Leadership

Basic income for all could lift millions out of poverty – and change how we think about inequality

The idea of a basic income for every person has been popping up regularly in recent years.

Economists, think tanks, activists and politicians from different stripes have toyed with the idea of governments giving every citizen or resident a minimum income off which to live. This cash transfer could either replace or supplement existing welfare payments.

Pilot projects and feasibility studies have been run or are under way in the Netherlands, India, Canada, Finland, France and elsewhere.

Even in the U.S., the idea finds support. Alaska, for example, already divides its oil revenues among its residents.

Most arguments in favor or against basic income have focused on its feasibility, simplicity, promotion of personal independence or effectiveness at reaching those who fall through the cracks of the welfare state.

However, the most important advantage of basic income may not be in its practical application but rather in how it could change the way we think and talk about poverty and inequality.

Benefits of a basic income

Giving every resident an unconditional grant, regardless of whether you are a billionaire or destitute, is a significant departure from our existing welfare state. The latter offers only limited and conditional support when working is not an option.

Support for a basic income comes from very disparate political and ideological circles.

Some libertarians like basic income because it promises a leaner state without a large bureaucracy checking people’s eligibility and policing their behavior. Others see it as enabling entrepreneurialism – the poor helping themselves.

On the left, many see basic income as an opportunity to plug numerous holes in the social safety net or even to free people from “wage slavery.” For feminists, basic income is a successor to the old demand for wages for housework.

Pilot projects suggest that simply giving money to the poor could successfully tackle poverty. In Namibia, poverty, crime and unemployment went down, as school attendance went up. In India, basic income recipients were more likely to start small businesses.

Jobs are no longer sole answer to poverty

When discussing inequality, we usually focus on employment and production. Yet, much of the world’s population has no realistic prospects of employment, and we already produce more than what is sustainable.

Basic income, however, separates survival from employment or production.

Our current answers to poverty and inequality stem from Fordism, the New Deal and Social Democracy. They center on wage labor: get more people into jobs, protect them in the workplace, pay better wages and use taxes on wages to fund a limited system of social security and welfare.

It would seem that to get people out of poverty, you have to get them into jobs. Politicians across the spectrum agree. Is there a politician who does not promise more jobs?

In my own research on labor in Africa, however, I have found that wage labor is only a small part of a larger picture.

In most of the Global South, whole generations are growing up without realistic prospects for employment. We cannot develop the world solely by getting people into jobs, encouraging them to start small businesses or teaching them how to farm (as if they didn’t already know). The painful reality is that most people’s labor is no longer needed by increasingly efficient global chains of production.

In economic speak, a large portion of the world’s population is surplus to the needs of capital. They have no land, no resources and no one to whom they can sell their labor.

South Africa and jobless growth

Thus, to believe that jobs or economic growth is going to address this crisis of global poverty seems naive.

The example of South Africa is telling. In a comparatively rich country where youth unemployment runs at more than 60 percent, pensions, childcare and disability grants are for many households the most important source of income. Yet many slip through the cracks of this limited welfare state.

As a healthy adult male, you stand little chance of either receiving a government benefit or finding decent employment, as economic growth has been largely jobless. For an adult without children, disability is the only access to these crucial grants.

In the early 2000s, a movement emerged in support of a very modest Basic Income Grant (BIG) of 100 rand (less than US$12 in 2002) per month. Significantly, this campaign received the support of the government-appointed Taylor Committee. Its report concluded that a BIG was likely fiscally sustainable and would lift as many as six million people out of poverty. It argued that this result could not be achieved by expanding existing welfare programs. However, the proposal was dismissed by the ANC, which continued to see employment as the only solution to poverty and inequality.

Not surprisingly, basic income campaigns have been prominent in countries with high socioeconomic inequality, like South Africa. These countries have both significant resources and a need for redistribution. In neighboring Namibia, another country with extreme inequality, a similar campaign has received growing support.

Furthermore, as the Club of Rome already realized in 1972, the productivist bias of our usual answers to inequality – grow more, produce more and grow the economy so that people can consume more – is ultimately unsustainable. Surely, in a world already characterized by overproduction and overconsumption, producing and consuming more cannot be the answer. Yet, these seem to be the answers with which we are stuck: grow, grow, grow.

Give a man a fish

To move beyond these defunct politics, we may need to think about distribution rather than production, a point powerfully argued by anthropologist James Ferguson. For Ferguson, giving a man a fish might be more useful than teaching him to fish.

The problem of global inequality is not that we do not produce enough to provide for the world’s population. It is about the distribution of resources. This is why the idea of a basic income is so important: it discards the assumption that in order to get the income you need to survive, you should be employed or at least engaged in productive labor. Assumptions of this kind are untenable when for so many there are no realistic prospects for employment.

This does not mean that basic income is a panacea. There are too many potential problems to list here. Yet, to give just a few examples: those countries whose populations would need it most might be least able to afford such schemes. And, basic income grants that are small enough to be politically acceptable may actually further impoverish the poorest if basic income replaces other grants.

Moreover, if people get money merely because they are citizens or residents of a country – shareholders in the wealth of that country – these claims become very susceptible to nationalist and xenophobic exclusion. Indeed, during recurrent episodes of xenophobic violence in South Africa, many explained their dislike of foreigners by accusing them of receiving welfare grants and public housing that should be going to South Africans.

Despite these problems, it is important to start experimenting with alternatives and to start thinking about distribution rather than production. After all, the welfare system that we have now also resulted from longstanding debates, experiments that were once considered unrealistic, ad hoc improvements and partial victories.

The Conversation

Ralph Callebert, Adjunct Faculty of History, Virginia Tech

This article was originally published on The Conversation. Read the original article.

Why Post-Mortems and Funeral Ceremonies For Failed Startups Are Important

“Success is not final, failure is not fatal: it is the courage to continue that counts.”
― Winston S. Churchill

Starting any kind of business requires a lot of hard work, attention and determination. It’s unfortunate that, not all business startups survive. In fact, according to statistics nine out of ten tech startups launched will fail within a span of less than three years. That can be quite disheartening!

I once read an article by Chris Poole of 4Chan (Creator of both Canvas and DrawQuest) – “Today my startup failed“-and one of the most touching paragraphs was this one:

I’m disappointed that I couldn’t produce a better outcome for those who supported me the most—my investors and employees. Few in business will know the pain of what it means to fail as a venture-backed CEO. Not only do you fail your employees, your customers, and yourself, but you also fail your investors—partners who helped you bring your idea to life.

Check out Techcrunch, for more details on this story.

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Source-Pixabay

Yes, failure sucks and nobody likes it!

But there’s good news too! Business failure is not the end of the world! There’s hope and founders can always bounce back.

Today i came across an interesting article on The Guardian, about a popular growing trend, where founders of failed business ventures  come together to celebrate and commemorate failure. You may ask- What really happens in such a gathering?

The mourners are in confession mode. When they’ve laid out their story before the audience, they raise a glass to failure – and once and for all put their failed startup to bed, to the cheers and support of the crowd.

A lot of entrepreneurs i know, have confessed that being a business founder can be a lonely affair. Same thing applies when a business venture fails and it has to be wound up. Many founders often feel isolated and alienated and that can be quite a daunting experience.

So why  attend such a gathering?

First of all, that depends on your situation.But here is a simple answer from the article-

Attending a social gathering that celebrates or mourns the death of business ideas or ventures offers an ideal opportunity to make such a transition smoother.

Read on the full article here –“Funerals for failed startups that allow entrepreneurs to rise from the ashes”

CB Insights too,  published a compilation of startup failure post-mortems by founders and investors and there’s a lot to learn from them. Read on-  166 Startup Failure Post-Mortems

4 Reasons Why A Business Plan Is Important

A business plan is a very important strategic tool for entrepreneurs. A good business plan not only helps entrepreneurs to focus on the specific steps necessary for their to make business ideas succeed, but it also helps them to achieve both their short-term and long-term objectives.

If you fail to plan, you are planning to fail! ― Benjamin Franklin

Venture capitalist and Silicon Valley pioneer Eugene Kleiner once stated that ‘writing a business plan forces you into disciplined thinking.’ An idea may sound great, but when you put down all the details and numbers, it may fall apart.

So why is the business plan so important?

Read on the : 4 Reasons Why A Business Plan Is Important.

I had originally  posted this article on iAfrikan.com