Transcriber: Michele Gianella Reviewer: Cristina Bufi-Pöcksteiner
When I speak, I would like you to think about one question.
Why is Scandinavia so rich?
One reason could be that we are sharing so much.
Then we get the common interest to make a big pie,
because we're going to share it in any case.
It isn't the only explanation,
but this is the explanation that we'd like you to have in mind.
And I move on now to think more about developing countries -
India and other countries.
Many countries are not so fortunate as us.
They are not sharing as much as we do, and they do much worse.
For example,
Rwanda is a tragic example, the big genocide in 1994.
It wasn't only a bad economic catastrophe, but it was also a human catastrophe,
as you all know.
800,000 people were killed just in a hundred days.
And you see, here's a graph of GDP development, over the period.
You see, there's a tremendous drop in 1994.
It was actually a drop in production of equal size of the drop in production
in the Great Depression in the US - greater, actually.
You also see a path
where it's increasing after things went better.
Both the tragedy in 1994, the consequences of that,
and the prosperity that followed after
were very unequally shared in the population.
This is typical.
Many countries in Africa and elsewhere have a lot of conflict.
In Africa, 80 percent of all countries
have [had] at least one year of civil war, since 1980.
And elsewhere, conflicts are more simmering maybe.
They are not so brutal as we have seen here.
But they are there,
and they are destroying
some of the economic performance of the country.
And the lives that people live are worse than they needed to be.
We need a solution for this.
The solution I'm going to talk about is universal basic income.
To people everywhere, in principle.
Together with a colleague of mine,
an Indian economist working at the New York University, Debraj Ray,
we have explored the possibility of using what we call a universal basic share,
which is a simple amendment to this universal basic income.
It is an amendment in the sense that you are committing
to a share of the total income in the country
that is shared by everybody.
Everybody's getting equal much of this - 10 percent, say, -
share of the total incomes in the country.
We're going to now look at some consequences of that,
and I'm going to give you some examples.
This is a universal basic share.
You have three sets of consequences,
and they are:
it reduces poverty and inequality,
that's one thing;
it increases the social insurance of other people;
and it reduces conflicts.
Each of these three things -
the universal basic share has a direct effect
on each of these three entities here.
It reduces poverty, obviously.
You take 10 percent of the income in the country,
and you give it to everybody.
That means that the poor people get much more than they had.
In India, 10 percent of the income
would mean that you give an amount
equal to the poverty line in that country.
You increase the social insurance, because now there's a certain level.
You can't fall below that.
If there's a drought in the country,
then you are not having the bad consequences
of running into debt in order to feed your family.
It reduces conflicts,
because now the group that you represent, they will also lose if there's a conflict
and production goes down,
because you get lower basic income via the basic universal share.
The most interesting thing is the interaction between these things.
That you have that reduced conflicts in itself is a social insurance,
because it stabilizes the economy.
Reduced poverty eliminates some of the conflicts.
Reduced inequality eliminates some of the conflicts
over which you can fight and have tremendous bad consequences.
To increase social insurance,
make people more secure to invest in good performance and in prosperity.
So they interact, these things.
Let me see whether we can find
any Indian experiments that can show some of this.
We cannot find any experiences where they use the universal basic share.
That's why we have it as an idea, because it hasn't been tried before.
There are some experiments where they use universal basic income.
There were 6,500 people that were given basic income in India,
under the administration
of a self-employed women's association,
in 2009 to 2012.
They received an amount, each of them, extra for the kids,
that were around the poverty line of each individual.
What happened?
Many people think, "They will just waste the money.
Easy come, easy go, so we waste it on temptation goods."
What is happening?
No, many of them invested to improve their toilets.
That's the first thing they did.
60 percent of households in India have to defecate in the open.
This is a terrible tragedy, for women in particular, in India.
The first thing they did,
was to get them resources to improve their toilets.
They invested in children,
more schooling for children, girls in particular.
Girls are discriminated in India.
They went up by 40 percent
compared to the villages that didn't receive a basic income.
And their schooling reached a level of 65 percent of the girls,
which is very high in Indian context.
They also saw better feeding in their households.
They got better nourished.
One indication of this
is the weight of girls compared to their age.
Those who were underweighted,
that declined.
It was a double effect of this,
compared to the villages that didn't receive basic income.
It was also the case that they didn't work less.
They worked more.
People who are afraid that basic income should lead to lower work
should look at some of the experiences where it had been tried out.
They worked more and they worked smarter.
They choose more of the work they did, because they were invested.
They have an insurance in the period between jobs,
so they can have a better job all in all.
And it also gave power to females, in particular, in the household.
When you get individual money, you get individual power.
You also got a bank account, they didn't have that before.
You have to pay it into a bank account,
and that caused more control over their resources.
You'd think that there are so many good things about these things
having a basic income,
and particularly if there's a universal basic share.
Because then you lift this floor that everybody stands on
in tandem with the economic growth and performance of the economy.
You're not lagging behind.
When there is prosperity, you get the share of the prosperity.
When there is new machinery,
you get the share of the benefits of the new machinery.
When there's more globalization,
you get a share of the benefits of more globalization.
People will say,
"Well, this is fine if you can pay for it.
It's nice, but it's too pricey for developing countries."
I would say the opposite.
You become rich by investing in these arrangements.
You don't have to be rich beforehand.
People will say,
"But these countries are so corrupt."
That can be more or less true.
We can't implement the scheme, that is.
But notice, this is a very transparent and simple scheme.
It's 10 percent, easy to check.
You're going to be broadcasted on television
that this year's bonus to everybody is so-and-so much,
and they can check whether they got it.
It's very transparent.
And also, if you fight corruption, then you will benefit even more.
So, we get the social interest in organizing a protest against corruption
because we get part of the benefit.
This is why we should stand on this platform
to move further in many countries.
Thank you.
(Applause)