19 Oct 2014

Why Marine Le Pen and Nigel Farage should be pushing for an Unconditional Basic Income for all

I'm again following on from my open letter to Jean Tirole yesterday. I am arguing that an intelligent alternative to the current recipe of neoliberal reforms and austerity would be to pay every citizen an Unconditional Basic Income, financed by a minuscule tax on all electronically mediated financial transactions in a given currency - wherever they occur in the world. In the case of the Eurozone, I claim that a tax of just 0.1% on all Euro-denominated transactions could provide a €6000 a year Unconditional Basic Income for everyone of the 330 million citizens of the Eurozone.

In this post, I want to argue that in addition to abolishing poverty at a stroke (hardly a trivial consequence), and being a fantastic deal for business (by providing complete employment flexibility and drastically reducing wage costs - see my last post), it is also a solution for the problem of illegal immigration - one of the major arguments that has been fueling the rise of anti-immigration parties such as  Nigel Farage's UKIP party in the UK, and Marine Le Pen's Front National in France.

So, here's how it works.

Currently, the citizens of a country like the UK are competing for jobs with clandestine immigrants, prepared to work for below minimum wages and with incomplete or non -existent job protection. With the current UK government committed to reducing their involvement in the job markets, they are quite happy to allow employers to use cheap and often illegal labour, on the grounds that it is good for the UK economy to be able to produce goods and provide services more cheaply.

The result is that while the UK economy is apparently booming in that there has been a large expansion in the number of jobs in the economy, those jobs are providing wages that are not even keeping up with inflation. There have been recent reports that the recent squeeze on incomes within the general population is the worst since the 1860s.

When politicians like Nigel Farage point to the hundreds of illegal immigrants swarming through the ferries in Dover every day, and claim that those illegal immigrants are undercutting the native work force and making it harder and harder to get decent paid work, it has to be admitted that they do have a point.

Of course, one option would be to clamp down on employees that employ clandestine workers. But this would be extremely expensive to do properly, possibly requiring thousands of police and other inspectors going round every factory and shop in the country searching for people trying to get round the employment legislation. And, of course, it would turn every non-white person in the country into a potential illegal immigrant that has to be denounced. We could rapidly find ourselves in the equivalent of 1930s Germany.

Why is a Unconditional Basic Income for citizens a way to solve this problem? Well, if you are a legitimate citizen of a country, and are receiving a basic montly payment of (say) €500 for each member of the household, an employer who wanted to get you to work for him would only need to offer enough money to top up your salary. Potentially, this might be a relatively modest sum - and it could be for a relatively small number of hours. There would be no need to work for a minimum 35 or 40 hour week as is currently the case if you are to have a chance of managing to feed, house and clothe a family. Staff could choose the amount of work they want to do.  In contrast, an illegal immigrant who was trying to survive on just the paid employment with no Basic Income, would have a very hard time. It would simply not be worth trying to get through immigration, because you would not be able to survive on just that salary. As a consequence, the UK would no longer be the eldorado for cladestine workers that it currently is.

Likewise, in Eurozone countries like Italy, currently the target for tens of thousands of desperate would-be immigrants from Africa and the Middle East, the existence of a Basic Unconditional Income for legitimate citizens would again prevent local workers from being undercut by clandestine workers prepared to work of substandard wages and with no protection.  And all this without the need for increased police surveillance! Isn't that a much more intelligent was to deal with the problem?  Illegal immigrants would simply not want to come and try and work in a country where they were not able to undercut legitimate citizens.

Let me stress that I would not want to reject legitimate refugees. If someone is under threat of persecution in their home country, I for one would be happy to see their name added to the list of Eurozone (or UK) citizens, and hence be eligable for the same Unconditional Basic Income payments that other citizens receive. But that would be a controllable process - new refugees would be added to the list if and only irf they gain refugee status (and hence citizenship).

But then there are all the economic migrants - the ones who are currently convinced that they will have a better life in the UK or in the Eurozone than they could possibly have back home. It's likely that the vast majority of migrants are in fact in this group. What would happen to them? Well, it's clear that if they are forced to compete with local citizens who already have €6000 a year in Basic Income, it will be a lot harder for them to compete... and that might be enough to stem the flow.

But there is an even better solution. Suppose that the Eurozone countries were to decide that, of the €2 trillion in revenue that the tax on Euro denominated transactions, a substantial percentage should be allocated to pay people in third world counties a Basic Unconditional Income of their own. Obviously, it would not be €6000 a year. But how about €100 a year? I'm convinced that if people in African countries were given €100 a year of Basic Revenue, but that those payments were conditional on just one thing - their residence in their country of origin, wouldn't that fix the current dilemma?

€100 would buy one hell of a lot in Niger or Burkino Faso. It would stimulate the local economy and really make it so that people can stay close to their families. Isn't that what the vast majority of people would choose to do?? Other countries such as the US and the UK could provide similar sums to help support developing countries. Importantly, these payments would not be loans - they would not increase the level of debt in third world countires. It would be real money that could be used to make the local economy work, but also to pay for much needed western technology and services if needed.

I am personally convinced that, given the choice, most migrants would normally prefer to stay close to their own families and in their own cultures rather than risking life and limb to reach the mythical eldorado of Western Europe where they would be like fish out of water. The current situation is just a demonstration of the stupidity of the present system.

And of course, a similar solution would almost certainly fix the immigration crisis faced by the US. Give a reasonably generous Unconditional Basic Income to all US Citizens at home, and give a smaller amount to anyone who stays at home in Mexico or the other Latin American countries and who is currently tempted to try and reach the US as an economic migrant.

So, there you have it. It seems that anyone who could be tempted to vote for a right-wing anti-immigration party like the FN and UKIP would logically be tempted to vote for a party that put the idea of an Unconditional Basic Income into their program. Let's do it.

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