My thanks to my sister Caroline for pointing me to this excellent article about the basic income idea, written by Rutger Bregman.
A shortened version of the article was published in the Washington Post - here's the link.
Highly recommended. It's amazing how few people have heard about this excellent idea.
For me, it is quite simply the best way to put debt-free money into the economy. An independent central bank authority would simply decide how much debt-free money can be injected into the economy. It would do it by directly injecting money into citizen's accounts. And at the same time, that authority should remove the same quantity of debt-based money from the system using a flat-rate universal Financial Transaction Tax on all electronic transactions involving the currency in question. No risk of corrupting politicians. No possibility of using the mechanism for personal enrichment.
Interesting article. I think it would be much more efficient to just hand people money with no expectations rather than the myriad of social programs we have now. On the other hand, I don't believe that the results would be so good when implemented on a large scale. It is totally different to be part of an experiment where you are being watched. Your behavior is noting to be the same.
ReplyDeleteBut of course another problem is who gets to decide how much people get? Won't every single person who is benefiting from this will of course go to the polls and vote for any candidate who says he or she will raise their stipend?
The Financial Transaction Tax sounds interesting, but if rate were anything but miniscule, wouldn't people just turn to cash transactions?
Hi Kevin,
ReplyDeleteConcerning the amount that people should get, one idea is to set it at a level which is just sufficient to live in a frugal way. Across the Eurozone that could be done for €250 per person per month I think.
The Transaction Tax would indeed be minuscule - well under 1%, and perhaps no more that 0.1%. That's because with $5.3 trillion a day in Foreign Exchange (for example) the vast bulk of what is traded is done electronically. You wouldn't use cash to avoid paying 0.1%.
Yes, you could start out at 250 per month and there would be great rejoicing. But that amount of money would have to be decided by somebody, and if you have that to *everybody*, you have created a huge monolithic political voting block of people that want it raised. One that in a democracy would be unstoppable. With the plethora of entitlements now, each group's interests do not align, and any change to these programs is complex and abstract to the voters.
ReplyDeleteNow you boil it all down to one number - everybody gets 250. Now you have a political majority who would like that number to be 300 because it is more fair, and nobody can actually live on 250, right? It's no longer complex or abstract, and no longer are the groups competing against each other for political favor. Almost everybody now wants it to be 300. How many people who ordinarily don't vote would go vote if they thought it would bring an addition 50 every month?
What would be the political force which resists raising it until the system breaks down? The conscious of the politicians or the reasonableness of the voters? No matter what safeguards you try to make, there will always be a politician willing to stand up and say, "Let's change the rules."
The decision would be made by the Central Bank - ECB for the Eurozone, Bank of England for sterling. And they would be as they are currently - that is to say totally indepedent of governments and politicians. Their job would be to inject the optimal amount of money into the economy at the bottom and then skim it off the top.
ReplyDeleteHonestly, I don't see why politicians need to be involved at all.
The Swiss have the appropriate concept. Back in the 80's I called it Life Rights. Making token gestures of 250 or 300 £'s or Euros per person per month, does not comprehensively resolve the growing problem of homelessness, rising poverty, and unemployment due to increased mechanisation and computerisation. The amount should be the equivalent of appropriate Sustenance, Housing and all associated bills, health and dental insurance, and a small amount of travel costs. This should be £15k per year each for those paying rent or mortgages, and £10k for those that don't.
ReplyDeleteThe cost of welfare would cease, other and financial pressures on the healthcare system would be reduced, and quality of service increased as care is paid for by health insurance. The population would be d-stressed, healthier, happier and those that truly want to work and deliver quality workmanship, will continue to do so and therefore add further quality and facets to their lives.
I know from a lifetime of first hand experience as an employer, that people who's financial lives have stability and no money worries, deliver superior workmanship, have good attitude and are loyal, having had the choice to work in a field they love, wrather than doing any job they hate simply because they are desperate for the money.
Many people who can't find a job they like and are good at, will choose to give of their time and abilities, helping in the community, or doing something worthwhile but which does not produce a monetary profit.
Thanks Leah! Yes, we agree completely. Your point about the quality of work that an employer could expect would increase with a basic income is very nice. Of course, the amount you would need in Switzerland would be substantially more than would be required to live with a similar lifestyle in Portugal, Spain or Greece for example.
ReplyDeleteDear Simon, Naturally the cost of living differs from country to country. Other benefits would be that Government Pensions would also be replaced by the Basic minimum income. Certain massively costly departments of government would no longer be necessary.
ReplyDelete