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IS THE PRESENT CRISIS AN UNPRECEDENTED OPPORTUNITY FOR BASIC INCOME?. Robert Boyer Plenary session 2 – Reforming social protection system and basic income 13th International Conference – BIEN 2010 Brazil. INTRODUCTION. The three objectives of this presentation
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Plenary session 2 – Reforming social protection system and basic income
13th International Conference – BIEN 2010 Brazil.
The three objectives of this presentation
At the core of the crisis: the erosion of the directresponsibilityof credit decision
1. At the core of the crisis: the erosion of the direct responsibility of credit decision….
Various financial entities buy these derivatives
Need of hedging
Securitisation by investment banks
Swaps against credit default
Externalization of the risk
Mortgage financial institution
Real estate buyers
Deepening of the gap between financing and risk taking
Incentive to take more risk
Figure 1 – The hidden origin of subprime crisis: a perverse division of labor within finance
Collapse of the joint responsibility of contract
Source : Yuliya Demyanyk, Otto Van Hemert (2008), p. 1
The endof a finance-led growth regime…
An unprecedented crisis generated by financial laissez-faire…thatdiffusesto the rest of the world
Source : Artus Patrick (2008), « Plaidoyer pour la création « d’acheteurs d’actifs risqués en dernier ressort », Flash économie, n° 416, 23 septembre, Natixis, Paris, p. 6 et« La finance peut-elle seule conduire à une crise grave ? », Flash économie, n° 429, 2 Octobre, Natixis, Paris, p. 3.
Source: Piketty, Saez (2003), QJE, p. 33, figure 11.
Source: Piketty, Saez (2003), figure 1, p. 11
Phillips Kevin (2002), p. 79.
Disciplining finance: a matter of efficiency in reducing the frequency of crises and an issue concerning social justice
Taxing finance : is it a method for financing Basic Income ?
Priority to domestic led growth via Basic Income: an alternative to laisser-faire globalization.
Van Parijsian capitalism
Society wide, solidarity Basic Income
Solidarity among wage earners : social contribution
Capital/ labor relation
A form of market relation
Beveridgian capitalisms segmented solidarity: general taxation
C1 – Any analysis about the future of basic Income has to take into account the novelty of the present crisis. It means that
the globalization without regulation,
the excess of financialization
and the lack of social and environmental sustainability
have come to an end.
C3 – Basic Income might be a relevant response to contemporary most urgent problems: the jobless recovery, the expansion of the working poor, the continuing excesses of financial remunerations, whereas many workers are loosing their job, house and health insurance.
Quite effective in fighting extreme poverty, and some programs with moderate costs have been promoting employment
A wave of social inclusion, i.e. a rupture with respect to the trends typically observed in Latin-America.
A stimulation of the domestic market,
Clear political dividends for the governments
A vibrant epistemic community.
C5 – Do not reiterate “The same size for all” error. International comparisons display a variety of national strategies along quite specific domestic political compromises when comparing Brazil, India or Alaska.
The inertia of segmented social allowances
A threat concerning the dismantling of past compromises,
The diversity of welfare components, built upon different risks.
A basic dilemma: should its level be low and/or a variant of a negative income tax …
…or should it be high and initiate the transition towards a radically new form of society?
How general and universal are its ethical foundations?
Can one prove logically its economic coherence with the typical social relations of capitalism?
Can one explore the nature of the political alliances that could trigger its emergence?
Practically, how to design such a system and how to promote the transition towards such a new socioeconomic regime?
Robert BOYERCEPREMAP (Paris) – GREDEG (Sophia Antipolis)140, rue du Chevaleret 75013 PARIS, FranceTél. : (33-1) 40 77 84 12
e-mail : email@example.com
web site : http://www.jourdan.ens.fr/~boyer/