economics | cathy wu

Historically and presently, there is (reasonable) opposition to such ideas:

The reasons for the opposition by the Social Democrats have been clearly stated by Eero Heinäluoma, one of their leaders, in a public debate for the 2007 election: “Basic income encourages inactivity, is too expensive, means just an additional system among the others and does not support Lutheran work ethics.” Their position probably also has a lot to do with the links between the Social Democratic Party and the trade unions, who are totally against the idea of an income which would not be linked to work, would certainly lead to a reduction of salaries, and benefit mainly employers in line with Milton Friedman’s proposal. However, there has not been in 2015 really strong positions against among the social-democrats.

However, here’s some extra motivation for exploring the ideas of negative income tax, basic income, participatory income:

Behind the implementation of the basic income, there is the question of the status of work in the country. In European countries, we have arrived at a situation where large numbers of people are unemployed, with very little chance that these numbers will go down in the near future. This is particularly due to the (proven) fact that automation and robotization are destroying more jobs than innovation can create.

This should push us to think about the possibility that this could be a permanent situation, where we will need fewer workers to produce what we need. In addition, with the reduction of resources on the planet, an ever-growing production does not seem so realistic. Some are underlining that we are entering a new era, and the present social systems and its usual tools may be inadequate, as it proves that poverty and social problems have increased in the last years without any serious sign of improvement.

via Basic income: how Finland plans to implement the first nation-wide project in the EU | Finland Politics.

The researchers found that savings from avoided health problems could recoup 26 percent of the cost to implement a transportation policy, but up to to 10.5 times the cost of implementing a cap-and-trade program. The difference depended largely on the costs of the policies, as the savings — in the form of avoided medical care and saved sick days — remained roughly constant: Policies aimed at specific sources of air pollution, such as power plants and vehicles, did not lead to substantially larger benefits than cheaper policies, such as a cap-and-trade approach.

Savings from health benefits dwarf the estimated $14 billion cost of a cap-and-trade program. At the other end of the spectrum, a transportation policy with rigid fuel-economy requirements is the most expensive policy, costing more than $1 trillion in 2006 dollars, with health benefits recouping only a quarter of those costs. The price tag of a clean energy standard fell between the costs of the two other policies, with associated health benefits just edging out costs, at $247 billion versus $208 billion.

While cutting carbon dioxide from current levels in the U.S. will result in savings from better air quality, pollution-related benefits decline as carbon policies become more stringent. Selin cautions that after a certain point, most of the health benefits have already been reaped, and additional emissions reductions won’t translate into greater improvements.
“While air-pollution benefits can help motivate carbon policies today, these carbon policies are just the first step,” Selin says. “To manage climate change, we’ll have to make carbon cuts that go beyond the initial reductions that lead to the largest air-pollution benefits.”

via Study: Cutting emissions pays for itself | MIT News Office.