonds, stocks of Alaskan, other American, and international companies, and real state investments. The Alaska Permanent Fund has evolved in value since then from US$ 1 billion to around US$ 40 billion today. Each resident in Alaska, as long as he or she is living there for a year or more – today they are around 700 thousand – has the right to receive an equal dividend, which has evolved from around US$ 300, in the early eighties, to US$ 1,654 per year per capita in 2007. This system has made Alaska the most equal of all 50 American States. In 1976, when Alaska had 300 thousand inhabitants, 76,000 voted “yes” and 38 thousand voted “no”, in a referendum about the idea. Today, as I could personally observe in 1995- when I visited Alaska for 7 days – and from what Professor Scott Goldsmith, from the University of Alaska, observed in his speech to the BIEN Conference in 2002, it would be considered political suicide for any leader in that US state to propose the end of the Alaska Permanent Dividend System.

Minister Baban mentioned that they are now examining the several experiences in all major oil producing countries. They are looking at how they use the proceeds of oil and discussing the matter within the government and the parliament. Due to the serious destruction of the infrastructure, including extracting oil, they decided first to use much of the resources on the rebuilding of what was destroyed by the war. I emphasized in all of the meetings that we Brazilians, Iraqis and people from the developing world must be aware of the effects of the several kinds of income transfers – such as the Earned Income Tax Credit in the US or the Family Tax Credit in the UK – that exist in the developed world that make their economies more competitive than ours if we don’t do the same or even better. I tried to show that an even better tool for this purpose is the unconditional basic income.

The Minister of Planning also mentioned that he was very fond of the micro credit experience of Professor Muhammad Yunus and the Grameen Bank in Bangladesh and that the Iraqi government was expanding the micro credit operations. I told him of my interaction with Professor Yunus during 2007. First, in Germany, last June, when we both were invited by Professor Gotz W. Werner for a Conference at the University of Karlsruhe on “Micro Credit and Basic Income as instruments to eradicate absolute poverty and to promote entrepreneurship”; second in my visit to Dacca, last July; and third, in November, in Yunus’ visit to Florianópolis, Brazil. On those occasions, I have explained him my strong belief on how both instruments, Micro Credit and Basic Income, can be well harmonized to attain the objectives of promoting development together with the practice of justice.

From the information that we gathered, Ambassador Bernardo de Azevedo Brito told me that I was visiting Iraq at the appropriate time for the purpose of presenting the proposal of what to do with the proceeds of the oil and natural resources, since they were exactly in the process of examining different alternatives in order to decide which will be the best one. We have learned that in the past twenty years Iraq has developed a Public Distribution System that has a universal character. Several kinds of basic items, including food and domestic needs, are distributed “in-kind” by the State through a net of hundreds of trucks and stores all over Iraq. After 2003, they have considered the distribution in monetary terms, but until now the banking system is still not sufficiently mature or developed to allow for this alternative.

Our next appointment was one of the most meaningful and very special. The ex-Prime Minister and leader of the main coalition in the Iraq Council of Representatives, Ibrahim al-Jaafari, received us for a conference and a dinner at his residence in the Green Area. I was quite surprised because I had no idea of what would happen. He came to the main door exactly at 19:30 pm to receive us and conducted us to the main hall where more than 40 authorities were already waiting for the conference. He introduced me to each one of five ministers of the present government, the President of the High Court of Justice, several ministers of the previous government of which he was the Prime Minister, including the Minister of Justice, his own previous Deputy in Chief, and about 30 members of the Council of Representatives, both men and women. Then he spoke for about 25 minutes in Arab translated into Portuguese by Mr. Alssabak about the importance to Iraq of my visit and the proposal that I was going to present. Then I had the word for about 50 minutes, which were sufficient to explain the fundamentals of the basic income idea, its evolution along the history of mankind and the advantages that the proposal could have for promoting a sense of solidarity among all Shiites, Sunnis, Kurds, Christians, Jews and other society groups.

I emphasized that the basic income was consistent with the Qur’an and the writings of its followers, and that the teachings of the principles of justice and equality in Islam are similar to those of Christianity. In the Book of Hadith, Omar, the second of the four caliphs that followed Muhammad, recommended to the citizens with large properties or gains that they should reserve a portion to those with less or nothing. The roots of the idea can be found in ancient history. Writing in the six century before Christ, Confucius observed that “uncertainty is even worse than poverty”. And “can anyone go out from his home except through the door?”. In fact, when we study the rationality of the Citizen’s Basic Income we conclude that it is such a common sense solution as going out from one’s home through the door.

I also reminded of Aristotle’s definition of Politics as the science of to attain the common good. In order to establish a fair life to all the people we need political justice, which must be preceded by distributive justice, making more equal those that are so unequal. Karl Marx presented similar ideas when he wrote of man’s mature form of behavior in society: “from each according to his ability, to each according to his need”, in his 1875 Critique of the Gotha Program. The same principle can be found in the most frequently quoted word in the Old Testament of the Bible, “Tzedakah” in Hebrew, that means social justice, or justice in society. A clear defense of the basic income project was made by Saint Paul in the Second Epistle to the Corinthians, in the New Testament: he recommended that the Macedonians follow the example of Jesus, who had decided to join the poor and live among them. As it is written, in order to have justice and equality: “He that gathered much had nothing over; and he that gathered little had no lack”. The defense of a minimum income is also clearly defended by Buddhism, as we can see in the assertions of the Dalai Lama in Ethics for the New Millennium: “If one accepts the luxurious consumption of the very rich, it is first necessary to ensure the survival of all humanity.”

I spoke about the main thinkers in History that developed the proposal of a guaranteed minimum income such as Thomas More, Juan Louis Vives, Thomas Paine, Bertrand Russell and the most wide spectrum of economists like Joseph Charlier, Dennis and Mabel Milner, Joan Robinson, John Maynard Keynes, Friedrich Von Hayek, James Edward Meade, George Stigler, Milton Friedman, James Tobin, Robert Theobald, John Kenneth, until the founders of BIEN such as Philippe Van Parijs, Guy Standing and Claus Offe that could be invited to speak to the Iraqis about how the Basic Income would help a society to provide dignity and freedom for all.

I explained how in Brazil a Guaranteed Minimum Income Program related to educational and health opportunities, the Bolsa-Família Program and other government initiatives, such as the Bolsa Escola, which preceded it were developed since the mid-nineties. Today around 45 million Brazilians, or one fourth of the 189 million inhabitants, are beneficiaries of the Bolsa Família Program that has been recognized as quite efficient in the fight against poverty and promoting equity. Then I announced the good news that the Brazilian National Congress became the first in the world to approve a law that, although gradually, will introduce an unconditional basic income.

I underlined that the Iraqis love soccer and that they have great admiration for the Brazilian players. I told that I had recently read in the Brazilian Press the interview of the Brazilian soccer coach, Jorvan Vieira, of the National soccer team of Iraq that was responsible for the Championship of the Asian Games. He said that in the beginning it was difficult for the Shiites to pass the ball to the Sunnis, then to the Kurds and so on. But once he managed to harmonize the team they were able to become the champions. When I was leaving Brazil for Iraq I asked Pelé whether he would sign two T-shirts: one of Santos Football Club and the other of the Brazilian National Team, respectively with the messages: To Iraq, all the best, Pelé; and I wish peace to Iraq, Pelé. So I gave the first one to al-Jaafari together with the DVD Eternal Pelé about his history and his best games.

They were all very enthusiastic both about the proposal and the idea that soccer can bring people together. The women who are members of the Council of Representatives asked me to present in a more complete form the Citizen’s Basic Income to the Commission of Human Rights on Friday, January 18. They would especially like to discuss the proposal from the point of view of women. I immediately accepted to do it in the first available hour, 9 am of our third programmed day. After my presentation, partly in Portuguese, translated into Arab, partly in English, (since many of them understood English, we moved to the large table with available seats for more than 40 people to have an Arab dinner. During the informal conversation I had the opportunity to learn more about Iraq and to answer questions about the viability of the basic income.

After the dinner, around midnight, we had the news that due to the religious festivities of the next two days, the Ashura, -when more than 10 million Iraqis all over the country go out to the streets- there would be a curfew. During the 18th and 19th of January it would be impossible for us to move from the compound and nobody would be able to go from their residence to meet us. We would only be able to fly again out of Baghdad on Sunday, January 20. I wanted very much to stay until Sunday, but Ambassador Bernardo de Azevedo Brito explained to me that it would cost a lot more and it wouldn’t be productive. Therefore we wouldn’t be able to do some of the already set meetings as the conversation with the Catholic Cardinal Emmanuel Delly III, nominated by Pope Bento XVI in 2007; with the President of the Economic, Investment and Reconstruction Commission of the Council of Representatives, Yonadam Kanna and his colleagues; with the Commission of Human Rights and with the Dean of the University of Baghdad, Mousa al-Musawi and his colleagues. Since we were reducing by one day the previously planned three-day-visit, the security company reduced part of what would be the cost of the third day. The costs of my trip were paid by the Council of Representatives of Iraq, although advanced by the Brazil-Chamber of Commerce and Industry. There were no expenses paid by the Brazilian Senate.

On January 17 we were received at the residence of the Speaker of the Council of Representatives, Mahmoud al-Mashhadani. Unlike the custom of receiving in formal attire authorities in the Council of Representatives, at home he was dressed with the Arabic traditional attire. He said that normally during the past two years he received authorities in his office in the Parliament. At home he receives only his family and close friends. In my case, however, he was receiving me at home because I came from a very friendly country, Brazil, that is an example for Iraq of how people from so many different origins were able to live in harmony and because we were able to have a peaceful democratization of the political system. Also, he added, because I had come to Baghdad to explain a relevant proposal to the benefit of Iraq knowing that there were some risks involved in that trip. Therefore he was receiving me as a true friend of Iraq.

I gave to him the Brazilian National soccer team shirt with Pelé’s message, I wish peace to Iraq, as well as the Pelé Eterno DVD, produced by Anibal Massaini, for the Iraqis to learn how to play even better. Again I made the parallel between how important for the players of the team to harmonize their behavior with how a basic income could help all the people to have a sense of living with solidarity based on the applications of the principles of justice with the existence of an unconditional basic income.

But would the Basic Income be paid to all citizens? Including President al-Mashhadani in Iraq, Pelé, Senator Suplicy and the most successful entrepreneurs both in Iraq as well in Brazil? Yes, I explained. But why, he continued, if we don’t need it for our survival? Because we will contribute relatively more for ourselves and for everybody else in society to receive the Citizen’s Basic Income.

Which are the advantages? We will eliminate all the bureaucracy involved in having to know how much is earning in the formal, as well in the informal market; we will eliminate the stigma or feeling of shame of anyone having to say: I receive only that, so I need a complement of income; we will also eliminate the dependency phenomena that results from a system that says that one will receive a complement of income if his or her income doesn’t attain a certain level. Then the person evaluates that if he or she starts some work and looses what the government was giving in that program, then the person might decide not to work anymore, and you produce the unemployment or poverty traps. Mainly, from the point of view of dignity and freedom of anyone it will much better to know beforehand that in the next period and more and more, with the progress of the nation, you and all members of your family will have the right to receive a Basic Income as a citizen’s right to participate in the wealth of the nation. Once more, I tried to explain how Iraq was in an excellent position to follow the example of Alaska of using the proceeds of oil exploitation to build a fund that would pertain to all 30 million Iraqis and more in the future.

In the final part of our friendly conversation, I told President al-Mashhadani about my speech from the Brazilian Senate tribune on September 2002, when the US Government was considering to attack Iraq to put an end to Saddam Hussein’s regime. Taking into account the popular movements for peaceful actions all over the world I started my speech quoting The Bomb, a beautiful poem by our great poet Carlos Drummond de Andrade in which after speaking about the horrors of the war he concludes saying of his hope that finally man will destroy the bomb. Then, I asked President George W. Bush to pay attention to the recommendations of Martin Luther King Jr. in his I Have a Dream speech of 1963, where he recommended his people not to accept to drink the tea of gradualism of those who say that things will become better with time, because if we don’t do the necessary changes, as soon as possible, America would live another sweltering Summer. But he also said that we should never drink from the cup of violence, hate, vengeance and war; that we should always confront physical force with the force of the soul.

President Bush didn’t listen to my appeal, although I had argued that we Brazilians had shown that we were able to finish a dictatorship through peaceful demonstrations. I could feel that he was really moved. He told me that the Iraqis want very much the American and foreign occupation to finish very soon. He said very assertively that the Council of Representatives, where there are many young people, will approve a proposal of a Basic Income, and that he wanted me to return again to Iraq to help in this process. He asked me to tell the family of Sergio Vieira de Mello that the Iraqi people feel that they are in debt with this Brazilian that lost his life when helping to pacify Iraq. That they have great respect and admiration for him and that soon there will be a special homage by Iraq for Sergio.

Our last meeting was with the Minister of Foreign Affairs, Hoshyar Zebari, as well with the Vice-Chancellor Labeed M. Abbawi. They mentioned how happy they were to receive a Brazilian Senator and that they want very much to increase Iraqi-Brazilian relations in all fields. In fact, the Minister of Commerce of Iraq is expected to visit Brazil soon.

Ambassador Bernardo de Azevedo Brito told me the he considered our journey very productive, in spite of becoming shorter than initially planned. He is continuing to work on the matter of our conversations with the Iraqi authorities. The President of the Economic, Investment and Reconstruction Commission, Yonadam Kannan visited him in A’mman in the following week.. The President and the Vice President of the Iraq-Brazil Chamber of Commerce and Industry, Jalal Jamel Dawood Chaya and Nawfal Assa Mossa Alssabak considered the trip “a great success, with an excellent repercussion all over in Iraq with the real interest of the several parts in approximating both countries”, as expressed in the attached letter of January 30, 2008.

Near us we did not see any menace or sign of violence during the time we were in Bagdad. Anyway it is relevant to mention that the Iraqian press registered on the 18th of January that one day before the reception at Mr. Al-Jaafari’s residence two mortars fell at a 1km distance from the place. Also, in the following week, unfortunately, due to suicide women, two bombs exploded at one popular market in Bagdah killing 73 persons and injuring more than 100 people. I have heard from the Irakians that in general those that are responsible for these violent attacks know exactly who they are trying to hurt and that they are very precise. I might have been somehow optimistic, but I was sure of not being the target of any kind of violence since the motive of this trip was exactly to propose an instrument that may contribute to more justice in that nation.

An Invitation to Present the Basic Income to East Timor
A few days after my return to Brazil, Carolina Larriera invited me for a reception in Rio de Janeiro for the 1966 Nobel Peace Prize, President of East Timor. On the occasion he gave his testimony about Sérgio Vieira de Mello contribution for peace during the transition period between Independence, the election of the Constitutional Assembly and the elections in this new Nation born in 2002 and about his own efforts to normalize de political situation in East Timor after the turmoil period of 2006 when episodes of violence occurred. I explained to him about my trip to Irak. He invited me for breakfast on the next morning.

For almost one hour I explained to him what the Citizen’s Basic Income was. That a new nation like East Timor with 1.1 million inhabitants that is now having a monthly revenue of around US$ 100 million from oil and gas exploitation may also build a fund that, with time, starting modestly, will be able to pay a basic income to all the people. He classified the idea as fascinating and said that he would like me to be in East Timor to explain it to the Prime Minister Cabinet as well as to the Parliament. On the next day, January 30, just before leaving Brazil back to East Timor, he called me confirming the invitation saying that the best hour would be at the end of March during a meeting in Dili with representatives of all donor countries. I said that I was honored by the invitation and would be happy to accept it.

Unfortunately, on February 10, President José Ramos Horta was victim of a violent attempt. As I write this article he is recovering from a very serious surgery that extracted from his stomach and lung two bullets. Here I express my deep solidarity for his family and the people of East Timor, wishing and praying for his prompt recovery. For example: please note how long it takes for me to explain the Bolsa Familia Program that exists in Brazil since October 2003, considering the values in effect since September 2009. Every family in Brazil with a monthly income per capita below R$ 140 has the right to receive a benefit that starts with the monthly amount of R$ 68, if this family has a monthly family income per capita below R$ 70. (In April, 24, 2010, US$ 1.00 was equal to R$ 1.76). This family also has the right to receive R$ 22, R$ 44 or R$ 66, if the family has, respectively, one, two, three or more children up to 16 years of age, more R$ 33 for each adolescent, from16 to 18 years of age, up to a maximum of two. So, the Bolsa Familia Program pays a minimum of R$ 22 and a maximum of R$ 200 per month. The average amount of the benefit is R$ 95 per family. The expenditure with the Bolsa Familia Program for 2009 was R$ 12.1 billion. The budget estimated for 2010 is of R$ 13.6 billion.

The average size of the Brazilian family is 3,5 persons. It is a little higher, around 4, for the families that are beneficiaries of the program. There are obligations to be fulfilled. If the mother is pregnant, she should go to the public health network – a health post or the municipality hospital – for exams and health conditions follow-up. Parents should take their children up to six years of age to be vaccinated according to the calendar of the Ministry of Health. The children from 7 to 16 years of age should go to school, with at least 85% attendance. The adolescents from 16 to 18 years of age should attend school, with at least 75% attendance.

Now let me explain the Basic Income. Let us suppose that, starting from next January the government announces that the Citizen´s Basic Income will be launched, even with a modest amount, higher than what is paid to the people granted with the Bolsa Familia Program. So the government would declare: Starting from next January, everyone in Brazil, including the foreigners living here for more than five years, regardless his/her social or economic condition, will receive R$ 40 per month. In a family with six members, the total will be R$ 240. With the progress of the country, this amount will be raised, we shall say to R$ 100, someday to R$ 500, R$ 1,000 and so on. It will not be denied to anybody. It will be unconditional. Isn’t it much easier to understand?

And which are the other advantages in paying the same amount to everyone? First, the elimination of all bureaucracy involved in knowing each person’s income in formal or informal market. That is, in the working card of the worker, public servant or in the payment made to anyone in any activity. Or in not registered payment, as those paid to people who take care of cars in the streets, to a neighbor who does your laundry or takes care of your children, while you go to work, or to the market or to street vendors. Elimination of any stigma or shame for a person to reveal: I earn only this much, so I need a complement of income for my survival. Elimination of the dependency phenomenon that occurs when there are programs that say: if a person does not receive up to that amount, he or she has the right to receive a complement of income. But if the person receives such a sum for the job and then the government cancels that much from him from that program then the person might decide not to do that job. And so he or she gets into the unemployment or the poverty trap. If all of us, meanwhile, know that from now on, everyone and all the members of our families have the right to a Citizen’s Basic Income, any work that we do will mean an addition to our income. Thus, there will be always an incentive for progress.

The most important advantage of the Citizen’s Basic Income is that it raises everyone’s level of dignity and freedom. In the sense that the Nobel Prize Winner Amartya Sen says, in “Development as Freedom”, that development, to be worthwhile, should mean higher degree of freedom for everyone in the society. It is the case, for example, of a girl who does not have another alternative for her survival than selling her body. Or a young man who, to support himself and his family is forced to work for the drug traffic gangs. Or even a rural worker who can only get jobs in slavery conditions. If there is a Citizen’s Basic Income in effect for these people and for everybody in their families, they can certainly refuse those alternatives, and wait a little while until an opportunity comes more in accordance with their propensity or vocation. They might even attend a professional course and get better chances to find an opportunity.

Some of you could think: would the Basic Income stimulate idleness? What should we do with those who have a strong tendency to vagrancy? Are there really a lot of them? Let us think a little bit. We, human beings, love to do a lot of things. And we feel responsible for doing different activities, even without being paid by the market. For example, mothers who breastfeed their children with lots of love; us, parents, when we take care of our children, to be well nourished, not to be hurt, and to grow up well; when our parents or grandparents need our support; in the local organizations, churches, academic associations where many of us have done voluntary works, because we feel helpful to the community. When the great painters, Vincent Van Gogh and Amedeo Modigliani painted their works, they went to the streets, trying to sell them for their survival, without any success. Both of them became ill and died early. Today their works are worth millions of dollars.

Furthermore, our Constitution assures the right to private property. That means that the owners of factories, farms, hotels, restaurants, banks, real estate and financial bonds have the right to receive the capital revenues, that is, the profits, rentals and interests. Do the Brazilian laws or of most other countries mention that to receive those revenues, the capital owners must demonstrate that they are working? No, and they usually work, and many of them also dedicate a good part of their time in voluntary works. Do they need to demonstrate that their children are going to school? No. Nevertheless, their children usually attend the best schools.

So, if we assure to those who have more resources the right to receive their revenues without conditions, why not extending to everyone, rich and poor, the right to participate in the nation’s wealth as our right for being Brazilians? Let’s consider certain aspects of our history. For more than three centuries, people were pulled away from Africa to come and work as slaves in Brazil, helping to accumulate capital of many families. Or, as President Lula has said, it seems that God is Brazilian, helping Petrobras to find oil reserves at the pre-salt layer in the depth of the Atlantic Ocean. Do you consider a good idea that all the Brazilians should participate in this wealth through a modest income that allows their survival, the same amount for everyone, as a citizen’s right?

It is a good sense proposal. Its bases were elaborated along the history of the human being and they are present in all the religions and in the thinking of a large spectrum of great philosophers, economists and thinkers. When you left your home today, did you pass through the window or any other way? Through the door? Well, as Confucius Said, 520 years before Christ that “uncertainty is even worse than poverty” and that “can anyone leave his home except through the door?” We want to demonstrate that, if we want to eliminate absolute poverty, becoming a more equal and fair society and assuring dignity and real freedom to everyone in the society, instituting the Citizen’s Basic Income is a solution as simple as leaving home through the door.

300 years before Christ, in the book “Politics” philosopher Aristotle taught that politics is the science that shows how to reach a fair life for everyone – the common good. For this, it is necessary political justice, which must be preceded by distributive justice that makes more equal those who are so unequal.

Which is the most cited Hebraic word in the Holy Bible, 513 times in the Old Testament? It is Tzedaka, which means social justice, justice in the society, which was the great longing of the Jewish people, as well as the Palestine people. In the New Testament, in the Acts of Apostles, we observe that they decided to join all their possessions, to live in solidarity, so as to provide to each one according to his/her needs. In Jesus’ parables, like in the Vineyard Landlord, we find similar principles. He hired several workers along the day. With each one he agreed what both considered fair. At the end of the journey he began to pay, starting with the last ones that had arrived, giving to everyone the same amount. When he reached the first peasant this one complained; you are paying the same to me as the last one that arrived here and I worked much more than he did. And the vineyard landlord answered; so, didn’t you realize that I’m paying exactly what we both considered fair, and that the last one that arrived here also has the right to receive enough for the needs of his family? In the Second Epistle of Saint Paul to the Corinthians, he recommends everybody to follow Jesus’ example. Despite being very mighty he had decided to join the poor people and to live among them. As it is written, in order to have justice and equality: “He that had gathered much had nothing over; and he that gathered little had no lack”.

Also the followers of Muhammad, the Qurán and the Islamism, in this aspect, adopt the similar principles. In the Hadith Book, the second of the four caliphs, Omar, said: Everyone that had big properties should separate a part for the ones who had little or nothing. In Buddhism, the Dalai Lama, in “Ethics for the New Millennium”, affirms that if we accept the luxurious consumption of the very rich we should ensure before the survival of all humanity.

If we advance in the History, in the beginning of the XVI Century, we will find the teachings of a great humanist, Thomas More. In 1516, he wrote a very nice book, “Utopia”, a place where everything works well. The story contains a dialog about capital punishment that, after being introduced in England, did not contribute to the reduction of violent crimes. So, the character commented that much better than inflicting these horrible punishments to whom does not have another alternative of becoming first a thief and then a corpse, is to assure everyone’s survival. Based on this reflection, a friend of Thomas More, Juan Luis Vives, wrote to the mayor of the Flemish city Bruges, a subvention treaty for the poor in which, for the first time, he proposed the guarantee of a minimum income.

Two centuries later, Thomas Paine, considered one of the greatest ideologues of the French and American revolutions, explained to the National Assembly of France, in 1795, in “Agrarian Justice”, that poverty is originated by civilization and private property. In America, where he had been before the independence, he didn’t see such deprivation and poverty as in the European villages and cities. But he considered a good sense that the person who cultivates the land and makes some improvement should have the right to receive the outcome of that cultivation. However, he should separate a part of this revenue to a fund that belongs to all. This fund, once accumulated should pay a basic capital and income to each resident in this country, not as a charity, but as a right of everyone to participate in the wealth of the nation that was taken away when private property was instituted. This was a proposal for all countries.

Another Englishman, an elementary school teacher, Thomas Spence, in a pamphlet published in London under the title “The Rights of Infants“(1797), proposed that each city should have auctions to cover all public expenditures including the building and the maintenance of real estate, as well as taxes paid to the government, that will distribute quarterly equal parts of the surplus among all residents ensuring their subsistence.

In 1848, Joseph Charlier, in “Solution du problème social”, stated that everybody has the right to enjoy the usufruct of natural resources created by the Providence to meet all their needs. In “Principles of Political Economy” (1848), the English economist and philosopher John Stuart Mill defended that a minimum for survival should be assured to everyone with or without capacity to work.

In the XX century, philosophers and economists of several tendencies, after examining several ideologies and proposals, reached for a common conclusion, as expressed by Bertrand Russel, in 1918, in “Roads to Freedom: socialism, anarchism and syndicalism”:

The plan we are advocating amounts essentially to this: that a certain small income, sufficient for necessaries, should be secured to all, whether they work or not, and that a larger income, as much larger as might be warranted by the total amount of commodities produced, should be given to those who are willing to engage in some work which the community recognizes as useful.

In 1920, in “Scheme for a State Bonus”, the couple Dennis e Mabel Milner proposed that: All individuals, all the time, should receive a small sum of money from a central fund that would be sufficient to maintain their life and freedom, should all else fail; that all people should receive a part of a central fund, in a way that all would have some sort of income to contribute proportionality to their capacity.

In 1937, the great economist Joan Robinson in “Introduction to the Theory of Full Employment”, suggested distributing to everybody on Saturdays, one pound sterling. Her fellow at the University of Cambridge, in England, who also had acquaintanceship with John Maynard Keynes and that, in 1977, was honored with the Nobel Prize in Economics, James Edward Meade, was one of the defenders of Citizen´s Income. Since when he elaborated the “A Guide of Economic Policy for a Labor Government”, in 1935, until the works in more matured way in his trilogy about Agathotopia, in 1989, 1992 e 1995, he developed a beautiful argumentation.

Meade related his long journey in search of Utopia. No matter how much he sailed, he did not succeed in finding it. On the way back, however, he came across Agathotopia. An economist, who became his friend told him the Agathopians knew where Utopia was, but they would not tell him because they were different from the Utopians, perfect human beings who lived in a perfect place. The Agathopians were imperfect human beings that committed foolishness and perfidies, but that after all, had succeeded in building a good place to live.

Meade observed that in Agathotopia they had built institutions and social arrangements that were the best to attain simultaneously the objectives of freedom, in the sense that each one is able to work in his/her vocation and is able to spend what he/she receives on the goods that he/she wants; equality, in the sense that there are no great differences between income and wealth; and efficiency, in the sense to reach the highest possible life pattern with the resources and the technology in effect.

And what were the arrangements? Flexibility in prices and wages to reach the efficiency in resource allocation: forms of association between the entrepreneurs and the workers so that the workers were hired not only for wages, but also for output participation; and finally, a social dividend that provides a guaranteed income for everyone. Meade proposed the achievement of these objectives by stages, but with firm steps.

The greatest economist of the 20th century, John Maynard Keynes, in 1939, in “How to Pay for the War?”, published in “The Times”, tried to convince his compatriots, before entering into the war, that they should get ready for the defense, and also, to separate around 2% of the Gross National Product, thus 100 million sterling pounds from a total of 5 billion to ensure everyone a basic income.

Abba Lerner, who worked with Oskar Lange in “On the Economic Theory of Market Socialism”, in 1944, published “The Economics of Control: Principles of Welfare Economics”, containing the proposition of institution of a fixed sum as a negative income tax for everybody.

Other economists honored with the Nobel Prize in Economics, defenders of the market system, argued in favor of the guaranteed minimum income for those who do not have the necessary for survival. So did Friedrick Hayek, in “The Road to Serfdom”, in 1944. George Stigler, in “The Economics of Minimum Wage Legislation”, in American Economic Review, 36, of 1946, observed that if we want to eradicate absolute poverty and promote employment, better than a minimum wage, should be the institution of a negative income tax, which should provide a minimum income to those who do not reach the necessary with his/her income. The same subject, was popularized in a very didactic way by Milton Friedman, in “Capitalism and Freedom”, in 1992. Also the Nobel Prize James Tobin made a great effort in the elaboration and defense of a guaranteed minimum income through a negative income tax during the sixties and seventies. James Tobin in many aspects was different than Friedman, because he was a defender of the Keynes propositions. In 1972, James Tobin helped the democrat candidate George Mc Govern in the elaboration of the proposition of one “Demogrant” of US$ 1.000 per year for all Americans, exactly the concept of a basic income.

James Tobin, Paul Samuelson, John Kenneth Galbraith, Robert Lampman, Harold Watts and 1200 economists, in 1968, sent a manifest to the U.S. Congress in favor of the adoption of a complement and guaranteed income. In 1969, President Richard Nixon invited Daniel Patrick Moynihan, an architect of social programs of the governments of John Kennedy and Lyndon Johnson, to design the Family Assistance Plan, which institutes the guaranteed minimum income through a negative income tax. It was approved by the House of Representatives, but obstructed by the Senate. On that time, one who made a great effort in the defense of a guaranteed income was Martin Luther King Jr, as we can observe in his several essays in “Where Do We Go From Here: Caos or Community?”, of 1997, where he affirms, “I am now convinced that the simplest approach will prove to be the most effective – the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income”.

In 2005, while I was in USA, I called on ex-Senator Mc Govern, who had lost the presidential elections for Richard Nixon, in 1972, to tell him that Brazil had approved the institution of the Citizen’s Basic Income, a similar concept to what he defended in 1972. He was very happy and told me, “People say that I was a man with ideas before my time”.

In 1974, the US Congress approved a proposal of a partial negative income tax, only for those who work and do not reach a certain level of income, under the name of Earned Income Tax Credit, which had an important development. Today more than 23 million families receive this income complement that amount more than two thousand dollars per year in average. This scheme is added to the Aid for Families with Dependent Children, replaced in 1996, by Temporary Assistance for Needy Families, to Unemployment Security, to Food Coupons, and to Social Security. In the last decades, almost all European countries created income guarantee and transference schemes, like the Minimum Income of Insertion, in France, Minimum Familiar Income, in Portugal, and child benefits in a very general way. In the Latin-American countries, conditional income transference schemes spread out, like Oportunidades in México, Chile Solidario, in Chile, Jefes and Jefas del Hogar, and more recently,Asignación Familiar, in Argentina, Avancemos in Costa Rica and Ingreso Ciudadano in Uruguai.

In 1986, in Louvain, Belgium, a group of social scientists, economists and philosophers, among them Philippe Van Parijs, Guy Standing, Claus Offe, Robert van der Veen, created BIEN, Basic Income European Network, to constitute a debate forum of forms of income transference in several countries, and to propose that in every country an Unconditional Basic Income should be instituted. Since then, every two years BIEN has held international congresses. In 2004, during the congress held in Barcelona, as there were researchers from the five continents, they decided to change BIEN into Basic Income Earth Network. During the 12th BIEN International Congress, in Dublin, in June 2008, a question was asked to us, Brazilians, whether we could host the next 13th BIEN International Congress. So it was defined that the 13th Congress will be held at the Faculdade de Economia, Administração e Contabilidade da Universidade de São Paulo, FEA-USP, in June 30th, July 1st and 2nd, 2010. President Luiz Inácio Lula da Silva accepted to deliver the inaugural speech of the event.

In the early sixties, in a fishermen’s village, the mayor observed that a huge amount of wealth under the form of fishing was produced, but many of its inhabitants were still poor. So he told its inhabitants about creating a tax of 3% on the value of fishing for the institution of a fund which belongs to everybody. He faced a great resistance: “Another tax? I´m against it”.

It took five years to persuade the community. Once instituted, it was so well succeeded, that ten years later he became the governor of the State of Alaska, where they discovered a large oil reserve in the late sixties. In 1976, Governor Jay Hammond told his 300 thousand co-citizens: “We should think not only about this current generation, but about the forthcoming one. Oil, like other natural resources is not renewable. So let us separate a part of the royalties originated from the natural resources for the constitution of a fund that shall belong to all residents in the state of Alaska. By 76 thousand votes for and 38 thousand opposed, 2X1, the proposal was approved. The law separates 25% of the revenue coming from the natural resources exploitation and invested in US bonds, Alaska´s companies stocks, contributing to diversify its economy, USA and international companies stocks, including some of the 30 most profitable companies from Brazil, like Petrobrás, Vale do Rio Doce, Itaú and Bradesco, which means we Brazilians are contributing to the success of this system, and real estate. The equity of the Alaska Permanent Fund increased from US$ 1 billion, in early eighties to US$ 40 billion recently. In 2009 it decreased because of the economic crisis, but is already in recovery.

Each person living for one year or more in Alaska could filled a one-page form, between January 1st to March 31th, that included his/her business and home address, if he/she lived there for one year or more, even if he/she had travelled, the number of people in the family up to 18 years of age, not being necessary to inform his/her income or possessions, a few more data and the witness of two persons about the veracity of the information. Who did that, since the early eighties, every year until the beginning of October, received in his bank account, by electronic transfer, or by a check sent to his house, first around US$ 300 and gradually more, up to US$ 2.069 per person in 2008. In 2009, the sum decreased to US$ 1305, because of the economic crisis that affected the economy and reduced the oil and stock prices in the New York Stock Exchange.

As shown by Professor Scott Goldsmith’s, of the University of Alaska, in Anchorage, in his paper presented in the IX BIEN International Congress, in 2002, in Geneve, the FPA has distributed around 6% of the Gross Domestic Product during the last 27 years to all its inhabitants – presently, there are about 700 thousand, among which 611 thousand complied with the requirements in 2008 – and has made Alaska the most equalitarian of the 50 American states. If in 1976 a referendum approved the proposal in the ratio of two to one, Goldsmith observes that, presently, proposing the end of the dividend system of the Permanent Fund of Alaska is political suicide for any leadership.

During the period 1989-99, while the per capita family income of the 20% richest families in USA increased 26%, the per capita income of the 20% poorest families increased 12%. In Alaska, due to the dividends paid equally to all its inhabitants, the increase of the per capita family income of the 20% richest families was 7%. The increase of the per capita family income of the 20% poorest families was 28%, thus 4 times more. This means that for the objective to reach a more fair society, the experience has been very successful. These results were shown by Scott Goldsmith in his lecture to the XI International Congress of BIEN, in Geneva, 2002. He mentioned that today it is political suicide for a political leader to propose the end of the Alaska Permanent Fund Dividend system.

In 1999, professors Bruce Ackerman and Ann Alstott, from the University of Yale, published the book “The Stakeholder Society”. Based on the proposal of Thomas Paine, they proposed that everyone in USA when turning 21 should have the right to receive a sum of US$ 80 thousand to start his/her adult life with the possibility to spend in anything that he/she wants, to conclude his/her studies, to start an enterprise or any other thing. One of his post-graduate students, member of the Fabian Society presented the idea to his personal friend, the former First Minister Tony Blair. When Blair announced that his wife Cherie was pregnant of their fourth son, Alexander, he said that from that time on every child born in England would receive a bank deposit when the child is born and completes 6, 11 and 16 years of age, respectively the amounts of 250, 50, 50 and 50 sterling pounds. If the child’s family had an annual familiar income below a certain level, near to 17 thousand sterling pounds, those amounts should be 500, 100, 100 and 100 pounds sterling respectively. As these deposits earn interests, when the person turns 18, he/she would have an amount near to 4 thousand or 5 thousand pounds sterling, as a right to participate in the wealth of the nation. Under the name of “Child Fund Trust”, this law was approved by the United Kingdom Parliament on May 13th, 2003. Finally, in his birthplace, the proposition of Thomas Paine, formulated in 1795, was applied, even modestly.

In Brazil, we could consider the institution of the Citizen’s Basic Income as consistent with the values defended by the indigenous living in community, by the fighting “quilombolas” and abolitionists for the slavery abolition and by all those researchers and scientists who fight for the creation of a fair nation in Brazil. Among those we can cite Caio Prado Junior, Milton Santos, Josué de Castro and Celso Furtado. In 1956, as the federal deputy of PTB, in a speech in the Chamber of Deputies about the income unevenness, the author of “Geografia da Fome” and “Geopolítica da Fome”(Hunger Geography and Hunger Geopolitics), Josué de Castro, affirmed:

I defend the need of giving the minimum to each one, according to the right that all Brazilians should have the minimum for their survival.

It was during the years of 1966-68, when I studied for my Master´s Degree in Economics at the Michigan State University, USA, that I came across with the concept of the income guarantee through the negative income tax. When I did my Doctorate in Economics at the MSU, with 15 months of studies at the University of Stanford, USA, I became more acquainted with the concept. When I went back to Brazil, I interacted with professor Antonio Maria da Silveira, who, in 1975, in Revista Brasileira de Economia, proposed the institution of negative income tax in Brazil in the article “Moeda e redistribuição de renda” (Currency and Income Redistribution).. When I was elected Senator by PT-SP, for the first time in 1990, I called Professor Antonio Maria to collaborate in the proposition of the Guaranteed Minimum Income Scheme, PGRM. Every adult person, of 25 years or more, who does not earn at least 45 thousand cruzeiros per month, should have the right to a complement of 30% to 50%, under the criterion of the Executive Power, of the difference between that level (in that time, about US$ 150 per month) and the income level of the person. The project was approved by the Federal Senate, by consensus of all parties, on December 16th, 1991. It went to the Chamber of Deputies, where, at the Committee of Finance and Taxation, received an enthusiastic written opinion from Deputy Germano Rigotto (PMDB-RS).

Then, the debate on the subject flourished in Brazil. In 1991, during a debate among approximately 50 economists with affinity to PT, held in Belo Horizonte, where, invited by Walter Barelli, Antonio Maria da Silveira and I presented the proposal of the PGRM. Professor José Márcio Camargo, from PUC-Rio de Janeiro, observed that the guarantee of a minimum income is a good step, but should be granted to needy families, with children in school age attending school regularly. So, they would not be forced to work early to help their family maintenance. He wrote two articles about the subject in the newspaper “Folha”, in December 3rd, 1991, and in March 10th, 1993. In 1986, Professor Cristóvam Buarque, from Universidade de Brasília, developed a similar proposal.

So in 1995, taking into consideration these thoughts, Mayor José Roberto Magalhães Teixeira (PSDB), in Campinas, and Governor Cristóvam Buarque (PT), in Distrito Federal, started their minimum income schemes associated to education opportunities, the Bolsa-Escola. Every family that, at that time did not receive up to half minimum wage monthly per capita, that is 70 reais, would have the right to receive the difference to complete the 70 reais per capita, in Campinas, or one minimum wage, in Distrito Federal. Those experiences spread out by several municipalities, such as Ribeirão Preto, Piracicaba, Jundiaí, São José dos Campos, Belo Horizonte, Belém, Mundo Novo etc.. In the National Congress, several bills of law were presented, requiring the support of the Federal Government for the municipalities that were going towards this direction.

In 1996, I took Professor Philippe Van Parijs, philosopher and economist who has defended very well the Citizen´s Basic Income, for an audience with President Fernando Henrique Cardoso and the Minister of Education, Paulo Renato Souza, attended also by Representative Nelson Marchezan, one of those proponents. Van Parijs expressed that unconditional basic income should be a better objective, but starting a minimum income guarantee associated with education opportunities was a good step, because it was related to human capital investment. It was then when President Fernando Henrique Cardoso gave the positive sign for the National Congress to approve the Law 9.533, of 1997. The law authorized the federal government to grant a financial support of 50% on the amount spent by the municipalities with minimum income associated to social and education actions schemes.

In March 2001, the National Congress approved and President Fernando Henrique Cardoso sanctioned a new law, of his initiative, Nr. 10219/2001, authorizing the federal government to celebrate agreements with the government of all Brazilian municipalities to adopt the minimum income associated to education al opportunities, or Bolsa Escola. The President gave the name José Roberto Magalhães Teixeira to the law, in homage to the Mayor of Campinas who had passed away. Later on, the government instituted the Bolsa-Alimentação and the Auxílio-Gás programs. In 2003, the government of Luiz Inácio Lula da Silva instituted the Vale – Alimentação program.

In October 2003, the government of President Lula decided to unify and rationalize the several programs such as Bolsa Escola, Bolsa Alimentação, Cartão Alimentação and Auxílio Gás in the Bolsa Família Program, which had 3.5 million families registered in December 2003. The number increased to 6.5 million families in December 2004, 8.5 million families in December 2005 and 11 million families in December 2006, and 12.5 million families in December 2009.

The Bolsa Família Program, among other economic policy instruments, contributed for the reduction of absolute poverty and inequality degree in Brazil. According to the studies of IPEA, Instituto de Pesquisa Econômica Aplicada number 30, PNAD 2008, First Analysis, of September 24th, 2009, the Gini coefficient of inequality of domestic income per capita, which reached 0.599; in 1995, 0.581, in 2003; decreased gradually every year, reaching 0.544 in 2008. The proportion of families under extremely poor line, with income per capita below R$ 93.75 which was 17.5% in 2003, decreased to 8.8% in 2008. The proportion of poor families, with income per capita below R$ 187.50, decreased from 39.4% in 2003, to 25.3%, in 2008.

This favorable result can also be shown by the following way. The 20% poorest families had an income per capita increase 47% faster than the income of the richest 20%. While in 2001, the average income of the 20% richest families was 27 times in relation to the 20% poorest families, in 2008 it was 19 times, a reduction of 30% in inequality in 7 years.

Brazil, despite the achieved progress, is still one of the countries more unequal in the world. While the poorest 40% live with 10% of the national income, the richest 10% live with more than 40%. The income appropriated by the 1% richest is the same as of the 45% poorest. The creation and expansion of the Bolsa Família Program, preceded by Bolsa Escola, Bolsa Alimentação and others, had positive effects. To advance towards a more efficient and direct eradication of the absolute poverty and greater equality and the guarantee of greater real freedom for all is the reason for the application of the Citizen´s Basic Income.

During the nineties, more and more I interacted with the researchers who founded BIEN, participating in the bi-annual congresses. I was convinced that better that an income guarantee through a negative income tax, or conditioned forms, should be an unconditional Basic Income for all the population. For this reason, in December 2001, I presented a new bill of law to the Senate for the institution of the Citizen´s Basic Income, CBI. The designed committee reporter, Senator Francelino Pereira (PFL-MG), after having studied the proposition, told me: Eduardo, it is a good Idea. But you have to make it compatible with the Fiscal Responsibility Law, where for each expenditure, it is necessary to have the correspondent revenue. Would you accept a paragraph saying that it will be instituted step by step, under the criterion of the Executive Power, starting with the most in need, as it is done by the Bolsa-Escola, and then the Bolsa Família Programs, until it is extended to everyone someday? I thought that it was a good sense, I remembered the recommendation of James Meade, and I accepted. Due to this aspect the bill of law was approved by consensus by all parties in the Senate, in December 2002, and in December 2003, by the Chamber of Deputies. In January 2004, the Minister of Finance, Antônio Palocci when consulted by President Luiz Inácio Lula da Silva, said that since it is to be instituted gradually, it was feasible, so he may sanction it. Therefore, on January 8th, 2004, the President sanctioned the Law 10.835/2004, creating CBI. On this day, he received the following message from economist Celso Furtado:

At this moment when Your Excellency sanctioned the Citizen’s Basic Income Law I want to express my conviction that, with this measure, our country puts itself in the vanguard of those that fight for the building of a more harmonious society. Brazil was frequently referred as one of the last countries to abolish slave labor. Now with this act which is a result of the principles of good citizenship and the wide social vision of Senator Eduardo Matarazzo Suplicy, Brazil will be referred as the first that institutes an extensive system of solidarity and furthermore, it was approved by the representatives of its people

In the same way as the first minimum income associated to education programs started locally, in Campinas and in the Federal District, it is possible to start the Citizen’s Basic Income in communities or municipalities.

Among the developing countries, a significant experience started in Namíbia, in the village Otjivero/Omitara, 100 km from the capital Windhoek, in January 2008. All its 1000 inhabitants of this rural village, since then, started to receive 100 Namibia dollars, or about US$ 12, per month for each citizen. The initiative was taken by the Coalition in Favor of Basic Income of Namibia, which has one of its enthusiasts, Bishop Zephaniah Kameeta, from the Lutheran Church, and who collected voluntary contributions from several sources, including from the Workers Union in the Federal Republic of German, to get the necessary fund. The magazine Der Spiegel of August 2009, published an extensive report about “How A Basic Income Scheme Saved a Namibian Village”, where it stressed lots of positive effects of the experience. The economic activity improved, lots of micro entrepreneurial initiatives started, absolute poverty diminished, the frequency of children in schools increased, the nutrition degree improved, the self esteem of the people increased, and there was a great interest of the society in the pioneer experience.

In Brasil, Recivitas – Instituto pela Revitalização da Cidadania, after having created in Vila de Paranapiacaba, on Serra de Mar, with 1.200 inhabitants, a Free Library and a Free Toy Center, so that people could have access to books and toys for their usufruct, decided to propose to its inhabitants the creation of the Citizen’s Basic Income. The President, Bruna Augusto Pereira and the coordinator Marcus Brancaglione dos Santos are waiting for the steps of the Mayor of Santo André, where the village is located, to carry on the project. While waiting, they started a pioneer experience in the village Quatinga Velha, in Mogi das Cruzes, where, since the beginning of 2009, they have paid R$ 30 per month to 61 persons.

Another propitious experience is taking place in Santo Antonio do Pinhal, in Serra da Mantiqueira, 177 km from São Paulo, on the way to Campos de Jordão. There, on October 29th, 2009, the Municipal Chamber, by consensus of its nine councilmen, approved the Municipal Bill of Law for a Basic Income, proposed by Mayor José Augusto Guarnieri Pereira, from PT, elected in 2004 by 55% of the votes and reelected in 2008, by 79.06% of the votes. The law was sanctioned by the Mayor on November 12th, 2009. It is the first, among the 5.564 Brazilian municipalities which approved a law instituting the CBI. Its first article declares:

With the purpose to turn Santo Antonio do Pinhal into a Municipality that harmonizes sustainable social and economic development with the application of justice principles, meaning the solidarity practice among all its inhabitants, and, above all, to grant a higher level of dignity to all its inhabitants, the Citizen´s Basic Income of Santo Antonio do Pinhal – CBI is instituted, consisting in the rights of all registered residents or residents in the Municipality for at least 05 (five) years, regardless of their social and economic status, to receive a monetary benefit.

Exactly as the federal law, it will be the same amount for everyone and sufficient to meet the minimum vital needs of each person, taking into account the development level of the municipality and its budgets possibilities. It will be attained by stages, upon the criterion of the Conselho Municipal de RBC, giving priority to the most needed segments of the population.

To finance the payment of the CBI, a Municipal Fund will be created with the following sources: 6% of the tax revenues of the municipality; donations from individuals or corporations, public or private, national or international; money transfers from the State of Federal Government; yields generated by the investment of the available funds and other resources. Santo Antonio do Pinhal, with 7.036 inhabitants (in 2008, according to IBGE), a half in the rural area and another half in the urban area, has 60 lodging houses, corresponding to 1,300 beds, 32 restaurants, small and medium farmers, artisans and several activities in the commerce and industry. There are good schools and low criminality index, zero homicides.

It is perfectly possible that the visitors, who on season holidays fill up the lodging houses and restaurants, feel enthusiastic to contribute for the pioneer achievement of the CBI and the principles of justice elaborated by philosopher John Rawls in “A Theory of Justice” (1971). According to Professor Philippe Van Parijs, in “Real Freedom for All” What (if anything) may justify capitalism?” (1995) Oxford, the CBI is one of the instruments that contribute for the realization of these three principles:

1. Each person is to have an equal right to the most extensive system of equal basic liberties compatible with a similar system of liberty for all (the principle equal liberty);

2. The inequalities of social and economic advantages are justified only if (a) they contribute to the improvement of the less advantaged of the society (the principle of difference), and if (b) they are linked to positions that everybody has equal opportunities to occupy (the principle of equal opportunities).

To turn the CBI feasible, it would be necessary to obtain a great amount of resources. If we want to give a farther better than the Bolsa Família, even modest, we should begin with at least an amount higher than the average paid by this scheme, R$ 95 per family, what means something like R$ 31.66 per person in a family of three members. So, if we think about a CBI of R$ 40, it would be R$ 240 per month in a family of 6 members. In 12 months, the yearly amount would be R$ 480 per person. If we multiply to consider 192 million of Brazilians in the beginning of 2010, we would need R$ 92.160 billion, something around 3.5% of the Gross National Product of R$ 2.6 trillion in 2009, about 6.7 times the Bolsa Familia budget of R$ 13.6 billion for 2010, a considerable leap.

R$ 40 per month is a modest amount, but along the time, with the progress of the country and the growing approval from the population, the CBI could turn into somewhat as 100, someday R$ 1.000 and so on. A way to make it feasible is the creation of the Citizen’s Brazil Fund, according to the Bill of Law nr. 82/1999, which I presented to the Senate. It was already approved by consensus by the Senate, and is in legal procedures in the Chamber of Deputies, where it was already approved by the Committee of Family and Social Security and is waiting for the written opinion of Deputy Ciro Gomes (PSB-CE), at the Committee of Finance and Taxation. This Fund is constituted by 50% of the resources generated by authorization or concession of the natural resources exploitation; 50% of the revenues from rentals of the Government real estate, which belong to all the population; 50% of the revenues generated by the concession and services and public works and other resources. The output generated by the investments of the Fund resources, like the Alaska Permanent Fund, will be used to pay CBI to all the Brazilian residents

Especially when more people understand how CBI could contribute for the construction of a fair and more civilized Brazil, more voices will be saying to the President of the Republic, to the Governors and Mayors: It is a good proposal. Let’s put it into practice right away. How are the 2010 election presidential candidates and their parties viewing the perspective of the CBI?

During the IV National Congress of the PT in Brasilia, February 19-21 of this year, by the unanimous vote of the 1.350 delegates, the following point was added to the National Program of Dilma Rousseff who was acclaimed Presidential candidate by consensus:

“The Great Transformation

The accelerated growth and the fight against racial, social, regional inequalities and the promotion of sustainable development will be the axis of the economic development structure.

19) The expansion and the strengthening of the popular consumption goods, that produces strong positive impact over the productive sector system, will be attained by:

a)…

f) permanent improvement of the income transfer programs such as the Bolsa Família, to eradicate hunger and poverty, to facilitate access of the population to employment, education, health and higher income;

g) transition from the Bolsa Família Program towards the Citizen´s Basic Income, CBI, unconditional, as a right of every person to participate in the wealth of the nation, such as set by the Law 10.853/2004, a PT initiative, approved by all parties in the National Congress and sanctioned by President Luiz Inácio Lula da Silva in January 8, 2004.”

In July 2008, after visiting Iraq, under the invitation of the President of the National Assembly, and before attending the invitation of President José Ramos Horta from East Timor, to propose the CBI for them, I asked for an audience to Minister of the Civil House, Dilma Rousseff. For one hour and 45 minutes I had the opportunity to explain to her all the development and the advantages of the CBI, In conclusion, she said that it was very interesting. In December of that year, I told her that I understood well her personnal merits that had made President Lula to choose her as his candidate for succeeding him. And since she had shown herself in favor of the CBI, I would support her mainly to help her in implementing it.

Senator Marina Silva, the PV candidate, informed me that she is also in favour of the CBI and that she told of the main formulators of her program to consider it among the socio environmental policies. Therefore, Professor José Eli da Veiga, from the University of São Paulo, wrote in the Marina Silva´s presidential program:

Both the uses of natural resources as well as the negative impacts over the ecosystems – in its various forms – may generate contributions to a Fund that allows the distribution of an annual dividend to all Brazilians and foreign residents for an year or more. It is a form of effective participation in the wealth generated by the nation as a citizen’s right.

[1]Work for the XIII International Congress of BIEN at FEA/USP, June 30, July 1st and 2nd, 2010. This is a relatively simple text, summarizing what I explained in deeper detail in my books “Renda de Cidadania. A Saída é pela Porta” (Cortez Editora e Ed. Fundação Perseu Abramo, 6th. ed. 2010) and “Renda Básica de Cidadania. A Resposta dada pelo Vento” (L&PM, 3rd. ed. 2008). You may find a more complete bibliography in both books.

[2]Eduardo Matarazzo Suplicy is Senator from PT-SP, Professor in Economics at the Escola de Administração de Empresas e de Economia de São Paulo, from Fundação Getúlio Vargas, Ph.D. in Economics by Michigan State University, USA, author of the Bill of Law that originated Law 10.835/2004 which institutes the Citizen´s Basic Income in Brazil and Honorary Co-President of BIEN, Basic Income Earth Network.

CONTACT
Eduardo Suplicy
http://www.senado.gov.br/eduardosuplicy/
email : eduardo.suplicy [at] senador.gov [dot] br

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http://www.worldwatch.org/node/543
The Hidden Shame in the Global Industrial Economy
by Ed Ayres / December 15, 2003

Conquistadors
Where do the raw materials to build our paneled offices, airplanes, and cell phones come from? Maybe you really don’t want to know. A lot of them come from plunder, of a kind we’d like to think came to an end long ago. In the 16th century, Hernando Cortez sailed to Mexico seeking gold for the Spanish empire. He found a lot of it, and seized it without compunction, killing any Aztecs who stood in his way. Today, that kind of plunder may seem antiquated-abhorred by the community of nations. Of course, we still suffer the depredations of various transnational criminal cartels and mafias. But those are the exceptions, the outlaws. Today, no self-respecting nation or corporation would engage in the kind of brutal decimation of a whole culture, simply to seize its treasure, that Cortez did. Or would it?

In fact, the plundering of precious metals and other assets is far more prevalent today than in centuries past, and on a larger scale. Now it’s not just Spain and a few other military powers seeking global dominance, but scores of nations seeking cell phones and teak furniture, that are seizing materials from native cultures-some of these materials in quantities that the conquistadors could never have imagined. Now it’s not just silver and gold, but coltan (for those cell phones), copper, titanium, bauxite, uranium, cobalt, oil, mahogany, and teak. And now, in place of the extinguished Aztecs and other now decimated cultures, it’s hundreds of still surviving cultures that are being overrun, in perhaps a hundred countries. And most significantly, while the looting is still done by invaders from across the oceans, it is often sanctioned and facilitated by the victimized peoples’ own national governments.

But while the plunder is greater now, it is in some respects less openly pursued and less visible than it would have been for Cortez, had the technology to observe it been available in his day. The conquistadors would likely have reveled in seeing their exploits shown on TV. Today such publicity is avoided, for compelling reasons: First, plunder usually entails invasion, and in the centuries since Cortez the world’s nations have moved toward nearly unanimous condemnation of unprovoked invasion-as reflected in their widely shared shock at the U.S. invasion of Iraq. There has been parallel progress in recognizing the wrongness of enslaving other people or simply killing them for their property. There’s an evolving appreciation of human diversity, and of the idea of a global (as opposed to European, or nationalist) community. Yet the incentives for seizing the wealth of others are as economically irresistible today as they ever have been, and the means of doing so are now far more widely available. So the seizing continues, but not necessarily by military assault. That’s not to say there aren’t still places where the job is done with outright killing, as the following pages will detail. In Indonesia, Sierra Leone, and Nigeria, there have been cases in which people who opposed extractive operations on their land were given Cortez-style removals from the discussion. But where the scrutiny of the global media is present, the means are more indirect, and appear to be accidental. People living near uranium mines that have left piles of radioactive waste on their land die of cancer in unusual numbers, and their children have unusual numbers of birth defects. Indians whose land has been taken over by oil-drilling operations are slowly poisoned by petrochemical contamination of their water and soil. Those living downstream from large gold mines find their drinking water laced with cyanide. Food sources are destroyed, as are sacred places-and people die of spiritual, as well as physical, deprivation. Those kinds of dying don’t make the evening news.

Second, the plunder is less visible now because it rarely need be witnessed by the people who end up with the wealth-the major purchasers of gasoline or gold chains or tickets to fly on aluminum-bodied planes. In gold rush days, the lucky miner who found a nice nugget could buy a fancy watch. In the modern economy, the man with the Rolex has likely never been anywhere near a gold mine. The big extractive industries are far from the urban centers where most of the affluent live. In poorer countries from which much of the world’s mineral and forest wealth is taken, the extractive operations are often in remote jungles or subsistence farming regions-homelands to people who are largely left out of the global dialogue and trade.

Finally, there is the unspoken disincentive of the world’s media giants to expose the exploitative nature of the industries that provide the raw materials of the economy that pays their way. Nearly all media, whether print or electronic, are funded by advertising for consumer goods that too often originate with raw materials largely taken from indigenous land or from ostensibly protected parkland. It would perhaps be unfair to say the media are part of a conspiracy of silence, because in all likelihood most media executives rarely stop to think about what fuels the economy that allows them to profit. But it’s fair to suggest that there’s a reluctance to undermine the foundations of the economy on which their whole business rests.

Not all extractive industries operate in the shadows. Many are honest businesses, run by people who are attentive to the human and environmental impacts of their operations. But those businesses are far too few. By some estimates, for example, some 80 percent of the logging done in Indonesia-one of the largest producers of wood in the world-is illegal. Some of the largest mines in the world, dumping thousands of tons of deadly poisons into their surroundings each day, are operating without the consent of the people whose land they have taken over.

Big Footprints
Mining and logging operations-the “extractive industries”-aren’t just small pin-pricks in the Earth’s skin, though they may appear that way on maps. Apologists may think of them as small holes discreetly drilled in large territories, for which small compensations to the impoverished inhabitants of those territories may be sufficient. But in fact, extraction has far-reaching impacts and costs. Because nature is not static but involves continuous movement of wind, water, and wildlife, contaminants released by mines can cause Pandora-like destruction. One of the most alarming forms of contamination is that of heap-leach gold mining, a modern technique that involves pouring rivers of cyanide on huge piles of low-grade ore to extract the gold. Cyanide is extremely poisonous: a teaspoonful containing a 2-percent cyanide solution can kill an adult. In February 2000, a dam holding heap-leach waste at a gold mine in Romania-the Baia Mare gold mine owned by an Australian company, Esmeralda Exploration-broke and dumped 22 million gallons of cyanide into the Tisza River. The poison flowed more than 500 kilometers downstream into Hungary and Serbia, wreaking what some called the worst environmental disaster since the Chornobyl nuclear explosion in 1986. Unfortunately, this event could not be written off as the last gasp of an outmoded technology. Heap-leach gold mining is on the increase. In Peru, the Yanacocha gold mine-second largest in the world-sits atop the South American continental divide, from which any similar breech would run all the way to both the Atlantic and Pacific Oceans. And in Tanzania, the Geita mine has just been sited on the Nyamelembo River, which drains into Lake Victoria. One of the largest and most valuable fresh-water lakes on the planet, Victoria is essential to the economies of Kenya and Uganda as well as Tanzania. A Kenyan environmental professor, Wangari Maathai (now the country’s environment minister), described the Geita mine as “the most insensitive economic undertaking I have ever come across,” explaining that “it is not just a matter of poisoning people. Very soon, the European Union will ban all fish exports from East Africa just because some toxic elements have found their way into the fish, and it will be a great economic loss to the local people whose life depends entirely on fishing.”

The kinds of spills produced by modern mines shouldn’t be compared to the relatively petty crime that occurs when someone dumps dry cleaning fluid into the sewer drain, or drops his old batteries into the garbage. Mine waste sends huge plumes of poison into the world’s rainforests, groundwater, and food. In Zortman, Montana, in 1982, the Zortman-Landusky gold mine spilled 52,000 gallons of cyanide into the local groundwater, and it was discovered only when a local mine worker smelled cyanide in his faucet at home. Cyanide was the agent used to kill Jews in Hitler’s gas chambers. Today, in West Papua, Indonesia, a gold mine owned by the U.S. company Freeport McMoRan dumps 120,000 tons of cyanide-laced waste into local rivers every day. In Papua New Guinea, the Ok Tedi copper mine, which was built on the local people’s land without their consent, dumps 200,000 tons of waste per day into the Fly River and has brought the once biologically rich region to ruin.

There are other means, besides rivers, by which damage from extraction can be spread. Wind, in particular, can be as dangerous a factor with big mines as with broken nuclear plants. Uranium mines produce huge piles of crushed ore waste, or tailings. According to the Center for World Indigenous Studies, the most common health risk associated with uranium mining is breathing radon-222 gas, which will continue to seep from the tailings for thousands of years to come. In Australia, the tailings dam of an abandoned uranium mine was burst by monsoon rains, and subsequent dispersal of the waste by river and wind has polluted an area of 100 square kilometers of land-driving out the Aboriginal people who lived there. In the U.S. Southwest, radioactive waste from an abandoned uranium mine owned by El Paso Natural Gas Company has blown toward an area used by Navajo Indians for shepherding.

In some cases, the extraction is not at a single point at all, but takes place over a wide area. Logging operations have decimated some of the world’s most biologically valuable forests. Many of these operations are either illegal or are sanctioned by corrupt national governments over the desperate objections of indigenous inhabitants. In Bolivia, in the late 1990s, the government granted logging concessions covering 500,000 hectares of Guarayo Territory and 140,000 hectares of Chiquitano de Monte Verde Territory. In Cambodia, illegal logging has led to severe deforestation, flooding, and destruction of rice crops-and to the displacement of people who depended on those forests for subsistence. In Liberia, in the year 2000, some $100 million worth of timber was cut down and sold, mainly to European consumers, to enrich the dictator Charles Taylor and to buy arms for his henchmen. In Indonesia, the looting of forests has reached new levels, with about 2 million hectares disappearing every year.

Buying Silence
Cortez did not have to worry about bad PR. Companies like Shell Oil or Freeport McMoRan may do their extraction in remote places, and with the tacit acceptance of the global media, but they can no longer escape the attention of activists and groups like Amazon Watch, Rainforest Action Network, and the Mineral Policy Center. Shell was burned badly when it was accused of collusion with the Nigerian government in the murder of the Ogoni activist Ken Saro-Wiwa, who had dared to protest Shell’s ruination of his people’s homeland. So, the major extractive industries have learned to become more discreet about how they take what they want. One of the most common strategies is to offer employment in the mines to indigenous people who are not well informed about the hazards, and to develop a dependency that the workers and their families are unable to break even when their health begins to break-a contemporary form of indentured servitude. An Aborigine writer, Vincent Forrester, describes how this dependency was established at the Ranger uranium mine in his people’s region of Australia. Mining royalties are paid to the government, not to the local people. (Most mining companies don’t pay royalties to anyone at all.) The government then supplies the community with essential services, but does not inform the people about the effects of the mining on their land and health. “This dependency, I believe, is a form of ransom,” writes Forrester. “White Australia says to the under-serviced, fledgling outstation movement, ‘You can have money for Toyotas, for bores, to help you set up, but if mining stops the money stops too.'”

A more hardball way of buying acquiescence is simply to find individual members of the local community who are willing to publicly support a proposed mining project in exchange for a small payment, which in an impoverished area can be a large inducement. The offers open rifts in the local community, causing enough disarray to allow the project to gain a foothold. In the late 1990s, for example, the Navajo Times reported that the HRI corporation, which wanted to open a uranium mine near the Navajo community of Crownpoint, New Mexico, had arranged to give lease payments to some of the Indian landowners living in the community. According to a report by Chris Shuey of the Southwest Research and Information Center in Albuquerque, the total amount of the payoff came to $367,000. The population of Crownpoint at that time was 2,700, which meant HRI was paying $136 per citizen to begin a process that would use the community’s underground water-bearing strata as a medium for “in situ leach” processing of uranium-turning the water into a “pregnant solution” from which the uranium would be extracted within one-half mile of several churches, schools, businesses, and most of the homes in the community.

In Madagascar, the Anglo-Austrialian mining giant Rio Tinto has tried to buy off the natives for even less. Rio Tinto wants to mine 40 kilometers of coastal dunes, bulldozing an indigenous homeland that is also a habitat for numerous rare and endangered plant species. The company’s strategy has been to invite the villagers to dinners at which they can eat and drink while watching PR films that extol the proposed operation but make no mention of likely damage. In hundreds of mining or logging operations around the planet, the main economic incentive for capitulation is the lure of jobs. Where people are poor, that lure of short-term cash can easily blind young workers to the long-term impacts of the project on their culture and health-and on the long-term sustainability of their local economy. In the Arctic, Inuit communities are now divided about whether to welcome more intensive oil drilling. Those who see a threat to their traditional way of life have put up strong resistance, but it’s rarely enough to fend off the incursions, especially when their own national governments have been bought off. In a globalized economy, the buying-off of governments has become widespread. A few years ago in India, for example, the indigenous Bhagata, Khond, Konda Reddi, and Samantha communities found themselves targeted by foreign companies interested in the bauxite (aluminum ore) deposits on their lands. Indian constitutional law protects indigenous peoples from unwanted exploitation of this kind, but that did not stop the state of Andhra Pradesh from secretly inviting the companies-and giving them leases-to begin mining. The opposing parties have been litigating ever since.

Is There Really No Alternative?
When economists talk about “extractive industries” they’re usually referring to mining, oil or gas drilling, or logging-essentially, the use of heavy machinery to cut raw materials from the planet. The concept could easily be broadened to include pumping water from aquifers, hauling fish from the oceans, shooting monkeys for bushmeat, or collecting honey from wild bees. We focus here on mining, oil drilling, and logging because they have been so heavily concentrated in places that are both the homelands of the world’s marginalized peoples and the habitats of the most threatened ecosystems. These industries are therefore the most direct-and least regulated-assaults of industrial society on the Earth’s cultural and biological stability.

To some extent, the lack of restraint in these industries may reflect an implicit belief, in the governments of industrial nations, that the genie long ago exited the bottle, and that trying to undo any damage it has done now is as unrealistic as trying to undo the damage done by the seizing of Indian territories by Europeans two or three centuries ago. But the idea that redressing past injustices is now “unrealistic,” too, makes a questionable assumption-that the descendants of the conquered Indians have long since been assimilated into the modern industrial economy and share the same benefits as the descendants of their conquerors. Yet, the reality of places like the Navajo reservations in the U.S. Southwest belies that assumption. Native American communities are far more impoverished, with far higher rates of disease, unemployment, and suicide, than the rest of the country. And it’s on Native American lands that the most blatantly exploitative extractive operations are concentrated. A similar observation can be made of the oil-rich Ogoni lands of Nigeria, or the Guarayo territory of Bolivia, among scores of others.

The political inertia that has allowed colonial-era racial distinctions to be perpetuated in the twenty-first century economy has also allowed outmoded assumptions about industrial productivity to be perpetuated. The prevailing belief is that if we want to continue having the rich lifestyle to which we are now accustomed, we have no choice but to keep on drilling and digging in the places where we already are-and, indeed, to commence new drilling in any place where more resources can be found. If the Inuit are hunting caribou in the Alaska National Wildlife Refuge (ANWR), but the war on terror and the fueling of American Hummers and Expeditions demands oil and there’s oil under ANWR, sooner or later the Inuit will have to step aside-will have to forget their antiquated ways, learn to speak English, head south, and find jobs at Exxon gas stations or Wal-Mart.

Such assumptions have been amply discredited, though you might never know it from following the mainstream news media and its conservative-dominated commentary. The discrediting takes several forms, each of which involves the exploding of a persistent myth about the materials economy: “Economic growth requires increasing materials and energy consumption.” In other words, population momentum (the unavoidable population growth of the coming years even with maximum stabilization policies), plus rising standards of living across the planet, will necessarily drive up demand for raw materials. Historically, economic growth has meant soaring material consumption. But the idea that this link must continue assumes that the efficiency of materials use must remain constant, which it need not. If cities were redesigned to be more compact, for example, the quantities of materials required to provide housing and transport per capita could be greatly reduced while actually improving the quality of urban life. As asphalt and gasoline use declined, so would the psychic and physical ravages of traffic congestion, auto accidents, air pollution, and suburban isolation. At the same time, growing efficiency in energy use, both from technological advances and from changes in consumer behavior (how about trading in your Expedition for a Prius, or your leaf blower for a rake?) could vastly reduce the per capita demand for oil or aluminum without compromising the pursuit of happiness. For the 2 billion people who are poorest, hopes for a better life do not have to require further impoverishment for those of their indigenous counterparts whose land is being mined or deforested.

“Meeting the need for increased supply of materials requires taking more out of the ground.” When the benefits of more efficient design and use have been exhausted, we may indeed need to increase the supply, at least until population has stabilized. But to assume that the increase must come from the ground falsely assumes that the new materials must be virgin. In the long-term ecology of the planet, nearly all materials are eventually recycled, and now we need to do that in the short term as well. The mines of the future will be, increasingly, the cities rather than the rainforests. Already, in some areas, aluminum recycling has reduced the need for bauxite mining by half.

“Mining or timbering in indigenous areas is cheap.” This argument is similar to the one employed by Wal-Mart, which says it’s economical to get poor people, who have few alternatives, to clean toilets and wash floors for cheap wages. That thinking is just one expression of the more general myth that industry can profit by not paying the externalities, or social and environmental costs, of production. But while economic practice remains entrenched in reactionary doctrine, moral consciousness has come a long way since the days when few people had any qualms about slavery. Exploiting cheap labor is a form of quasi-slavery, and the hundreds of organizations dedicated to raising public sensitivity to that have long since brought us past the point where social costs can be ignored. The true costs of extractive industries will inexorably become more internalized-for example, in requiring oil companies to bear the medical costs of diseases brought by their polluting of indigenous water supplies. As that happens, the prices of oil and other raw materials will rise, and there will be more incentives to develop sustainable substitutions-of renewable energy for oil, of recycled metals and wood for virgin, and of more efficient use for more supply.

AND WHILE WE’RE AT IT
HUMAN RIGHTS INSURANCE

HISTORY
http://www.basicincome.org/bien/aboutbasicincome.html#history

History of Basic Income, Part One
The idea of an unconditional basic income has three historical roots. The idea of a minimum income first appeared at the beginning of the 16th century. The idea of an unconditional one-off grant first appeared at the end of the 18th century. And the two were combined for the first time to form the idea of an unconditional basic income near the middle of the 19th century.

1. Minimum income: the humanists More (1516) and Vives (1526)
Raphael’s cure for theft – The idea of a minimum income guaranteed by the government to all the members of a particular community is far older than the more specific and radical idea of an unconditional basic income. With the advent of the Renaissance, the task of looking after the welfare of poor people ceased to be regarded as the exclusive preserve of the Church and of charitable individuals. Some of the so-called humanists started playing with the idea of a minimum income in the form of public assistance. In Thomas More’s (1478-1535) Utopia, published in Louvain in 1516, the Portuguese traveller Raphael Nonsenso, walking on the central square of the City of Antwerp, narrates a conversation he says he had with John Morton, the Archbishop of Canterbury. Such a scheme, he argued, would be a more astute way of fighting theft than sentencing thieves to death, which had the unpleasant side effect of increasing the murder rate.

“I once happened to be dining with the Cardinal when a certain English lawyer was there. I forgot how the subject came up, but he was speaking with great enthusiasm about the stern measures that were then being taken against thieves. ‘We’re hanging them all over the place’, he said. ‘I’ve seen as many as twenty on a single gallows. And that’s what I find so odd. Considering how few of them get away with it, how come we are still plagued with so many robbers?’ ‘What’s odd about it?’, I asked – for I never hesitated to speak freely in front of the Cardinal. ‘This method of dealing with thieves is both unjust and undesirable. As a punishment, it’s too severe, and as a deterrent, it’s quite ineffective. Petty larceny isn’t bad enough to deserve the death penalty. And no penalty on earth will stop people from stealing, if it’s their only way of getting food. In this respect, you English, like most other nations, remind me of these incompetent schoolmasters, who prefer caning their pupils to teaching them. Instead of inflicting these horrible punishments, it would be far more to the point to provide everyone with some means of livelihood, so that nobody’s under the frightful necessity of becoming, first a thief, and then a corpse.” [1]

A pragmatic theological plea for public assistance – It is, however, Thomas More’s close friend and fellow humanist, Johannes Ludovicus Vives (1492-1540), who should be regarded as the true father of the idea of a guaranteed minimum income, as he was the first to work out a detailed scheme and develop a comprehensive argument for it, based both on theological and pragmatic considerations. Juan Luis Vives was born in Valencia in a family of converted Jews. He left Spain in 1509 to escape the Inquisition, studied at the Sorbonne but soon got fed up by the conservative scholastic philosophy that was prevailing in Paris at the time and moved on to Bruges in 1512, and in 1517 to Louvain, one of the main centres of the humanist movement, where he was appointed professor in 1520. He taught more briefly at Corpus Christi College, Oxford, but spent most of his adult life in the city of Bruges, where his statue can still be seen on the bank of one of the main canals. In a memoir addressed to the Mayor of Bruges in 1526 under the title De Subventione Pauperum (On the Assistance to the Poor), he proposed that the municipal government should be given the responsibility of securing a subsistence minimum to all its residents, not on grounds of justice but for the sake of a more effective exercise of morally required charity. The assistance scheme would be closely targeted to the poor. Indeed it is because of their ability to target them more efficiently that public officials should be put in charge of poor relief. To be entitled to the latter, a poor person’s poverty must not be undeserved, but he must deserve the help he gets by proving his willingness to work.

“Even those who have dissipated their fortunes in dissolute living – through gaming, harlots, excessive luxury, gluttony and gambling – should be given food, for no one should die of hunger. However, smaller rations and more irksome tasks should be assigned to them so that they may be an example to others. [...] They must not die of hunger, but they must feel itspangs.” Whatever the source of poverty, the poor are expected to work. “Even to the old and the stupid, it should be possible to give a job they can learn in a few days, such as digging holes, getting water or carrying something on their shoulders.” The point of requiring such toil from the beneficiaries of the scheme is in part to make them contribute to the funding of the latter. But it is also to make sure that “being busy and engrossed in their work, they will abstain from those wicked thoughts and actions in which they would engage if they were idle”. Indeed, this concern should consistently extend to those born rich: Emperor Justinian was right, according to Vives, “in imposing a law that forbade everyone to spend his life in idleness”. If the poor cannot be parasites, why could the rich? [2]

At two junctures, Vives anticipates some insights that will drive later thinkers in the direction of a basic income. “All these things God created, He put them in our large home, the world, without surrounding them with walls and gates, so that they would be common to all His children.” Hence, unless he helps those in need, whoever has appropriated some of the gifts of nature” is only a thief condemned by natural law, because he occupies and keeps what nature has not created exclusively for himself”. Further, Vives insists that relief should come “before need induces some mad or wicked action, before the face of the needy blushes from shame… The benefaction that precedes the hard and thankless necessity of asking is more pleasant and more worthy of thanks”. But he explicitly discards the more radical conclusion that it would be even better if “the gift were made before the need arose”, which is exactly what an adequate basic income would achieve.

From Vives to the Poor Laws – Vives’s plea explicitly inspired a scheme put into place a few years later by the Flemish municipality of Ypres. It also contributed to inspiring incipient thinking and action about forms of poor relief, from the School of Salamanca of Francisco de Vitoria and Domingo de Soto (from 1536 onwards) to England’s Poor Laws (from 1576 onwards). Less well remembered than his friends and protectors Erasmus and More, Vives’s pioneering thinking on the welfare state has been recently rediscovered. [3]

He is also still remembered in his Alma Mater, the University of Louvain: A stone from his house has been incorporated in the wall of the “Universitaire Halle”, which houses the rectorate in the old town of Leuven. And the meeting room of the Chaire Hoover in the new town of Louvain-la-Neuve, where the Collectif Charles Fourier met in 1984-86 to discuss basic income and organise the founding meeting of the Basic Income European Network, has been named “Salle Vives”.

Vives’ s tract is the first systematic expression of a long tradition of social thinking and institutional reform focused on the public exercise of compassion through government-organised means-tested schemes directed at the poor. Despite the difficulties and doubts aroused by the operation of the poor laws, the thinkers of the nouveau régime made public assistance an essential function of the government. Thus, Montesquieu (L’Esprit des Lois (1748), section XXIII/29, Paris: Flammarion, Vol.2, p. 134): “The State owes all its citizens a secure subsistence, food, suitable clothes and a way of life that does not damage their health”. This line of thought eventually led to the setting up of comprehensive, nationally-funded guaranteed minimum income schemes in a growing number of countries, most recently, France’s RMI (1988) and Portugal’s RMG (1997).

2. Basic endowment: the republicans Condorcet (1594) and Paine (1596)
Condorcet on social insurance – However, towards the end of the 18th century, a different idea emerged that was to play an even greater role in the alleviation of poverty throughout Europe. The first known person to have sketched the idea is the first-rate mathematician and political activist, Antoine Caritat, Marquis de Condorcet (1743-1794). After having played a prominent role in the French revolution, both as a journalist and as a member of the Convention, Condorcet was imprisoned and sentenced to death. While in prison, he wrote his most systematic work, the Esquisse d’un tableau historique des progrès de l’esprit humain (published posthumously by his widow in 1795), whose last chapter contains a brief sketch of what a social insurance might look like and how it could reduce inequality, insecurity and poverty.

“There is therefore a necessary cause of inequality, of dependency and even of misery, which constantly threatens the most numerous and most active class of our societies. We shall show that we can to a large extent removing it, by opposing luck to itself, by securing to those who reach old age a relief that is the product of what he saved, but increased by the savings of those individuals who made the same sacrifice but died before the time came for them to need to collect its fruit; by using a similar compensation to provide women and children, at the moment they lose their husbands or fathers, with resources at the same level and acquired at the same price, whether the family concerned was afflicted by a premature death or could keep its head for longer; and finally by giving to those children who become old enough to work by themselves and found a new family the advantage of a capital required by the development of their activity and increased as the result of some dying too early to be able to enjoy it. It is to the application of calculus to the probabilities of life and to the investment of money that one owes the idea of this method. The latter has already been successfully used, but never on the scale and with the variety of forms that would make it really useful, not merely to a handful of individuals, but to the entire mass of society. It would free the latter from the periodic bankruptcy of a large number of families, that inexhaustible source of corruption and misery.” [4]

This distinct idea, which will end up inspiring, one century later, the birth and development of Europe’s massive social insurance systems, starting with Otto von Bismarck’s old age pension and health insurance schemes for the labour force of unified Germany (from 1883 onwards). Though not targeted to the poor and involving massive transfers to the non-poor, these systems soon started having a huge impact on poverty as their development quickly dwarfed public assistance schemes and relegated them to a subsidiary role. In one way, social insurance brought us closer to basic income than public assistance, as the social benefits it distributed were not prompted by compassion, but by an entitlement, based in this case on the premiums paid into the insurance system. But in another way, it took us away from basic income, precisely because entitlement to the benefits is now based on having paid (or having had one’s employer paying) enough contributions in the past, typically in the form of some percentage of one’s wage. For this reason, unlike the most comprehensive versions of public assistance, even the most comprehensive forms of social insurance cannot provide a guaranteed minimum income.

Condorcet and Paine on basic endowment – However, it is the very same Marquis de Condorcet who was the first to briefly mention, in the context of his discussion of social insurance, the idea of a benefit restricted neither to the poor (deserving of our compassion) nor to the insured (entitled to compensation if the risk materialises), namely the idea of “giving to those children who become old enough to work by themselves and found a new family the advantage of a capital required by the development of their activity.” Condorcet himself is not known to have said or written anything else on the subject, but his close friend and fellow member of the Convention Thomas Paine (1737-1809) developed the idea in far greater detail, two years after Condorcet’s death, in a memoir addressed to the Directoire, the five-member executive that ruled France during most of the period separating the beheading of Robespierre and the rise of Napoleon.

“It is a position not to be controverted, he writes, that the earth, in its natural, uncultivated state was, and ever would have continued to be, the common property of the human race.” As the land gets cultivated, “it is the value of the improvement, only, and not the earth itself, that is in individual property. Every proprietor, therefore, of cultivated lands, owes to the community a ground-rent (for I know of no better term to express the idea) for the land which he holds; and it is from this ground-rent that the fund proposed in this plan is to issue.” Out of this fund, “there shall be paid to every person, when arrived at the age of twenty-one years, the sum of fifteen pounds sterling, as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property. And also, the sum of ten pounds per annum, during life, to every person now living, of the age of fifty years, and to all others as they shall arrive at that age”. Payments, Paine insists, should be made “to every person, rich or poor”, “because it is in lieu of the natural inheritance, which, as a right, belongs to every man, over and above the property he may have created, or inherited from those who did.” [5]

From Paine to the Stakeholder Society – This idea of an equal basic endowment given to all as they reach adulthood, has reappeared now and then, for example in the writings of the French political philosopher François Huet. In his attempt to combine liberalism and socialism, he proposed that young people should all be given an endowment financed out of the taxation of the whole of that part of land and other property which the bequeather has himself received (see esp. Le Règne social du christianisme, Paris: Firmin Didot & Bruxelles: Decq,1853, pp. 262, 271-3).
The same endowment idea, combined as it was by Paine with a basic pension, has been more recently revived and developed in great detail by two Yale Law School Professors, Bruce Ackerman and Anne Alstott (The Stakeholder Society, New Haven: Yale University Press, 1999). The justification for this $80.000 unconditional grant, however, is no longer common ownership of the earth, but more comprehensive conception of justice as equality of opportunities. [6]

3. Basic income: the utopian socialists Charlier (1848) and Mill (1849)
Charles Fourier’s right to subsistence – What equal ownership of the earth justifies, in Paine’s view, is an unconditional endowment for all, not a guaranteed income. A number of 19th century reformers, such as William Cobbett (1827), Samuel Read (1829) and Poulet Scrope (1833) in England (see Horne, Thomas A. “Welfare rights as property rights”, in Responsibility, Rights and Welfare. The theory of the welfare state, Boulder & London: Westview Press, 1988, 107-132, for a useful survey), have rather interpreted it so as to give guaranteed income schemes a firmer basis than public charity. Most famous among them is the eccentric and prolific French writer Charles Fourier (1836: 490-2), one of the radical visionaries Marx contemptuously labelled “utopian socialists”. In La Fausse Industrie (1836), Fourier argues that the violation of each person’s fundamental natural right to hunt, fish, pick fruit and let her/his cattle graze on the commons implies that “civilization” owes subsistence to everyone unable to meet her/his needs, in the form of a sixth class hotel room and three modest meals a day.

“Le premier droit, celui de récolte naturelle, usage des dons de la nature, liberté de chasse, cueillette, pâture, constitue le droit de se nourrir, de manger quand on a faim. Ce droit est dénéié en civilisation par les philosophes et concédé par Jésus-Christ en ces mots: (…). Jésus, par ces paroles, consacre le droit de prendre quand on a faim, son nécessaire où on le trouve, et ce droit impose au corps social le devoir d’assurer au peuple un minimum d’entretien: puisque la civilisation le dépouille du premier droit naturel, celui de chasse, pêche, cueillette, pâture, elle lui doit une indemnité. (…) Si l’ordre civilisé enlève à l’homme les quatre branches de subsistance naturelle, chasse, pêche, cueillette, pâture, composant le premier droit, la classe qui a enlevé les terres doit à la classe frustrée un minimum de subsistance abondante, en vertu du neuvième droit (subsistance abondante). Mais voici de nombreux obstacles à la concession de ce droit: D’abord, il faudrait chercher et découvrir le mécanisme sociétaire d’industrie combinée qui, donnant quadruple produit, fournirait de quoi satisfaire en minimum. D’autre part, comme la multitude assurée d’un minimum abondant ne voudrait que peu ou point travailler, il faudrait découvrir et organiser un régime d’industrie attrayante qui garantirait la persistance du peuple au travail, malgré son bien-être.” [7]

Fourier, however, is as clear about the non-universality of the delivery of this income in kind (only a minority would be accommodated in those sixth class hotels) as he is about the absence of a work test: it is an unconditional entitlement for the poor by way of compensation for the loss of direct access to natural resources. His disciple and leader of the Fourierist school, Victor Considérant (Exposition abrégée du système Phalanstérien de Fourier, Paris, 1845) makes a step in the direction of a genuine basic income when emphasizing that, when work will have been made attractive thanks to the Phalansterian system, “one will be able to forward a minimum income to the poor members of the community with the certainty that they will have earned more than the expenditure by the end of the year”. But despite the nature of the underlying justification, poor relief is still not being turned into a universal income.

“La distribution des travaux par groupes et séries ayant la propriete de les rendre attrayants, toutes les classes de la société recherchent avec ardeur des places dans toutes les branches infiniment variées de fonctions sociales. Il n’y a donc plus de paresseux: on pourra faire aux sociétaires pauvres l’avance d’un minimum, avec la certitude qu’ils auront gagné plus que leur dépense à la fin de l’année. Ainsi, l’établissement du régime sociétaire extirpera la misère et la mendicité, fléaux des sociétés basees sur la concurrence anarchique et le morcellement. Il serait impossible aujourd’hui de faire au peuple l’avance du minimum: il tomberait aussitôt dans la fainéantise, attendu que le travail est répugnant. Voilà pourquoi la Taxe des pauvres, en Angleterre, n’a fait qu’élargir la plaie hideuse du paupérisme. – L’avance du minimum, c’est la base de la liberté et la garantie de l’émancipation du prolétaire. Pas de liberté sans minimum; pas de minimum sans attraction industrielle. Toute la politique d’émancipation des masses est là.” [8]

Joseph Charlier’s territorial dividend – In 1848, however, while Karl Marx was finishing off the Communist Manifesto in another neighbourhood of Brussels, the Fourierist author Joseph Charlier (1816-1896) published in Brussels his Solution du problème social ou constitution humanitaire (Bruxelles, “Chez tous les libraires du Royaume”, 1848, 106p.), which can be regarded as containing the first formulation of a genuine basic income. Undoubtedly inspired by the Fourierist tradition, he saw the equal right to the ownership of land as the foundation of an unconditional right to some income. But he rejected both the right to means-tested assistance advocated by Charles Fourier himself and the right to paid work advocated by his most prominent disciple Victor Considerant. The former, he reckoned, only dealt with the effects, and the latter involved too much mingling by the state. Under the labels “minimum” or “revenu garanti” (and later “dividende territorial”), he proposed giving every citizen with an unconditional right to a quarterly (later, monthly) payment of an amount fixed annually by a representative national council, on the basis of the rental value of all real estate. In a later book, in which he further develops his proposal, he relabels it “dividende teritorial” (La Question sociale résolue, précédée du testament philosophique d’un penseur, Bruxelles, Weissenbruch, 1894, 252p.). Such a scheme, he argues, would end “the domination of capital over labour”. Would it not encourage idleness? “Hard luck for the lazy: they will be put on short allowance. Society’s duty does not reach beyond securing each a fair share of the enjoyment of what nature puts at his disposal, without usurping anyone’s rights.” Anything above the minimum will have to be earned. [9]

Mill’s most skillfully combined form of socialism – Charlier’s obstinate plea was hardly heard, and he was himself quickly forgotten. This is not quite what happened to another admirer of Fourierism: John Stuart Mill. The relevant passage is the sympathetic discussion of Fourierism which he added to the second edition of his Principles of Political Economy, published the year after Charlier’s first book. This discussion unambiguously ascribes to the Fourierists the proposal of a non-means-tested basic income:

“The most skilfully combined, and with the greatest foresight of objections, of all the forms of Socialism, is that commonly known as Fourierism. This System does not contemplate the abolition of private property, nor even of inheritance; on the contrary, it avowedly takes into consideration, as elements in the distribution of the produce, capital as well as labour. [...] In the distribution, a certain minimum is first assigned for the subsistence of every member of the community, whether capable or not of labour. The remainder of the produce is shared in certain proportions, to be determined beforehand, among the three elements, Labour, Capital, and Talent.”

The idea is clearly there, and under the pen of one of the most influential political thinkers of the century. But it will take another six decades before something like a real discussion arose for the first time. [10]

1. Thomas More, Utopia (1st Latin edition, Louvain, 1516), English translation by Paul Turner, Harmondsworth: Penguin Classics, 1963, p. 43-44.
2. Juan Luis Vives, De Subventione Pauperum, Sive de humanis necessitatibus, 1526; Dutch translation on behalf of the Magistrates of Ypres: Secours van den Aermen, Antwerp, 1533, reprinted by Valero & Fils, Brussels, 1943, 114p.; French translation by Ricardo Aznar Casanova: De l’Assistance aux pauvres, Brussels: Valero et Fils, 1943, 290p; English translation of part II only by Alice Tobriner: On the Assistance to the Poor. Toronto & London: University of Toronto Press (“Renaissance Society of America Reprints”), 1998, 62p.
3. Vives’s impact on social policy thinking has been emphatically recognised in Spain, for example, through the creation (in 1987) of the Fundacion Luis Vives, a foundation supporting Spanish NGO’s in the area of social policy with seats in Madrid and Brussels (http://fundacionluisvives.recol.es/quienes.asp), or through the creation (in 1998) of the Instituto de Seguridad Social Juan Luis Vives, a research institute on the welfare state at Madrid’s Universidad Carlos III (http://www.uc3m.es/uc3m/inst/IUSS/dpiuss.html).
4. Condorcet, Esquisse d\’un tableau historique des progres de l’esprit humain (1st edition, 1795), Paris: GF-Flammarion, 1988, p. 273-274.
5. Thomas Paine 1796, p. 611; 612-613.
6. For discussions of basic endowment proposals in connection with basic income, see The Ethics of Stakeholding, Keith Dowding, Jurgen De Wispelaere, and Stuart White eds., Basingstoke: Palgrave/Macmillan, 2003; and “Rethinking Distribution”, Erik O. Wright ed., special issue of Politics and Society, 2003.
7. Charles Fourier, La Fausse industrie (1836), Paris: Anthropos, 1967, p. 491-492.
8. Victor Considrant, Exposition abrege du systeme Phalansterien de Fourier, Paris, 1845, section “Plus de paresse – extinction de la misere et de la mendicite – armees industrielles”, p. 49.
9. For more details, see Cunliffe, John & Erreygers, Guido, “The Enigmatic Legacy of Charles Fourier: Joseph Charlier and Basic Income”, History of Political Economy 33(3), Fall 2001, 459-484. Note that this idea of equal ownership of the value of natural resources justifying a universal basic income is not restricted to the Fourierist tradition. It later appears, for example, in the early Herbert Spencer’s (Social Statics, London: J. Chapman, 1851) writings on land reform, in Henry George’s (Progress and Poverty (1879) London: The Hogarth Press, 1953) advocacy of a “single tax”, in the normative writings of Leon Walras (Etudes d’economie Sociale (1896), Lausanne: Rouge; Paris: Pichon & Durand-Auzias, 1936.), one of the founding fathers of mathematical economics, and, most rigorously, in the writings of the Canadian left-libertarian political philosopher Hillel Steiner (An Essay on Rights, Oxford: Blackwell, 1994).
10. J.S. Mill, Principles of Political Economy, 2nd ed. 1849, New York: Augustus Kelley, 1987, pp. 212-214, Book II, chapter 1.

History of Basic Income, Part Two.
The 20th century saw three periods when discussion about basic income was particularly intense. Firstly, under names like “social dividend”, “state bonus” and “national dividend” proposals for a genuinely unconditional and universal basic income were developed in inter-war debates in England. Secondly, after some years of silence this type of ideas was rediscovered and gained considerable popularity in debates about “demogrants” and “negative income tax” schemes during the 1960s and 70s in the United States. Thirdly, a new period of debate and exploration emerged as basic income proposals were actively discussed in several countries in North-Western Europe from the late 70s and early 80s. Quite independently, this century also saw the introduction of the world’s first, full-blown basic income scheme through the birth of the Alaska Permanent Fund, providing annual dividends to all the inhabitants of Alaska.

1. From militancy to respectability: England between the wars
Russell’s combination of anarchism and socialism – Things start waking up in Britain in 1918, towards the end of the First World War. In Roads to Freedom, a short and incisive book first published in 1918, the mathematician, philosopher, non-conformist political thinker, militant pacifist and Nobel laureate in literature Bertrand Russell (1872-1970) argues for a social model that combines the advantages of socialism and anarchism. One central component of it is a UBI “sufficient for necessaries”.

“Anarchism has the advantage as regards liberty, Socialism as regards the inducement to work. Can we not find a method of combining these two advantages? It seems to me that we can. […]

Stated in more familiar terms, the plan we are advocating amounts essentially to this: that a certain small income, sufficient for necessaries, should be secured to all, whether they work or not, and that a larger income – as much larger as might be warranted by the total amount of commodities produced – should be given to those who are willing to engage in some work which the community recognizes as useful…When education is finished, no one should be compelled to work, and those who choose not to work should receive a bare livelihood and be left completely free.” [1]

Milner’s State Bonus – In the same year, the young engineer, Quaker and Labour Party member, Dennis Milner (1892-1956), published jointly with his wife Mabel a short pamphlet entitled “Scheme for a State Bonus” (1918). What they argued for, using an eclectic series of arguments, was the introduction of an income paid unconditionally on a weekly basis to all citizens of the United Kingdom. Pitched at 20% of GDP per capita, the “State bonus” should make it possible to solve the problem of poverty, particularly acute in the aftermath of the war. As everyone has a moral right to means of subsistence, any obligation to work enforced through the threat of a withdrawal of these means is ruled out. Milner subsequently elaborated the proposal in a book published by a respectable publisher under the title Higher Production by a Bonus on National Output. Many of the arguments that played a central role in later discussions can be found in this book — from the unemployment trap to labour market flexibility, from low rates of take up to the ideal complement of profit sharing, but the emphasis is on the “productivist” case: the state bonus can even be vindicated on grounds of efficiency alone. Milner’s proposal was enthusiastically backed by fellow Quaker Bertram Pickard, supported by the short-lived State Bonus League — under whose banner Milner took part in a national election —, discussed at the 1920 British Labour Party conference and definitively rejected the following year [2].

Major Douglas and the Social Credit movement – It did not take long, however, for another English engineer, Clifford H (“Major”) Douglas (1879-1952), to take up the idea again with significantly greater impact. Douglas was struck by how productive British industry had become after World War I and began to wonder about the risks of overproduction. How could a population impoverished by four years of war consume the goods available in abundance, when banks were reticent to give them credit and their purchasing power was rising only very slowly? To solve this problem, Douglas (1924) proposed in a series of lectures and writings, often quite confused, the introduction of “social credit” mechanisms, one of which consisted in paying all households a monthly “national dividend”. The social credit movement enjoyed varying fortunes. It failed to establish itself in the United Kingdom but attracted many supporters in Canada, where a Social Credit Party governed the province of Alberta from 1935 to 1971, although it rapidly dropped the idea of introducing a national dividend.

Cole and Meade on social dividend – While the popularity of the Social Credit movement was first swelling and next shrinking in broad layers of the British population, the idea of the UBI was gaining ground in a small circle of intellectuals close to the British Labour Party. Prominent among them was the economist George D.H. Cole (1889-1959), the first holder of Oxford’s Chichele Chair of Social and Political Theory (later held by Isaiah Berlin, Charles Taylor and G.A. Cohen). In several books, he resolutely defended what he was the first to call a “social dividend” (Cole, 1935). “Current productive power is, in effect, a joint result of current effort and of the social heritage of inventiveness and skill incorporated in the stage of advancement and education reached in the arts of production; and it has always appeared to me only right that all the citizens should share in the yield of this common heritage, and that only the balance of the product after this allocation should be distributed in the form of rewards for, and incentives to, current service in production.” (Cole 1944: 144) In his presentation of J.S. Mill in History of Socialist Thought (1953), Cole also seems to have been the first to refer to the idea of a UBI by using the English expression “basic income”, which quickly spread as the discussion became international in the 1980s [3].

Politically less active, but with a far wider international reputation than Cole, another Oxford economist, the Nobel Laureate James Meade (1907-1995), defended the “social dividend” with even greater tenacity. The idea of a social dividend is present in his Outline of an Economic Policy for a Labor Government (1935) and in several other early writings (Meade 1937, 1938) as a central ingredient of a just and efficient economy. And it was to become a crucial component of the Agathatopia project, to which he devoted his last writings (1989, 1993, 1995): partnerships between capital and labor and a social dividend funded by public assets are there offered together as a solution to the problems of unemployment and poverty. Around the same time and place as the notion of “social dividend” appeared in the writings of James Meade, it also surfaced in a famous discussion on market socialism by two professors at the London School of Economics Oskar Lange (1904-1965) and Abba Lerner (1903-1982): in reply to a remark by Lerner (1936), Lange (1937) made clear the expression “social dividend”, which he used to refer to the return on collectively owned capital, had to be understood as contribution-independent.

It is on the background of this inter-war discussion that the liberal peer Juliet Rhys-Williams (1943) proposed a “new social contract”, whose central element consisted in a basic income. Universal, but not quite unconditional, as it made availability for work a necessary counterpart for the uniform grant. Payment of the grant is suspended during strikes, for example. However, it was the alternative proposal for a national minimum income (tied to a broader program of unified national child benefit and social insurance) made in 1942 by another liberal peer, William Beveridge, director of the London School of Economics, that prevailed in Britain — and soon started spreading elsewhere in Europe —, thus relegating UBI-type proposals to the fringe of the UK’s policy-relevant debate.

2. Short-lived effervescence: the United States in the 1960s
Three American approaches to the guaranteed minimum – It is in the turbulent America of the 1960s, at the peak of the civic rights movement, that a real debate on universal basic income resurfaced, with three main sources of inspiration. Firstly, Robert Theobald (1929-1999) and his Ad Hoc Committee on the Triple Revolution (1964) defended in various publications a vaguely specified guaranteed minimum income on grounds reminiscent of Douglas, such as the belief that “automation is rendering work for pay obsolete, and that government handouts are the only way to give the public the means to buy the immense bounty produced by automatons”. Secondly, in his popular Capitalism and Freedom (1962), the American economist and Nobel Laureate Milton Friedman (1912-2006) proposed a radical simplification of the American Welfare State through the introduction of what he there called a “negative income tax”. Friedman’s proposal of a linear negative income tax would fully integrate the income tax and transfer systems. It was offered as a simple and radical alternative to the patchwork of existing social welfare schemes. And it was itself meant as a transitional stage on the way to an ideal, transfer-free capitalist society (For Friedman’s own account of where he got the idea from and relevant references, see the Suplicy-Friedman exchange in BIEN NewsFlash 3, May 2000). Finally, and most importantly, James Tobin (1918-2002), John Kenneth Galbraith (1908-2006) and other liberal economists started defending in a series of articles the idea of a guaranteed minimum income more general, more generous and less dependency-creating than the existing assistance programs.

Tobin’s demogrant – Tobin, Pechman and Miezkowski published the first technical analysis of negative income tax schemes in 1967, where they came out in favor of a variant involving an automatic payment to all citizens – a genuine UBI which Joseph Pechman proposed calling a demogrant. In contrast with Friedman’s proposal, Tobin’s demogrant scheme was not meant to replace the whole system of social assistance and insurance schemes — let alone to help extinguish the welfare state altogether —, but only to reconfigure its lower component so as to make it a more efficient and work-friendlier instrument for raising the incomes of the poor.

Under Tobin’s proposal, more generous than Friedman’s and more precise than Theobald’s, each household was to be granted a basic credit at a level varying with family composition, which each family could supplement with earnings and other income taxed at a uniform rate. (For relevant references and Tobin’s own account of how his demogrant proposal evolved, see the Suplicy-Tobin exchange in BIEN NewsFlash 11, September 2001)

Nixon’s Family Assistance Plan and McGovern’s support for the demogrant – In this lively and promising context, a petition was organized in the Spring of 1968 calling for the US Congress “to adopt this year a system of income guarantees and supplements”. It was supported by James Tobin, Paul Samuelson, John Kenneth Galbraith, Robert Lampman, Harold Watts and over one thousand more economists, though not by Milton Friedman. In a context in which dependence on the existing means-tested welfare system was increasing dramatically, this petition contributed to creating a climate in which the administration felt it had to move ahead. This led to the Family Assistance Plan (FAP), an ambitious social welfare program prepared by the democrat senator Daniel Patrick Moynihan (1927-2003) on behalf of Republican President Richard Nixon’s administration. The FAP provided for the abolition of the aid program targeting poor families (AFDC) and incorporated a guaranteed income with financial supplements for workers which came close to a negative income tax scheme. It was publicly presented by President Nixon in August 1969, adopted in April 1970 by a large majority in the US House of Representatives, rejected by the relevant Commission of the US Senate in November 1970, and definitively rejected in 1972, despite several amendments meant to assuage the opposition, owing to a coalition between those who found it too timid and those who found it too bold. A more ambitious “demogrant” plan was included on James Tobin’s advice in democrat George McGovern’s platform for the 1972 presidential election, but dropped in August 1972. Combined with McGovern’s defeat by Nixon in November 1972, the beginning of the Watergate affair in March 1973 and Nixon’s resignation in November 1974, the defeat of the FAP in the Senate marked the end of the short but strong appearance of UBI-type ideas in the US debate. The discussion continued however in a more academic vein, on the basis of five large-scale experiments with negative income tax schemes (four in the USA and one in Canada) and controversies over the results.

3. New departure: North-Western Europe in the 1980s
The first initiatives: Debates in Denmark and the Netherlands – Towards the end of the 1970s, while the demogrant debate was virtually forgotten in the United States, a debate on a UBI started up from scratch in a number of European countries, in near total ignorance of previous discussions, whether in Europe or in America. Thus, in Denmark, three academics defended a UBI proposal by the name of “citizen’s wage” in a national best-seller later translated into English under the title Revolt from the Center (Meyer et al, 1978). But it is above all in the Netherlands that the new European discussion on UBI took off. The first voice to be heard in this discussion was that of J.P. Kuiper, a professor of social medicine at the Free University of Amsterdam. Struck by how sick some people were able to make themselves by working too much while others were making themselves sick because they could not find work, he recommended uncoupling employment and income as a way of countering the de-humanizing nature of paid employment: only a decent “guaranteed income”, as a called it, would enable people to develop independently and autonomously (Kuiper, 1976). In 1977, the small radical party (Politieke Partij Radicalen), grown out of the left of the Dutch Christian-democratic party, became the first European political party with parliamentary representation to officially include a UBI (basisinkomen) in its electoral program. The movement grew quite rapidly, thanks to the involvement of the food sector trade union Voedingsbond, a component of the main Trade Union Confederation FNV. With its exceptionally high proportion of women and part-time workers among its members, the Voedingsbond played a major role in the Dutch debate throughout the 1980s. It initiated a series of publications and actions defending a UBI combined with a drastic reduction in working time and hosted the Dutch UBI association on its premises. In 1985, the Dutch discussion reached a first climax when the prestigious Scientific Council for Government Policy created a sensation by publishing a report in which it recommended unambiguously the introduction of a so-called “partial basic income”. Such a partial basic income is a genuine UBI, but at a level insufficient to cover the needs of a single person and hence not meant to replace the existing conditional minimum income system.

Developments in Britain and Germany – Around the same time, the debate began to take shape in other countries too, albeit more discretely. In 1984, a group of academics and activists gathered around Bill Jordan and Hermione Parker under the auspices of the National Council for Voluntary Organizations formed the Basic Income Research Group (BIRG) – which was to become in 1998 the Citizen’s Income Trust. Despite the consistent support of independent minds such as the assistant editor of the Financial Times Samuel Brittan and the sympathy shown for the idea by liberal-democrat party, the UBI did not manage to reach mainstream politics — except in the very attenuated form of a baby bond — in Blair’s New Labour era any more than under Thatcher’s neo-liberalism. In Germany, Thomas Schmid, an eco-libertarian from Berlin, got the discussion going with his Liberation from False Labor (Schmid ed. 1984). Several collective volumes emanating from the green movement pursued and developed this first initiative (Opielka & Vobruba 1986; Opielka & Ostner 1987). At the same time, Joachim Mitschke (1985), professor of public finance at the University of Frankfurt, began a long campaign in favor of a citizen’s income (Bürgergeld) administered in the form of a negative income tax. However, the fall of the Berlin wall (1989) and the consequent reunification of Germany (October 1990) stopped this incipient public discussion for many years, despite the support it enjoyed from reputed academics like Claus Offe (1992, 1996), close to the greens, and to a lesser extent Fritz Scharpf (1993), close to the social democrats. It is only around 2005, after reunification was more or less digested, that a surprising convergence generated a rich national debate.

The basic income debate in France – In France, the debate got off the ground more slowly. The influential left-wing sociologist and philosopher André Gorz (1923-2007) initially defended a life-long basic income coupled to a universal social service of 20,000 hours (Gorz 1985). However, his fear of social life getting entirely colonized by paid employment drove him towards the defence of an unconditional income (Gorz 1997). In a very different vein, Yoland Bresson (1984, 1994, 2000), self-described as a “left Gaullist” economist, offered a convoluted argument for a universal ”existence income” supposed to be pitched at a level objectively determined by the “value of time”. Alain Caillé (1987, 1994, 1996), leader of the “Movement against Utilitarianism in the Social Sciences” (or MAUSS) advocated an unconditional income as the expression of society’s fundamental trust in those excluded from the labor market and in their ability and willingness to invest in activities of collective interest. And Jean-Marc Ferry (1995, 2000), a political philosopher in the Habermas tradition, developed a plea for a UBI as a right of citizenship at the level of the European Union, in a context in which he reckons full employment, conventionally understood, is forever out of reach and in which a “quaternary” sector of socially useful activities needs to be developed.

The birth and expansion of BIEN – These modest national debates emerged independently from one another and the intellectual contributions that fed them were unaware of most of the history of the idea, if not the whole of it. However, they gradually came into contact with one another thanks to the creation of BIEN. In March 1984, a group of researchers and trade unionists close to the University of Louvain (Belgium) published a provocative UBI scenario under the collective pseudonym “Collectif Charles Fourier”. The scenario was entered in a competition on the future of work earning the Collectif a prize with which it organized in Louvain-la-Neuve (Belgium) in September 1986 the very first meeting gathering UBI supporters from several countries. Pleasantly surprised to discover how many people were interested in an idea they thought they were almost alone in defending, the participants decided to set up the Basic Income European Network (BIEN), which published a regular newsletter and organized conferences every two years. The birth of similar networks in the United States, South America and South Africa, the intensification of contacts with pre-existing networks in Australia and New Zealand, and the presence of an increasing number of non-Europeans at the BIEN conferences, led BIEN to re-interpret its acronym as the Basic Income Earth Network at its 10th congress, held in Barcelona in September 2004. The first congress outside Europe of the newly created worldwide network was held at the University of Cape Town (South Africa) in October 2006.

4. Modest but real: Alaska’s dividends
The introduction and development of the only genuine universal basic income system in existence to this day took place many leagues from these debates. In the mid 1970s, Jay Hammond, the Republican governor of the state of Alaska (United States) was concerned that the huge wealth generated by oil mining in Prudhoe Bay, the largest oilfield in North America, would only benefit the current population of the state. He suggested setting up a fund to ensure that this wealth would be preserved, through investment of part of the revenue from oil. In 1976, the Alaska Permanent Fund was created by an amendment to the State Constitution. In order to get the Alaskan population interested in its growth and continuity, Governor Hammond conceived of the annual payment of a dividend to all residents, in proportion to their number of years of residence. Brought before the United States Supreme Court on grounds of discrimination against immigrants from other states, the proposal was declared in contradiction with the “equal protection clause”, the fourteenth amendment of the Federal Constitution. The proposal was modified in order to overcome this objection, and transformed into a genuine universal basic income. Since implementation of the program in 1982, everyone who has been officially resident in Alaska for at least six months – currently around 650,000 people – has received a uniform dividend every year, whatever their age and number of years of residence in the State. This dividend corresponds to part of the average interest earned, over the previous five years, on the permanent fund set up using the revenue from oil mining. The fund was initially invested exclusively in the State economy, but later became an international portfolio, thus enabling the distribution of the dividend to cushion fluctuations in the local economic situation instead of amplifying them (Goldsmith, 2004). The dividend stood at around $300 per person per annum in the early years but was close to reaching $2000 in 2000, when the stock market plummeted and cut the dividend in half in the course of a few years. In 2008, however, the size of the annual dividends reached a new all-time high with payments of $2069 per person. Alaska’s oil dividend scheme has repeatedly been proposed for other parts of the world, but still remains unique — and helps make Alaska the most egalitarian among US states.

“The history of basic income” is based on chapter 1 of L’allocation universelle by Yannick Vanderborght and Philippe Van Parijs (expanded English version in progress, to be published by Harvard University Press). The web version has been edited and abridged by Simon Birnbaum and Karl Widerquist. For the full list of references, see Vanderborght, Yannick & Van Parijs Philippe (2005), L’allocation universelle, Paris: La Découverte.

1. Bertrand Russell, Roads to Freedom. Socialism, Anarchism and Syndicalism, London: Unwin Books (1918), pp. 80-81 and 127.
2. On the Milners, Bertram Pickard, Major Douglas, James Meade, G.D.H. Cole and other aspects of this first public emergence of the UBI proposal, see Van Trier (1995).
3. The term basic income appears in the following context:”Mill did, however, regard as much nearer practicability those forms of socialism which, at a sacrifice of idealism, accepted a moderate degree of economic inequality. On this score he praised the Fourieristes, or rather that form of Fourierism which assigned in the first place a basic income to all and then distributed the balance of the product in shares to capital, talent or responsibility, and work actually done.” (p. 310). The Dutch equivalent (basisinkomen) had already been used in 1934 by Nobel laureate Jan Tinbergen, in the context of discussions about the program of the Labour Party (PvdA) in his own country, the Netherlands.

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