The Story Behind the Paper

2 09 2019

As with most journal articles there is a story behind the work, but these are rarely told. In this post, I thought I’d share why we wrote our paper entitled Universal Basic Income and Inclusive Capitalism: Consequences for Sustainability.

Over the past two decades, I have worked closely with Prof. Nicholas Ashford, Prof. Robert Ashford, and Charles Caldart to identify strategies that could transform the industrial state towards sustainability. This research has resulted in two editions of our textbook entitled Technology, Globalization, and Sustainable Development. While the scope of this work is vast, at its core is how regulation/policy, innovation, and new economics can be leveraged to create an environment for disruptive change towards sustainability.

When we started this collaboration, the trends in income inequality were clear, but the national/international conversation related to using some form of universal basic income to address inequality was limited. Following the 2008 global financial crisis, this situation started to change, as did the conversation about the role of automation/AI in displacing well-paid employment opportunities.

We have long argued for the need to consider “employment” as a fundamental, but frequently overlooked, aspect of sustainability, which is why we put the words Environment, Economy, and Employment on the front cover of the textbook. What many people may not realize (without a careful read of the textbook) is that we view employment from two perspectives – (1) traditional employment that provides people with an income from their labor and (2) employment of the capital they may own that also provides an income.

Given our focus on employment, we have been tracking how technology (think automation, digital technology, software, AI, robotics, etc.) has been reshaping work and what this means for the idea of full-time, well-paid work. The first section of the new paper presents some of these trends, especially related to the hollowing out of the middle class in the US and many OECD nations.

The second section of the paper looks at the macro environmental challenges we face and raises a critical question. If we advance a scientifically-optimistic “efficiency” agenda (i.e., do much more with much less) to address environmental problems, is this approach likely to result in less well-paid jobs? We believe this could be the case. As knowledge/skills are continually embodied into more advanced forms of capital (technology, AI, etc.), the ability of labor to claim its share of the work being done (what we call productiveness; which is not the same as labor productivity) declines. It is also important to add that while the total number of jobs may actually remain the same or increase, what we are focusing on is what is doing the work and what this means for income (i.e., income from labor and from technology/real capital ownership).

The implications from this understanding of the economy point to some challenging questions. For example, if human knowledge and skills (especially, routine manual and cognitive tasks) are being embodied in technology/real capital, the question of who or what is really doing the value-added work becomes important. It also raises uncomfortable questions about the ability of workers to claim a greater share of the wealth being created, if the majority of the work being done (value being added) comes from the technology/real capital side of the equation.

Over the years, I have tried various ways to explain what is a set of complex and interconnected ideas, but during a conversation I had with our new Dean in 2017, I found a “two ice hockey stick” analogy to be useful. Put simply, both hockey sticks represent curves of the two most pressing issues of our time, increasing inequality and increasing environmental problems. As mentioned above, the typical set of solutions to environmental problems is to essentially do more with less through efficiency/advanced technology (the scientifically optimistic solution to unsustainability). The problem is that as the capability of technology grows, its ability to capture value-added aspects of work also grows. Thus, the environmental solutions adopted may worsen inequality as the number of well-paid jobs declines.

A different problem is revealed if we only consider the inequality ice hockey stick (the inequality challenge) and its potential solutions. For example, if the solution to inequality is to provide everyone with some form of basic or guaranteed income, this raises an important question about what this surge in effective demand (i.e., consumption) would mean for the environment. Hence, both ice hockey stick curves need to be addressed at the same time, in a holistic and integrated way.

During my conversation with Dean Richard Blythe, I used the two ice hockey stick analogy to explain my current research agenda, which led to an invitation to join the Dean, Enric Ruiz-Geli, and Marcelo Stamm for the first Dean’s Discussion focused on Innovation Ecologies. My main remarks in the video of this conversation (below) run from minutes 7-14. Interestingly, the Dean’s Discussion and engagement with Enric and Marcelo helped expand my thinking to include the importance of architecture, but not in the traditional sense related to the artistic design, engineering, and construction of buildings. Rather, in relation to the ‘financial’ architecture behind the construction and ownership of buildings/infrastructure, and what this means for inequality and the ability of community members to participate and engage in the use of newly developed facilities/space. More on this below.

Around the same time as the Dean’s Discussion, I read Andrew Yang’s new book – The War on Normal People – which provides a data-rich description of how technology/AI is displacing jobs in America. Yang’s solution to this problem is to provide every citizen over the age of 18 with $1,000 a month, which is now commonly known as the Freedom Dividend. As my Tweet to Yang below highlights, while our understanding of the inequality challenge is the same, Yang’s book did not mention the environmental problems that may accompany a surge in effective/aggregate demand. Hence, the idea for a paper was born that connects the inequality and environmental challenges (the two ice hockey sticks) with an economic theory that understands the ability of capital to do work (like labor) and addresses inequality through its broad ownership.

For those outside of academia, one of the best ways to advance an idea is to share, discuss, and debate it at academic conferences. Fortunately, two opportunities arose. The first was a conference at Oxford University on Endogenous Growth, Participatory Economics, and Inclusive Capitalism, and the second was the 12th Biannual Conference of the Canadian Society for Ecological Economists (CANSEE) in Waterloo. Both of these conferences helped define the boundaries of the paper and allowed me to experiment with different ways of communicating key ideas such as the two ice hockey sticks. My CANSEE conference presentation is provided below.

 

A video of my CANSEE presentation can be accessed by clicking on the image below. [Note: select the fifth video from the top of the list on the right of the screen, which has a graph behind the play icon.] My presentation starts at minute 29; however, I recommend first listening to Prof. Jennifer Clapp’s presentation on “Financialization and its Sociological Effects.” Her research reveals the rapid growth of financialization and its implications for the social and biophysical world. I would argue it also makes a powerful case for rethinking how we consider the architecture of financial investments/arrangements and what this means for ‘real’ capital ownership, inequality, and environmental sustainability.

The several month timeframe of the conferences provided a window to search for UBI proposals to incorporate into the paper. A keen eye will spot eight UBI proposals in the CANSEE presentation, but our final paper included 14 UBI proposals alongside a proposal for a federal work program. When reviewing each of these proposals, our attention focused on the rationale behind the programs, how they would be financed, who would be illegible for funds (e.g., was there a work or age requirement), how much people might receive, and whether the programs had any connection to the environment. What was illuminating was the sheer diversity of ideas and how the ideological framing of the inequality problem tended to dictate the solution. For example, those who view work as essential for individual/social well-being tended to advance a conditional UBI (i.e., the basic income is received if the recipient is working). In contrast, those who view inequality as a product of the current economic system tended to advance an unconditional UBI (i.e., the income is received regardless of the recipient’s employment status).

What the writing of this paper revealed is the need for additional articles that describe how the Binary Trust would function, what a government-backed inherently sustainable corporate investment certification system might look like, and what needs to change for sustainability investments to look promising from a return on investment perspective. From an advancement of knowledge perspective, I’m looking to collaborate with colleagues in architecture/engineering who are interested in exploring how the financial architecture behind their developments could transform the use of their architectural/engineering designs. The basic idea is to integrate the visible (physical) and invisible (financial) components of architecture in ways that enrich society and the biophysical world.

Given Yang’s connection to the genesis of this paper, it seemed fitting to show how a binary economics approach to inclusive capitalism could be implemented alongside his UBI proposal. Another important argument of the paper is how this system needs to be focused on inherently sustainable investments. Put simply, the paper advocates an approach to addressing both ice hockey sticks at the same time and in an integrated, holistic way.

A week before the final article was published, Elon Musk endorsed Andrew Yang as his pick for the next U.S. President. Thus, I decided to launch the release of the paper with the following tweet.





2019 EPP and PUA Graduation

20 08 2019

Congratulations to our 2019 Public and Urban Affairs (PUA) and Environmental Policy and Planning (EPP) graduates! The video below (taken through Google Glass) captures my view of the 2019 CAUS Commencement Ceremony. It also provides a behind the scenes look at the ceremony, which I hope the family and friends of our graduates will enjoy.





Public-inspired Science Podcasts

24 07 2019

Earlier this year I attended a Story Collider event where students in the U.S. Water Study research team (at Virginia Tech) gave inspirational talks about how they found their way to working on public-inspired science. The team just released a recording of the five talks.

One of the talks was given by Chivonne Battle, a graduate student in our Masters of Urban and Regional Planning (MURP) program. I highly recommend listening to her remarkable story.





Student Presentations – May 7, 5-7:45pm

29 04 2019

From 5:00 to 7:45pm on May 7, 16 teams of students (in SPIA/GEOG 2244 Sustainable Urbanization) will be presenting their projects that envision the VT Innovation Campus. The presentations will be held in room 220 in the New Classroom Building and will consist of a poster, handout, and a live demonstration of how they have analyzed their ideas using UrbanFootprint.





Envisioning the VT Innovation Campus

26 04 2019

Last fall, Virginia Tech announced its plan to build a 1,000,000 square-foot Innovation Campus in Alexandria as part of a larger pitch to bring Amazon’s HQ2 to Northern Virginia. After hearing this news, I started thinking about how this development could be explored in my Spring semester Sustainable Urbanization course.

Around the same time, I was also introduced to UrbanFootprint – a big data urban analytics platform – as an interesting tool for teaching urban sustainability. Combining these two opportunities resulted in a proposal to use UrbanFootprint to study the new Amazon HQ2 and VT Innovation Campus. However, I faced to two challenges with this idea. The first was securing the financial resources to cover the UrbanFootprint license for up to 90 students. The second was finding an appropriate way for the class to engage with the VT Innovation Campus team to make sure that (1) students had access to relevant information and (2) their final products would be of value to the team.

After exploring a couple of funding opportunities, the first challenge was solved when the Urban Affairs and Planning Program (UAP) and the School of Public and International Affairs (SPIA) kindly agreed to share the cost of a one semester license. In addition, UrbanFootprint agreed to allow over 80 students in the class to use the platform in teams, rather than as individual users, which had not been done on this scale before.

The second challenge was addressed by working closely with Dr Kristie Caddick, the project manager for the VT Innovation Campus. As one might expect, building a 1,000,000 square-foot campus is a formidable challenge and managing such an endeavor requires a dedicated team that was forming at the time I was exploring this idea. Fortunately, the team saw the pedagogical value of challenging our undergraduates to learn more about the project and explore visions of how the campus could be developed.

As with all new ideas, it’s never as easy as you hope. While the funding for the UrbanFootprint license had been secured, it took a patient team of professionals at VT and UrbanFootprint to develop a workable license agreement that was signed the day before classes begun. This delay meant the teaching team were co-learning the platform with the students, which was a little uncomfortable at first, but resulted in a learning environment that was ‘real’ and collaborative.

By the time we reached Spring break, the teaching team had a sufficient handle on the platform that we moved from knowledge/skill-based exercises to a more complex task – to start exploring how the VT Innovation Campus could be built in Alexandria. This task was co-designed with Dr. Caddick, who introduced the students to the history of the VT Innovation Campus and more recent developments via a guest lecture.

Dr. Kristie Caddick talking with students about the VT Innovation Campus

In parallel with their work in UrbanFootprint, students have been searching for best practices of sustainable urbanization in the US and overseas that are now informing their ideas for the VT Innovation Campus. Last week, each of the 16 teams crafted a vision statement for the new campus. Several of the draft statements are shown in the slideshow below, along with a few pictures from several guest lecturers who have joined us this semester.

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On May 7, from 5:00 – 7:00pm, in room 220 of the New Classroom Building at Virginia Tech, 16 teams of students will present their visions for how the VT Innovation Campus could be developed. The presentations will consist of a poster that outlines their vision and development strategies and a live demonstration of how they analyzed the potential impacts of their vision using UrbanFootprint.





VT Authors Celebration

22 03 2019

Below are a few pictures from the VT authors celebration that was held this afternoon at Newman Library.

 

 





Oxford Conference – Feb 8-9, 2019

7 02 2019

On February 8-9, 2019, I will be taking part in a conference at St. Bennet’s Hall, Oxford University, on Endogenous Growth, Participatory Economics, and Inclusive Capitalism. The conference will run from 10:00am to 4:30pm each day and is open to anyone interested in these subjects. I have provided an outline of the conference agenda below.

Friday, 8 February 2019

Welcoming Remarks
Dr. George Bitsakakis, Official Fellow
Director of Studies in Economics at St. Benet’s Hall, Oxford University

Achieving Fuller Employment and Per Capita Growth by Broadening Capital Acquisition With the Earnings of Capital: A Theoretical Overview
Professor Robert Ashford
Syracuse University

Conference Luncheon

Innovation, Intellectual Property, and Endogenous Growth
Dr. George Bitsakakis, Official Fellow
Director of Studies in Economics at St Benet’s Hall, Oxford University

Simulating Company-Specific Benefit from Broadening Capital Acquisition with the Earnings of Capital
Dr. Shyam Ranganatha, Assistant Professor
Department of Statistics, Virginia Tech

A Game Theoretic Model of Broadening Capital Acquisition with the Earnings of Capital: Prospects of More Inclusive Capital Markets Based on Binary Economics
Michael Kotarinos, Ph.D. Candidate, Department of Mathematics and Statistics
Master of Statistics, University of Florida Department of Statistics, University of South Florida

General Discussion
All Participants and Attendants

Saturday, 9 February 2019

Welcoming Remarks
Dr. George Bitsakakis, Official Fellow
Director of Studies in Economics at St. Benet’s Hall, Oxford University

Achieving Fuller Employment and Per Capita Growth by Broadening Capital Acquisition With the Earnings of Capital: A Theoretical Overview (Brief Recap)
Professor Robert Ashford
Syracuse University

Inclusive Capitalism and Sustainability
Dr. Ralph P. Hall, Associate Professor
School of Public and International Affairs, Virginia Tech

Conference Luncheon

Robert Ashford’s Inclusive Capitalism: Using Stock Purchase Loans
Professor Demetri Kantarelis (via Skype)
Department of Economics, Assumption College

Robert Ashford’s Approach to Inclusive Capitalism as the Best Available Proposal for Addressing the Problems that Result from Automation
Paul Davidson (via Skype), Founding Editor, Journal of Post Keynesian Economics
Holly Chair of Excellence in Political Economy Emeritus, University of Tennessee

Broadening Capital Acquisition With the Earnings of Capital in China:
An Innovative Means of Promoting Domestic 
Consumption and Economic Growth
Professor Tony Fang, Stephen Jarislowsky Chair in Economic and Cultural Transformation
Department of Economics, Memorial University of Newfoundland

General Concluding Discussion
All Participants and Attendants