By Malcolm Torry, University of Bath, previously London School of Economics, Basic Income Earth Network (BIEN) and formerly Citizen’s Basic Income Trust.

The modern debate about Basic Income—an unconditional income for every individual: sometimes called a Universal Basic Income, a Citizen’s Income, or a Citizen’s Basic Income—can be dated from the founding of the Basic Income Research Group in 1984. The Basic Income European Network (BIEN) soon followed in 1986. For the following thirty years the subject remained a minority interest. Once every two years an international congress was held; most of us knew each other; and I could honestly say that I had read everything written on the subject in English as well as some of the books and articles in other languages.

But then everything changed. Opinions differ as to precisely when that happened, but it was about ten years ago. And inevitably opinions differ as to why it happened. I suspect that there was no single factor, but rather a combination of them: successful pilot projects had taken place in Namibia and India; the Swiss were preparing for a referendum on the subject; the Finns were discussing a minor experiment with something similar to a Basic Income; the fake news that Finland was planning to give everyone a Basic Income began to circulate, and try as we might we couldn’t stop it; and the UK had seen the first mainstream newspaper article on the subject for twenty years in The Guardian following the publication of my Money for Everyone: the first general introduction to the subject for nearly fifteen years. BIEN’s international congresses became annual events; a journal, Basic Income Studies, was founded; think tanks and academic departments piled in; and publications multiplied. Nobody can now say that they have read everything on the subject. A personal consequence was that what had been a half a day a week voluntary task quickly became an almost full time one, so I had no option but to retire early from the post of Team Rector of a large and busy South London parish in order to give to Basic Income organisations and research the time that they needed. If we count second editions, I have now written twelve books on the subject, and it has been a particular pleasure to have worked with Edward Elgar on four of them: A Modern Guide to Citizen’s Basic Income: A multidisciplinary approach (2020), Basic Income—A history (2021), A Research Agenda for Basic Income (2023), and Unconditional: Towards unconditionality in social policy (forthcoming).

Whilst there are now thousands of books and articles on Basic Income, what sets those four books apart is their somewhat obsessive concern for clear definitions and the best available research. Agreed definitions and high quality research matter, and the debate suffers when they are neglected.

To take a recent example: The Government of Ontario called an experiment with payments that varied with the recipient’s household structure and other income a ‘Basic Income Pilot Project’. A means-tested and household-tested income is a long way from unconditionality, so the experiment was not a ‘Basic Income pilot project’ as that phrase might normally be understood: but it has often been discussed as if it was one. And a number of recent United States experiments that have employed ‘Basic Income’ terminology have imposed proxy means-tests, again disqualifying them as Basic Income pilot projects. This matters, because only if we all understand the same things by the same words can we communicate accurately; and if we mean different things by the same words then misunderstanding is bound to occur. The problem that we now face is that the global extent of the Basic Income debate means that a) it is more important than ever that definitions should be agreed and that we should all stick to them, and b) it is more difficult than ever to achieve agreed definitions and just as difficult to ensure conformity with definitions over which consensus might have emerged.

Just as important as agreed definitions is the employment of the best available research methods. For instance: A particular contribution that the UK has made to the Basic Income debate is microsimulation research. A Basic Income would never be implemented on its own because it would have to be paid for by implementing new taxes, adapting existing taxes and benefits, or creating new money. Whilst a Basic Income is always an unconditional income for every individual, a ‘Basic Income scheme’ is a specified level of Basic Income along with the funding method fully specified and changes to existing taxes and benefits also fully specified—and there is an endless number of different ones, all with different effects. The only way to ensure that a Basic Income scheme would not increase poverty or inequality, would not tip low-income households into deeper poverty, would be affordable, would take people off means-tested benefits, and so on, is to employ microsimulation: a computer programme that employs a vast real-world dataset to predict what would happen in the real world if a particular scheme were to be implemented. In the UK we have discovered that there is a fairly narrow range of Basic Income levels that would be feasible. The existence of such robust research does not stop campaigners advocating for high Basic Incomes that they should know by now would impose deeper poverty on poorer households, and neither does it stop Basic Income’s opponents from employing a particular infeasible Basic Income scheme to vilify the whole idea of a Basic Income: but it does mean that the research results are available for anyone who wants an intelligent debate about Basic Income and how it might be feasibly implemented.

This is just one example of the importance of employing the best available research. The same applies to every aspect of the Basic Income debate. Readers might tire of the way in which my books are strewn with references, but they are essential, as are the long bibliographies that contain only high quality social science research and not some of the less well evidenced books that my readers sometimes hope to find there.

Both clear definitions and high quality research matter, which is why I was particularly pleased to be asked to write the Research Agenda for Basic Income for Edward Elgar. It starts with a thorough discussion of definitions, and then outlines both the research that is already available and the research that now needs to be done.

To be personal again: It is a pleasure to see so many organisations and individuals now involved in the global Basic Income debate. In order to give to new generations of researchers, educators and advocates the social space that they need to run the organisations, hold the conferences, and write the books and articles that the debate now needs, it is high time for some of us who have been involved for forty years to leave the field. Unconditional will be my last book on social policy, and I look forward to seeing how the next generation develops the global debate on Basic Income and on unconditionality more generally. I hope that some of them will publish with Edward Elgar.  

A Research Agenda for Basic Income
By Malcolm Torry, University of Bath, previously London School of Economics, Basic Income Earth Network (BIEN) and formerly Citizen’s Basic Income Trust is available now.

Read the introduction and other free chapters on Elgaronline

By Christian Le Bas, Professor of Economics, ESDES Lyon Business School, Lyon Catholic University, France

Frugal innovation (FI thereafter) has been garnering great research interest in the last two decades. The literature tells us a new frugal product is associated with a substantial reduction in costs compared to a standard product due to the limited number of basic functionalities while having a minimum level of technological and ecological performance. Because its manufacturing cost is also reduced, its price is lower compared to those of more standard products, as a consequence, it can be purchased by consumers with low incomes. Such a new type of innovation provides valuable products for low-income communities contributing to economic inclusion in the process of consumption. FI is therefore, inclusive. This type of new product is more durable, simple, efficient, less technologically sophisticated and costly. In the past, located in emerging countries it is today more “global”, gaining followers in developed economies. In this context, FI shows strong potential to foster inclusion and sustainability effectively.

We show in the book, FI is part of a new technological paradigm. The size of the product is smaller, and the number of functionalities/components is reduced (product therefore easier to recycle). As a consequence, the product is more reliable (it has a longer lifespan) and less technological complex (easier to repair). The core of this new paradigm is therefore design simplification. As a result, there is less pressures on natural resources. It can be manufactured more easily/quickly and therefore saves energy. Consequently, FI is a green (or environmental) innovation. In the current period the frugal product seems to interest consumers who are ecologically virtuous by choice.

FI is without a doubt an innovation of transformative change (Schot and Steinmueller) aligning social and environmental concerns with innovation (for profit) objectives. FI can be considered as a part of the solution to the main problems of the planet (global economic inequalities and climate change).

Technological frugality shares a number of characteristics with the low-tech approach: simplicity in the architecture of the product, the search for (much) less technological complexity, the use of limited resources (including economic resources or R&D), ecological properties (“resources-saving”). But deviates from a low-tech paradigm in what the goal of frugality is not technological, it is to provide affordable goods in terms of price. Technology is just one way to do that. The frugality approach does not refuse (by principle) the use of high-tech technologies in design activities (such as the use of design methods as artificial intelligence) or in the manufacturing of frugal products (like robotics).
Until now, most of the literature addressing FI has been qualitative empirical and the analytical frameworks have come from Management Science. Little attention has been given to understanding the technological core of FI and, more importantly, to the underlying economic mechanisms that are affected by technological frugality. This book aims to fill this gap. For achieving this we rely on a mix of theories linked to the Schumpeterian approach to innovation (Economics of innovation) combining methods from Evolutionary Theory, Microeconomics, and Industrial Organization.

My book The Economics of Frugal Innovation. Technological Change for Inclusion and Sustainability aims to fill this gap. Chapter 1 of the book discusses the various definitions of FI found in the literature and pictures some striking cases of frugal product. In chapter 2 I articulate the notion of technological frugality (the frugal direction of technological change) and the concept of technological paradigm at the core of the innovation studies as an evolutionary research programme. The idea of design simplification resumes this new paradigm. Chapter 3 explores economic topics in relation with the frugal direction of technological change: the resource constraints schemes, a new model of induced innovations and the structure of innovation demand-side approaches. Chapter 4 proposes an analysis showing the positive consequences of the frugal direction of technological change for the environment. Chapter 5 addresses an issue much dealt with in the literature: the relation between technological frugality and sustainability. Because we assume FI is in general sustainable, we explore the relevance of a new taxonomy that sticks more the empirical evidence : weakly sustainable frugal versus fully sustainable frugal. In chapter 6 we fill a gap by delineating en econometric exercise aiming to understand what type of innovators implement FI. Our estimations enable us to retain complex innovator (achieving product and process innovation) are more prone to innovate frugally. Chapter 7 in the literature, we find the idea FI is considered as a disruptive innovation concept due to Christensen. New frugal product staying in the low-end segment of the market cannot be considered as competing standard product and therefore cannot feed a process of disruption. Our starting point in chapter 8 is : can FI a possible determinant of economic growth in LDC. Our pessimistic conclusion is : we do not find any evidence in favour of this assumption.

The novelty of the book lies in presenting the economic mechanisms ruling the design, the implementation, and the diffusion of FI innovation. As such, the book is likely to be of interest to people (academics, experts, various kinds of practitioners) wanting to study new types of technological innovation in relation to sustainability.

The Economics of Frugal Innovation by Christian Le Bas, Professor of Economics, ESDES Lyon Business School, Lyon Catholic University, France is out now.

Read the introduction and other free chapters on Elgaronline

By Raghbendra Jha, Emeritus Professor, Arndt-Corden Department of Economics, Australian National University

Despite some obstacles like the crises of the late 1980s and early 1990s, developing economies, the global economy, and international trade experienced steady growth during the period 1980-2000. It was widely claimed that this was partly the result of the adoption of the doctrine of the globalisation by a large majority of developing countries.

By Richard Wagner, Emeritus Professor of Economics, George Mason University, US

I was pleased when Edward Elgar invited me to contribute a book on public choice theory to its series on “Rethinking Economics.” My entire academic career has taken place inside the corridors of public choice thinking, starting with my 1963 enrollment in the Ph.D. program in economics at the University of Virginia. I enrolled there and not somewhere else after reading James Buchanan’s and Gordon Tullock’s 1962 Calculus of Consent. That reading settled my indecision about whether I would study economics or political science, for reading that book convinced me that I could study both in Virginia’s economics program.

            After my first year at Virginia, moreover, Buchanan and Tullock invited me to attend a conference they were sponsoring in October 1964 in what at the time they were calling “nonmarket decision making.” With weakening memory after nearly 60 years, I no longer recall full details of that conference. Among the 15-20 attendees were such prominent contributors to the early years of public choice as Duncan Black, Anthony Downs, Roland McKean, William Niskanen, Elinor Ostrom, Vincent Ostrom, William Riker, and Thomas Schelling.

            The conferees were united in their dislike of the common practice of using concepts from welfare economics to offer advice to politicians about optimizing one thing or another. It’s not that they were opposed to optimizing in principle, but that they thought that politicians were already quite adept at being politicians, and so didn’t need help from economists. After all, politicians were typically elected repeatedly to their offices, leaving those offices only when they chose to do so. Politicians didn’t need economists to help them to be better politicians.

            The conferees pursued a quite different analytical challenge, which was to uncover the hidden logic that undergirded political action. Politicians were recognized to be at least as rational as ordinary people, only they operated inside a different type of social and institutional environment than did ordinary persons. In this respect, Vilfredo Pareto’s 1915 treatise on Mind and Society distinguished between two major environments that contained human action within society. One of those environments elicited logical action by participants. These were commercial and scientific environments. The other of those environments elicited action that was non-logical, which is different from being irrational. The primary non-logical environments in society were politics and religion.

            Logical environments were primarily environments dominated by direct experiences of costs and gains by participants. Those participants invested in their choices and bore the value consequences of the resultant outcomes. By contrast, non-logical environments were animated by impressions and images. One beautiful illustration of the difference in environments arises in different approaches to the existence of God. Pascal’s Wager pertains to a logical environment with Pascal counseling that the mathematics of infinity explains that a prudent person would choose to believe in God. Alternatively, Anselm’s so-called proof starts with someone who believes in God and counsels people to probe the meaning and significance of that belief in their lives. Applied to politics, this means that people start with feelings to which politicians seek to appeal by crafting images that resonate with those feelings.

            The early public choice theorists confronted the problem of making their ideas intelligible to an economics profession that for a good half-century had become accustomed to using economics to proffer advice to politicians, mainly through the medium of welfare economics. To gain a foothold in that profession, it seemed prudent to proceed by making marginal changes to the prevailing schemes of economic theory. Hence, public choice, which was given its name in only in 1968, embraced the standard postwar assumptions of optimizing individual choice and systemic equilibrium, and proceeded to emend those assumptions to incorporate political phenomena. For instance, William Niskanen published Bureaucracy and Representative Government in 1971. This book treated bureaus within the context of the theory of the firm by modifying the theory of the firm to account for the inability of bureaus to capitalize their profits. It wasn’t that bureaus couldn’t conceivably return profits; it was that their institutional arrangements prevented them from doing so. Instead of returning profits, bureau officials would convert what would have been profits into rents for bureau officials and relevant legislators.

            In my judgment, public choice has become ossified over the course of its life. Rethinking Public Choice seeks to fight that ossification by replacing the orthodox equilibrium framework with one based on such concepts as evolution, complexity, and emergence. Models don’t just help us to see more clearly; they also shape what we see or think we see. Models are not neutral elements that just magnify our thoughts. To the contrary, they carry our thinking in particular directions. In this respect, equilibrium models are rendered in the passive voice.

            In contrast, Rethinking Public Choice is rendered in the active voice. Everything that happens occurs because of actions people undertake somewhere within a social system. There is, moreover, no such thing as acting on a social system. All action occurs inside a social system, and with that system’s architecture continually changing in response to those actions. A central bank, for instance, does not control a price level. It instructs brokerage houses to buy private assets, which sets in motion transactions that bring about changes in asset holdings throughout the social system, including changes throughout the structure of prices.

            Rethinking Public Choice ranges widely throughout the material that public choice theorists have addressed, always seeking to explore alternative insights that arise through this emphasis on active voice theorizing where human population systems feature dense collections of people always acting, and with much of what those actions accomplish being unintended by-products of human interaction within complex social systems. In this respect, Rethinking Public Choice looks to the Scottish Enlightenment and not to post-war welfare economics for its animating scholarly inspiration, only integrating those insights of old with such new schemes of thought as evolution, complexity, emergence, and some dialectics of constituting social order.

Rethinking Public Choice, by Richard E. Wagner, George Mason University, US is out now.

Read the introduction and other free chapters on Elgaronline

Written by Charles J. Whalen, Research Fellow, Baldy Center for Law and Social Policy, University at Buffalo, USA

On October 19, 1987, the US stock market lost nearly 25 percent of its value—the largest single-day drop in history. As market distress reverberated worldwide, values on global stock exchanges plummeted, resulting in “Black Monday”—the first contemporary global financial crisis. In the aftermath of that crash, American economists held their annual meeting in Chicago, and Hyman Minsky was the speaker it seemed everyone wanted to hear.

Minsky, then a professor on the verge of retirement at Washington University in St. Louis, was thrust into the limelight by the 1987 crash. That’s because many regarded him as the most prominent opponent of the economics profession’s insistence that financial crises and business cycles no longer represented important real-world problems. While other economists were either ignoring crises and cycles or dismissing them with general-equilibrium analyses, Minsky was developing a “financial instability hypothesis”—that explained booms and crashes as an inherent part of a modern economy—and patiently applying his theory to analyze a series of such episodes that occurred in the decades before and after World War II.

Minsky understood that achieving serious public-policy reform—aimed at reaching and sustaining full employment and better addressing financial instability and other real-world problems—requires also reconstructing economics. In fact, that was the explicit aim of a workshop he convened in 1991, when he served as a senior scholar at the Levy Economics Institute of Bard College. Minsky stressed a reconstruction grounded in an appreciation of the following: constant economic change, the need for economic decision-making in the face of uncertainty, and the role of socioeconomic institutions and public policy as key determinants of economic processes and outcomes. He was an eclectic economist, who learned from a diverse group of professors at the University of Chicago and Harvard University (including Henry Simons, Oscar Lange, and Joseph Schumpeter), but in the last few decades of his life he was most at home among economists calling themselves post-Keynesians and institutionalists.

When the severe global financial crisis of 2007–2009 blindsided economists and policymakers alike, Minsky and his ideas were back in the headlines. For example, he was featured in a front-page story in The Wall Street Journal, and The Nation published an essay with the title “We’re all Minksyites Now.” However, by then Minsky had been dead for a decade, so the task of applying his insight to that crisis fell upon his intrepid followers, many of whom who have come to embrace the term “post-Keynesian institutionalism” to describe their approach to economic theory and policy.

Two new books by Edward Elgar Publishing look at the global financial crisis and several new and continuing economic challenges by drawing heavily on Minsky’s insight and analyses. The books also seek to trace the development and contours of post-Keynesian institutionalism, and to advance that approach by taking the ideas of Minsky and other pioneering contributors—including John R. Commons, Joan Robinson, and John Kenneth Galbraith—in new directions.

In Reforming Capitalism for the Common Good: Essays in Institutional and Post-Keynesian Economics, 25 essays (written over three decades) build on the work of Minsky and institutionalist John R. Commons to address the causes and consequences of US macroeconomic instability, job offshoring, community economic dislocation, financialization, income inequality, and rising worker insecurity. The result is a compelling case for reforming capitalism by addressing workers’ interests as an integral part of the common good, and for reconstructing economics in the direction of post-Keynesian institutionalism. Scholars and students of economics and labor studies will appreciate the incisive analyses and real-world focus, while policy analysts and concerned citizens will welcome the book’s optimistic vision for our economic future.

In A Modern Guide to Post-Keynesian Institutional Economics, an international team of more than a dozen scholars breaks new ground by extending recent analyses of today’s investor-driven (“money manager”) capitalism, with special attention to financialization and economic insecurity. It also sharpens concepts and methods (such as social capital and stock-flow consistent modeling, respectively), sketches new theories on labor and financial markets, and infuses post-Keynesian institutionalism with insight from other research traditions including feminist and environmental economics. The book serves as both a valuable reference volume and a source of material suitable for course adoption at either the undergraduate or graduate levels.

Both books make it clear that post-Keynesian institutionalism does not rest upon Minsky alone. But they underscore the continuing importance of Minsky’s contributions for those interested in a historically and institutionally grounded reconstruction of economics. They also highlight the enduring relevance of his focus on ongoing economic evolution, support for the goal of full employment, and commitment to a democratic and humane economy.

Minsky pointed us in the right direction. Earlier this year, a team of foundations announced a commitment to allocate more than $40 million to economic and policy research focused on alternatives, with special attention to inequality and the economic challenges faced by workers. Inspired by Minsky, post-Keynesian institutionalists have been studying these problems for decades. Minsky may be gone, but we can still stand on his shoulders to better understand the real world and craft a more constructive body of economic theory and policy.

Reforming Capitalism for the Common Good
is available to purchase now.

Charles J. Whalen, Research Fellow, The Baldy Center for Law and Social Policy, University at Buffalo, Buffalo, NY, US

Read a sample chapter on Elgaronline.

A Modern Guide to Post-Keynesian Institutional Economics
is also available to purchase now.

Charles J. Whalen, Research Fellow, The Baldy Center for Law and Social Policy, University at Buffalo, Buffalo, NY, US

Read a sample chapter on Elgaronline.

This is also part of the Elgar Modern Guides Series