Issues with the Basic Income

Vegans, environmentalists, and basic income advocates need to be talking to each other.  But in many cases, they have not even HEARD of each other.  In this rather lengthy post, I will raise four questions that environmentalists and vegans might (or do) raise about the basic income idea, and then discuss them.

Basic income? What’s that?

It was only recently that I became aware that there WAS a group of people, mostly academics, interested in the basic income idea. In a previous post, I explained what the basic income is: it’s a universal income guarantee, generally enough to provide subsistence for adult citizens. (It needs to be for adults, or we are encouraging overpopulation; and it needs to be for citizens, or we are inviting the world to immigrate to our shores.)

But will a basic income do anything for the environment? It is something of a pleasant surprise to find that I’m not the first person to ask this question.  In the somewhat academic book Freedom and Security: An Introduction to the Basic Income Debate, by Tony Fitzpatrick (New York: St. Martin’s Press, 1999), the author devotes an entire chapter to “Ecologism and Basic Income.” He raises (pages 184 – 191) several concerns which environmentalists might have concerning a basic income (hereafter: BI). I have rephrased these a bit, and here they are:

1. A basic income (BI) might be good from the social justice angle, by helping the poor, but it’s not clear how this would help the environment. Would it, for example, dampen the destructive effects of economic growth? Since it’s an income redistribution proposal, wouldn’t it just shuffle the money around, rather than blunting the destructive environmental effects of consumerism and economic growth?

2. A BI is unconditional (no means test, no need to have or even pursue a job). This would reward people for pursuing activities outside of paid employment, or doing nothing at all. But would these non-job activities necessarily be environmentally friendly?

3. A BI would seem to require a centralization of society. But many environmentalists, such as the Green Party in different countries and the post-carbon advocates who want to promote more localized economies, want exactly the opposite — they want to see decentralization, “thinking locally,” local economies, growing local food, and so forth.

I was inspired to think of another possible objection:

4. Even if a BI does dampen the destructive environmental effects of perpetual economic growth, in a world of resource shortages, there may not be any need to reduce wealth. We may be looking at an impending financial collapse, and soon be faced with a world of shortages in which reducing the incentive to work may be unnecessary or actually counter-productive.

In a single post, I can’t give a fully satisfactory answer to these objections.  But the BI is my default position on social justice and the environment, until someone can convince me there’s a better policy.

The BI and economic growth

We have hit the limits to growth, consumption is destroying the planet, and it’s time to turn back. Will the BI help us in this respect?

The BI isn’t even on the radar screen of most intellectuals, much less politicians, and changing the political system is a monumental task.  Moreover, the economy is likely to collapse of its own weight in the not too distant future, with absolutely no legislative action needed.  This raises the question of “why bother?” with the BI.

Both Democrats and Republicans are engaged in a futile argument about how best to “grow” the economy, and in the meantime this is propelling ever higher levels of debt.  But we have likely already encountered the physical limits to growth, and in practical terms it won’t be possible to restart economic growth without cheap oil.  Peak oil means the end of cheap oil and the end of economic growth.  Borrowing or investing isn’t going to help. God isn’t going to put more oil in the ground, no matter how much money you have. The current government debt ceiling crisis is just a gigantic distraction.

My suspicion is that implementing a BI to “dampen” the economy is not going to be necessary.  Events are going to “dampen” the economy sufficiently just by themselves, and figuring out how to “dampen” the economy in the summer of 2011 is likely to be an academic exercise for some future historians.

A more important reason for supporting the BI is that it would prevent economic growth from starting up again.  Most likely the economy will be in ruins by the time a BI could even be placed on the political agenda.  But even after this, some people will still point fingers at the oil companies, the liberal media, the Arabs, or whoever, and put forward the ridiculous idea that we need to get the economy growing again.  That’s when we’ll need a serious discussion of the BI.

In such a future situation, with resource shortages, high unemployment, and the temptation to exploit what remaining fossil fuels we have to “restart” the economy, a BI might be highly useful. It would encourage people to remain at the low end of the economic spectrum and take it easy. Rather than restart the growth economy, it would enable people to be happy with a non-growing economy.

The BI and economic efficiency

The BI might actually promote economic growth by promoting economic efficiency. Some BI advocates (not “limits to growth” people, obviously) actually put this forward as an advantage of the BI — that a BI would actually further economic growth. From the point of view of the environmentalist, though, this wouldn’t be a good thing — so is the BI something we really want?

How might the BI promote economic growth?  This could be argued either way, but one might say that the rich tend to spend their extra money on conspicuous consumption items, like diamonds or Picasso paintings, that in themselves don’t generate a lot of economic growth. The poor, though, are likely to spend it on things that require actual industrial production to increase.  This argument is a bit arcane, but revolves around the issue of whether spending by the poor is more likely to stimulate growth than spending by the rich.  The BI, by shifting income from the rich to the poor, might thereby promote economic growth.

Even if we grant this rather nebulous argument, it just looks at the consumption side. What about production? There is no question that placing a tax on income would reduce production. That’s because anytime you place a tax on some activity (in this case work), you tend to decrease that activity. People, both rich and poor, will tend to work less. So no matter how you weigh the effect of whether the poor or the rich will spend money more destructively, it is money chasing declining economic activity. People will work less if you tax work, so total economic output (and therefore environmental destruction) will decline.

The BI and centralization

A lot of “green” activism is directed towards local rather than national or international economies and politics. Partially this is because there is so much negative environmental realities associated with “globalization,” partially this is because of the fossil fuel costs of shipping goods around, and partially this is just a distrust of central governments which seem to operate on behalf of huge corporations.

I don’t have a lot of sympathy for decentralization as an ideology. This is just romanticism unless it is based on actual environmental impact. It’s quite valid in regard to transporation, so I agree with the “locavores” on that issue. But transportation is just a relatively small part of the cost of goods. Food shipped from Mexico or even Chili or New Zealand may be less environmentally destructive than the same food produced locally — depending on how the food is produced locally. If you are living in a dry or cold climate, it may be more energy-intensive to produce food locally than to ship it in. Think about trying to grow rice in Colorado, or greenhouse bananas in Alaska, versus the energy cost of shipping those items in from elsewhere.

In general, in the absence of any central controls, there is no market regulation of the use of a natural resource and we have the whole problem of “the tragedy of the commons” that Garrett Hardin wrote about in an essay republished in The Environmental Handbook put out for the very first Earth Day. “Tragedy of the commons” is actually a misnomer — it should be called an “open access regime.” Everybody just grabs for a resource that is essentially “free,” and anyone who tries to do the “right thing” by conserving the resource, just puts themselves at a competitive disadvantage with those who do not. Decentralization just puts the world in an environmental downward spiral in which those who pollute or destroy the environment the fastest, are at an economic advantage over those who try to behave responsibly.

The BI and a Steady-State Economy

The most serious objection to the BI is in fact that in the future resource-depleted world, the economy would be so depressed that a BI would not work.

In today’s economy, would anyone suggest a BI for Somalia? Of course not. There’s hardly any wealth worth taxing in Somalia in the first place. The tax rate would need to be so high that the incentive to work at all would be destroyed and the system would collapse. The problem is, that in a truly “sustainable” economy, in which all the environmental cards are fairly laid out on the table, we may be so much poorer that it may make no sense to implement a BI. It would be like trying to get Somalia to implement a BI.

Some people, most notably Gail Tverberg, have argued that a steady-state economy is only possible at a very basic level. She suggests the economy of the year 1750 as a place where it might work.  At this level, probably a BI doesn’t make a lot of sense. Yes, you’d need ecological economics, and some sort of social justice, but probably not a BI.

No one really has a good, scientific answer to this question, but I am a bit more optimistic about the future. My back-of-the-envelope estimate is that “sustainable” means a vegan population of on the order of ½ billion to 1 billion people, existing at roughly a “European” standard of living. It would be smaller and poorer than people in today’s Europe, but healthier and more secure.

There are actually an indefinite number of sustainable economies, each with its own population / affluence balance. You could have a larger and poorer population, or a smaller and more affluent population. The problem with meat consumption is that it has a serious environmental cost (thus reducing the human population that could sustainably be supported) but does not increase the affluence (the standard of living). In fact, it seems to decrease affluence. It creates serious public health problems, which are currently bankrupting the U. S. with rising health costs. It also promotes violence; it essentially requires some cruelty to animals, and people who are cruel to animals are typically also social problems.

We need to reduce our population. The ecological footprint of U. S. livestock is actually greater in many respects than the ecological footprint of humans by themselves, we need to understand that we do not simply have a “population” problem: we have a “population – livestock” problem. Both need to be dealt with.

But which economy is “optimum”? I would suggest that the optimum population is one in which resources are sufficiently abundant so that a BI makes sense. This still leaves a number of choices, but narrows down the range considerably; we want an economy in which people are not so poor that their lives are driven fundamentally by necessity.  If we live in a world in which a sustainable human economy cannot support a BI, then most likely we need to think about reducing our population.

 

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