Category Archives: Economy

A liberal case for the Eurodividend

In this article,  Jorge Tanarro develops an idea to beat the economic crisis and makes the case for the introduction of the Eurodividend, the liberal way.

Rutger Bregman, the author of ‘Utopia for Realists‘, tells us that 37% of British workers think their jobs are meaningless. As machines take over human labour, we are struggling to find the sense and purpose in the work we end up doing. Jeff Hammerbacher, a brilliant data scientist that used to lead the data team at Facebook, said “the best minds of my generation are thinking about how to make people click ads.” Machines are not taking the jobs we do not like or do not want to do. They are taking expensive jobs that are cheap to automate. However, in order to call it technological ‘progress’, shouldn’t they be taking the meaningless jobs, so we have the freedom to actually do something that we consider valuable in our limited and unique lives?

Coming back to Facebook, Mark Zuckerberg said that “we should have a society that measures progress not just by economic metrics like GDP but by how many of us have a role we find meaningful. We should explore ideas like Universal Basic Income to make sure that everyone has a cushion to try new ideas.” The socio-economic system we have today in the European Union is not broken or defective; in fact, it is probably one of the greatest human achievements in history; but it is also one of the most fragile – so could the Unconditional Basic Income (UBI) make it much more resilient and fairer?

By covering the most basic of Maslow’s hierarchy of needs, the UBI would give citizens the freedom to refuse a job and to work for free in something they consider meaningful without risking their own survival. The labour market would be impacted because meaningless jobs would get far fewer candidates (becoming more expensive) but meaningful jobs would get far more candidates (becoming cheaper). Automation would continue trying to make expensive jobs cheaper so it would end up dealing mainly with meaningless jobs as soon as these become more expensive. We would be reshaping technological development and automation with no need of new specific regulations or ‘robot taxes’. So should we, liberals, be promoting Unconditional Basic Income?

Ways to justifying and implementing UBI

There are quite a few different ways of justifying and implementing the UBI, some even incompatible with each other. The left-wing parties GUE-NGL and PES will certainly come up with their own models and narratives and we should be ready to engage in that discussion and make the case for it with our liberal values and perspectives. If we don’t take ownership of a position in that dialogue, ALDE might end up taking the observer seat in one of the most interesting and promising political developments of our time.

The Universal Basic Income is not simple and it has two fundamental problems:

It should be universal, otherwise meaningless jobs get more expensive and get exported to other countries. It should be basic, and it is difficult to agree what ‘basic’ means.

At the ALDE Party Council of June this year, a plenary debate was organised on UBI and Employment Automation with Philippe van Parijs, Hanno Pevkur and Barbara Visser. Philippe van Parijs is a very well known UBI advocate that also came up with the idea of a ‘Eurodividend’. European is probably as universal as we can get, but it sounds just good enough.

Good enough would also be to get as broadly ‘basic’ as ‘feasible’. In Alaska, everyone receives an annual cash dividend that represents their share of the revenue derived from the oil reserves of the state, the so-called Alaska model. Scott Santens proposes to extend this model to intellectual property and big data calling it ‘netizen dividend’ or ‘data dividend’. The beauty of this model is that it is not about the right to receive an agreed amount of money from the state at the end of every month but about recognizing instead the citizens as stockholders that receive a dividend depending on the revenue derived from those common assets. This way, the rent is diverted directly to the citizen before any of it reaches the hands of governments or corporations.

Possible combinations and effects

A Eurodividend could be based on the revenue derived from a European Fund managed by the European Union that would be growing over time, getting progressively larger shares of European natural resources (the allowances of the emissions trading system, water, coal, gas, wildlife, etc.), European natural monopolies (electrical grids and other networks for energy, water supply networks, highway networks, railways, stock exchanges, lotteries, olympic sports federations, EU labels, etc.), European transport hubs (international harbours, airports, train stations, etc.) and the European Patent Office. It could also be combined with the idea of Quantitative Easing for People (QE for People) allowing the European Central Bank to distribute extra money directly to the citizens through the European Dividend to maintain inflation in the eurozone under control.

This way the European Fund would reflect the value of European cooperation by making the citizen the direct beneficiary of a dynamic European economy. The progressive nature of the dividend would allow society to digest the changes smoothly and adapt little by little to the impact of the new guaranteed income. The irregularity of its amount and risk component of its financial nature might help citizens understand that the Eurodividend is not free money but actually the product of a very complex and fragile socio-economic system. As the system thrives, the dividend raises, but if the system struggles, the dividend would diminish; and if the system collapses… well, at least one thing would be clear: we would all have something to lose.

Jorge Tanarro

Do you agree? disagree? Just come and join our conversation about the European Dividend in the #economy channel of the ALDE Party Individual Members Slack group!!!