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.

What causes War?

I was intrigued by Ferdinand Mount‘s article in the recent issue of London Review of Books. His basic premise is that countries go to war because of economic and related resource issues. WW1 was really about Germany’s lack of natural resources which were available in neighbouring countries. This festered on into WW2 which continued the argument. The same is true of most wars, often a reaction against ‘imperial’ exploitation by a stronger power. The EU and the supranational European Court of Justice were established to provide an arrangement whereby such conflict would not happen again in Europe.

Of course I’ve oversimplified, but the essence is there. Brexit will inevitably increase the probability of a future European war. If there were a no-deal Brexit, the resulting arguments about unwinding the hugely complex relationships between UK and EU will probably go on for decades, probably with ill will.

The UK will also go into negotiations with US, China, India etc, with the relatively weak negotiating position of desperation, resulting in more conflict and ill will.

Of course, in general democracies do not go to war, but with the threatening rise of populism who knows? War and conflict are historically favoured tactics of populists to get the people behind them.

Those of us who believe Brexit to be a total disaster should not cease saying so. We know that the Brexit vote was ‘won’ one lucky day three years ago. It can be changed.

Featured image of German troops entering Sudetenland 1938 from Bundesarchiv, via Wikimedia Commons

 

Inequality

The recent issue of London Review of Books has an interesting review by James C. Scott of the book The Great Leveller: Violence and the History of Inequality from the Stone Age to the 21st Century, by Walter Scheidel. It seems that the increasing inequality exhibited in the recent neoliberal era is not a historical anomaly, but a characteristic of periods of reasonable stability in all societies over thousands of years. Those that have get more and more, at the expense of those that have not. The great levellers are wars, plagues, and their consequences such as revolutions or massive disruptions such as the Great Leap Forward.

It seems that Scheidel’s book is a bit of a counsel of despair, in that he suggests that most of the social advances made in social justice, democracy, education, trade unions, welfare state… have little effect on this underlying trend.

As a counter-example, Scott does point to the example of Scandinavia, which is particularly stable because “They provide even the poorest with the resources necessary to maintain their dignity.” This is surely the measure of a decent society, and sadly one that many free marketeers appear not to believe in.

Of course, it is arguable that if the level of all is rising, then it does not matter, as the situation of even the lowest is improving. The period of austerity since 2008 seems to have reduced any leverage this argument may have had.

I would suggest that it is not beyond the wit of man to come up with more equitable systems that allows all human beings to maintain their dignity. Good places to start include taxation of scarce or undesirable resources – land, wealth, carbon, financial transactions,… progressive taxation, removing tax havens, money reform so that new money benefits society directly, basic income with a reduced minimum wage, provision of adequate ‘social housing’… There is no shortage of good directions, it just needs the will, particularly of the better off.

Featured image shows UK wealth distribution by decile (IFS), but of course hides the extremes and unknowns at the right hand end. And many countries have much worse profiles.

A veneer of culture?

We visited Weimar in Germany a few years ago and were very impressed by this grand city with its tree-lined streets, parks and grand cultural connections – a superb place to visit for a few days. It was therefore with some interest that I read the recent article by David Blackbourn ‘Princes, Counts and Racists’ in the London Review of Books. It was all about Weimar, and told more than I had learned from tourist literature and being there – particularly its dramatically contrasting associations with Wolfgang Goethe and Adolf Hitler.Read More »