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Marcel Canoy Distinguished lecturer Erasmus School of Accounting and Assurance Columnist Financieele Dagblad Adviser ACM (competition authority)
https://www.youtube.com/watch?v=C9wP7KQggvY
Changing attitudes and realities around work and leisure
Increasing need for participation, in a broad sense
Ageing
Robots
Changing social structures
Complex tax system
Excessively broad compensation schemes
Fraud, control and humiliation social security
Stigma
Expensive and ineffective activation policies
Limited incentive to work
Increased expenses health
care
Current system ill-suited for the future
The case for change is obvious
Those who look only to the past or present are certain to miss the future
John F. Kennedy
Response to changing social economic, political and economic environment?
Fear of Muslims, migrants, robots, globalization
Lack of trust in politics
Rise in fact-free
politics and populism
•UBI = unconditional amount in € at
subsistence level for all
• Differs from means tested social security
provisions
• Debate on ‘all’, ‘level’ and ‘finance’
Makes system much simpler
Gears towards participation in broad sense
Responds to future labour market trends
Liberal (reaction to paternalism and administrative burden of social security)
Marxist (equality, social mobility)
Philosophical (freedom)
Treat UBI as a bean counter
Ignore behavioural effects
Show model results that are clearly unsuited and hence should be ignored
Consider it unfair and not targeted
Out of their comfort zones (!)
Freedom is key
Can be exploited to ◦ Technological innovation bottomup
◦ Social innovation
Civil organisation in neighbourhoods, health care education
Social care (caregiving)
◦ Development
◦ Other stance towards experiments and failure
Freedom should be interpreted in a Tocquevillean way
No freedom without responsibility
Purpose of freedom is to add to the size of the cake, not to grab as much of it
Responsibility at individual level without prescribing nature of the responsibility
Lowers stress
At the margin great incentive to work
Likely to reduce health care costs
Fundamental change in bargaining positions
But can benefit either side
◦ Will it happen?
◦ It might
◦ But experiments in developing countries showed otherwise
◦ The Economist: nice idea but income tax need to be raised with 60%
◦ Scott Santens:
I beg you pardon? You forgot a few things
Not good to look at average incomes
You forgot current spending on social security
You assumed flat taxes
To which I add: you forgot behavioural effects
You end up with tax cuts instead of increase
But this assumes you can effectively tax the super-rich
Bold assumption in US, very bold under Trump
Treat UBI as a bean counter
Ignore behavioural effects
Show model results that are clearly unsuited and hence should be ignored
Consider it unfair and not targeted
Out of their comfort zones (!)
Landing and moving about on the moon offers so many serious problems for human beings that it may take science another 200 years to lick them.
-- Science Digest, 1948 While theoretically and technically television may be feasible,
commercially and financially I consider it an impossibility, a development of which we need waste little time dreaming.
-- Lee De Forest, 1926 The actual building of roads devoted to motor cars is not for the
near future, in spite of many rumors to that effect. -- Harper's Weekly, 1902
Heavier than air flying machines are impossible. -- Lord Kelvin, president, Royal Society, 1895
Wageningen, Groningen, Leeuwarden, Utrecht, Tilburg (and counting)
Advantages ◦ Lower scale less costly
◦ Allows us to see how people respond to freedom
◦ Gears at places where problems are most urgent
◦ No need to overhaul the system
Disadvantages ◦ Not a real UBI
◦ What can we really conclude?
◦ Practicalities, scale limited, length limited, not properly measured, weird stance minister
Developing countries (e.g. India, Namibia, Kenya) ◦ (Surprisingly?) positive results ◦ Namibia
malnourishment, crime and truancy fell 25-42%
◦ Malawi school enrollment girls and women up with 40%
◦ General: good use of the money
poverty decreases
longer-term benefits in income, health, and tax income
no negative effect on labor supply
saves money
Older experiments (US, Canada)
(Thanks to Prof. Olli Kangas)
Starts in 2017 for 2 years
Huge public and political support
Well funded (20 billion)
Various models (Full UBI partial negative income tax)
Scientific setup
◦ NIT is cheaper and more geared towards problem areas
◦ UBI is … unconditional
◦ Differences not that big, but NIT seems politically (much?) more feasible in NL
Universal basic income is an appealing idea, because ◦ It matches much better with future trends than
current system
Many arguments against are simply wrong
But not all
Lot of uncertainties still
Curious to see outcomes experiments in NL and in particular Finland
Negative Income Tax probably easier