Purchasing Power — Why Basic Income Is A Human Right
Hazel Henderson is founder of Ethical Markets Media, Certified B Corporation (USA and Brazil). She is a world-renowned futurist, evolutionary economist, worldwide syndicated columnist, and author of award-winning Ethical Markets: Growing the Green Economy (2006) and eight other books. Her articles have appeared in over 250 journals, including Harvard Business Review, New York Times, Christian Science Monitor, as well as journals in Japan, Venezuela, China, France and Australia. Since becoming a full-time media executive in 2004, Hazel has stepped down from many of her board memberships, including Calvert Social Investment Fund (1982-2005), the Social Investment Forum and the Social Venture Network. She has been Regent’s Lecturer at the University of California-Santa Barbara, Horace Albright Chair in Conservation at the University of California-Berkeley, and advised the U.S. Office of Technology Assessment, the National Academy of Engineering and the National Science Foundation from 1974 to 1980.
Christopher P. Skroupa: Regarding reframing the issue of human rights, your writings over many years have focused on economic rights for all as human rights. In the 1930’s FDR’s New Deal also included economic rights as personal security. How do you see this kind of approach to human rights in our 21st century?
Hazel Henderson: I think that as the march of automation and robotization continues—and it seems to be accelerating—we really do have to deal with the right to an income, or purchasing power, because this becomes the key issue in security, and I think we’ve seen this very much in the 2016 election. The whole idea of how we’re going to make it possible for people to have purchasing power beyond just being fortunate enough to have a rich parent, or to have a job, or good access to society’s fruits of all of this abundance is going to be really one of the the key issues. This probably means that the discussions going on now in many countries about providing some kind of Universal Basic Income are going to be replayed. We played this movie before, and back in the 1960s was the first discovery of this whole idea that we had to rethink the whole idea of work and relation to an income.
Now we find that many who totally rejected the idea in the 60s are reconsidering. You find everybody from central bankers to some of the biggest companies in Silicon Valley are realizing that they have to take some responsibility for the jobs that their business models are destroying, and that they are going to have to take some kind of responsibility for what this does as a societal issue.
Skroupa: In your work, in your writing, have you seen any example of companies really exploring how they can create that basic economic income—some kind of compensation for the automation that is being implemented across America and throughout the world?
Henderson: Yes, there are lots and lots of examples around the world where this is a whole new debate—whether some kind of universal minimum income would be more efficient than having all of these kind of bureaucratic means, whether it’s unemployment insurance or food stamps or welfare.
I’m very familiar with Brazil—I worked there many years teaching at a business school there and there are many small cities in Brazil who have been authorized to have local currencies. If you have a small city and you have lots of unemployed people and lots of urban tasks that need to be done, why wait for the central planners and the central budget to give a grant to your city to do this if you could simply clear your own market and match unemployed people to the tasks that need to be done by having your own local currency? So this is one of the ways people are going about it.
Another alternative, which I’m familiar with in Brazil as well as in Mexico, is what is called the Bolsa Família, or “the family market.” This happened under the presidency of Lula Da Silva starting in 2003 where they began to give this limited form of regular income to women because women were really the family caregivers, provided the women saw that the children go to school—they had to have a little stamp to say that they’ve been in school and that they had been to doctors to have regular checkups. The program was very successful in bringing millions of people in Brazil out of poverty so that they were able to join the ranks of consumers and buy motorbikes and rent apartments.
There was a vote in Switzerland about whether there should be a guaranteed income which almost passed—it was quite popular. There is also a group in Silicon Valley forming an experiment for people who are unemployed, homeless and dispossessed in one way or another giving a guaranteed monthly or weekly income. Additional experiments are now underway in Finland and Canada. Of course, this whole thing is based on the idea of a very conservative economist who worked for Ronald Reagan, Milton Friedman. He called it a negative income tax, and there again he said it wasn’t about charity but it was basically about making sure you had aggregate demand in an economy which is really fueled by consumption, 70% of our economy is fueled by individual personal consumption. So it’s essential to prevent another recession to maintain purchasing power.
Skroupa: So these smaller more rural areas are creating these micro-markets no longer participating in the global marketplace, and then, of course, you have this most recent experiment in Silicon Valley where they are experimenting with having this negative income tax originally conceived by Milton Friedman, and those two ideas in my mind seem to be polar opposite in that one is polarizing, ostracising, discluding someone from the global market, and the other is actually bringing people that were not previously participating into it. So do you believe that this will create a dilemma in the global marketplace, in that these micro-markets will only benefit a small population of people in these third-world countries versus first-world countries? Which do you think is going to be better in the long-run globally?
Henderson: Well, it’s very interesting because this was the first thing that occurred to me when I began studying this. I was all gung-ho for the idea of a minimum guaranteed income, and then I thought, “Well, that is really an awful thing to say to people: “Ok, well, you can just go away—we don’t need you now.” And yet this was an experiment done in Amsterdam. I was giving a lecture there in the 70s, and they had tried such a guaranteed income experiment there with unemployed, mostly young people, and as you know, this is a big big problem—the unemployment level for young people in some countries is sometimes 40%, and I think in Spain 50%.
So I visited this facility. It was a big old house in the center of Amsterdam and a lot of these young people that were getting the guaranteed income actually were doing a lot of volunteering in the community, others were forming micro-businesses using the money to buy little trucks so that they could do deliveries or things like that, So it seemed to me that it wasn’t totally a way of excluding them, but I think that the model that they used in Brazil definitely brought people in rather than sort of telling them to go away.
Back in those days, I also teamed up with Louis and Patricia Kelso on the basis of worker-owned companies. They devised the employee stock ownership plans (ESOPs) and got them through the Congress, and we now have about 11,000 employee-owned companies in this country. For example, here in Florida, the Publix supermarket chain—very profitable—is owned by the workers.
Yet another model which is kind of ignored by mainstream press is the actual model of cooperative enterprises, and as you may know, the year 2012 was set by the United Nations as the year of cooperatives. Their research shows that more people on this planet are actually employed by cooperative enterprises than all of the commercial for-profit corporations put together. I am an investor in co-ops.
So I think what we have to do is pull back and take a wide shot, and realize that there are as many ways you can organize human enterprises as novels you can write. And that’s why we have the emergence today of the Benefit corporation, like my company.
Skroupa: So it’s almost like currency has evolved from simply being a bottom line to more of these environmental social and other fields where it’s no longer about a dollar sign necessarily, but about the impact that they are having.
Henderson: And the real value. Of course, the other thing that comes about because of the availability of information now is the understanding that money is not the same thing as wealth. Money actually has no value, and money isn’t scarce—money is simply a tracking system like inches and centimeters and yards. It’s an information system that tracks and keeps score of the things that are really valuable like human talent and enterprises and interacting with the resources of the planet.
People see the money being printed on TV now all the time, and what always interested me was the reaction of the Tea Party and others after the financial meltdown and everybody losing their homes. Occupy Wall Street had many of the same signs that they were carrying, saying, “Where’s my bailout?” and they got the idea, “Oh I see. They print money and they give the money to their friends on Wall Street.” The old economic textbooks say that you were supposed to pour this money into the top of big banks so it would trickle down and it would re-energize Main Street, and of course, that didn’t happen in a global economy. Instead, the money went straight overseas to speculate on which sovereign bonds were going to collapse: the credit default swap market. So that’s why you suddenly have this huge rise over the past decade and in 2016 where people are talking about inequality and fairness.
Skroupa: So of all of these alternative income models to ensure purchasing power, and obviously one size doesn’t fit all—which would you consider to have been the most effective?
Henderson: I think I’d go along with what you were saying. I think the diversity is really good, and it’s never one size fits all, so all of these in different ways are appropriate. There are ways a guaranteed income can reduce the need to have all these bureaucracies, trying to give people back money, and then there are local currencies that not only clear the local markets where you’ve got unemployed people and unmet tasks that need to be done, but it also keeps the money circulating at home, so it keeps fuller employment in that particular region.
Christopher P. Skroupa is the founder and CEO of Skytop Strategies, a global organizer of conferences.