By MARCOS PAULO DE LUCCA-SILVEIRA & ROGÉRIO JERÔNIMO BARBOSA*
From Emergency Assistance to Basic Income: normative aspects of the contemporary debate in Brazil
Introduction
Emergency Basic Income, Emergency Aid, Coronavoucher: names that refer to the same income transfer program as the Federal Government, designed to alleviate the socioeconomic effects of the crisis precipitated by the Covid-19 pandemic for the poorest and most informal. Among the terms, the second, “Emergency Aid”, is officially included in Law 13.982/2020, which implemented the policy. However, terminological variations are not fortuitous. In a gradient, they map interests. On the one hand, those who emphasize how such a program could be a first step towards a broader social program, some kind of permanent “basic income”. On the other, those who emphasize its eminently temporary character, a validity strictly linked to the pandemic. In this text, we discuss only the first of these two positions and point out the diversity of normative principles and impasses that underlie the apparent terminological consensus within this group.
The debate on “basic income”, thus animated by the context, however, gained some formats and directions that were not necessarily present in the pre-existing specialized literature. Concerns about fiscal and political viability, compatibility with past social programs and state implementation capacity, for example, have dominated public arenas. Our purpose here, however, is to extend this discussion by adding a layer to its normative elements.
As a contextualization, we bring some results on the effects of the emergency basic income. We then proceed to present a taxonomy of normative concepts that will allow mapping the broad set of underlying issues. In the end, we use normative concepts to present a reflection on the current Brazilian political debate.
The effects of Emergency Aid
The economic crisis brought about by the Covid-19 pandemic has aggravated the vulnerability of the poorest strata of the population. These, in general, are occupants of informal jobs, who suffered a greater number of casualties and more intense loss of earnings. Furthermore, such activities are less likely to be carried out at a distance; which means they are more likely to be exposed and infected by the coronavirus. The purpose of the Emergency Aid was to try to address these two dimensions: to compensate for the income losses of these families and to encourage the maintenance of social distancing (reducing the urgency of looking for jobs for those who were laid off, for example). It is not, therefore, a program designed to combat regular mechanisms that generate poverty and inequality.
Existing information on the effects of Emergency Aid suggests that the objective of economically protecting the poorest households has been reasonably addressed. In the chart below, we display the values of household income per capita of the poorest 40% of the population, comparing May 2020 (with and without the incidence of Emergency Aid) with the income distribution observed in 2019. We found that, for the population located in strata between the 2% and 35% poorest poor (P2 to P35 percentiles), the incidence of the benefit meant that the incomes of these families were slightly higher than the levels of 2019 (it remains to be seen whether this small additional portion would also be able to generate the epidemiological effect desired by politicians, the maintenance of the distancing). The non-existence of the aid would imply quite intense losses (dashed line).
The following graph, however, focusing on the intermediate strata (percentiles P40 to P90), shows that the same compensatory effect does not occur for the middle class. This is a population with a slightly higher income (mostly between R$ 500 and R$ 1500 per capita) and more likely to occupy a job with a formal contract — therefore, to a large extent, ineligible for the emergency program.
Such an emergency protection gap in these intermediate strata (in particular, up to the poorest 70%) justifies, for some, the nickname of “new vulnerable”: a group that, under common circumstances (including “usual” economic crises), does not would be at risk of job and income loss (Barbosa, Prates & Meireles, 2020). This, obviously, does not equal their actual and potential losses to those verified in the lower strata. In any case, there is evidence that at some point over a longer period of time, even in the absence of economic recession, a reasonable portion of this group will have experienced the condition of poverty (Soares, 2010), defined in operational terms as the inability to purchase food to meet nutritional needs, access to services, transportation and adequate housing (basic needs). In other words, even if a photograph in cross section does not necessarily capture them below an arbitrary poverty line, it is likely that they will have crossed it at some point.
From Emergency Aid to Basic Income
The effects of Emergency Aid were surprisingly positive, in view of its economic objectives and despite its numerous problems — among them, a botched implementation strategy (Barbosa et al., 2020), targeting errors and fraud. As the incidence of the benefit among the poorest was actually able to protect these strata against income losses, there was a drop in the poverty rate, from 18,7% (in 2019) to 14,9% (in the last week of May)[1], as measured in monetary terms only. The Gini coefficient for household income per capita it fell from 0,543 to 0,487 over the same period—although this result for inequality also reflects uncompensated losses in the middle and top of the distribution. These results, however, will last for the duration of the Emergency Aid. The moment the policy ends, the socioeconomic indicators will point to a huge deterioration. It is in this context that the concern with the possibility of a permanent policy of the same nature emerges in the public debate: would it be possible to make the positive effects also lasting? But what would be the design of such subsequent permanent policy and what would be the objectives pursued by it?
The first observation, tending to be consensual, is that the value of the Bolsa Família cash transfer would have been, for a long time, insufficient. The program's poverty and extreme poverty lines (R$178 and R$89, respectively) would be below food and non-food costs basic of the population. And, in addition, the unstable funding of the program meant that, from 2014, with the fiscal adjustment policy, its budget shrunk, reducing the scope of beneficiaries and the average values per household and per capita (Barbosa, Sousa and Soares, 2020). A permanent basic income, it is argued, could not suffer from these same problems: its benefit should be higher and its financing stable.
The susceptibility of the middle strata to the socioeconomic effects of the pandemic has also raised concerns about this supposedly “new” vulnerability. Public arguments on the table, however, highlight that the income volatility of this population was already known (Soares, 2010). Thus, even if they are not in an acute state of deprivation, these families would experience chronic instability, which would deprive them of the possibility of planning and long-term investments, both in material and immaterial goods (including education).
The expanded focus, however, introduces another challenge. Usually, the focus criterion is some line of household income per capita: individuals below the threshold are eligible. However, for the State, which grants the benefit, household income observable it is only the one formally declared. From the point of view of state capacities, it is virtually impossible to have accounting control over income from informal sources — except through the verbal declaration of the amounts received. With this, the concern emerges that individuals and families who are just a little above the program's eligibility threshold have incentives to "informalize". Since informality is a historical and chronic problem in the Brazilian labor market, some argue that broad targeting should not be based directly on income.
It is this concern that responds, for example, to the idea of a “children's basic income”. Due to even higher fertility rates among the poorest (despite secularly declining), the base of the age pyramid is much wider among this population. As a result, we observe an age bias in poverty: there is a disproportion of children and adolescents living in poverty. An income directed to this group, regardless of their actual socioeconomic conditions, would end up, indirectly, being focused on the poorest. In other words, a “universal children's basic income” would be, in reality, a non-universal basic income with indirect targeting. Thus, the direct criterion of income is avoided and the anticipated adverse consequences on the degree of formalization are circumvented.
Naturally, however, other questions emerge: what about poor families where there are no children?; Would such a program replace other existing income transfer policies? Groups differ in responses. The absence of children awakens to the need for a complementary principle of eligibility or for the maintenance of transfer programs with different purposes in parallel, such as Bolsa Família itself. Should basic income then only address income volatility, while the BF maintains its role in combating extreme poverty? This intertwines the question about the functions performed by the transfer programs: would they be absorbed and contemplated by a basic income? Or would it be desirable to abandon some of your objectives in order to guarantee budget availability to execute a larger program?
Finally, would the payment of an amount imply the state's lack of commitment with respect to the provision of services such as health, education and other functions of social assistance? There are, for the time being, no great advocates of substituting payments for services in the Brazilian public debate. However, it is recognized that if the amount of the benefit paid is too high, it will end up working as a new spending ceiling, in practice, compressing budgets for other items — and thus, inadvertently, reducing or preventing new investments in priority areas . Thus, a combined concern with the size of the program and its coexistence with other sectors in the range of a Welfare State is manifested.
Conceptual map of basic income
There is a significant and growing academic literature on the existence of a normative justification for a basic income in contemporary societies. As we have already suggested, the polysemy of names around a single income transfer program is not a coincidence. There is a political dispute around this program. Different versions and names of a basic income have gained supporters in public arenas in different countries in recent years and, in recent months, this program has been encouraged as an effective public policy to be adopted in order to reduce the tragic effects caused by the coronavirus pandemic.
However, these disputes and dissensions are not limited to the political arena. Even if we focus our analysis on a more specific debate, on basic income universal, the academic literature on the issue – which today can already be considered multidisciplinary, involving the fields of philosophy, economics, political science, sociology, among other related areas – is also not uncontroversial. Authors considered fundamental for different (and even opposing) political spectrums – such as Thomas Paine (1797), Milton Friedman (1968) and Martin Luther King (2010) – present proposals that are seen as precursors or related to this program[2]. In contemporary academia, the idea of universal basic income is associated with the work of the Belgian political philosopher Philippe Van Parijs (VAN PARIJS, 1995; VAN PARIJS, VANDERBORGHT, 2017, among others)[3]. But what would be the common characteristics of the different normative basic income proposals? And what are the moral reasons given by advocates of universal basic income for its adoption by a just state? We believe that by answering these two questions, we will be able to illuminate some urgent issues that must be discussed in the contemporary political scenario.
According to Bidadanure, there are at least five characteristics that can be considered common to the different universal basic income proposals found in the literature (BIDADANURE, 2019). First, the benefit must be paid in cash and not in the form of a basket of products, such as a basic basket. A second feature associated with these propositions is that these benefits must be individual. That is, unlike most long-term programs in democratic societies, these programs should not be based on household (or family) income and should not be targeted at a single family member. More than that, it must be unconditional. Should you receive it, you have an inalienable right to that income – whether you are rich or poor, young or old, formal, informal or unemployed. Finally, two last characteristics: the payment of this program must be regular from a temporal perspective (paid monthly and not in a single installment at a given moment in life[4]) and must not have eligibility criteria. He is universal. Classification criteria and distinction between beneficiaries and non-beneficiaries tend to create stigmas and potentiate social prejudices.
The choice for all these characteristics is not random. There are moral reasons for them, directly associated with the defense of the adoption of a universal basic income, according to its supporters. According to Van Parijs, if we want to be fair, we must aim for a free society, that is, a society whose members are as free as possible (VAN PARIJS, 1994, p.71). The appropriate instrument for this, as the Belgian philosopher would develop in several articles and books over more than two decades, would be the adoption of a universal basic income.
It may surprise some readers that this proposal is libertarian in tone. Some readers must really be wondering: isn't universal basic income an egalitarian proposal from the left? As the Belgian philosopher emphasizes, his proposal is a “real libertarianism” (VAN PARIJS, 1995), which does not prevent the proposal from having an egalitarian core or from being adopted by egalitarians. But why then should we adopt universal basic income?
For the end of economic domination, for the extinction of gender and racial oppression. These are three overarching moral reasons found in the literature.[5] More than that, advocates of universal basic income seek to emphasize that there are no moral reasons to assume a superior moral value — usually associated with an idea of social reciprocity — in some types of work over others. This seems to be a fundamental part of the moral justification of the proposal and polemic, which divides even the group of egalitarian philosophers. Should absolutely everyone have the right to do whatever they want and receive an equal basic income? To use the classic example from literature: even a surfer in Malibu[6]? According to advocates of universal basic income, yes. Wouldn't that be discouraging those who work hard in difficult jobs? Defenders of universal basic income argue that we cannot unconsciously adhere to a “productivist” moral value, usually shared consciously or not by members of contemporary societies, of valuing work and our professional choices, as well as the individual responsibility associated with it. to them.
There is still an important point to be highlighted from this literature on universal basic income. We need to understand what is behind the adjective “basic”. This adjective should not be seen as a mandatory synonym for “minimal”, but refers to the fact that income derived from work would supplement this income from the program (Bidadanure, 2019, p.486). Obviously, defining what this “basic” would be does not seem to be a simple task, even in an ideal scenario without a severe shortage of resources. How to establish a universal base seems to be an even more important question if we think about countries with fragile economies, in crisis or in development: how to finance seems to be an inescapable question. More than that, it does not seem to be a simple answer to the question of whether universal basic income should be understood as a value in itself, regardless of the consequences that this program will cause. Under real circumstances, could other important established social programs conflict or lose funding with this new program? Should universal basic income always exist, even if it generates negative externalities such as informality, inflation or otherwise worsens the situation of vulnerable people?
These seem to be important points that are still not completely answered in a consensual way in the contemporary theoretical literature. It seems plausible to assume that advocates of income distribution programs are sensitive to the consequences resulting from this public policy. However, some supporters of basic income may consider its existence to be a value in itself, as it would allow real freedom that would never be achieved with targeted income programs. In this way, consequences might not be the only element of an evaluation.
Another important normative debate, which is not usually present in the literature on basic income, can help in a careful moral reflection that can enrich the usual reflections on this theme. There are at least three general principles of justice and philosophical currents that can defend the adoption of targeted or universal cash transfer programs: a principle of sufficiency, a principle of priority and one of equality.[7].
Proponents of the intrinsic value of equality argue that the assessment of a distribution should be always performed in comparison to an equality criterion, that is, a relational element must be present in the comparison. Contrary to this relational element, we would have defenders of “doctrines of sufficiency” (FRANKFURT, 2015), as well as defenders of an “extended humanitarianism” (TEMKIN, 1993) or a “prioritarian vision” (PARFIT, 2002). For the latter, “benefiting people matters more the worse off these people are” (PARFIT, 2002, p.101). Thus, benefits to those in the worst economic situation should be prioritized.
Finally, advocates of sufficiency doctrines or sufficientitarian theories (FRANKFURT, 2015). If, on the one hand, these theories do not care about equality or some other comparative ideal, on the other hand, they also do not defend the unrestricted priority of those who are worse off. According to this range of theories, helping the worst off matters only if these individuals find themselves in a position below a critical threshold. So morally what matters, according to sufficiency adherents, is whether everyone has enough to live above a critical threshold. Thus, supporters of this doctrine defend two distinct but interrelated theses. A positive thesis – which affirms the importance of people living without deprivation, above a certain critical threshold – and a negative thesis, which “denies the relevance of certain additional distributive appeals” (CASAL, 2007, p. 298), above the threshold previously determined.
Reflecting on which moral principle we defend seems to be a task that takes precedence over the choice of which public policy we want and, consequently, on which income distribution program – be it universal basic or focused and emergency – that we defend. An emergency aid program can be justified by different political perspectives and moral values, which impacted its format and objectives. If we do not discuss our primary moral motivations, we will always be running the risk of not even being able to identify who our allies are and who our political opponents are, as well as limiting ourselves to evaluating important normative criteria, but of second order, such as efficiency or effectiveness in decision making. We have to know where we want to go in order to choose the best way forward. It is true that consequences matter, but we must ask ourselves what consequences we seek. If successful, this simple taxonomy of concepts and moral principles that we present in this section outlines different normative paths that must be taken into account in the political debate on emergency aid and basic income.
Normative considerations on a Brazilian basic income
The brief review of the theoretical literature provides us with an interpretation of the main issues that are in the contemporary political debate in Brazil: (1) income volatility, and (2) universalization or not; (3) in case of targeting, whether direct or indirect.
The important concern with income volatility can be understood as a claim to fairness that deserves special attention. Even adherents of doctrines of sufficiency would judge this theme as of special moral relevance.[8]. However, this agenda, to fit correctly into a justice perspective, requires us to take into account longer periods of time and the longitudinal behavior of family resources. If this moral concern about income volatility is limited to a claim that, from a perspective of distributive justice, no one should face deprivation at any stage of their life, we suggest calling it diachronic sufficientarianism[9]. From this perspective, what matters morally, from a perspective of distributive justice, is that people, throughout their entire lives, should not face severe deprivation at no stage, and must always live above a threshold (whether that threshold is one of the poverty lines or basic need lines). Above that threshold, distributive concerns would cease to be relevant.
Thus, we can draw two lessons from this issue. On the one hand, by clarifying this moral concern, we can better understand the current political debate. On the other hand, the concern with income volatility present in the debate highlights the importance of giving greater attention to the temporal dimension in theoretical works on distributive justice.
In addition, there are other issues that need to be better worked on by political theory and carefully evaluated by those who formulate public policies. The literature on basic income assumes universalization as a necessary feature, which would eliminate the diverse and dangerous stigmas caused by targeted programs. However, universalization does not seem to be a question with a simple and uncontroversial answer. As we can identify in the contemporary political debate, in Brazil, animated by emergency aid, the concern with expanding the set of beneficiaries cannot disregard the high levels of pre-existing poverty and inequality — and that, added to the concern with fiscal possibilities and implementation compels consideration of targeting as an alternative. He would be fair design a universal program with the levels of deprivation of the poorest strata and the present and expected state budget restrictions for the post-pandemic future?
The existing debate in Brazil about the different targeting strategies, direct and indirect, sheds light on another one of moral relevance, even more foundational: should we defend a basic income regardless of its effects and externalities? Informality as a possible unpremeditated product of a direct and comprehensive targeting system suggests the relevance of taking the consequences into account before expressing ourselves in favor or against an income transfer program. Is, therefore, our normative position favorable or contrary to basic income sensitive to circumstances? The theoretical debate can be enriched by taking questions of this order seriously.
Different principles of justice can justify different income distribution programs. If it is true that every egalitarian, priority or sufficientitarian recognizes that we should not live in a society where people live below the extreme poverty line, this does not mean that the policies to be defended by different principles of justice will be similar. Precisely for this reason, a normative reflection can help empirical evaluations and recommendations, as well as clarify the political debate. The reverse is also true: normative theory needs to consider empirical evidence. In order to enrich the political debate on emergency aid, it is urgent to identify and normatively justify the social problem that we want to face with this program. A qualified debate about the best institutional design requires that normative issues be taken into account.
*Marcos Paulo de Lucca-Silveira is a teacher at São Paulo School of Economics of the Getulio Vargas Foundation (FGV-SP).
*Rogério Jeronimo Barbosa is a postdoctoral researcher at Center for Metropolis Studies at USP.
Originally published on the blog of Virtual Library of Social Thought.
References
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ACKERMAN, B., ALSTOTT A. Why stakeholding? In:Redesigning Distribution: Basic Income and Stakeholder Grants as Cornerstones for an Egalitarian Capitalism, ed. B. Ackerman, A Alstott, P Van Parijs, pp. 43–65. London/New York: Verso, 2006.
BARBOSA, Rogério J.; SOUZA, Pedro HG Ferreira de; SOARES, Sergei SD “Income Distribution in the 2010s: A Lost Decade for Inequality and Poverty”. IPEA – Text for Discussion. Brasilia: IPEA, 2020 (in press).
BARBOSA , Rogério J.; PRATES, Ian; MEIRELES, Thiago de Oliveira. “The vulnerability of Brazilian workers in the Covid-19 pandemic”. Bulletin – Public Policy & Society Solidarity Research Network, v. 2, April 2020.
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CASAL, P. Why sufficiency is not enough? Ethics, 117, (2), 2007.
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Notes
[1] Considering a poverty line of one third of the minimum wage in force in 2020. The poverty rate for 2019 was calculated from the 2019 Continuous Annual PNAD, with deflated values for May 2020. The poverty rate for the fourth week of May was calculated with Pnad-Covid.
[2] Milton Friedman (1968) presents a “negative income tax” proposal, which has some similarity with the universal basic income proposal, according to part of the contemporary literature. Bidadanure's (2019) article presents an excellent review of the basic income debate, which we follow in part of this session.
[3] In Brazil, the academic works and political propositions of Eduardo Suplicy stand out (SUPLICY, 2013).
[4] A program in this format is known in the literature as “basic capital”. This proposal can be found in the formulation of Ackerman and Alstott (ACKERMAN, ALSTOTT, 2000; 2006).
[5] See Bidadanure (2019) for references on these reasons.
[6] The example of the surfers, which motivated the cover image of the classic book by Van Parijs (1995), is always presented in the literature on basic income as a critique of egalitarian positions presented by other important philosophers, such as John Rawls, who argues that fair institutions they should not subsidize those who choose to surf every day and do not use their productive capacities (RAWLS, 2001, p. 179).
[7] On this issue, see LUCCA-SILVEIRA, 2017.
[8] It seems clear that this concern would also be one of the priorities of defenders of priority and egalitarian positions, which tend to be more favorable to income distribution programs.
[9]This temporal issue seems to be little explored in the normative literature on the subject.
