UBI: The Global Antipoverty Experiment

By Tenzin Chomphel
Editor in Chief

The back and forth of the best way to resolve extreme poverty, wealth inequality, and just taxation, may often appear endless to most. While global poverty is lowering at a rate of roughly sixty-eight million people per year, that still leaves an unacceptably high level of poverty around the world. Domestically, the United States experiences an estimated thirty-eight million still in poverty, and inequality has additionally been on the rise, with the bottom ninety percent of households accounting for less than a quarter of the total wealth.

Arguably one of the most controversial, yet blossoming proposed solutions to come out of this sphere, is a system where the government theoretically transfers payments directly into the hands of the individual citizen, commonly dubbed Universal Basic Income.

Universal basic income has taken on other monikers such as Guaranteed Income and Basic Pension, and differed in the exact schematics. The only core principles necessary to define a program as UBI, is that it serves as a periodic money payment, unconditionally delivered to all on an individual basis, with all receiving the same amount. Hence the universal aspect. Additionally, the amount provided is generally intended to skew towards the necessary amount to purchase only critical needs such as food and rent costs. Hence the basic aspect.

Discussion of a basic income can be dated back as far as the early 16th century. However concrete proposals that are often cited as the first hints can be drawn more so from the late 18th century, the most notable of these brought up by American founding father Thomas Paine. In his “groundrent” proposal, every citizen would receive fifteen pounds from the government after turning the age of twenty-one. Since then, accounts of politicians, CEO’s, activists, and academics pushing for their various iterations of wealth redistribution have popped up throughout modern history.

The primary motivations for a UBI foremost are poverty alleviation and combating wealth inequality. This applies particularly to developing countries with large populations still living in harsh socioeconomic conditions. In the hands of an individual living marginal to the poverty line, implementing such a systematic approach would theoretically allow for certain disposable income, which they could then use to reinvest into their human capital, health or education for example. Applying the theory of influential economist John Meynard Keynes, this would also provide additional money being injected back into these local economies through the multiplier effect. The resulting increased consumption would spur economic activity, and thus growth. 

For developed economies, an argument for UBI also stems from advancements in automation and technology. As machinery becomes more sophisticated and able to do the work of more individuals at a much cheaper rate, the resulting effect is job loss from largely low skill workers. This is interpreted from projections that automation will displace twenty million jobs globally in the manufacturing sector alone by 2030. Proposals for UBI however, contrary to popular belief are not meant to be interpreted as a replacement to these jobs. Similar to welfare programs such as subsidies, they are meant to provide a safety net to support a person’s main source income. Individuals would not be incentivized to quit their jobs based off of a basic income placed marginal to their country’s poverty line. In the words of social entrepreneur Hillary Cottam, “Welfare systems are designed to manage needs, but not designed to manage capabilities so that families can stand on their own.” 

If UBI can indeed theoretically serve as an effective panacea for wealth inequality, the question then is why the idea has struggled for centuries now to gain traction. One of the main reasons is how difficult it is to sell the idea of a basic income politically. With such minimal evidence on the long-term effects of UBI on a population, particularly one scaled to the size and diversity of a country, it is no surprise why it may be a political risk. Other common criticisms include the real impact on labor force participation, inflation, and of course the large price tag of such a program. These concerns also emphasize the need for additional real-world evidence to provide more conclusive answers to.

We have established that UBI faces a serious barrier to progress without more concrete evidence of its effects. Only within the 21st century has any actual progress in this sense been made. One notable success is Brazil’s conditional cash transfer scheme Bolsa Familia, which has helped half the amount of Brazilians living in extreme poverty, and lowered income inequality as well. India is another country where Basic Income is already in the mainstream political discussion. Numerous Indian economic advisors argue that it should be considered to help the country’s mass chronic poverty, especially in light of weak local administration and apathetic public officials. Variants are currently being trial run, such as in 2019 when the government began doling out a minimum income to small and marginal farmers. 

A young girl’s Bolsa Familia registrant card.

One of the world’s largest experiment in cash transfers however, is not being performed by any government at all, but through the nonprofit GiveDirectly. GiveDirectly aims to transfer cash directly into the hands of populations living in extreme poverty, such as over ten  million dollars specifically to rural residents in Siaya county, Kenya. The experiment was meant to examine its effect on the overall region, testing the “general equilibrium”, and it found that estimated a “fiscal multiplier” of 2.6 for this area, implying that every one dollar invested in fiscal stimulus grew the local economy by more than double. A breakthrough for the credibility of cash transfers, and by extension UBIIt is worth noting that the United States also recently began to consider the idea of a UBI more seriously, again mostly based on arguments of inequality and job displacement due to automation. Public advocates of these efforts include tech entrepreneur Chris Hughes in Stockton California, Newark mayor Ras Baraka, and democratic presidential candidate Andrew Yang‘s Freedom Dividend of one thousand dollars a month for every American citizen. Within the context of the 21st century milestones, UBI’s notoriety has gained a second wind that may be unprecedented for its proponents. The question we are now presented with is whether governments, and the people they represent, will view it as an undeserved handout, a costly and outlandish dream, or a decisive investment into the individual.

Photos courtesy of:
Scott Santens
Senado Federal

Bolivia In Crisis: The Legacy of Evo Morales

by Marc Camanag
Staff Writer

Although there is little consensus on whether Bolivia’s recent shift in leadership constitutes a coup, there is a power struggle plaguing the nation. Amidst widespread protests, it is clear that the resignation of former president Evo Morales carried very real consequences for the Latin American nation and its people. But to what extent? The fall of Morales — the country’s first indigenous president — after nearly fourteen years in office sparked violent protests between his native loyalists and defected police forces. While mostly rooted in deep-seated fears of regression, strong opposing ideologies in Bolivia date back to earlier times involving oppressive post-colonial structures

The current interim president and successor, Jeanine Áñez, is a senator of European descent with a problematic history of anti-indigenous tweets. And since Morales’ resignation, Áñez has only served to further aggravate this ethnic tension. All things considered, Morales’ legacy may be the only tangible piece in the complex puzzle of Bolivia’s future. 

Morales’ ascension to power in 2006 was strongly regarded as a victory for indigenous Bolivians, who have long been subjected to hegemonic rule under a small elite of European descent. For many, Morales was a much-needed break from the tradition of the Spanish colonial era that had long divided the population. Under his administration, the stark social divisions of the past were completely disrupted by a rhetoric of populism and racial distinction. Morales’ Bolivia saw a growing number of indigenous representatives within the government, along with a revival of indigenous culture and the establishment of the Wiphala as an official flag. Despite criticism that his discourse was polarizing and sparked disunity, it is apparent that Morales had a major hand in uplifting the long-marginalized indigenous people of his nation.

Economically, the impoverished Bolivia thrived under his presidency, with two million people being lifted out of poverty through the redistribution of natural gas assets and maintenance of a balanced national budget. For a country that has long suffered from instability and poverty, Evo Morales was a beacon of hope — and then things started to change.

Eventually, Morales’ desire to protract his rule manifested in increasingly concerning behaviors. As more and more of his opponents were prosecuted and institutions become packed with pro-Morales figures, Bolivians began to search for a way out. Their victory in a referendum that enacted term limits was short-lived; soon after, the nation’s Constitutional Court ruled that such an imposition would violate Morales’ human rights. Years of dissatisfaction with the president culminated in this year’s presidential election, during which results were halted for an entire day prior to the announcement that Morales’ lead margin was enough to avoid a runoff. Amid mass accusations of fraud by the incumbent president, the Organization of American States confirmed the presence of irregularities and urged for a new election. This revelation only further incensed Bolivians, who took to the streets in late October to protest against Morales. 

These demonstrations proved to be the conditions for Morales’ fall, but the death blow came when police commandos in Cochabamba sided with protestors against the president’s re-election. The initially localized mutiny triggered a nationwide defection of security forces — an action that foreshadowed Morales’ demise. Now in the streets themselves, police officers across the nation voiced their disdain for Morales, burning the Wiphala flag and tearing the symbol from their uniforms. After weeks of protest, the military requested that Morales resign from the presidency to restore peace in the country. The demand — coup d’état or not — was successful, and the embattled Morales left Bolivia for Mexico soon after. 

Into today, the ex-president’s retreat has not become the solution that the military expected it to be. As Morales’ opponents scaled back from the streets, they were subsequently replaced by his supporters, who fear the loss of political gains made for indigenous communities. Jeanine Áñez — the self-proclaimed interim president — has done little to pacify this new unrest, seemingly condoning the police’s escalating violence against indigenous defenders of Morales and ignoring the rising death toll of these protests. Even with the promise of new presidential elections within ninety days, the opposition senator has faced incredible condemnation, particularly for creating a caretaker cabinet without any indigenous members and having made derogatory tweets against indigenous people — including one that referred to Morales as a “poor Indian”. With the nation in such a fragile state, Áñez must work quickly — before the crisis escalates into a violent and unforgiving civil war

For now, Evo Morales will likely remain in Mexico, where he has been granted asylum. Despite his desire to return to Bolivia and finish his term, it may be too late to make amends. For many, Morales’ legacy is already set in stone. 

Featured image courtesy of Ruperto Miller

Opinion: No Crackdown in Hong Kong

by Marshall Wu
Staff Writer

When Hong Kong was returned to China by the end the of its lease to the United Kingdom in 1997, among the agreements made between the United Kingdom and China was a fifty-year guarantee of one country, two systems. After over one hundred years under British rule, today Hong Kong is uniquely part-Western and part-Chinese. It is no longer the same city it once was under Chinese emperors. This is apparent in a common viewpoint among Chinese today, who may find Hong Kongers ‘spoiled’. In dramatic difference from the city of Shenzhen, fewer than thirty minutes north, Hong Kong has truly become a dual-language populace. In Hong Kong, cab drivers speak English and street signs retain both Chinese and English spellings.

Hong Kongers’ identities have once again been called up for debate by a controversial extradition bill which has now since been withdrawn. Hong Kong’s duality in governance would formally end when one country, two systems expires, but its citizens may not want to accept it. For protesters, the fundamental question is not about the change of rules but about how Hong Kongers now find themselves as different from China. The debate goes beyond Hong Kong, and invites the world to weigh in: Has Hong Kong’s history under British rule created Hong Kong, the city-state, or can it re-embrace its Chinese history again? As long as Hong Kong looks across the river to the north and refuses China, there will always be room for conflict.

As the current protests have extended into their eighth month, Beijing may be considering harsher measures. However the feared Tiananmen-style crackdown, rolling armored vehicles and soldiers into streets, is an unlikely outcome now and in the future. Barring extreme circumstances, a bloody crackdown would be harmful to China’s long-term control of Hong Kong itself, as well as China’s international standing and its ambitions abroad.

While negotiating Hong Kong’s handoff between the United Kingdom and China, Deng Xiaoping stated to Margaret Thatcher that if he wanted, he could skip the negotiations and retake Hong Kong by force within a day. Thatcher responded with the plain and simple: The world would see for itself that the change in hands was marked by bloody transition. The British, formerly the imperialistic overlords would represent stability and peace while China would be condemned as belligerent. China could have taken Hong Kong without negotiating, but the issue was not about China’s physical possession of the city. Taking Hong Kong by force would have destroyed the city’s economic confidence, stability, and powerful international characteristic. Taking the city by force would have been somewhat a pyrrhic victory.

Thatcher’s response to Deng continues to be relevant today. Despite that China’s international stature has strengthened significantly since 1997, it may still be getting used to the discomfort of losing its former primacy where Middle Kingdom has become East. Today it must contend both with a city which at its core is not entirely Chinese and rejects Beijing’s rule and a world which would not respect the ugliness of a crackdown. Thatcher’s response was about what China could not control- unlike a time before British ownership of Hong Kong. The act of subduing Hong Kong by force today might similarly miss the point of what exactly China means to subdue. Is it in fact the protests themselves, or the beliefs which drive them?

Had Deng chose to bypass negotiations, the price China would pay for forgetting about the world was made simple in the outcome of Tiananmen in 1989. The diplomats and statesmen who went through the painful years of diplomatic isolation and international ostracization following the crackdown are alive today. When they consider dealing with Hong Kong, the cost of returning to that period is surely on their minds.

Many anticipated that China’s 70th anniversary celebrations would be the definitive end of Hong Kong’s months of protesting. Unsurprisingly, Beijing showed no move to silence protests even in the face of heightened protests on the day of anniversary. Assuming that Beijing was willing to risk punishment from around the world in exchange for Hong Kong was a dubious assumption. Many argued that China would obsess to have a clean stage to celebrate the 70th anniversary of its founding, yet neglected to consider what would be an incomparably worse setting had it decided to bring guns and tanks into Hong Kong’s streets. While Beijing is said to care about appearances, that would not make it unpragmatic. No matter how ugly the protests are to Beijing, in a digitalized, affluent, and multinational city such as Hong Kong, media of soldiers shooting would be incomparably worse in every measure. No amount of repression could prevent pictures, cameras, and reporters from bringing the shooting to front pages everywhere across the world.

On the contrary, any violent crackdown in Hong Kong could only lead China to lose it for the foreseeable future. In a city not yet subject to Chinese censorship, pictures and memories of China marching into Hong Kong would last forever. Organized and internet-savvy Hong Kongers would weaponize media of Chinese ‘attacks’ in ways only preventable through unrealistically high levels of political and internet repression. This is not to mention that repression going beyond physical force would violate what sovereignty Hong Kong has. Today Hong Kong sees itself as more than just a river away from the mainland. Rolling in troops from across the bridge is a contemptuous but tacit acknowledgement of their differences made clear for everyone to see.

A crackdown in Hong Kong has repercussions beyond the immediate area that go into China’s own international projects. China’s Belt and Road Initiative (BRI) goes beyond Asia and Middle East, some of its silk roads tying China all the way to Europe, the Arctic, and beyond. They currently intend to bind China to states between itself and the end of the silk roads in political, economic, and even social ways. If China wants its projects to succeed, it must become politically sensitive to these mixed group of countries ranging from autocracies to democracies. The message of the BRI coming from China is that of cooperation and prosperity.

Today the initial honeymoon period for the BRI is far past, and resistance to the project has started building.  Countries crucial to BRI such as India have already expressed significant reluctance over further cooperation: For starters, the infrastructure debt from the Belt and Road Initiative taken on has become highly suspicious to domestic populations no matter how much their national governments want the investments. In this current state of BRI, stunning on-the-fence BRI partners with heavy-handedness in Hong Kong is tantamount to Beijing calling it quits on BRI itself. China’s investments and efforts will have been wasted. To think that Hong Kong, whose GDP has already been surpassed by its quieter and more docile neighbor Shenzhen, would be worth harming China’s future ambitions for might only be possible if China were irrationally unpragmatic.

In summary, an aggressive crackdown would be counterproductive in nearly every way. Beijing may be said to care about face and stability when it comes to justifying suppression, however it is not unrealistic. Crushing protests may credit Beijing with neither. But more than that, the question is about Hong Kong’s beliefs, which are not something reducible by anything like a gun.

Photos courtesy of:

Guillaume Ferrante