An idea whose time is coming?

“Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”

Milton Friedman

This quote by economist Milton Friedman is used by John Lanchester in his recent article in London Review of Books on Universal Basic Income. As one of the most influential economists of the 20th century, Friedman probably has a point.

Lanchester takes us through many experiments in Universal Basic Income from across the world. The evidence is that it works, that it reduces stress among poor people, reduces drug and alcohol use, reduces crime, etc etc. Depending on the level set it can also remove the need for much other public spending on benefits for the poorer sections of society.

The direction we are moving, in terms of increasing disruption due to climate change and robotic technology, suggests that some such solution is going to be inevitable unless we are willing to revert to Victorian approaches of almost washing our hands of the problem of the ‘undeserving poor’, and leaving it to charity.

What is not clear is what would be the optimum level for such a basic income, how fraud and coercion could be avoided, etc. Which is why it is suggested that it be introduced at a low level and gradually increased.

Of course, the question is how to pay for it. The inertia in the current taxation system suggests that it is unlikely to come through ‘steady as she goes’ political change. But Lanchester suggests that with the coming crises the situation will be ripe for just such a change.

The article does not mention the possibility of more fundamental change to the underlying money system to ‘pay’ for such a system. What if money were created as basic income for people, rather than as debt to fund the banking system? Or some hybrid of the two. I.e. we change the nature of banking and money itself to be more in the interests of the people. Now there’s a thought. See Positive Money.

Utopia for Realists

It’s surely obvious that the current economic system is not working, what with increasing inequality, increasingly low wages at the bottom, squeezed public finances,  financial crashes, resulting populism, ever-increasing automation, ineffectively-addressed global warming and so on. And it seems equally clear that the global elite haven’t a clue what to do about it and plan to just let it run while they continue their comfortable lives.

utopia for realistsRutger Bregman’s book Utopia for Realists: And How We Can Get There brings up the heretical suggestion that we can do something about it, all we need are the visionary ideas and the determination to follow them through.

There is no reason why we cannot end poverty, give free money to everyone (basic income), move towards a shorter working week, pay important workers like nurses and bin men a commensurate salary, and open borders once the imperative to move anywhere but home is removed.

That sounds like a Utopia, you say. Yes it is. But we need a stretching vision of where we want to get to and then maybe we’ll start moving there.

Bregman cites the fascinating story of how neoliberal free market ideas moved from being the interest of just a few economists in the years after WW2, when Keynes dominated economic thought, to becoming the dominant force behind world economics from the 1970s to the present. These ideas have now run their course and are actually the cause of the predicaments we increasingly find ourselves in.

We desperately need these new Utopian ideas to gain momentum. So go read Utopia for Realists.

What human energies could be freed up for a New Renaissance!

 

 

Removing poverty

Contrary to what some politicians might like you to believe, it is easy to remove most poverty. Simply give poor people, indeed everybody, enough money to subsist. It’s called basic income.

How to pay for it? There are two ways.

1. Pay out of current government moneys

There are many benefits to the economy:

  • more economic activity, so more taxes
  • less need for benefits, so less government costs
  • reduced minimum wage, so more employment, so again more taxes
  • less crimes of desperation
  • more intelligent behaviour from the poor (yes)
  • disincentive to immigration, as would apply to citizens only; there is also less incentive for people to move from other countries with a similar policy
  • reduced inequality means reduced discontent with governments
  • of course, you would net off against current tax and benefit schedules so that most people were not directly affected and continued to be paid the same as previously
  • etc.

So it wouldn’t cost as much as you might think.

2. Just create the money

The central bank simply creates the necessary cash, outside of government accounts. You could regard this as pump priming the economy. (Compare QE, but this time for the needy.)

If just one government does this, this will inevitably cause its currency to slowly decline against others, but we are talking small percentages, so slow, here.

If a majority of world governments do it, there is no cost. It is free money.

Basic Income is a no-brainer. Why doesn’t it happen?

There is this obsession among the empathy-bypassed richer classes that the poor are feckless and not trying hard enough, so they should be forced into desperation so that they will do any job at any price for all hours of the day and night. I suspect this came from the early days of industrialisation, when cannon fodder was need for the emerging industries. It went away after WW2 (did you know that Richard Nixon tried to introduce basic income in the US in the 1970s?) But this prejudice has been reinforced since the 1970s by right wing parties in UK, US and elsewhere.

It is nonsense. Basic income has been tried many times, and the evidence suggests that if you treat people like paid-up members of the human race they will behave like it. Give people a decent start and they will make their way.

In a world of increasing automation and concern about where the future jobs will come from, basic income seems even more needed.

It’s about political will

In the end, in a world of plenty as we have in the West, poverty is about political will and little else.

Eradication of poverty is also surely an essential precondition for a New Renaissance.

The inspiration for this post came from ‘Utopia for Realists’ by Rutger Bregman. Beware reading it, it might haunt you with the sanity of its ideas!

Featured image is Caricature of poor people at a workhouse having dinner; by Phiz (?), via Wikimedia Commons

 

 

 

In the groove

Human societies get so stuck in a collective mental groove, like a railroad track, that they cannot see a way out of the predicaments caused by being in that groove. Take ‘jobs’. As automation gradually replaces many of the jobs that make society work today, we worry about where the future jobs are going to come from. For instance, what are all those lorry/taxi/delivery drivers going to do to earn a living when transport is automated? How are we going to generate enough taxes to adequately provision the public sphere and feed those who don’t have jobs?

The only answer is to get out of the groove.

  • Why do we need a 5-day-week job, why not 4 or 3 days?
  • Why does everybody have to have a ‘job’?
  • Why not a basic income for everyone that provides for minimal subsistence?
  • Why do countries across the world need to compete economically, and thus drive down standards of living for everyone, can they not co-operate?
  • Why is money created to the benefit of banks, not of people or of governance?
  • Why can’t we have a more equal distribution of wealth?

The answers lie in the human imagination. History suggests that crisis precedes the inevitable change. It doesn’t have to be that way. There are enough intelligent people on the planet, but many vested interests that do not want things to change…

The same is of course true about other issues, such as climate breakdown and its consequent travails. The forward scouts (scientists) have long told us the bridge is down on the track ahead, and the train will go over into the ravine if we stay on this track. We just need the imagination to change track.

Featured image by Mississippi Department of Archives and History – via Wikimedia Commons