Iran Tests Most Generous Basic Income Plan Yet

Iran hardly comes to mind when it comes to testing bold new ideas (never mind its various scientific and technological achievements in the face of sanctions and a reactionary theocracy). But since 2011, it has been testing and monitoring one of the most generous basic income schemes in the world, joining the likes of Canada, Finland, and the Netherlands (among others) in exploring the merits of an idea that has been gaining traction amid concerns about mass unemployment from advancing automation.

The program, which is ongoing, was launched during the tenure of President Mahmoud Ahmadinejad, himself hardly a progressive (to put it mildly). But it was ideal timing, as it followed cuts to subsidies for bread and fuel, which disproportionately impacted the poor. Participants received a monthly cash transfer equivalent to 29 percent of the country’s median household income — which would amount to over $16,300 a month in the U.S.! This is far more generous than the $1,000 or so monthly stipend that is typical in most basic income schemes. Even advocates of the idea might think it is far too much to sustain a productive population.

Yet, as BusinessInsider reported, not only did researchers find that most recipients remained employed, but many of them worked more hours.

Despite reports in local press that the poor were forgoing their jobs to spend the extra money, the investigators found no such evidence.

“Our results do not indicate a negative labor supply effect for either hours worked or the probability of participation in market work, either for all workers or those in the bottom 40% of the income distribution,” they wrote.

They did find people in their twenties tended to work a bit less. But “this is not surprising since the attachment of Iranian youth to the labor market is weak,” they wrote, and many young people may have used the money to enroll in higher education they otherwise couldn’t afford.

In other cases, the extra money appeared to increase how much time people spent working. Service workers, such as housekeepers, teachers, and deliverymen, upped their weekly hours by roughly 36 minutes, “perhaps because some used transfers to expand their business.”

In other words, people were empowered to invest the money they received in ways that created greater values for themselves and, by extension, their loved ones and community. This comports with the results of the basic income experiments conducted in Canada and Namibia, as well as Brazil’s Bolsa Familia program, which is one of the few examples of a full-fledged cash-transfer scheme (although not quite a basic income, since it is conditional on children attending school and being vaccinated).

Unfortunately, Iran’s experiment also proved another common feature of the basic income idea: widespread negative attention and cynicism, in this case by both politicians and the general public. Across different societies and cultures, the idea of handing people money with no string attached strikes a visceral chord.

But given where automation and economic innovation are heading, it seems inevitable that mass unemployment — and the massive wealth imbalance that would follow — will need to be corrected. Not only would a guaranteed income provide for people’s basic needs, but as these pilot programs are thus far proving, they would empower individuals with the resources they need to unlock their own potential, whether it is freeing up time for socially valuable work (caregiving, volunteering, etc.) or investing in their own creative or commercial ventures.

What are your thoughts?

 

My Thoughts on Bucking the Paris Agreement

For what it is worth, it seems to me that most opposition to the Paris Agreement is predicated on mere ignorance to its contents and a visceral, categorical rejection of anything multilateral or international in nature, regardless of the details and benefits. (And given the considerable support for it by a broad range of stakeholders – from national security figures to big corporations, including major energy companies – the usual argument that such policies are inherently anti-business, or favor only idealistic environmentalists, simply do not wash.) It is anti-globalism for anti-globalism’s sake.

If folks actually read the Agreement – which most people had never heard of or had forgotten about until recently – they would find that it is explicitly nonbinding and hands-off with regards to how nations can go about mitigating climate change. In fact, it stipulates “nationally determined contributions” whereby every nation individually sets their own goals and how to reach them, whether through the free market, government programs, etc. Unlike its predecessors, the Paris Agreement furthermore places emphasis on “bottom up” solutions that favor working with private sector and civil society groups, something that opponents ostensibly favor. Ironically, these provisions were included in part to win over skeptics like the U.S. who criticized the binding nature of prior agreements such as the Kyoto Protocols.

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How Households Worldwide Spend Money

Citing data from Eurostat, a research arm of European Union, The Economist has an interesting chart showing how households in some of the world’s largest economies differ in their spending habits.

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As The Economist points out, the results say as much about the socioeconomic status of these countries as they do their culture and values:

Russians splash 8% of their money on booze and cigarettes—far more than most rich countries—while fun-loving Australians spend a tenth of theirs on recreation, and bookish South Koreans splurge more than most on education. Some of the differences are accounted for by economics. Richer places like America and Australia, where household expenditure is around $30,000 per person, will tend to spend a smaller share of their costs on food than Mexico and Russia, where average spending is around $6,000. And politics plays a part too. Predominantly private health care in America eats up over a fifth of each household’s budget, whereas the European Union, where public health care is common, only spends 4% on it. In Russia, government-subsidised housing and heating make living cheaper, and this means money is left over for the finer things in life.

For a partial breakdown of how individual E.U. member states fare, here is a similar chart (note the research was pre-Brexit):

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Again, the results speak to both socioeconomic disparities and cultural preferences:

In Malta, an island nation of 450,000 south of Italy, almost 20% of household expenditure goes on restaurants or hotels. In Lithuania that figure is 2.9%. Relative to much of the EU, Lithuania is a poor country with a per capita household expenditure of €7,500 ($8,500), half the EU average. Thus its people spend a larger share of their budget on food and clothing than any other EU country. Somewhat predictably the Dutch splurge most on recreation, while Greeks spend the least (a trait that pre-dates the financial crisis)—the money they save could perhaps be spent on more sensible endeavours like transport, or paying-off debt.

You can see the full dataset with all E.U. countries here.

What are your thoughts?

How the World Will Look in 2050

According to the latest estimates by the United Nations, within the next three decades, the world’s population will increase from 7.3 billion to 9.7 billion. By the end of the century, it will rise by another 2 billion, although at a slower rate than in the previous two centuries.

The following infographic from The Economist provides a vivid depiction of how this growth is highly uneven, with Africa and Asia accounting for most of it.

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Note how the U.S. will be the only developed country among the twelve most populous by 2050, whereas today more than half of the largest countries by population are in the developed world. Africa alone accounts for more than half of this growth, with its population projected to double to 2.5 billion. Nigeria, the continent’s most populous nation and largest economy, will overtake the U.S. with over 400 million inhabitants, despite being roughly twice the size of California. Continue reading

The End to Malaria

Malaria has been a scourge of humanity for thousands of years, and as recently as a century ago, was a problem in almost every country. The GIF below shows how far we have come towards completely eradicating this debilitating disease:

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Courtesy of Global Health Sciences, University of California, San Francisco

As recently as the 1950s, developed countries like the U.S. and the U.K. were still dealing with malaria infections; by the 1970s, most wealthy countries had completely wiped it out. Today, over a hundred nations across both the developed and developing world are free of malaria, with nearly thirty others in the process eliminating it. Continue reading

Latin American Attitudes to the U.S.

The United States’ relationship with Latin American has long been a fraught one, not least because the country historically regarded the entire hemisphere as being under its sphere of influence, subject to military interventions, orchestrated coups, and support for dictators.

But as The Economist reports, since the mid-1990s, following the end of the Cold War — and with it, most U.S. meddling — as well as the sweep of democracy and economic growth across most of the region, sentiments have warmed up quite a bit. Continue reading

Economic Freedom vs. Social Progress

According to the 2017 Index of Economic Freedom,  conducted annually by the Heritage Foundation, a leading U.S. conservative think tank, the following countries rank the highest in “economic freedom”, which includes factors such as rule of law, property rights, ease of starting and running a business, and regulatory and tax burden:

  1. Hong Kong
  2. Singapore
  3. New Zealand
  4. Switzerland
  5. Australia
  6. Estonia
  7. Canada
  8. United Arab Emirates
  9. Ireland
  10. Chile

The United States ranks 17th, after Lithuania and the Netherlands and ahead of Denmark and Sweden (though not by much). Continue reading

Lessons From Singapore’s Health Care

When it comes to the never-ending debate on America’s health care system, international comparisons abound. The usual point of reference is, naturally, our neighbor to the north, although France, Switzerland, and the U.K. are sometimes invoked as well (the French in particular have been consistently recognized by the WHO as having the best health care in the world).

However, there is no shortage of countries with universal health care systems of some form or another, so why not broaden the scope of these comparative analyses to see what else we can learn? New York Times columnist  did just that with a piece that examines the incredible success and efficiency of the Singaporean model. Continue reading

The Next China

In 1980, when it first began to liberalize and open up to the world, China was already the ninth largest economy (albeit due mostly to its sheer size). The embrace of low-cost manufacturing, wherein China in essence became the  world’s factory, played a key role in propelling it towards becoming the second largest economy just thirty year later; by some metrics, it has already surprised the United States as the single largest economy.

Now that China is transitioning rapidly towards medium and high-tech industry (akin to developed countries), it is leaving room for another Asian powerhouse to takes its place. According to an article in The Diplomat, the five likeliest contenders are Malaysia, India, Thailand, Indonesia, and Vietnam — the MITI-V, or more colorfully, the”Mighty Five”.

Within the next five years, these nations will rise to be among the world’s fifteen most globally competitive manufacturing countries. This is a critical stage in the advancement  of a society’s wealth and prosperity: according to a report from consultancy McKinsey & Company, industrial development “contributes disproportionately to exports, innovation, and productivity growth”. Continue reading

The World’s Healthiest Countries

According to the Bloomberg Global Health Index, which includes such factors as life expectancy, access to health care, and malnutrition, these are the world’s healthiest countries:

The top ten nations were:

  1. Italy
  2. Iceland
  3. Switzerland
  4. Singapore
  5. Australia
  6. Spain
  7. Japan
  8. Sweden
  9. Israel
  10. Luxembourg

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