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Arguing about justice

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Axel Gosseries
, 
Philippe Vanderborght

Towards an unconditional basic income in Brazil?

Eduardo Matarazzo Suplicy

Résumé

Nesse capítulo, eu reflito sobre a história da renda básica no Brasil, tendo em conta minha própria experiência politica. Primeiro, mostro como a garantia de uma renda mínima inspirou propostas concretas em meu país. Depois analiso como o principal programa social no Brasil, o Bolsa Família, tem sido considerado um exemplo a ser seguido por outros países em desenvolvimento. Terceiro, explico porque considero que a Renda Básica de Cidadania (RBC) é superior, em muitos aspectos, às formas condicionadas. Finalmente, tento mostrar como poderemos avançar em direção a uma verdadeira RBC no Brasil.

Texte intégral

Introduction

  • 1 Thanks to James H Potts and Daniel G Parrilha for their suggestions on the final draft of this pape (...)

1In the past two decades, I have been actively involved in the debate about universal and unconditional basic income. Since my first election as Senator in Brazil, in 1990, I have been pushing for such a basic income in political circles, with some significant and, perhaps, surprising success. In what follows, I reflect upon this experience, in four steps. First, I detail how basic income came to inspire concrete policies in my home country. Second, I focus on the main social assistance program in Brazil today, the Bolsa Família, which is widely regarded as one of the examples to be followed by other developing countries. Third, I explain why I think that a Citizen’s Basic Income (CBI) remains superior, in many ways, to such a conditional scheme. Finally, in the fourth section, I try to show how we can move towards a true CBI in Brazil. I dedicate this essay to the 60th birthday of Philippe Van Parijs, who has taught us so much and has been a source of inspiration about the origins and the qualities of basic income1

How basic income inspired Brazil’s social policy

2In 1966-68, and again in 1970-73, as I was studying for my Master’s and my PhD in Economics at Michigan State University, in the USA, I came across the concept of income guarantee through a negative income tax (NIT). Back in Brazil, I interacted with Professor Antonio Maria da Silveira, who had proposed the institution of such a NIT in our country (Silveira 1975). When I was elected Senator by PT-SP for the first time in 1990, we then worked together on a proposal called the Guaranteed Minimum Income Scheme, PGRM. Every adult person 25 years or older who did not earn at least 45 thousand Cruzeiros per month (at that time, about US$150) should have the right to a complement of 30% to 50% of the difference between that level and his/her disposable income. The project was approved by the Federal Senate, by consensus of all parties, on December 16th, 1991. It went to the Chamber of Deputies where, at the Committee of Finance and Taxation, it received an enthusiastic written opinion from Representative Germano Rigotto (PMDBRS). The proposal, however, was not voted in that form because of several developments that followed.

3The debate on the subject then started to flourish in Brazil. In 1991, during a discussion with approximately 50 economists who were close to the Worker’s Party (PT), Antonio Maria da Silveira and I presented the PGRM proposal. Professor Jose Marcio Camargo observed that the guarantee of a minimum income was a good step, but that it should be granted to needy families only, with children attending school on a regular basis. These children would then not be induced to work in order to help the survival of their families.

4In 1995, taking these thoughts into consideration, Mayor Jose Roberto Magalhães Teixeira (PSDB), in the municipality of Campinas, and Governor Cristovam Buarque (PT), in the Federal District, started minimum income schemes linked to educational opportunities. Both programs were called the Bolsa-Escola. All families with income per capita below half the minimum wage, 50 reais – the minimum wage at the time was 100 reais – would have the right to receive a) in Campinas: whatever would be necessary to complete 50 reais per capita for the family; b) in the Federal District: a full minimum wage of 100 reais, no matter the size of the family, or how many people in the family were working or not. Those experiments inspired several other municipalities. In the National Congress, bills were presented defining the support level that the Federal Government would provide to municipalities introducing minimum income programs related to educational opportunities.

5In 1996, I took Philippe Van Parijs for an audience with President Fernando Henrique Cardoso and the Minister of Education, Paulo Renato Souza. Van Parijs argued that an unconditional basic income was a first-best, but also recognized that starting with a minimum income guarantee associated with education opportunities was a good step, because it was related to investment in human capital. President Fernando Henrique Cardoso then gave permission to the National Congress to approve a law which authorized the federal government to grant a financial support of 50% of the amount spent by the municipalities that provide a minimum income linked to social and educational opportunities.

6In March 2001, again under Fernando Henrique Cardoso’s impulse, the National Congress approved another law authorizing the federal government to conclude agreements with all Brazilian municipalities in order to implement the Bolsa Escola. Later on, the government also instituted the Bolsa-Alimentação and the Auxílio-Gás programs. In 2003, Luiz Inácio Lula da Silva’s government instituted the Vale-Alimentação program.

7In October 2003, President Lula’s government decided to unify and rationalize these different programs into a single Bolsa Família Program, which had 3.5 million families registered in December 2003. The number increased to 6.5 million families in December 2004, 11 million families in December 2006, and 13 million families, or around 50 million Brazilians, in June 2011.

The Bolsa Família: a success story

  • 2 Sources: Study number 30 of IPEA – Instituto de Pesquisa Economica Aplicada, First Analysis about t (...)

8Along with other economic policy instruments, the Bolsa Familia Program greatly contributed to the reduction of absolute poverty and the level of inequality in Brazil. The Gini coefficient had reached 0.599 in 1995, but gradually decreased every single year, reaching 0.581 in 2003, 0.544 in 2008 and 0.530 in 20092. The proportion of families under the extreme poverty line, with income per capita below R$ 93.75 which was 17.5% in 2003, decreased to 8.8% in 2008. The proportion of poor families, with income per capita below R$ 187.50, decreased from 39.4% in 2003 to 25.3%, in 2008. These favorable results can also be shown in the following way. The 20% poorest families had an income per capita increase 47% faster than the income of the richest 20%. While in 2001, the average income of the 20% richest families was 27 times higher than that of the 20% poorest families, in 2008 it was 19 times higher, a reduction of 30% in seven years.

  • 3 As of September 1st, 2011, R$1,00 was US$0.63, and €0.44.

9Since March 1st, 2011, when the newly elected President Dilma Rousseff announced an adjustment of the program, the Bolsa Familia started to function as follows: if the family per capita income is below R$70 per month, it is entitled to receive a basic benefit of R$70 per month3. All families with monthly per capita income below R$140 are entitled to R$32, R$ 64 or R$96 if they have one, two, three or more children under 16 years of age respectively, plus R$38 for each adolescent between 16 to 18 years of age (up to a maximum of two). Therefore, the average benefit per family has increased to R$115 per month, with a minimum of R$32 and a maximum of R$242 per month.

10The average size of the Brazilian family is 3.5 persons. The average is a little higher, around four, for families that benefit from the program. These families need to meet important requirements. If the mother is pregnant, she has to go to the public health network for pre-natal examinations and monitoring. Parents have to take their children up to six years of age to be vaccinated according to the calendar of the Ministry of Health. Children from seven to 16 years of age have to go to school, with an attendance average of at least 85%. Children from 16 to 18 years of age must attend school with at least 75% attendance.

11Despite the achieved progress, Brazil is still one of the most unequal countries in the world. While the poorest 40% live with 10% of the national income, the richest 10% live with more than 40%. The income appropriated by the 1% richest is the same as of the one the 45% poorest. Undoubtedly, the creation and expansion of the Bolsa Familia Program had positive effects. However, in order to move towards a more efficient and direct eradication of the absolute poverty, as well as to achieve greater equality and guarantee greater real freedom for all, Brazil should implement a true Citizen´s Basic Income.

Towards a CBI

  • 4 In 2004, BIEN became the Basic Income Earth Network.

12During the 1990s, I increasingly interacted with the founders of the Basic Income European Network (BIEN)4, and took part in its bi-annual congresses. I became convinced that an unconditional Basic Income for all was much better than conditional schemes or even a NIT. For this reason, in December 2001, I presented a new bill of law to the Brazilian Senate, which called for the institution of the Citizen´s Basic Income (CBI). After having studied the proposition, Senator Francelino Pereira (PFL-MG) argued that it had to be made compatible with the Fiscal Responsibility Law under which it is necessary to secure corresponding revenue for expenditures. He suggested the inclusion of a paragraph saying that the CBI had to be instituted gradually, starting with those most in need, until one day it will be unconditional for everyone regardless of income. It reminded me of Meade’s recommendation, in the last chapter of Agathotopia (1989). What is important is to have our objectives crystal clear in mind, and to move firmly, gradually, into that direction.

13The bill of law was duly amended and approved by consensus of all parties in the Senate (December 2002) and the Chamber of Deputies (December 2003). When it came to the President for his examination, Minister of Finance Antonio Palocci told him: ”since it is to be introduced step by step, it is feasible and you may sanction it”. On January 8th, 2004, President Lula da Silva sanctioned the Law 10.835/2004 that institutes a CBI, step by step, under the Executive criteria, starting with those most in need, such as in the Bolsa Família program. Later, then, we will introduce an equal CBI for everyone as an individual right to a stake in the nation's wealth. On this day, the President received the following message from economist Celso Furtado:

  • 5 This letter was sent directly to President Luiz Inacio Lula da Silva, on January 8, 2004, with a co (...)

As Your Excellency sanctioned the Citizen’s Basic Income Law I want to express my conviction that, with this measure, our country puts itself in the vanguard of those who fight for the building of a more harmonious society. Brazil was frequently referred as one of the last countries to abolish slave labor. Now with this act which is a result of the principles of good citizenship and the wide social vision of Senator Eduardo Matarazzo Suplicy, Brazil will be referred as the first to institute an extensive system of solidarity and moreover, it was approved by the representatives of its people5

14As I see it, a true CBI should be as high as possible in order to meet each person’s vital needs, and should be paid to all members of a community, municipality, state, country, or even, someday, to the whole population of a continent or the world. Regardless of his/her origin, race, sex, age, civil, social or economic condition, everyone will have the right to receive the CBI as a right to participate in the wealth of that community, municipality, state, country, continent or the planet. Such a scheme has many advantages. Let me mention a few of them.

15First, all the bureaucracy involved in knowing each person’s income from the formal or informal market would be eliminated. This would also allow for the elimination of any stigma or shame, since individuals would not need to tell civil servants: "I earn only this much, so I need a supplement of income for my survival".

16Second, perhaps the most important advantage of the Citizen’s Basic Income is that it raises everyone’s level of dignity and freedom. Take the case, for example, of a girl who does not have another alternative for her survival than renting her body. Or a young man who, to support himself and his family is forced to work for the drug traffic gangs. If there is a Citizen’s Basic Income, they can refuse those alternatives, and wait for opportunities that match their propensity or vocation.

17Third, a basic income allows for the elimination of the dependency trap. Conditional programs function as follows: if a person's income is below a given amount, she is entitled to an income supplement. When she gets a job, she loses (part of) the benefit. Hence, she might decide not to take that job, falling into an unemployment or poverty trap. With a universal basic income she will have more employment options.

18One of the most often-heard objections to Basic Income consists in saying that it would stimulate idleness. The Brazilian Constitution and laws, as well as the laws of so many countries, protect the right to private property. This means that the owners of factories, farms, hotels, restaurants, banks, real estate and financial bonds have the right to receive capital revenues, that is, profit, rent and interest. Do the Brazilian laws, or of most other countries, mention that to receive those revenues, the capital owners must demonstrate that they are working? No, and they usually work, and many of them also dedicate a good part of their time to voluntary work. Do they need to demonstrate that their children are attending school? No. Nevertheless, their children usually attend the best schools.

19So, if we assure those who have more resources the right to receive their revenues without conditions, why not extend to everyone, rich and poor, the right to participate in the nation’s wealth as our right for being Brazilians? If we want to eliminate absolute poverty, becoming a more equal and fair society and assuring dignity and real freedom to everyone in the society, instituting the Citizen’s Basic Income is a solution as simple as leaving home through the door.

Turning basic income into reality in Brazil

20In Brazil, we could consider the institution of the Citizen’s Basic Income (CBI) as consistent with the values defended by the indigenous, by the fighting ”quilombolas” and abolitionists for the slavery abolition, and by all those researchers and scientists who fight for the creation of a fair nation.

21In the same way as the first minimum income linked to educational opportunities started locally, in Campinas and in the Federal District, it is possible to start the CBI in communities or municipalities.

22Take the example of Recivitas – Instituto pela Revitalização da Cidadania, an organization which has created a free library and a free toy center in Vila de Paranapiacaba (Serra do Mar, 1,200 inhabitants). It has recently proposed the creation of a CBI. Recivitas's President Bruna Augusto Pereira and coordinator Marcus Brancaglione dos Santos are waiting for the steps of Santo Andre’s Mayor to carry out the project. While waiting, they started a pioneering experience in another village, Quatinga Velha where, since the beginning of 2009, they pay R$ 30 or US$ 18 per month to 83 persons. This is possible thanks to the voluntary contributions of several citizens.

23Another promising experiment is taking place in Santo Antonio do Pinhal, in Serra da Mantiqueira, 177 km from São Paulo, 6.500 inhabitants. There, on October 29th, 2009, the Municipal Chamber, by consensus of its nine councilmen, approved the Municipal Bill of Law for a Basic Income, proposed by Mayor Jose Augusto de Guarnieri Pereira (PT). Among the 5.565 Brazilian municipalities, it is the first that approved a law instituting the CBI. Its first article declares:

With the purpose of turning Santo Antonio do Pinhal into a Municipality that harmonizes sustainable social and economic development with the application of justice principles, meaning the solidarity practice among all its inhabitants, and, above all, to grant a higher level of dignity to all its inhabitants, the Citizen´s Basic Income of Santo Antonio do Pinhal – CBI is instituted, consisting in the rights of all registered residents in the Municipality for at least five years to receive a monetary benefit regardless of their social and economic status.

24Exactly as in the federal law, it also states that the CBI will be achieved gradually, giving priority to the most needed segments of the population. To finance the payment of the CBI, a Municipal Fund has been set up.

25To turn the CBI feasible for the whole country however, it would be necessary to collect a great amount of resources. If one wants to provide an even modest improvement in relation to the Bolsa Família, Brazil should begin with at least an amount higher than the average paid by this scheme, i.e. R$ 96 per family, which means something like R$ 37 per person for a family of three members. So, if we think about a CBI of R$ 40, it would amount to R$ 240 per month for a family of six members. In 12 months, the yearly amount would be R$ 480 per person. With Brazil's population reaching 191 million in 2011, we would need R$ 91,680 billion, something around 2.71% % of the Gross National Product of R$ 3,388 trillion or US$ 2,287 trillion in 2010, about 6.7 times the Bolsa Familia budget of R$ 13.6 billion for 2010. This is a considerable leap.

26R$ 40 or US$ 23.5 per month is a modest amount, but in time, with the progress of the country and the growing approval from the population, the CBI could turn into R$ 100, then R$ 1.000, and so on. One way of making it feasible is the creation of the Brazil Citizen’s Fund, according to the Bill of Law # 82/1999, which I presented to the Senate. It has already been approved by consensus by the Senate, and is in legal procedures in the Chamber of Representatives, where it has been approved by the Committee of Family and Social Security. This Fund is constituted by 50% of the resources generated by authorization or concession of natural resources exploitation; 50% of the revenues from rentals of federal government real estate, which belong to all the population; 50% of the revenues generated by concession and services and public works and other resources. The output generated by the investments of the Fund resources, like the Alaska Permanent Fund, will be used to pay CBI to all the Brazilian residents.

  • 6 Glaeser as quoted by Philippe Van Parijs in a letter to the Executive Committee of the Basic Income (...)

27Brazil Citizen’s Fund legislation is now awaiting approval by the Chamber of Representatives Committee of Finance and Taxation. Representative Ciro Gomes (PSB-CE), the bill's reporter in the last Congress, finished his term on January 2011, and a new reporter has been nominated, Federal Representative Claudio Puty (PT-PA) (from the Worker’s Party, State of Para). He will be able to present a favorable report as long there is a green light from the Executive. This is not so easy, although I have been trying to say that I am ready to accept any suggestion to make the proposal feasible. It is important to consider that Congress approved in 2010 President Lula's initiative regulating the proceeds of the oil found in the Pre-Salt area deep in the Atlantic Ocean. The legislation has as its main objectives the eradication of poverty, the expansion of educational opportunities, scientific and technological progress, and better environmental and cultural activities. Another promising alternative to be pointed out is Glaeser's suggestion of a global emission tax (Glaeser 2011: 2216).

Smart environmentalism needs to embrace incentives (…) Throughout the world, we can adopt a global emission tax that charges people for the damage done by their carbon emissions (…) Opponents of big government understandably worry that this type of policy will just turn into an added source of revenue for the government, but this worry can be reduced with a public commitment to rebating tax to citizens as an energy dividend, much as the state of Alaska pays each of its citizens an annual dividend from all revenues.

28Especially when more people understand how CBI could contribute for the construction of a fair and more civilized Brazil, more voices will be saying to the President of the Republic, to the Governors and Mayors: "It is a good proposal. Let’s put it into practice right away".

Conclusion: what are the immediate prospects?

29During the IV National Congress of the PT in Brasilia, February 19th to 21st, 2010, by the unanimous vote of the 1.350 delegates, the following point was added to the National Program of Dilma Rousseff, who was acclaimed Presidential candidate by consensus:

The Great Transformation
The accelerated growth and the fight against racial, social, regional inequalities and the promotion of sustainable development will be the axis of the economic development structure. (...)
19) The expansion and the strengthening of the popular consumption goods, that produces strong positive impact over the productive sector system, will be attained by:
a) (…)
f) permanent improvement of the income transfer programs such as the Bolsa Família, to eradicate hunger and poverty, to facilitate access of the population to employment, education, health and higher income;
g) transition from the Bolsa Família Program towards the Citizen´s Basic Income, CBI, unconditional, as a right of every person to participate in the wealth of the nation, such as set by the Law 10.835/2004, a PT initiative, approved by all parties in the National Congress and sanctioned by President Luiz Inácio Lula da Silva in January 8, 2004.

30It would be rational that the Bolsa Familia and the state social programs become unified since they are quite similar. Both could be increased in value, for more people, in the direction of the CBI.

31President Dilma Rousseff was elected last October 31st, in the second ballot, with almost 55.7 million votes, 56% of the total. On her inauguration day, last January 1st, she announced that the eradication of misery or extreme poverty in Brazil would be her first and most important priority.

32On June 11st, President Dilma Rousseff launched the Brazil Without Misery Plan. The main purpose is to include in the program those 16.27 million people who are not yet being benefitted by the Bolsa Família program, although there are people who, according to the 2010 Census, are living with less than 70 reais per capita. She announced that the government will start making an active search for these people wherever they are. Since many of these people are children up to 14 years of age, the Bolsa Família Program will increase the benefit from three to five children up to 15 years of age that may receive the 32 reais per child. This measure is expected to reach 800 thousand families more, up to 2014, and 1.3 million more children.

33It will be a tremendous challenge for a 150-year old financial institution like the Caixa Econômica Federal, a Caisse des Dépôts, to administer the unconditional right to all 191 million Brazilians. But for an institution that was able to increase the number of families benefiting from the Bolsa Família Program from 3.5 million (December 2003) to 13 million families (June 2011), the management of a Citizen’s Basic Income to all Brazilians is a feasible objective. It is my purpose to help President Dilma Rousseff and her Ministers to take the necessary steps to institute the Citizen's Basic Income by 2014.

Bibliographie

References

CASTRO, J. (1951), Geopolítica da fome: ensaio sobre os problemas de alimentação e de população do mundo. Rio de Janeiro: Editora da Casa do Estudante do Brasil.

FRIEDMAN, M. (1975 [1962]), Capitalismo e liberdade, Rio de Janeiro, Editora Arte Nova.

GLAESER, E. (2011), The Triumph of the City, London: Penguin.

INSTITUTO CIDADANIA (2001), Projeto Fome Zero: uma proposta de política de segurança alimentar para o Brasil, São Paulo. Instituto Cidadania/Fundação Djalma Guimarães.

LAVINAS, L. (2001), The appeal of minimum income programmes in Latin America, ILO Brasil Regional Office – World Bank Agreement. SES (Seeking Distributive Justice – Basic Security for All) n.7.

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Notes

1 Thanks to James H Potts and Daniel G Parrilha for their suggestions on the final draft of this paper.

2 Sources: Study number 30 of IPEA – Instituto de Pesquisa Economica Aplicada, First Analysis about the results of the 2008 PNAD – Pesquisa Nacional por Amostra de Domicilios, published in September 24th, 2009, plus the 2009 PNAD results officially published by the IBGE – Instituto Brasileiro de Geografia e Estatistica in 2010.

3 As of September 1st, 2011, R$1,00 was US$0.63, and €0.44.

4 In 2004, BIEN became the Basic Income Earth Network.

5 This letter was sent directly to President Luiz Inacio Lula da Silva, on January 8, 2004, with a copy to my office (see Suplicy 2010: 367).

6 Glaeser as quoted by Philippe Van Parijs in a letter to the Executive Committee of the Basic Income Earth Network (BIEN) on June 8, 2011.

Auteur

Eduardo Matarazzo Suplicy (PhD in Economics, Michigan) started his career as a lecturer in economics (São Paulo). In 1978, he was elected State Representative at the State Assembly of São Paulo. One of the founders of the Worker’s Party (PT) he became one of its Federal Representatives in 1982. In 1988, he was elected City Councilman and President of the City Council of São Paulo. Since 1990, he got elected three consecutive times (for 8 year terms) as Senator representing the State of São Paulo and the Workers' Party. In this capacity, he was able to get passed the Act instituting a Citizen's Basic Income, to become one day unconditional. His main book is Renda de Cidadania. A Saída é pela Porta (Fundação Perseu Abramo/Cortez Ed., 6th ed. in 2010).

© Presses universitaires de Louvain, 2011

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