Charles Clark, of St. John's University, who will discuss the economic feasibility of a basic income guarantee in the United States at the next USBIG seminar;

DAY & TIME: 5 to 7pm, Friday, March 23rd.

PLACE: Room 411 of Fayerweather Hall in the Sociology Department of Columbia University on main campus next to St. Paul's Chapel near the entrance at Amsterdam Avenue and 117th Street.

The April speaker will be Michael Lewis of SUNY-Stonybrook.


"Fundamental Instability and the Growing Constituency for the Basic Income Guarantee"

Stanley Aronowitz, sociology professor at the City University of New York and coauthor of The Jobless Future, discussed the political situation that prevented the U.S. from adopting a Western-European-style welfare state in the middle of the twentieth century and changes in the political situation that could make it possible for a coalition to develop large enough to push through a basic income guarantee in the United States early in this century.

In the 1930s unions were a strong progressive force in the United States, supporting New Deal reforms such as the minimum wage. But in 1949, after the unions' push for national healthcare failed they changed strategies and together with major employers created what Aronowitz called "the private welfare state." Unions won healthcare, job protection, and other benefits from their employers rather than from the state-as was the case in Europe. Some unions even won elements of a basic income guarantee from their employers: The printers' unions at the New York Times won six-month sabbaticals at 80 percent pay. Autoworkers won full pay if their plant closed down as long as they were willing to relocate should a job become available. Longshoremen won full pay whether they worked or not as long as they were available for work if needed, and today some longshoremen now work only a few days a year while drawing fulltime salaries.

With the private welfare state, unions did not feel the need to push seriously for increases in the public welfare state. Like any other institution, unions are self-perpetuating bureaucracies. According to Aronowitz, after unions won private welfare benefits from their employers, distribution of these benefits to their members became a central source of union power. Many unions are essentially healthcare distribution firms. By the 1960s, when national healthcare was again on the agenda, unions did not support it as they had in the 40s. Instead, they supported the creation of Medicare and Medicaid for retired persons and the indigent. Union policy statements are still very progressive, but they have often sat on their hands while social benefits have been taken away. A large reason for this is that union members have been insulated from problems of people outside the unionized sector. But, Aronowitz believes, unions could soon reemerge as a powerful progressive force in the United States.

As Aronowtiz argued in the Jobless Future, good jobs are gone. The size of the unionized sector has been shrinking for decades. More and more people are forced to go into the low-wage sector. The recently booming "new economy" industries have not developed private welfare benefits common in America's old industrial base. For example, two-thirds of Microsoft employees have no benefits. More and more people have no access to the safety net provided by the private welfare state, and more and more people are forced to move in and out of the labor force, as employers need them. As the need for security in the absence of the private welfare state becomes more and more apparent, the political constituency in favor of the basic income guarantee is growing. The growing popularity of the living wage movement is evidence of the growing concern with people in the low wage labor market. But a living wage assumes that people have access to stable jobs.

With the increasingly contingent nature of jobs at all skill levels, people need the kind of insurance that the basic income guarantee can provide. Unions today can see the dangers for their members in the increasingly insecure labor market and they will see the need for basic income guarantee more than they have in the past. Union support is essential, and with it, the basic income guarantee could quickly return to the political agenda. Workers with sometimes well-paid but often contingent jobs in the new economy would benefit from the security a basic income guarantee could provide. Workers in the growing low-wage sector would also benefit from the same security. In short, the coalition to press for the basic income guarantee is out there and growing.


Herbert Simon, one of the most brilliant advocates of the Basic Income Guarantee, died February 9th in Pittsburgh. An economist at Carnegie Mellon University for over fifty years, Simon won the Noble Prize in economics in 1978 for his work on "bounded rationality"--the problem of economic decision making when the standard economic assumption of perfect information does not hold. Under such circumstances people can't reach their optimum or the point of "utility maximization" Simon examined how they will instead search for "good enough" and how this behavior will affect economic outcomes. Simon also worked in philosophy, history, and computer science, and he has become known as one of the fathers of artificial intelligence. Simon advocated the basic income guarantee since the 1960s and one of his last publications was his contribution to last fall's Boston Review article on the basic income guarantee, "UBI (Universal Basic Income) and the Flat Tax," in which he argued that a 70 percent flat income tax could support all government spending with enough left over for an $8,000 basic income for every adult and every child in the United States, while still preserving work incentives and adequately rewarding people for their efforts. His presence will be missed, but his contributions will be around for a very long time.

4. A DECISIVE STEP TOWARDS A NEGATIVE INCOME TAX IN FRANCE? (Reprinted from the BIEN News Flash No. 7, Jan. 2001)

Along with a number of other countries across Europe, France is considering a reduction of its income taxes. However, only about one half of French households currently pay income tax, which implies that only the comparatively rich half of the population would benefit from the tax cut. For any European government, and especially a red-green government, this makes such a measure hard to sell. To make it acceptable, the government tried to couple it with a reduction of the "generalised" social security contributions (CSG) on the lower layers of income, which would benefit the low-paid workers. But France's supreme court (Conseil constitutionnel) turned down this option on the 19th of December 2000, mainly on the ground that it involved a discrimination among similarly situated households and therefore violated the principle of equality before the tax system. Some, including the social affairs minister Elizabeth Guigou, then proposed to increase the minimum wage, while offsetting the cost for the employers of low-paid workers through selective cuts in their social security contributions. But a majority emerged in favour of using a more straightforward method to boost the disposable incomes of low-income households: to design the tax cut in the form of a refundable tax credit. As the idea smells, in the French context, of market-liberal ideology, a consensus was not easy to reach. But by early January the Prime Minister and Finance Minister became convinced that this was the way to go, and on the 11th of January 2001, Le Monde's main headline was: "Lionel Jospin endorses the tax credit". The following day's issue of the same newspaper carried, under the title "Tax credit: don't be shy, comrades!", a characteristically crisp article by former Prime Minister Michel Rocard (also chairman of the social affairs commission of the European Parliament and one of the keynote speakers at BIEN's Berlin congress). He rejoiced at the fact that the proportionality and hence the yield of the CSG (introduced by the government he headed) was not affected, and urged that the existing guaranteed minimum income scheme (RMI), which his government also introduced, should evolve into a refundable tax credit of the negative-income-tax type, such as the "allocation compensatrice de revenu" recently proposed by the "Rocardian" Roger Godino. "The replacement of all that [the RMI and other assistance schemes with a flavour of charity] by a single principle, applicable to rich and poor alike, designed so as to provide people with work incentives and to prevent them from being trapped in non-work situations, is something that looks far more impressive and that corresponds far more a leftish conception of the relationship between income, taxation and work." But what about the idea's suspicious pedigree, in particular its association with Milton Friedman, the founder of monetarism, "which causes inequalities to expand exponentially and many countries to be locked in underdevelopment"? This system, Rocard replies, we've got it, whether we wish it or not. "Why then refuse the instrument for dampening human suffering which Friedman himself had seen fit to append to the system, as he understood the social cruelty of what he was proposing? It would beat it all to take the worst and leave behind the best." (Le Monde, 12.01.01) From the information made available by the Finance Ministry, however, it seems clear that the French version of the refundable tax credit will not be integrated with either the RMI nor the tax reductions for higher earners and will be similar to the American EITC or the British WFTC, rather to a straight negative income tax, though more general from the start as it would not be restricted to families with children. In the case of a single person, for example, once the new scheme is fully in place (2003), the credit would start at a level of about 200 Euros annually for earnings at 30% of the minimum wage, reach a maximum of nearly 700 Euros at the level of the minimum wage (about 850 Euros per month) and be phased out gradually until it vanishes at 140% of the minimum wage. Because of the refundable nature of the tax credit, this is no doubt an important and unprecedented step in the direction of a negative income tax and, beyond, of a universal basic income, though more modest, for example, that the Netherlands' 2000 tax reform.


Under the headline, "Maybe the election will shame us into sharing our wealth," the September / October 2000 issue of the Radical Middle Newsletter (edited by Mark Satin) reported on six new proposals for the redistribution of income and wealth, including the basic income guarantee. Here are excerpts:

"For the first time in four decades, Americans have been talking about how to intelligently share their wealth. . . . At least six such ideas are ready to fly . . . if their champions can get them off the ground. . . .

"The guaranteed income was a hot new idea in the 1960s, assiduously promoted by Robert Theobald and other young turks. But it never went anywhere. Today's basic income proponents are more market-friendly than most of their Sixties counterparts. And they're using arguments that are more pragmatic (even their term-of-choice, "basic income," is less incendiary than the term "guaranteed income").

"For the last three years, Research Associate Karl Widerquist has been doing yeoman work on the basic income at the Jerome Levy Economics Institute in Annandale-on-Hudson, N.Y. In his policy papers (#245 and #289 at, Widerquist provides reams of evidence that "interest in [the basic income] is again gaining" -- in part because it's seen as a poverty-precluding mechanism. The new advocates are calling for smallish basic incomes that would deter (or at least ease) poverty, not middle-class-like guaranteed incomes. One typical proposal calls for a basic annual income of $8,000 for each adult and $2,000 for each child. Another calls for $4,000 per person.

"Perhaps the best-known member of the new generation of basic income advocates is Philippe Van Parijs. Educated at Oxford and Berkeley, he started working on the topic on a commune in 1977 . . . and is still working on it as a professor-activist at Louvain University in Belgium.

"Like Widerquist, Van Parijs is long past imagining that a basic income would turn us all into wonderful people. He's interested in freedom, efficiency, and ecology, not in the New Person. "The freedom we need to be concerned with is not just the freedom to choose among [products]," he says in his scholarly clarion call, Real Freedom for All (1995). "It is the freedom to choose among the various lives one might wish to lead."

"A good capitalist, Van Parijs thinks the basic income can make the high-job-turnover, information age economy more efficient: "With a basic income, individuals could go through repeated and protracted periods [during which they learned] new skills. [And] there would be less [need for government programs like] minimum wage legislation." Van Parijs also sees the basic income as fundamental for ecologists. To the extent the basic income "encourages simple living," he says, it would slow down the "spread of significant environmental externalities."

"In the U.S., the Green Party supports the basic income. Its platform calls for "a graduated supplemental income, or a negative income tax, that would maintain all individual adult incomes above the poverty level, regardless of employment or marital status" ("

Other proposals discussed in the article include: (1) "Universal capitalism" as Kenneth Taylor calls ideas based on Louis Kelso's original proposal for universal stock ownership. (2) The "living wage" movement. (3) The National Jobs for All Coalition. (4) Employer subsidies for hiring low wage labor as proposed by Edmund Phelps and Robert Haveman. And (5) "Self-help accounts" or "stakeholder accounts," as proposed by Bruce Akerman and others. This idea is similar to the basic income guarantee because it includes a universal grant, but the grant is given at key points a persons life rather than regularly throughout a person's life.

Satin criticizes the Basic Income Guarantee for being just a little too radical for the Radical Middle. "On the one hand, (basic income and universal capitalism) would give each of us maximum freedom. On the other hand, they'd strip us of responsibility for standing on our own two feet." He mentions the often quoted, but questionable conclusions for the negative income tax experiments in the United States in the late 1970s: that it broke up marriages and caused people to quit their jobs. But he concluded that any of the six proposals would be vastly better than the meager proposals put forth by Gore and Bush during the election campaign.

For the full text of this article go to:
Or see the homepage of the Radical Middle Newsletter, "thoughtful idealism, informed hope" at:


Nothing in this proposal is guaranteed, but Richard Freeman, an economist at Havard, and Eileen Appelbaum of the Economic Policy Institute, proposed sending a one-time "prosperity dividend" of $500 to every citizen of the United States. They made the proposal in an Op-Ed piece in the New York Times on February 1st, 2001 entitled "Instead of a Tax Cut, Send Out Dividends."

Freeman and Appelbaum's logic is two-fold: First, the United States now has an enormous budget surplus and therefore it can afford to give back the roughly $140 billion that the prosperity divided would cost. Second, as worries of a recession increase president Bush has promoted his tax cut plan as a way to stimulate the economy. Tax cuts, however, are a rather slow method to stimulate the economy. If enacted, they probably wouldn't have much of an effect until next year, but which time the economy may already be recovering. The prosperity dividend could be enacted immediately; it would have a strong stimulative effect on the economy; it would mean most to those who have least; and it would be not have long-lasting effects on the tax code. Despite this idea's merits, it has little chance of being adopted by the Bush administration. George W. Bush's primary motive for his tax cut proposal does not seem to be fiscal stimulus, but a strong desire to reduce the tax burden on wealthy Americans.

Of course, a one-time dividend is far from a full basic income guarantee, but the authors cite the Alaska Permanent Fund as an inspiration, and the prosperity dividend is similar enough that it could open up people's minds to this sort of idea.


Stephen C. Clark's website, "Jasper's Box," is dedicated to the transformation of how money is thought of and used on our planet. Among other things (such as Clark's monetary theories), it includes his new thirteen-chapter novel, entitled "Daily Bread, The Story of Jasper's Box." It was posted one chapter at a time from October 7, 2000 until January 6, 2001. The story begins when mysterious ATM machines suddenly appear dispensing $100 in cash per day to each person who puts her hand on the screen. This basic income guarantee is financed by a large but stable and predictable inflation. All 13 chapters of the novel can be found at:


The Caregivers' tax credit campaign has reported that making the child tax credit REFUNDABLE is now on the national agenda. The proposal is for a refundable tax credit of $1000 per child. The current child tax credit mostly benefits families with children above $25,000--those with low or no wages get little to nothing at all. Refundability would extend the benefit to all children in families with incomes below that level. This is not a complete solution to income for poor people nor is it a basic income guarantee, but $1000 makes an enormous difference if you're poor. The caregivers' tax credit campaign urges you to contact your members of Congress and urge them to support this legislation. For more information see:

For those who are skeptical about the difference between a caregivers' tax credit and a true basic income guarantee, it has one very important thing in common with it: it lacks the poverty trap aspects that made AFDC so unpopular. Also, the guaranteed income movement of the 1960s and 70s is often spoken of as if it were a complete failure, but--as Robert Harris pointed out--it lead DIRECTLY to the creation of two successful government programs: Food Stamps and the Earned Income Tax Credit (EITC). Most likely, the success of the EITC, has played a big part in making it possible for a refundable child tax credit to enter the political agenda. Thus, the guarantee income movement of the 1960s is still indirectly having a positive affect on legislation today. A small refundable child credit now, could lead to a larger one in the future and perhaps someday to a refundable adult credit. This is by no means an inevitable course of events, but a universally refundable tax credit will be much more likely after a child credit proves successful.


"What can I do to help?"

Thanks to everyone who has asked that question. I've been very impressed by all the enthusiasm USBIG has received. Apparently, there is a lot more support for the idea in the United States than one might expect; we just haven't been organized. There are three simple things that everyone can do: (1) Keep me informed about any news related to a basic income guarantee, including and especially any new publications on it, and I'll let everyone on the mailing list know. (2) If you know other people who would be interested in USBIG, get them onto the mailing list. (3) Give us your ideas and your input. If there is something you think you could do that would help USBIG, let me know.

Beyond the simple things there is only ONE THING WE NEED RIGHT NOW: Someone to keep the website updated. Right now we have two people with really good web skills with no time and one person with really bad web skills and very little time. The shell is there; no major construction is needed right now, just adding to what's already there.

In the future they'll be more to do. We don't as yet have any formal paid membership, but as planning for the conference gets closer we will most likely ask everyone to become a member. Perhaps when the conference comes we'll need some labor to help with set up, organization, and operation; I'll let you know.


THE U.S. BASIC INCOME GUARANTEE NETWORK (USBIG), which publishes this newsletter, is dedicated to promoting the discussion basic income guarantee in the United States. USBIG supports a regular seminar series, a newsletter, a website, and soon a conference. Information on USBIG can be found at:
Or by email at:

THE BASIC INCOME EUROPEAN NETWORK (BIEN) maintains a website, publishes a newsletter, and organizes conferences promoting basic income in Europe and around the world. The BIEN website is:

THE CITIZENS' INCOME STUDY CENTRE of Britain publishes a newsletter and maintains a website; both have news on citizen's income (a version of BIG) from the United Kingdom and around the world:

BASIC INCOME/CANADA (BI/Canada) is developing a website and maintains an email discussion group. To subscribe, send a message to: saying To be included on the BI/Canada email list to receive periodic newsletters, send your email address to with on the subject line.

OASIS (ORGANISATION ADVOCATING SUPPORT INCOME STUDIES IN AUSTRALIA), The Australian Basic Income group, publishes an email newsletter and maintains a website with literature about basic income in Australia and around the world. Anyone interested in receiving a copy of their newsletter should contact: Allan McDonald at: or see their website:

UNIVERSAL BASIC INCOME NEW ZEALAND (UBINZ) promotes basic income in New Zealand. Their website is:

THE SOUTH AFRICAN NEW ECONOMICS FOUNDATION (SANE) promotes BIG in South Africa and Worldwide. It can be found at:

VERENIGING BASINKOMEN promotes Basic Income in the Netherlands. It's website is:

GRUNDEINKOMMEN OSTERREICH promotes Basic Income in Austria. Their website is:

BIEN IRELAND promotes Basic Income in Ireland. They can be reached by email at:

BIEN BRASIL (BASIC INCOME EARTH NETWORK) promotes basic income in Brasil. The Coordinator, Eduardo Suplicy, can be reached by email at:

RED RENTA B?SICA has information in Spainish on the basic income guarantee in Spain:

THE BOSTON REVIEW included an extensive article on the basic income guarantee in its October-November 2000 issue. The article will be published as a book this spring. The full text of the issue can be found on line at:

THE CENTER FOR THE STUDY OF DEMOCRATIC SOCIETIES (CSDS) has been talking about some form of BIG for 30 years. More information can be found at:

MATS H?GLUND has created two BIG web sites: One in English: And one in Swedish:

THE GEONOMY SOCIETY, which promotes using land taxes to support a universal basic income guarantee, can be reached at:

MANFRED FUELLSACK maintains a BIG bibliography on line at:

SOCIAL AGENDA sponsors a Caregivers Tax Credit Campaign. Although it isn't a universal basic income guarantee, it will distribute income to anyone caring for (directly or indirectly) another human in need. Their website is:

THE ALASKA PERMANENT FUND pays a partial Basic Income Guarantee to all Alaska residents funded from oil revenue. For information see:

HEALING POLITICS: CITIZEN POLICIES AND THE PURSUIT OF HAPPINESS, Steve Shafarman's book on the Citizens' Dividend can be ordered on line at:

FINALLY, If you know any BIG news; if you have any comments on the newsletter or the web site; if you know anyone who would like to be added to this list; or if you would like to be removed from this list; please email me at:


-Karl Widerquist, coordinator, USBIG.