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The Ethics and Economics of the Basic Income Guarantee Georgetown University From the SelectedWorks of Karl Widerquist 2005 The thicE s and Economics of the Basic Income Guarantee Karl Widerquist Michael Lewis Steven Pressman Available at: https://works.bepress.com/widerquist/9/ 1 The Ethics and Economics of the Basic Income Guarantee This is an early version of a manuscript that was later published as: Karl Widerquist, Michael Anthony Lewis, and Steven Pressman (editors) The Ethics and Economics of the Basic Income Guarantee. Aldershot, UK: Ashgate, 2005 If you want to cite or quote it, please refer to the published version. If you have any questions, please contact me at: [email protected] v 2 The Ethics and Economics of the Basic Income Guarantee Contents List of Figures vii List of Tables viii List of Contributors x Preface xiii Acknowledgments 1 An Introduction to the Basic Income Guarantee 1 Michael Lewis, Steven Pressman, and Karl Widerquist Part One: History 2 In the Shadow of Speenhamland: Social Policy and the Old Poor Law 13 Fred Block and Margaret Somers 3 Inheritance and Equal Shares: Early American Views 55 John Cunliffe and Guido Erreygers 4 The Guaranteed Income Movement of the 1960s and 1970s 77 Robert Harris 5 A Retrospective on the Negative Income Tax Experiments: Looking 95 Back at the Most Innovate Field Studies in Social Policy Robert A. Levine, Harold Watts, Robinson Hollister, Walter Williams, Alice O’Connor, and Karl Widerquist Part Two: Debate 6 Basic Income in the United States: Redefining Citizenship in the 109 Liberal State Almaz Zelleke 7 Basic Income, Liberal Neutrality, Socialism, and Work 122 Michael W. Howard 8 A Framework for Justice and Fairness 138 Roy Morrison 9 Does She Exploit or Doesn’t She? 160 Karl Widerquist 10 Perhaps There Can Be Too Much Freedom 172 Michael Lewis 3 Part Three: Evidence 11 Income Guarantees and the Equity-Efficiency Tradeoff 185 Steven Pressman 12 Have the 1996 Welfare Reforms and Expansion of the Earned Income 205 Tax Credit Eliminated the Need for a Basic Income Guarantee in the United States? James B. Bryan 13 Back to Work Incentives in a Dynamic Perspective: An Application 220 to French Labor Market Thierry Laurent and Yannick L'Horty 14 Social Minima in Europe: The Risks of Cumulating Income-Sources 234 Stephen Bouquin Part Four: Proposals 15 The Political Economy of the Basic Income Grant in South Africa 257 Nicoli Nattrass and Jeremy Seekings 16 The Approval of the Basic Income Guarantee in Brazil 271 Eduardo Matarazzo Suplicy 17 The Basic Income Guarantee in Europe: The Belgian and Dutch 279 Back Door Strategies Yannick Vanderborght 18 The Cost of Eliminating Poverty in Canada: Basic Income With 304 an Income Test Twist Derek Hum and Wayne Simpson 19 Can a Negative Income Tax System for the United Kingdom Be 315 Both Equitable and Affordable? Randall Bartlett, James Davies, and Michael Hoy Index 339 v 4 The Ethics and Economics of the Basic Income Guarantee Figures 2.1 Trends in grain prices 24 2.2 Grain prices 25 2.3 Per capita poor relief expenditures in Speenhamland and 32 non-Speenhamland counties (agricultural parishes only) 2.4 Agricultural wages 1790–1834 35 2.5 Winter wages of southeastern farmworkers 36 12.1 Static versus dynamic traps on the French labor market 205 18.1 (1a and 1b) 298 18.2 (2a and 2b) 297 18.3 (3a and 3b) 300 18.4 Income comparison for 1 adult, 3 children 305 18.5 Income comparison for 2 adult, 2 children 306 Perhaps There Can Be Too Much Freedom 5 Tables 2.1 Divergent Speenhamland narratives 21 2.2 Forms of relief by modern names 23 4.1 Unemployment rate, number of persons and families in poverty, 84 1960–1975 9.1 Payoff table 155 9.2 Risk payoff table 156 10.1 Poverty rates based on factor income (pre-fiscal policy) 169 10.2 Poverty rates based on disposable income (post-fiscal policy) 170 10.3 Poverty rate reduction due to fiscal policy 171 10.4 Percent of factor income: Poor who escape poverty due to fiscal 171 policy 10.5 Productivity growth rates in manufacturing 173 10.6 Growth of real GDP per worker 174 10.7 Equity efforts and efficiency 175 11.1 Health status of household head by annual household income 188 level: Population under 65 years old (MEPS data–1996) 11.2 Limitations on ability to work of household head by income 189 category: Population under 65 years old (MEPS data–1996) 11.3 Average family income by source (1997 dollars) single-mother 190 families in the poorest decile 11.4 Average family income by source (1997 dollars): Single-mother 191 families in the second poorest decile 11.5 Average family income by source (1997 dollars): Single-mother 193 families in the second quintile (3rd and 4th deciles) 12.1 National minimum income (RMI) 200 12.2 Local monetary assistance (LMA) 200 12.3 202 12.4 203 12.5 Static/dynamic traps 204 12.6 Characteristics of the different types of workers 206 12.7 Summary of the results 208 13.1 Proportion of unemployed women who found a part-time job 213 13.2 Proportion of unemployed population finding a temporary job 213 13.3 Short-term transitions 219 13.4 Employment–unemployment transitions between January 1997 219 and September 1998 13.5 Reductions of employer contributions to social security system 222 in Belgium 6 The Ethics and Economics of the Basic Income Guarantee 17.1 Estimates of the extent of poverty and the cost of basic income and 287 guaranteed income plans for Canada 17.2 Additional estimates of the extent of poverty and the cost of inter- 289 mediate basic income and guaranteed income plans for Canada 18.1 309 18.2 309 18.3 Frequency of tax payers 310 18.4 Critical tax rates/demogrants/break-even income without base 310 broadening 18.5 Critical tax rates/demogrants/break-even income with base 311 broadening 18.6 Critical tax rates/demogrants/break-even income without base 311 18.7 Critical tax rates/demogrants/break-even income, government 312 transfers eliminated, with broadening 18.8 “Pseudo aggregate” analysis without base broadening 312 18.9 “Pseudo aggregate” without base broadening 313 Perhaps There Can Be Too Much Freedom 7 Contributors Randall Bartlett is in the Department of Economics at the University of Guelph, Guelph, Ontario, Canada. Fred Block teaches sociology at the University of California–Davis. He is a senior research fellow with the Rockridge Institute, a progressive think tank in the San Francisco Bay Area. His recent writings have focused on the politics of social welfare and the economic sociology of market societies. Stephen Bouquin is Professor of Sociology at the University of Picardie–Jules Verne and a research fellow at the G. Friedmann-Center of the National Center for Scientific Research. He received his Ph.D. in sociology at the University of Paris VIII in 1999. James B. Bryan is at Manhattanville College. John Cunliffe is in the Department of Politics and International Studies, University of Warwick. James Davies is in the Department of Economics at the University of Western Ontario, London, Ontario, Canada. Guido Erreygers is in the Department of Economics, Faculty of Applied Eco- nomics, University of Antwerp. Robert Harris is the former Executive Director of the President’s Commission on Income Maintenance, and the former Vice President of the Urban Institute. Robinson Hollister is Professor of Economics at Swarthmore College, and coauthor of Labor Market Policy and Unemployment Insurance. Michael W. Howard is Professor of Philosophy at the University of Maine. He received his Ph.D. from Boston University in 1981. He is the author of Self- management and the Crisis of Socialism (Rowman and Littlefield, 2000), and the editor of Socialism (Humanity Press, 2001). Michael Hoy is at the Department of Economics at the University of Guelph, Guelph, Ontario, Canada. Derek Hum is Professor of Economics at the University of Manitoba. He is a graduate of Mount Allison University, Oxford University and received his Ph.D. from the University of Toronto. He was formerly research director of an experi- mental test of a guaranteed income program in Canada. Dr. Hum is coauthor of Experimental Social Programs and Analytic Methods: An Evaluation of the U.S. 8 The Ethics and Economics of the Basic Income Guarantee Income Maintenance Projects (1984), and (with Wayne Simpson) of Income Maintenance, Work Effort and the Canadian Mincome Experiment (1991). Thierry Laurent is at the Center for Economic Studies (EPEE), University of Evry, France. Robert Levine is Senior Economic Consultant at the Rand Corporation, and is author of The Poor Ye Need Not Have With You: Lessons From the War on Poverty. Michael Anthony Lewis is Associate Professor of Social Welfare at the School of Social Welfare, Stony Brook University. He is the coauthor (with Karl Widerquist) of Economics for Social Workers. Yannick L’Horty is at the Center for Economic Studies (EPEE), University of Evry, France. Nicoli Nattrass is Professor of Economics at the University of Cape Town. She holds a doctorate from Oxford University. She is the author of, most recently, The Moral Economy of AIDS in South Africa (Cambridge University Press, 2004). She is the coauthor (with Jeremy Seeking) of From Race to Class: The Changing Nature of Inequality in South Africa (forthcoming, Yale University Press). Alice O’Connor is Associate Professor of History at the University of California– Santa Barbara, and is author of Poverty Knowledge: Social Science, Social Policy and the Poor in Twentieth Century U.S. History. Steven Pressman is Professor of Economics and Finance at Monmouth University.
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