Earlier this week, the Canadian province of Ontario announced it would be conducting a pilot program for 4,000 of its residents, guaranteeing each person minimum income even if they did not work. While the idea of giving away “free money” may draw criticism from some, this is not a new concept. In fact, programs similar to this have been around for nearly 50 years, with the ultimate goal of eventually replacing the welfare system as we know it.

Read on further to find out more about guaranteed basic income (otherwise known as universal basic income or basic income), its purpose, the history behind it, and how it might impact the future of welfare programs worldwide.

Guaranteed Basic Income?

So what is guaranteed basic income (GBI)? According to the Basic Income Earth Network (BIEN), this type of payment has five key characteristics: it is paid in intervals instead of all at once, the medium used allows the recipient to use it any way they want (it is not a Food Stamp card, for example), it is paid on an individual basis only, it is paid without a means test, and those that receive it are not required to work.

Everything else, such as the amount of money in each payment or longevity of payments varies based on the proposal. (In the Ontario test case it does have an income threshold and is paid to only the 4,000 included in the program; the rest of the principles still apply.)

The Purpose of GBI

Guaranteed basic income is not really “free money,” as some may claim; it does serve a few important purposes. An article from Law Streeter Eric Essagof already does a great job of explaining the GBI’s use in fighting poverty. Namely, the income encourages people to keep working, while also ensuring that if their income rises, they won’t automatically lose the benefits they rely on (also known as the “poverty trap”). In addition, in the United States at least, it could streamline a complicated system where someone who needs benefits has to sign up for five different programs that all fall under one welfare system.

There are other potential benefits associated with a guaranteed basic income. If people were assured of at least some income, they might be more likely to go to school for more education or training or even take a chance and start their own business. They could also pursue passions (such as writing, for example) that they are harder to take on when their time is dictated by the necessity to make money. For individual workers, a guaranteed income would also enable them to bargain more effectively with their employers and force employers to agree to concessions in order to keep their workers.

History of GBI

The Ontario GBI pilot program is certainly not the first of its kind; in fact, it is not even the first in Canada. The first program was conducted in the province of Manitoba in the 1970s, and led to societal health improvements while simultaneously not discouraging work participation. The idea for a universal basic income can be traced even further back than that–much further, in fact. In 1797 Thomas Paine, a pamphleteer famous for his work “Common Sense” in support of the American Revolution, stated that in exchange for social consensus among the people, the government should offer yearly payments to its citizens.

Since then there have been numerous debates between thinkers on all sides of the political spectrum, but generally basic income has been viewed as a positive. The accompanying video looks at the evolution of the basic income idea:

This type of program and the philosophy behind it have been embraced outside of Canada as well. The most recent effort was in Finland: earlier this year, the Finnish government selected 2,000 unemployed people at random to begin receiving a guaranteed basic income of €560 for two years instead of the unemployment benefits they had been receiving. The major advantage to this for the participants would be that if they found jobs they would still get to keep their basic income, as opposed to losing unemployment benefits.

Through the Finnish trial, which is still ongoing, the government wants to see whether this type of program can help the country’s ailing economy by encouraging part-time work. In addition to this trial, other similar programs worldwide have proven successful, such as one in Brazil in 2004 and another in Namibia in 2007. There was also a similar cash transfer pilot program in India from 2011 to 2012 that led to increased test scores and improved health in participating villages.

Despite the success of many of these programs, there seems to be a perception that they can only be successful in poorer countries and would never work in an “affluent” country like the United States. However, even the United States has some history with the guaranteed basic income. One of the earliest efforts, the Negative Income Tax Experiments, took place between 1968 and 1990 in New Jersey, Pennsylvania, Iowa, North Carolina, Indiana, Washington state, and Colorado. Although these experiments had successful outcomes, they were not politically popular and they lost their momentum. Arguably the most successful experiment so far concerning guaranteed basic income in the U.S. is currently ongoing, and can be found in Alaska.

In 1976, a permanent fund was set up in Alaska to preserve profits made by the oil industry to ensure that the wealth would benefit future populations in the state. This fund was allocated for a basic income program in 1982, and ever since then anyone living in the state for at least six months is eligible to receive a dividend from the state. At its peak in 2008, the fund annually paid out more than $2,000 per resident.

The following video looks at how the program is playing out in Finland and other places:

Future of GBI

With more and more places willing to at least launch guaranteed basic income pilot programs, the future of the measure seems bright. This is especially true given the benefits that it so far has offered, along with the fact that automation is increasingly making many jobs obsolete. Currently, along with Finland, there are also ongoing guaranteed basic income trials occurring in Italy and the Netherlands, with Scotland considering a trial of its own as well.

While a basic income has been advocated by some philosophers, researchers, and other individuals, overall there has not been a tremendous groundswell of support. Even in places where pilot programs have been launched, these are usually only reserved for a few thousand people in countries with tens if not hundreds of millions of citizens. So, if this program has repeatedly proven so successful and could replace faulty welfare programs, why are countries not more willing to try them?

The answer starts with cost. In 2016, Swiss voters rejected a basic income for the country’s citizens, and while Scotland is considering adopting such program, the rest of the UK in general is resistant. This opposition comes even when polls show that up to 64 percent of Europeans approve of a basic income. Part of that, however, might be attributed to how the survey questions were worded, in that they do not mention tax increases necessary to provide that income.

Aside from cost, there are other considerations, such as the fear of automation. Although some fear this trend could lead to a dearth of jobs, some economists are quick to point out this same thesis has been made before with regard to past trends, and has been proven wrong by new innovations that, in fact, created more jobs. Additionally, while some want to use basic income to replace existing safety nets, there is no proof yet that exchanging one for the other is actually superior. Even some of the protections basic income is supposed to offer can be turned on their head, with a basic income convincing some employers they can pay lower wages. There’s also the argument that basic income will lead to people choosing simply not to work. The video below looks at basic income, highlighting some pros and cons:

Conclusion

Guaranteed or universal basic income as an idea has been around for hundreds of years. As an idea put into practice, it has been around for at least around half a century. Moreover, in seemingly every case, pilot programs incorporating basic income guarantees have been successful in a number of measures, from raising GDP and improving test scores to ensuring nutrition. Furthermore, these types of programs have been lauded by leaders on all parts of the political spectrum as everything from a panacea for solving the broken welfare system to necessary in a world that is increasingly automated.

However, for all its success stories, guaranteed income has never become widespread nor long-lasting. The reasons for this apparent contradiction are manifold and run the gamut from high costs to exaggerated benefits. Additionally, for every country that has adopted and embraced the idea there are others that have rejected it.

What is basic income’s outlook then? In a world that is increasingly feeling budget cuts and squeezes, it seems unlikely a major initiative to expand the program is possible, especially given the ascendance of more conservative leaders who rose to power partially on attacks of the social welfare system. Basic income, then, is unlikely to be guaranteed or universal anytime soon, yet continued successful trials indicate that when conditions are more favorable, it could become the norm.

Michael Sliwinski

Michael Sliwinski (@MoneyMike4289) is a 2011 graduate of Ohio University in Athens with a Bachelor’s in History, as well as a 2014 graduate of the University of Georgia with a Master’s in International Policy. In his free time he enjoys writing, reading, and outdoor activites, particularly basketball. Contact Michael at staff@LawStreetMedia.com.

The post A Right to Life, Liberty and a Basic Income?: The History of Guaranteed Basic Income appeared first on Law Street.

It’s hard getting back to a normal routine after two weeks of holiday fun. But hey, it’s only a four-day workweek and after today you’re halfway through! Welcome to RantCrush Top 5, where we take you through today’s top five controversial stories in the world of law and policy. Who’s ranting and raving right now? Check it out below:

Megyn Kelly is Making a Switch

Yesterday, Fox News host Megyn Kelly announced that she is leaving the network to go to NBC instead. According to Fox News her last day on air is Friday. Her motivation for making the move? According to Kelly, one factor was that she’ll now be working during the day, and will have more time to spend with her three young children.

She will play several roles at NBC, including hosting a daytime program and a Sunday evening news show. Kelly was with Fox News for over 12 years and became one of TV journalism’s biggest voices, especially during the 2016 presidential campaign when she sparred with President-elect Donald Trump.

An ending, and a new beginning… pic.twitter.com/clyKaDpQTW

— Megyn Kelly (@megynkelly) January 3, 2017

This will probably be a hard blow for Fox News, after months of drama surrounding its founding chairman Roger Ailes. Multiple women, including Kelly, have accused Ailes of sexual harassment. Ailes denied all of the accusations but eventually resigned.

Emma Von Zeipel

Emma Von Zeipel is a staff writer at Law Street Media. She is originally from one of the islands of Stockholm, Sweden. After working for Democratic Voice of Burma in Thailand, she ended up in New York City. She has a BA in journalism from Stockholm University and is passionate about human rights, good books, horses, and European chocolate. Contact Emma at EVonZeipel@LawStreetMedia.com.

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The rumors surrounding Hillary Clinton’s health won’t stop, Walmart bought Jet.com, and Finnish baby boxes are saving lives. ICYMI, learn about all that and more this Monday with Law Street’s best of the week!

1. Clinton’s Pneumonia: A Post-Speech Scare, a Body Double, and a Tame Trump

The facts are thin, and the story even thinner: Hillary Clinton has pneumonia. That’s pretty much it. But of course, that raises some very intriguing questions–especially if you’re a conspiracy theorist: Has she been harboring the disease, shielding her failing health from the media since she was Secretary of State? Did she contract it while delivering a contracted speech to Goldman Sachs? And given the very fact that Clinton has spent her entire career tag teaming with a body double–in speeches, in meetings with now-deposed Middle East dictators, at a dinner date with Bill–has she already moved on from not only this election season, but this life? Read the full article here.

2. What Walmart’s Purchase of Jet.com Says About the Retail Industry

In August, Walmart purchased the online-only retail website Jet.com for $3 billion. Before the sale, Jet.com forecasted that it would be losing money until at least 2020, as it attempts to establish itself prior to becoming profitable. That raises the question of why the world’s largest retailer, with an online presence of its own, would decide to buy a fledgling retail site that didn’t plan on making money for several years. Read on to find the answer to that question and how it is influenced by the changing retail marketplace, where online presence is more important than brick and mortar stores and is necessary to compete against online behemoths like Amazon and Alibaba. Read the full article here.

3. Thinking Inside the Box: How Finland Makes Parents and Babies Happy and Healthy

Washington, D.C. has the highest infant mortality risk of all the world’s high-income capitals–7.9 deaths for every 1,000 births. But the infant mortality rate in Finland is much lower, and one of the reasons for this is the simple but effective Finnish baby box. All new parents in Finland are eligible to receive a box from the government to help them through the early stages of their child’s birth. Inside the box, there are essential items for raising an infant such as clothes and, because it is Finland, a snowsuit. The box itself doubles as a crib, reducing the risk of accidental death during sleep. Read the full article here.

Alexis Evans

Alexis Evans is an Assistant Editor at Law Street and a Buckeye State native. She has a Bachelor’s Degree in Journalism and a minor in Business from Ohio University. Contact Alexis at aevans@LawStreetMedia.com.

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Washington, D.C. has the highest infant mortality risk of all the world’s high-income capitals–7.9 deaths for every 1,000 births. But the infant mortality rate in Finland is much lower, and one of the reasons for this is the simple but effective Finnish baby box. All new parents in Finland are eligible to receive a box from the government to help them through the early stages of their child’s birth. Inside the box, there are essential items for raising an infant such as clothes and, because it is Finland, a snowsuit. The box itself doubles as a crib, reducing the risk of accidental death during sleep.

Countries all over the world are now emulating Finland’s baby box idea, which has been around for decades. One such imitation, the “Barakat Bundle,” hopes to encourage women to make prenatal visits while providing them with the essentials to raise a healthy infant, thereby reducing both maternal deaths and infant mortality. The Barakat Bundle, although inspired by the Finnish baby box, is geared more to the needs of mothers and infants in Southeast Asia. For example, it includes medical supplies, such as a clean delivery kit for children born at home.

Today this practice is so culturally engrained in Finland that it continues largely without comment. Parents there overwhelmingly opt in favor of the baby-box, even well-off parents, and it has become a shared part of the Finnish identity. But when this idea is discussed in the United States it seems controversial; the ultimate symbol of the dreaded “nanny state.” Is the baby box an adorably autocratic threat to personal liberty?

Unboxing the Box

The first step to answering that question is to look at how the baby box actually works. This tradition dates back to 1938 when Finland was much poorer than it is now and had an infant mortality rate of 65 out of 1,000 births. The rate now is 2.52 out of every 1,000 births, an improvement that is certainly not entirely due to the baby box. But the rate is half that of infant mortality in the United States, so the baby box may be a significant factor. From the start of the program until 1949, the box was only available to low-income families. But starting in 1949 the box became available to everyone. This may help account for the program’s success, much like the way the inclusion of everyone in Social Security–not as a hand-out but as something you pay into and therefore “deserve” to benefit from–helped to sell the idea to the American people.

There have been other changes over the years as well, some of which are designed to encourage certain parenting behaviors. For example, formula and bottles are deliberately not included any longer, which promotes breastfeeding. Boxes also contain cloth diapers, rather than disposable ones, for environmental reasons. There are also condoms in the box, which would probably disconcert a more conservative American audience. The clothes in the box are gender neutral, designs change yearly, and as you would expect, are extremely adorable. And practical. So much so that 95 percent of Finnish mothers choose the box–including mothers who already have children–even though you can opt for a cash payout instead. In fact, those who don’t live in Finland can purchase a version of the box from several companies, such as Finnish Baby Box. You can watch parents opening the box on YouTube if you are curious about the contents.

This brief video does a good job of summarizing some of the key elements to the baby box.

There’s also a requirement that women have to have at least one prenatal visit, before they are four months pregnant, to be eligible to receive one. The Barakat Bundle requires a pre-natal visit as well, which they anticipate will reduce maternal deaths.

The simple genius of the baby box is not just that the contents of the box are useful tools for parents, but the box itself. In fact, this simple cardboard box may be the main reason why the program has reduced infant mortality. The box comes with a mattress and is specifically designed to provide the optimum sleeping environment for an infant to avoid SIDS or cot death. The U.K. has taken heed and is launching a pilot program to give out baby boxes to mothers in hopes of reducing its relatively high infant mortality rate. A similar program is happening in Texas, sponsored by a local Rotary Club, which will give out 100 boxes to new mothers.

This video explains some of the benefits of the baby box to help babies sleep safely.

And this one shows how some of the new mothers and babies react to the baby box.

Who knew that the safest place to put a baby was in a cardboard box?

State Sponsored Shower

In the videos and examples above, hospitals and altruistic private organizations take it upon themselves to invest in these boxes and distribute them to new mothers. Why doesn’t the state government step in to do this too, if baby boxes are so effective?

Finns don’t quite see it this way but many Americans view the baby box, and other similar handouts, as antithetical to the values of freedom. It does seem a bit odd, if you think about it, that all the babies born in the same year receive the same outfits. And that parents are steered toward certain behaviors, such as breastfeeding, by a “benevolent” government entity when they might want to make other choices. Americans have a deep-seated wariness of large government, as well as a love for it, that pushes them away from embracing these kinds of policies. Finland gives away 40,000 of these boxes every year…but that’s just in a country the size of Finland. The level of bureaucracy that it would take to accomplish the same task of giving every mother a baby box in the United States would be staggering, and to many, terrifying. And to be perfectly blunt about it, expensive.

The American Approach

Americans have an alternative approach, which is the tradition of the baby shower. Rather than have the state or federal government welcome your baby into the world with a box of essentials, American parents often received personalized and eclectic gifts from friends and loved ones. This seems more in keeping with our love of diversity and our individual uniqueness. Baby showers are in fact a great way to ensure that you have the tools you need to survive the first months of parenthood.

It is the families who do not get the shower experience, however, that should be the concern. If you don’t need a baby box because you have a network of family support and the financial means to collect those items yourself, the baby box idea is still helpful but it provides more of a convenience and a sense of community rather than a financial benefit. Even the wealthy Finnish mothers typically choose the baby box in part because it isn’t about the box. It is what the box represents, that you and your new child are part of a community that cares about you and investing in your child’s future. Getting the box is part of being Finnish. For a family who needs the baby box, it is also about being part of a community that cares about you, but also also about the very practical reality that unless you get the box your baby will not have access to many of the items inside it.

The baby box, therefore, shows the fault-lines in our political thought. Giving away a baby box to every family, ensuring that all children start out with as equal a chance as we can give them, speaks powerfully to our egalitarian values. After all, one of the things Americans are most proud of about our society is our belief that the United States is the most egalitarian society on earth. Everyone has a chance to succeed. Our greatest political turmoil often results from the perception that we are losing that egalitarian character in our society.

It’s the giving away portion that gives us pause. Americans are wary of government overreach. We like our charity to be a private affair, run by altruistic individuals and faith communities, not the government. And our individualism resists anything that seems like a state uniform–no matter how adorable.

Support for the baby box, therefore, turns on whether you see it as a giveaway from the nanny state to parents who should be taking responsibility themselves or whether you characterize it as an investment by society into these newborns. It all comes down to responsibility and who should have it. In Finland, they have answered that question. Finns feel that society as a whole ultimately shares responsibility for, and therefore investment in, its children. In the United States, our paradoxical character makes the answer more mixed.

Conclusion

The baby shower doesn’t do anything to help the family that needs the baby box. If you had the kind of family support that baby showers represent you wouldn’t need the box. Placing the responsibility to provide these kinds of tools solely on the baby shower emphasizes for new parents who don’t have the same blessings that they are on their own. Sharing that responsibility across society with the baby box does the opposite. It provides tangible benefits but it also sends a clear message that this baby is part of our community. Part of our future. And that we all, together, share in the investment into that future. The parents are the MVPs, but everyone is on the team.

Resources

The Washington Post: Why Babies Should Sleep in Cardboard Boxes

Barakat Bundle: About

BBC: Why Finnish Babies Sleep in Cardboard Boxes

The New York Times: Why Finland’s Babies Sleep in Cardboard Cribs

Daily Mail UK: New Mothers Given Finnish Style Baby Boxes

Today: Thinking Outside The Box: Finnish Baby Kits Could Save Infant Lives

Goodreads: The Nordic Theory of Everything

The Atlantic.com: Finland’s Baby Box: Gift From Santa or Socialist Hell? 

Goodreads: Liberty and Coercion 

Goodreads: The Politicians And The Egalitarians

Mary Kate Leahy

Mary Kate Leahy (@marykate_leahy) has a J.D. from William and Mary and a Bachelor’s in Political Science from Manhattanville College. She is also a proud graduate of Woodlands Academy of the Sacred Heart. She enjoys spending her time with her kuvasz, Finn, and tackling a never-ending list of projects. Contact Mary Kate at staff@LawStreetMedia.com

The post Thinking Inside the Box: How Finland Makes Parents and Babies Happy and Healthy appeared first on Law Street.

The concept of a “basic income” style welfare program has been talked about for years. There are a number of variations, but it’s based on a pretty simple concept–we can replace most of the current welfare benefits given by a country by instead guaranteeing everyone a set amount of money per month. If people want to work more to add on to it, they can, if they choose not to or are unable to, that is the money they live with. The concept of a basic income has received both criticism and praise from individuals on almost every part of the political spectrum. But as much as a basic income program has been talked about, no one has really given it a serious try, until now. Finland is launching an experiment to put the basic income program to a test.

The government will essentially select 2,000 individuals who are already receiving some version of unemployment benefits. They will be given roughly $630 in American dollars each month; a control group will remain on their existing unemployment benefits. This program will take place sometime in the next few years, and money is being set aside in the budget specifically for this purpose.

Finland’s experiment with a basic income is being called historic, and the first of its kind. That’s mostly true, although basic income experiments are gaining ground elsewhere as well. While Switzerland rejected a referendum that would test a similar program, the city of Utrecht, Netherlands is starting an experiment in January, and a private organization called Y Combinator is running a pilot program in Oakland, California. Still, Finland’s experiment appears to be the broadest currently in the works.

There are a lot of outcomes that people who support a basic income program are hoping to see happen. For one, there are hopes that it will reduce unemployment rates, because it will allow people who are currently on unemployment benefits to take on low-paying, seasonal, or part-time work without fear of losing those benefits. There are also hopes of long term benefits. According to NESTA, a UK-based science and technology think-tank quoted in Forbes:

A basic income can provide a safety net for people wishing to retrain, which is worth considering given the massive technological changes that we anticipate in the decades ahead. It can enable citizens to make greater unpaid contributions to their communities, strengthening the fabric of social relations and reduce the burden of professional care. And the reduction in poverty brought about by a basic income can provide children with a much better start to life.

Right now though, all of these hopes are just theories–no one knows exactly how a basic income will play out in practice. That’s why all eyes will be on Finland’s experiment.

Anneliese Mahoney

Anneliese Mahoney is Managing Editor at Law Street and a Connecticut transplant to Washington D.C. She has a Bachelor’s degree in International Affairs from the George Washington University, and a passion for law, politics, and social issues. Contact Anneliese at amahoney@LawStreetMedia.com.

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