Universal Basic Dividend: A path to economic justice with Sarath Davala, Ken Webster and Till Kellerhoff

THE CLUB OF ROME PODCAST

As the world faces increasing inequality and environmental degradation, the Universal Basic Dividend (UBD) emerges as a promising idea for a more equitable and sustainable economic system. UBD proposes that the wealth generated from our shared resources, such as land, air and water, should benefit everyone, not just a few.

In this episode, Till Kellerhoff is joined by Ken Webster and Sarath Davala to explore the transformative potential of UBD. They discuss the ethical justification for sharing the commons, examine the challenges of implementing UBD and consider how UBD could help transition to a regenerative economy. 

Tune in for a thought-provoking conversation on how UBD could pave the way for a fairer and more sustainable future.

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Full transcript:

Till: (0:00) Welcome to the Club of Rome podcast today on the Universal Basic Dividend. My name is Till Kellerhoff. I am Program Director at the Club of Rome and Program Lead of the Earth for All Initiative. We have two great guests today, and I'm very pleased to welcome Ken Webster, who is a visiting professor at Cranfield University, fellow at the Cambridge University Institute for Sustainable Leadership, contributing author of the latest report to the Club of Rome, Earth for All, A Survival Guide for Humanity, and lead author of three Earth For All deep dive papers on universal basic dividend. Welcome Ken. And we have with us today Sarath Davala, who is an Indian sociologist and president of the Basic Income Earth Network, amongst many, many other things, he co authored the book, Basic Income, A Transformative Policy for India. And he's also a contributing author to the Earth for All deep dive paper, unconditional cash transfers and t he five turnarounds, beneficiaries perspectives. Welcome Sarath. Let's dive, dive right into the topic universal basic dividend. And Ken, let's, let's start with you. I think many people have heard the expression universal basic income in the last years. It has been a prominent discussion, basically described as a regular cash payment to all members of a community without any conditions. Today we speak about the universal basic dividend. Maybe you can start explaining in a few words what what that is, and how it relates to the concept of the universal basic income many listeners will be familiar with.

Ken: (1:42) Okay, thank you Till. The universal basic dividend is really a kind of basic income, because it is an unconditional cash transfer. It is regular, and it is, if you like, an obligation towards the fellow members of our communities. But the basic dividend differs in the use of the word dividend, rather than just income, and the dividend is a reward, if you like, for owning something, or co-owning something, or having a share of something. Now a basic dividend is connected to common resources. It might be the atmosphere, it might be the ocean, it might be forests, it might be the local Tool Lending Library. These are commons. These are resources which people can access and also as part of a community manage so the basic dividend is a reward, or a share of a reward, for resources which have been captured, enclosed is generally the word people use, and it's an ethical obligation to give people a share of these surpluses. In the economic language it's called economic rents. These are surpluses which are not required to keep the business going. So if some of our shared heritage has been captured, the idea is part of the gains from that should be put into a fund, and the benefits of the fund should feed back to everyone in the community, either nationally or in the grand scheme of things, globally,

Till: (3:23) Super thank you, Ken. And we will dive a bit deeper into the practicalities of all of that. And Sarath, you have worked for many, many years on the universal basic income and ideas around that, and we know that there are many, many different concepts on how to implement that. Do you feel like language matters a lot in this regard? We speak about universal basic dividend today, you have worked a lot on universal basic income. What's your approach towards that whole debate?

Sarath: (3:46) As long as the vision aligns, I think I would say, what's in a name that's not the point. I think philosophically, like Ken has just mentioned, philosophically, we come from the same pedigree. I mean, it's, it's to say that every individual on Earth is entitled. So I think we belong to the same blood group.

Till: (4:10) Super. Well, you mentioned the entitlement. Where does that come from? Why do you think people are entitled? Can you mention the obligation right in the context of the comments? Why do you think Sarath, we are entitled to receive something like a universal basic income?

Sarath: (4:24) Because I think natural resources, and all resources basically belong to people of the land, any given land, okay, so, and then the wealth that is created in any given society is a kind of, comes from several generations of contribution. So a few individuals cannot stand today at the end of the road and say that we made this, we made that money. So I think we have to really go to the roots of what wealth is and who owns it. I think those questions, these are the civilizational questions we are raising now. I'm glad to be alive at this time.

Till: (5:03) That's good, and it really comes to fundamental points, right? And can you argue that there's something like the commons that might be a little bit difficult for everyone to understand, and is it, is it right to say that it might be something in between private and public ownership, and that there is a category we need to we might have forgotten, is the dichotomy between private and common.

Ken: (5:25) That's the key point Till, I think that many people have forgotten or not been able to engage with the concept of the commons in more recent times, because you say on one side is either private ownership, which is very familiar. And equally familiar is state ownership. You know, public ownership and control, whereas in the middle there always used to be, if you like, meso scale or middle scale, social institutions. I've got a lovely little quote here about that from a writer called Dil Green. He said, commons are mesoscope social institutions, not micro, individual or macro, collective, but meso. But it's in the middle where life takes place. I like that, where we all live. The missing middle is the key, build commons. Now the commons are a set of resources people who have access and to those resources, and a set of rules by which those resources are used. The aim is to maintain those resources for all generations. This is what the commons if it was grazing back in the 14th century in England, or it was the use of the forests. It exists all over the world in different forms, but I think this is an opportunity to revive the middle, the missing middle, Green called it, the opportunity to look more at what we can do for each other. And it's rooted in the idea that the state of economic and technological development makes the adoption of openness, quoting again, cooperation and shared ownership and governance a more rational economic choice in meeting the needs and wants of humanity than one based on competition, artificial scarcity and the pursuit of profit. So I think it's an exciting area to recover the notion of the commons. But the very strong element of this is it's taking unearned income, it isn't making a firm any less competitive, and giving it as unearned income, as a dividend, in the language I use. And it also ties in with what Club of Rome's been very interested in, which is, how do we get prices to tell the truth? You know, we can't run an economy if environmental and social costs are exported with no comeback. But if we put the prices up on fossil fuels, etc, there's a lot of resistance to that, of course, because the poor suffer the most. So it does two jobs at once, there or three. It's ethically the right thing to do. It allows us to charge the real price for resource extraction and damage of the environment, and it gets the poor on side, because they feel more secure, and in this economy at the moment, what many millions of poor people are saying is, I don't feel secure. And everybody has perhaps begun to realize that you need a different way to approach this problem, and you need to bring economic security as well as social and environmental concerns to the fore, and I think it's really brave of the Club of Rome to make that point.

Till: (8:49) Thank you very much, Ken and you mentioned various aspects of this whole debate, and kind of a holistic approach towards the universal basic dividends, in the sense that it has an ethical component, it has a strong economic component in what is often now described in internalization of externalities. But Sarath, I mean,that's a debate many economists have today as well, right? Like we make certain products we don't want that have environmental harm more expensive, but that is usually in the form of kind of taxes that then go to the government. Why do you think it's important to have this dimension of cash transfer to citizens, which is different to kind of taxes where the government then decides where the money goes?

Sarath: (9:32)

Yeah, let me go back to the point that Ken was making. I would not take this very artificial binary of private versus state ownership. No, I think it is not a settled matter, we should go back a little and then say, how did we come here is a question we should ask now, like, for example, there is a does government really own all that it says it owns? Is a question. There was a big Supreme Court case in India where a group of people who were working asking the government to close down the mines. They said that people own the mines, natural resources, and government is only a custodian. Okay, so the Supreme Court gave it the judgment, which said that, yes, people are the owners of the mines and the land, and the government is only a custodian and so we start unpacking that, and start breaking it down into pieces that what is the difference between the custodian and the real owner? So I think we need to, we have, we are at the brink of both the climate emergency, we are destroying the planet, and also the large scale precarity is also causing, going to cause the point that Ken mentioned about the large scale insecurity in the society, which is going to be extremely damaging, and it will blow on our face very soon. So on this twin crisis, I would say that we actually accept those principles and work on those principles and have a dream. And I would say tax and all are the mechanics that will will eventually have to be sorted. So I would only say that let I would not front load the mechanics. I would really say we should have this vision to disrupt the kind of the kind of order that has brought us to the brink.

Till: (11:26)

Thank you. And I think it's a very important point to point out that we're confronted kind of with two crisis. We have the climate crisis, but we also have the social and inequality crisis that has taken shape. And both of them is fundamental also in the way we think about our economies, and one could say that for a large part of the 20th century, in simplified terms, one could say that the model of progress was jobs and growth, right? It was assumed that increasing production and consumption ideally also increasing wages and more productivity and more goods and services were often used as a proxy for well being, almost. And there is now Thomas Palais has this quote saying, we are in an era of transition. Employment was a fundamental problem of the 20th century. Income distribution will be the fundamental problem of the 21st century. So maybe first Sarath, we speak, of course, also about different economies, right? When we speak about kind of high income countries, this aspect of, yes, it's really more about distribution now is, of course, very apparent, because we see that the ever increasing production of goods and services is not a good model of progress there anymore. How do you see that in the context of the model of progress in the Indian case, the Indian economy, where, of course, an important discussion is also still the lifting people out of poverty. So how does kind of increasing the production relate to the distributional component in your context?

Sarath: (13:00)

Well, I think no country can escape the kind of growth imperative that is now ruling all our minds, that every country wants to be on that highway of growth, and we have come to a kind of growth trap where we say that unless there is growth, there's no there's not going to be enough money. There's not money, enough money to give to people if we want to give through welfare schemes, okay, but, but I would say from the ground, I think the pressure is coming to the governments to really relook at the current disposition of some, some parties are saying that, you know this, we should create jobs. We should create jobs. I mean, I can sit and put a put on a graph that it is impossible to create jobs. We cannot create jobs with the kind of technological, technological stage we have come to. So what we have to do is that wellbeing of people has to be seen as part of a macro economic priority. You see, it's not about just numbers, it's about people. So to keep people alive and standing and working, I think we have to take that as a factor into your macroeconomic thinking and balancing.

Till: (14:23)

Thank you and Ken, maybe also in this context, before we dive deeper into the practicalities of the universal basic dividend. But how do you feel like does this approach relates to our kind of economic paradigm? I mentioned that, you know, growth is a paradigm to a certain extent. What does this suggestion, how does it relate to, to to how we think about our economies today?

Ken: (14:46)

Yeah, in the 20th century, as we know, jobs and growth led. The good thing about that, of course, was the jobs were largely full, full time, and they would last for a whole career. Since the orientation of the world moved towards much more freedom for financial organizations, lots of globalization, some of which had great, great plus to it, income disparities have rather ruined the idea of growth and jobs, because the rich don't spend that much actually, they keep it and then acquire more assets. Acquiring more assets often means real estate, for example, and or stocks and shares. It was an extractive, it became an extractive financial system. So what does it mean to say, we want jobs and growth if most of the growth ends up in income being given to the already wealthy, and that in the other direction, precariat, precarity in employment just multiplies. This also fits in with the resources question too, because if we talk quite a lot about a circular economy, making sure it's not extractive in materials and energy sense, so much. We also need to get away from an extractive monetary economy. In other words, it's about circulating and maintaining capitals. So we need to be able to circulate money back to the base quite deliberately. It's not going to happen in a sort of 20th century sense anymore. And that's part of that shift in thinking towards it from extraction to circulation in money and material stroke energy cycles. And this is an important, I agree with Sarath that at the moment, let's just get the vision sorted out. I'm very convinced that getting a heuristic, a narrative that's quite tight and people can go, yeah, I like that. Now in the opposite direction, the right wing are very good at harnessing emotional content, you know, outrage or fear or so good grief, there should be some space to make some very positive moves without resorting to downright lying.

Till: (17:13)

Many, many good points. Ken, thank you. And indeed, I mean, the question of narratives is very important, because we know that reality is very much shaped by that as well. Right? It's shaped by ideas. We know the quote by John Maynard Keynes saying the ideas of economists, both when they are right and when they are wrong, are more powerful than is commonly understood. So, you know, we have a lot of narratives that shape reality. We see a lot of myth and counter narratives in this world as well. I mean, we grew, you know, I grew up in the times of trickle down economics and the thought that accumulation of capital at the top would, by any ways, lead to wellbeing gains for the broad masses, because it trickles down in a way. And Ken you describe that there might, in certain areas, even be a trickle up effect. So it is important to build and to paint this attractive news story of where we could move towards to. And Sarath, you're doing, that for many, many years. And, and one of the attractive ideas in this context is really the unconditionality, right? You speak about that it's important. It doesn't really matter where the money, what is being spent for, but it is an obligation for society. Why do you think it's so important to have this unconditionality In this whole debate?

Sarath: (18:26)

I feel that of the five pillars of universal basic income we talk about, unconditionality is the real cutting edge, and that is probably the central and the core value of the universal basic income or university dividend. It should. It's unconditionality, because we want to decouple work, work and wage linkages that we started believing as something organic and nature given, or it's like a, you know, it's, it's so in the current imagination, but I think it is not we shouldn't even call a wage. That's why we're calling it dividend or income, which is unconditional. So unconditional because we say that it should be the ground to stand on and give you the choice to either participate or not participate in the labor market. That is going to be the only possible way of surviving in the next couple of decades, because that is the direction we are all moving towards. And only that unconditionality, I would say, and the choice and the freedom that people will gain from it will make them raise that question the right kind of questions that we have been talking since the beginning of this podcast. And I think those questions have to be raised, and those questions need to be resolved in an entirely 21st century way, rather than this kind of a dilapidated 20th century imagination.

Till: (19:14)

And indeed you mentioned the unstable societies again we see also in, you know who votes to which parties that very often populist and extreme right parties are voted by people who fear a lot about the future. It's economic insecurity in the future which makes, makes people lose trust in our current economic system. And you would - yes, go for it.

Sarath: (20:17)

I mean, on just one brief thing on this narrative that absolutely you were saying this, and then Ken was saying this, the right wing parties have gotten their narrative. I think, which is which is really playing out, not because their narrative is absolutely utopian, but I think their narrative is answering some of the questions that are coming from the insecurity of the populations. I think it is only because of that alignment that today we have progressively more and more, you can see everywhere right wing parties actually coming to power because they are on. I mean, this is exactly what Guy Standing's thesis is, that, what happens to the precariat, what are the political implications, electoral, political implications of the precariat, the growing precariat? I think those are the things we are already seeing. So I think we should, we should get our narrative here. And I'm not saying we are great guys and we are virtuous and all that. That's not the point I'm making. I'm saying that it is necessary, and this is part of what we believe in our vision, that Ken and I are talking about.

Till: 21:29

Very good point. And then I think what a narrative really makes attractive is kind of the combination of a vision and then practical steps to get there. And so I think it's important for us to have that vision, but then also be able to at least describe the way a little bit there, because it's, I think, in this approach, important to point out that it's not utopia, and we see some practical examples. And one aspect you mentioned in the papers very often is the Alaska Permanent Fund. We mentioned that as well in the Earth for All book. So maybe Ken, maybe you can say a few words about the Alaska Permanent Fund.

Ken: (22:01)

The Alaska Permanent Fund was an attempt by its originator to get a lot of that done by saying it's going to be put in a fund, and then that fund's going to invest in things which are beyond the fossil fuel age, and the dividends from that investment will be shared with everybody in Alaska, every you know registered citizen. I like Sarath's definition there. It's a platform, it's a foundation. It's not a safety net. That makes it look like, oh, you've not done very well. We'll, we'll look after you a little bit, rather than this is what you have earned, in a sense, as a citizen, it's a foundation. You can do more care work, you can do, get, earn more income. You do what you want with it. It's up to you. And incidentally, Sarath probably you'd come on to this. But it goes to women too. It goes to individuals too. It's not money anymore in control of men, as can happen in some societies, and because it's not a voucher, and because it's not in kind, real decisions can be made about this. I love one of the comments from a recipient, I think it was in in Africa, who said, I don't want to buy another goat. I'm going to buy a guitar. So this idea of a citizen's wealth fund, or it's got different terms, is really a key element of the Alaska Permanent Fund. It got tweaked, you know, politics never is as pure as that. But the idea was, it's transparent. There's the money coming in, there's the money going out. You can see what happens, and it can expand. It doesn't just have to be around fossil fuel resources. It's anything where surplus economic rents, surplus profits can be earned. The classic one Henry George was writing about this in the 19th century, was increasing land values. You know, I bought a house 30 years ago. It's worth a lot. Now, okay, I decorated it, but I didn't do anything to earn that money. I just sat here, whereas people now who buy a house, they've got very high mortgages, it might not go up so much. Now, why did I get something for free? Because it was actually everybody around me that made the community I happily live in. It's not down to my effort. So there are lots of ways of extending a basic dividend to other resources. It might be financial transactions, fees or taxes. It might be around carbon emissions you were talking about. Just briefly I'll finish here Keynes and his comments about economists. There was one I think I flagged in an earlier discussion, which was that men possess thoughts, but some ideas can possess men. And it was a 19th century thing, so it's men, but you get that difference. I think we're chasing here. I'm getting excited about it, just talking about it, about ideas that will possess people and go, this is what I want. I don't know how the details are going to work, but this, I'm going to vote for this. Get annoyed about this. Protest about this. I want it. I want this. It's only fair. And I think there's enormous power in that.

Sarath: 25:27

Yeah, Till I think one quick I think we started with the question of Alaska, and then we went to many places. Now I think this universality and unconditionality are absolutely non negotiable. I'm not going to the practical. I'm not talking from the practical end of the game. I'm talking from the supply end of the game. Now, 200 years ago, or 250 years ago, universal suffrage would have, people would have laughed at it. The reason why slaves and women were not given voting rights is because they thought that they were not simply capable of thinking about the public affairs, and then choose the right kind of so I think to give voting rights to every individual, every adult, I think, is, came from a vision, right about a democratic society. Okay? Now they didn't have pilot studies, and they didn't have any of that burden at that time. They had a vision. Abolition of Slavery was a vision. Came out of a vision William Wilberforce. Now, the point I'm trying to come to is that, why unconditional and why universal? I think if we look at it from a kind of a spiritual and poetic angle, I think we look at giving the basic income or dividend as the light, the sunlight that everybody gets. I know some parts of the world don't get enough sunlight. But then I think it is unconditional. It's available to everybody. Okay, so it's like rain that is available to everybody. No, we are actually trying to equate this to that, that these are the vehicle, because we are talking about natural resources. So this should be that. Now coming to the other question of how it will play out is one question I would like to address, and that is where I get this interesting example of Nepal. Where we, I think we have to distinguish between human systems and the mechanical systems. Our industrial imagination kind of forces a mechanical system on us, which is a kind of static. Once you make it, it has to have all the components and it will fly. Okay. Otherwise it won't fly. Whereas a human system has a learning curve, an airplane on its own doesn't have a learning curve. It doesn't automatically become from A airplane to Z airplane. So in Nepal in 1990s they introduced a universal pension for people above 72 years old, everybody, including the former prime minister to the last man in the village, will get this pension. Everybody's entitled. Okay, there's no selection, there's no targeting. There's no nothing, okay? And they started with $1 a month. This was, I'm saying, about the 90s, okay? And today it is for everybody above 62 I think 62 or 65 and continues to be universal in that bracket, and it's $40 a month. Now, how did $1 become $40? I think that is the learning curve. That is where the political economy has worked, and that is where all the dynamics of political economy work. So we should first of all accept the human system. And whenever we introduce a great idea, I think the system has human system has its own learning curve, and when we do that, we we don't have to have everything in place and say that is it practical? On the one hand, I would say you should have a vision. Forget about practicalities. They will come eventually, Number one. The second extreme example I give is that if a wild animal is chasing you, you will not sit and deliberate. That is it practical that I will be able to run and save myself. You won't deliberate, you don't have, you just run.

Till: 29:30

Thank you, Sarath. And maybe coming to the end. We see that sometimes there is a kind of tendency of people voting against their own benefits. We see that in Germany, for example, in the context of inheritance tax, right, inheritance tax should be something most people would benefit off, and many people think of the little house they inherit from their grandma, and therefore are against bigger inheritance tax. For very wealthy and high income people, and we see that there is a very, very well functioning machinery of myth around the economy that many people tend to believe and that makes it difficult to implement more radical solutions. Ken how do we overcome that in the context of universal basic dividend? It is an attractive vision. It is a feasible option, but still we see starting points in many countries we see still seem to be miles away from that. How do we manage that transition, and how do we get people on board?

Ken: 30:30

I thought you were going to say kilometers away, but let's let's have miles. Let's be Imperial about it. No joking apart. I often have to reach for Milton Friedman here, a right wing economist who says that we have to have a utopia in mind, and for two reasons, one, to know whether we're going towards it or away from it. And secondly, when a crisis, real or imagined, he says, arrives, politicians will scrabble around for things that might work. You know, you have you've got to have the idea ready. And that's, I think, what Sarath and I are part of, and yourselves, honing the idea, getting it, getting it portable, and then it depends on the time. It depends on the times. There will be a crisis, real or imagined. We're almost, we're maybe in it when and when people will be looking the politicians be looking for something new and fresh and probably workable.

Till: 31:43

Yeah. And as we know, you never want a serious crisis to go to waste. And crisis are moments of reshaping our systems that can, however, always go two directions. At the moment in Europe, we see a lot of right wing parties benefiting from that. But Sarath, do you also share some optimism that this crisis can be shaped in the right direction, and we are able to have transformative change in the good direction that benefits planets and people?

Sarath: 32:14

I think many things globally, at a very, very global level, are coming together that in the next, even 20 years, also I see, I see things will be changing rapidly, a transformation happening in which direction it will go is again, matter of how the human, the elasticity of human systems, go this way. It could go this way. But I think what is our role in this our our role and the institutions that they represent, is to be ready, as Ken was pointing out, is to be ready with a vision. When somebody for some politician, I'm not a politician. I can't think like a politician, but then I can have an engagement with a politician. And when they come and ask, can you tell me something? I have a story to tell. I have narrative to tell, and I have a vision to share. And it's up to them what they want to do. To do it. So let me do my job. Well, is my thing, and I feel very optimistic that it is happening.

Till: 33:09

Excellent Sarath, and last question to both of you, what role do you see for the Club of Rome and this whole thing?

Ken: 33:16

Well, to keep on doing what it's been doing so successfully, which is to make, if you like, a super structure, a superstructure around ideas. You've got the modeling. So the ideas aren't just, yes, it's great we have a vision, but you've been able to model things to say, well, if this happens, then that is quite likely, because your original modeling is still fantastically relevant. You got it right. And if you keep making reasoned, rational, pertinent comments and publications, you're honest, you're on the right, definitely on the right side of things. And I think many people refer back to the Club of Rome as a place where they can find intelligent, constructive forward looking work. I'm very proud to have been able to support your work, and I hope it goes on for a very long time.

Sarath: 34:13

Absolutely, I echo what Ken has said. I think you've been doing fantastic work, and I think this kind of this, in the cusp of this, bringing the social ecological concerns together and articulating them is extremely important. In fact, I think it has really it can go very far. I don't know how your outreach, but I think you should reach out to the youth and to the music. I think it should translate your vision needs to get translated into something that reaches the youth and young people. They are the largest demographic, and then they are the ones who are going to take all this into the future. Thank you very much for making me part of this.

Till: 34:53

Thank you very much. And has been a fascinating discussion. I would still have many questions, but maybe we just meet again in a year or so, discuss progress ands ee where we are then. Thank you very much for joining, and thanks everyone for listening to the Club of Rome podcast. For more information, please visit Club of rome.org and see you next time. Thanks for joining. Thanks Ken, thanks Sarath.