by Yannick Vanderborght | Oct 1, 2012 | Opinion
What did I learn from this splendidly organized gathering of academic and activists from over thirty countries? As usual, many things. About people and about things. About facts and about dreams. I discovered, for example, that Götz Werner was perhaps even better at reciting Goethe than Eduardo Suplicy at singing Dylan. I also admired how much progress had been made in the sophistication of the study of small-scale basic income experiments. Long gone is the time when all that seemed to be needed was to hand out some cash and enthusiastically report that all recipients were delighted to get it and that at least some made laudable use of it. Serious assessments of the effects of duly specified basic income schemes require control groups of similarly situated communities who do not receive anything, or who receive the same total amount but distributed according to different rules. And even the best assessment of this sort cannot claim to tell us what a real-life basic income scheme would bring about, if only because the funding side tends to be left out, or because of the recipients’ awareness that the experiment is limited in time, or because the political packaging of a real-life reform is most likely to affect individual responses. Nonetheless, these experiments are instructive in all sorts of ways and are well worth the hard work they require: conducting laborious interviews and processing recalcitrant statistics, sometimes even in flooded villages, as reported by Guy Standing, with water above the waist and the laptop above the water.
Ecological sustainability and basic income: three links
In these brief remarks, however, I shall concentrate on two points that struck me particularly because of they ran through several of the workshops I attended. The first one is the link between basic income and ecological sustainability, which featured was central in many presentations and the subsequent exchanges. On reflection, however, there is not one but there are three such links, logically independent and profoundly different from each other.
The first link is connected to the theme full employment. In good Keynesian fashion, an unconditional basic income is sometimes defended on the ground that it boosts economic growth and thereby employment. Like any other minimum income scheme, it redistributes from the rich, who save more, to the poor, who spend more, and it thereby helps sustain effective demand and business confidence. More often, however, and in contrast to many other schemes, an unconditional basic income is defended instead on the ground that it provides an alternative to the pursuit of full employment through economic growth: Freiheit statt Vollbeschäftigung. The underlying idea is that we must manage to tackle involuntary unemployment in a way that does not rely on a growth of production that constantly outpaces the growth of productivity, indeed — as discussed in a fascinating session of our congress — in a way that is consistent with de-growth. This way consists in transforming both some involuntary employment and some involuntary unemployment into voluntary unemployment. Or, to put it differently, some people make themselves sick by working too much and must be enabled to work less, while others get sick because of being excluded from work and must be enabled to access the jobs freed by those working too much. There is one simple way of achieving this: an unconditional basic income. This is a conclusion reached in the early eighties by some of the earliest basic income advocates in the context of the first signs of awareness of the “limits to growth”. It is also, fundamentally, the view now held by Baptiste Mylongo and the décroissants. The recognition of the right to idleness is here meant as the supply-side, anti-Keynesian, earth-friendly solution to the problem of unemployment
The second link passes through the price mechanism. Prices are a handy tool for guiding both consumption and production. They condense in a single figure millions of data about the preferences of consumers and the scarcity of factors of production. But they can go badly wrong because they do not spontaneously incorporate either the damage inflicted on the environment or the right of unborn generations to use their share of the resources of the earth. In order to correct this twofold major defect, some prices must be dramatically increased to reflect so-called negative externalities and to protect the legitimate interests of the unborn. One salient example of this is a carbon tax sufficiently high to keep the total of emissions below the ceiling that should not be exceed, or equivalently the sale to the highest bidder of carbon emission permits whose total amounts to this ceiling. In either case, the consumers will ultimately pay the price, but something must be done with the huge proceeds. Whether at the world level or at the European level, there is one simple way, both efficient and fair, of distributing them: an unconditional basic income. The logic is fundamentally analogous to the equal distribution of the rent on land advocated in Thomas Paine’s Agrarian Justice (1796). Three “eco-bonus” proposals along these lines were proposed at one of our sessions, in greatest detail by Ulrich Schachtschneider.
There is, however, yet another quite distinct link between basic income and ecological sustainability. At its core is the role that will need to be given to trans-national transfers. Those who make this third link may share with the décroissants the view that we in the “North” need to reduce our consumption. But they do not conclude that we need to reduce our working time, because there is no good reason to believe that we should reduce our production as well as our consumption. This sounds paradoxical but is easy to understand. No one visiting, for example, the Democratic Republic of the Congo can resist the conclusion that achieving a decent standard of living for all inhabitants of the world through local production within a foreseeable future is simply out of the question. This is so because of a combination of sustained demographic growth, deeply dysfunctioning and under-resourced administrative, judiciary and educational systems, and sheer climatic conditions which, in the absence of unaffordable generalized air conditioning, cannot but keep productivity down in quite a large number of countries. To believe that fair trade or the end of exploitation of the “South” by the “North” would enable these countries to get out of trouble is sheer self-serving wishful thinking. The growth of production in poor countries can and will help, of course, but access to a minimally decent living standard for all within a foreseeable future cannot count on it as its main means. It must also count on a massive dose of one or both of two other means: massive migration to the North and massive transfers to the South.
If the migration of hundreds of millions of Africans to Europe is regarded as undesirable for both the communities they leave and the communities they join, only trans-national transfers are left. And to be sustainable at a high level, such transfers arguably need to be both inter-personal (as opposed to inter-governmental) and universal (as opposed to means-tested), i.e. take the form of something like a universal basic income. As was the case with the first link I mentioned above, sustainability here requires a reduction of consumption in the North and the introduction of a basic income. But in the first case, the basic income was there to help increase the leisure enjoyed in the North, and in the second case to channel wealth to the South. Unlike the former, this latter argument, frankly, has nothing to do with what triggered my interest in basic income thirty years ago. But it is closely related to the argument I used in my contribution to one of the sessions of this congress to explain why the buffering device needed to save the euro needs to take the form of a universal basic income.[1]
Universality and unconditionality: the crucial conjunction
The second point I want to mention emerged particularly clearly from the session that hosted a conversation between Götz Werner, CEO of the large drugstore DM, and Wolfgang Strengmann-Kuhn, member of the Bundestag for the Green Party. A central part of the background of any discussion on social policy in Germany is the dramatic reform of the German welfare state by Gerhard Schröder’s red-green government known as Agenda 2010 or Hartz IV (2005). By reducing the duration of unemployment benefits, lowering the average level of social assistance and increasing the pressure on benefit recipients to seek and accept jobs, it is fair to say that the reform has improved the competitiveness of the German economy. But in a free trade area, making one country more competitive means making the other countries less competitive, and if this free trade area is also a single currency area, this means, for these other countries, deficits in the balance of trade, persistent unemployment and a pressure to restore their competitiveness by similarly scaling down their welfare states. For this reason, Hartz IV is no small factor in the current crisis of the Eurozone.[2]
Nonetheless, it is also fair to say that nothing ever happened in Germany that was better than Hartz IV at triggering a lively basic income debate. To understand why, note, first of all, that about half the recipients of the new social assistance scheme officially called Arbeitslosengeld II (but colloquially called “Hartz IV”) are at work. The reform massively extended the possibility of the Kombilohn, of low earnings combined with benefits. As such, this is not something basic income supporters should object to, as it is inherent in a universal basic income that it would generalize this possibility. But there is a major difference. Gerard Schröder himself complained that Hartz IV was “misused” by employers, as they used it to get workers into lousy jobs, with harsh conditions, no on-the-job training and no prospects of improvement. This is precisely why basic income supporters find unconditionality so important: a benefit granted to (potential) workers irrespective of whether they are willing to accept a job enhances their bargaining power and enables them to turn down poorly paid jobs of no intrinsic interest.
Put differently, the universality of the basic income — its not being means-tested — is what enables a person to say yes to a low-paid job. Its unconditionality — its not being work-tested — is what enables a person to say no to a low-paid job. Universality without unconditionality is a recipe for exploitation, because of the potential misuse of the Kombilohn by employers. Unconditionality without universality is a recipe for exclusion, because of the trap created by means-tested handouts. Instead, the conjunction of universality and unconditionality — so central to the basic income movement since its inception — is a path to emancipation. How emancipatory it can be will of course depend on its level. As stressed by Wolfgang Strengmann-Kuhn, however, the emancipatory effect starts being produced even with a level of basic income far below what would be deemed sufficient to live on for one’s whole life, even in a city, even on one’s own. Even a much lower universal and unconditional basic income broadens life options and thereby empowers its beneficiaries: it can make it realistic, for example, to accept an internship or an apprenticeship, or to combine further education with a part-time job, or to take the risk of becoming self-employed or of starting a cooperative, in situations in which today, in the absence of a basic income, one would be forced to accept a lousy full-time job.
A “partial” basic income, i.e. a low but genuinely universal and unconditional basic income, is therefore one obvious way in which one can move forward. But there are many others, more or less suited to local circumstances, more or less achievable in a particular political context, more or less likely to trigger a sequence of further emancipatory steps rather than unleash a damaging backlash. To move forward, we must dare to be “visionaries”, as emphasized by Götz Werner, while not hesitating to be “opportunists”, as demonstrated by Wolfgang Strengmann-Kuhn. Guided by our vision of a just society and a just world, we must be on the lookout for political opportunities to get closer to it, without denying the size of the challenges ahead — not least those arising from globalization — and without too much optimism about immediate success. Some good surprises are then bound to come our way…
[1] “No Eurozone without euro-dividend”, downloadable from www.uclouvain.be/8609.
[2] See my response to Gerard Schröder’s defence of Agenda 2010 on the occasion of his visit to Brussels in April 2012 : “L’Agenda 2010: un modèle pour l’Europe?”, downloadable from www.uclouvain.be/8611
by Guest Contributor | Jul 9, 2012 | Opinion
D.R. Thompson
I have watched with quiet fascination the evolution/resurgence of alternative politics since the financial meltdown of 2008. In my opinion, we have (at least) two broad camps developing: a Ron Paul brand of libertarianism that seeks to return to a prior vision of capitalism lost, and a new brand of Economic Democrat (often reflected in the Occupy Movement and/or Green Party or the ‘New Economy’ movement) that seeks a balance between capitalism as we know it and the people at large, who are more often than not suffering the brunt of capitalism run amok.
Both factions are reacting to an increasing corrupt two-party system that sees Big Business allied with Big Government. The result is an alliance that destroys the middle class, promotes elitist globalism devoid of democratic oversight, increases the power of the security state, enriches the upper one percent of society with corporate welfare, and engenders corporate socialism through unsustainable monetary policies. The result sections society into an increasingly enriched, globally based upper echelon that guts the wealth of whole nations and peoples.
How this has happened we may disagree on, but both factions are in firm unity that we have arrived at this situation and it has been slowly developing the past 30 to 40 years.
The question is, of course, what do to about it. This essay seeks to dissect some of the ideas behind Economic Democracy, and then to suggest how libertarians and other de-centralists actually might see benefit in them.
In my mind, libertarians in general need to grasp the fundamental contradiction that a Ron Paul style of political shift — specifically one that is devoid of actions to directly break up monopolistic, duopolistic or cartel-like aspects of Big Business — could devolve into a neo-feudalistic scenario where large corporations essentially create corporate fiefdoms through which transnational factions evolve and compete. This could mean less, not more, liberty. In other words, some aspects of libertarian policies could have the exact opposite impact than what is intended and actually just hand power over to the big corporate interests they so often rail against. This new level of corporate power would likely not make us any more free and continue — even expand — the cycle of abuse seen today.
On the other side of the equation, the alternative of centrally planned, top down governance, if taken to the extreme, would create a kind of global fascism that stifles innovation, punishes individualism, guts individual wealth and undermines democratic sovereignty. We don’t want that either.
My argument here is that we can avoid these extremes by recognizing that each political pole must understand the logical limits of its own zeitgeist and determine at what level of society a particular philosophy or approach will work best for the overall benefit of people. This often comes down to understanding what is best centralized and/or cooperative in nature, and what is best left to individual choice and freedom.
In my mind, a centrally planned, cooperatively managed government enterprise is best used to develop the infrastructure upon which a free, democratic, innovative and entrepreneurial society flourishes. Examples of how this can work are numerous: the Interstate Highway System, National Airspace System, the Internet (based on the government’s DARPAnet), and the standardized Electric Grid.
We should translate the same thinking to a rethought national financial infrastructure that provides a basic income guarantee (BIG) and sufficient monies to develop new energy technologies and ensure they are put widely into use. All of this could be done through a Cooperative Central Bank that is government sanctioned but subject to democratic input from its citizen members. Ideally, bank policies and programs would be managed by a board that is in turn subject to democratic approval.
Basic Income Guarantee
A universal basic income that provides a simplified social safety net and replaces Social Security, welfare and unemployment benefits, would ideally be provided to all adults with no required means test, even while the upper tier income brackets are still taxed. In point of fact basic income programs exist to a certain degree already with our large-scale pool of veterans (with their benefits), the earned income tax credit, Social Security and ever-extended unemployment benefits. It is a well-known fact that over 50% of Americans already pay no income tax. Templates for a BIG already exist in the Alaska Permanent Fund and the recently enacted basic income guarantee in Brazil. In this country, Social Security is the model we can build on; we could move toward a basic income by expanding that program, or implementing, as suggested by Robert Reich, a reverse income tax.
If you believe the idea of a basic income has no support, I urge you to do a quick Internet search and you will be astounded by the array of individuals that has supported a BIG throughout history, including Martin Luther King Jr., Thomas Paine, Milton Friedman, Daniel Moynihan, and John Kenneth Galbraith, just to name a few.
Rather than perennially watch the upper 1% obtain high earnings in ever more unjust, cynical and/or demeaning ways, it’s time to fight for a BIG and higher minimum wages for everyone. The reason: Americans earned almost 57% more per hour 40 years ago when accounting for inflation, even as productivity has continually increased. The situation continues to deteriorate and must be turned around.
We all agree that the reason for wage stagnation is not that people are lazy. It is that trade and labor policies of the last 40 years have allowed it to occur even as overall productivity has increased substantially, based primarily on automation. A BIG simply recognizes these productivity gains are at least in part an overriding social benefit rather than solely a corporate benefit channeled toward investors.
Put another way, a BIG allows us to simplify what we have and admit that we need a universal requirement that will provide a sound foundation for social stability and income equity within an efficient, technologically based society. We need to fully grasp that while a modern society should always offer the opportunity to work, automation makes it possible — even desirable — that all do not need to work (in the traditional sense), even among those groups we have historically felt should work. Simply put, we need to redefine the term ‘productive.’ ‘Productive’ can mean doing something that one loves and has a passion for, rather than working for an employer. A basic income can allow this to happen on a wide scale. As robotics and software continue to evolve and eliminate a plethora of even more jobs, the end result need not need to be chronic unemployment; with a BIG we can empower people to choose to work or not, thus leveling the playing field in the relationship between labor and capital.
While some would argue this is a statist utopia at its worst, as such a program would be run by the Federal Government, I beg to differ. My first question is: why does it need to be a Federal Program? Is the Federal Reserve ‘federal’? Most understand it isn’t: it is privately owned.
What we can do therefore is to turn the Fed on its head by creating a completely transparent, citizen-owned, Internet-ran, Cooperative Central Bank that is separate from (although approved by) the Federal Government and can print money into existence for two primary reasons: a BIG, and infrastructure (discussed below). All adult citizens could be a member of the cooperative. What can back such money? The physical infrastructure itself, including public lands and assets. In other words, we either have or can build the assets and provide liquidity as we go. This new form of debt-free money would be an alternative to Federal Reserve Notes and could complement other forms of new currency (i.e., Treasury Notes) that would be backed by other forms of assets (i.e. Gold). While some would argue that Cooperative Banking should remain only at the local community, the Internet has re-shaped our concept of what ‘community’ is. In short, globalization and technology has made ‘national’ the new local.
The template for a Cooperative Central Bank already exists in the National Cooperative Bank established in 1978 under President Carter. Perhaps that bank’s mission just needs to be rethought and expanded. Also, while different in their mandate, some states have already implemented Cooperative Central Banks that become the ‘bank of banks’ to cooperative banks throughout that state. Countries that have implemented Cooperative Central Banking can also be looked to as models. Moreover, some writers, such as Richard Cook, even lobby for an international bank with a similar mandate as stipulated in this essay, based on a reformed International Monetary Fund.
A key mandate of Central Banks during the economic crisis has been to provide ‘liquidity.’ But rather than provide liquidity through quantitative easing (where the Federal Reserve purchases Government Debt directly, often from ‘too big to fail’ banks), that inevitably channels any wealth to the top while driving inflation at the bottom, non-debt money generated through a new Cooperative Central Bank could provide another flavor of liquidity in a way that benefits the general population instead of primarily channeling those gains toward the elites.
A Wider Net of Social Security
If we are honest, most Americans, even staunch conservatives, appreciate the modest guarantees of Social Security for elderly Americans and would grow to appreciate a BIG that would empower the individual and, ironically to some, create more independence in the same way that Social Security allows for many seniors today to be more independent. While we may idealize some agrarian form of the independent ‘gentleman farmer’ as envisioned by Thomas Jefferson or a survivalist as envisioned by Thoreau, in our modern age any lack of income (whether urban or rural) simply generates suffering, ill-health, malnutrition, and a variety of other socially negative outcomes. A basic income, particularly when complemented by a well-thought out Healthcare system and other incentives toward positive outcomes, could alleviate such problems. If we steer education intelligently, and human inventiveness and entrepreneurship are promoted, bottom up endeavors can be nurtured in a variety of altruistic and productive ways, using a BIG as the foundation.
For the nostalgic among us who wish to return to some ideal world of very limited government and no intrusive Powers that Be, we need to remember something about the history of life prior to the advent of our current (albeit admittedly corrupted) modern societies. Life was short, and it was brutish. To the extent human beings can cooperate together to alleviate overall suffering, they should. And technology makes that possible. Why shouldn’t we use the benefits of that technology for the overall good? What is the alternative? An atomized society of iPad-toting survivalists dodging the bullets of those that choose to organize, probably via transnational large-scale businesses? I don’t believe such a neo-feudal world is desirable. We joke today that Apple is as large as a country. If we move down a libertarian path it won’t be a joke: Apple will make internal laws and provide security for its people if nation states cannot.
Green Energy Infrastructure
Another potential use of non-debt money generated through a Cooperative Central Bank is to create a green energy infrastructure, where the Central Bank could work with local cooperative banks to fund a multitude of sustainable energy projects. Regardless of where you stand on ‘climate change,’ a sustainable, clean, long-term energy infrastructure is a good thing. And again, the idea would be to ‘back’ the money with the asset created, i.e., the green infrastructure that creates the sustainable energy environment that could be the foundation on which long-term prosperity and entrepreneurial activity are built. The infrastructure would be publicly owned (perhaps by State) and corporations charged fees to use it. These use fees could then be channeled back into maintenance and any ‘profits’ toward a basic income in the form of a citizen’s dividend, just as in Alaska oil revenues are channeled back into the Permanent Fund.
Some of you are probably laughing that all of this is absolutely unaffordable and inflationary. But if we significantly downsized the military (something both Economic Democrats and Libertarians certainly agree on) and aggressively sought ways to create global treaties to outlaw open aggression, the energy and resources expended on maintaining the security state and Global US empire could be effectively channeled into more productive long-term objectives through a Cooperative Central Bank and a green infrastructure initiative geared toward fully integrating efficient, non-polluting energy technologies into our economies. Moreover, the Bank could be managed soundly through a systems approach so that expenditures would be monitored carefully and inflation kept in check. Certain levels of income could still be taxed, and fees for corporate resource utilization could be expanded.
We can look back to the New Deal infrastructure projects of the WPA, many of which are still used today by millions of people, as examples of intelligently channeled social energy into long-term infrastructure.
Simplification and Common Ground
The proposals above, including a new Cooperative Central Bank, Basic Income Guarantee, and Green Infrastructure development could be done in tandem with simplifying Federal Government as we know it. Agencies could be eliminated or downsized. Regulations that stifle innovation could be thrown out or rethought.
As a rule, the overriding mission statement of promoting the general welfare of the people should be revisited and integrated into every facet of government.
But can Economic Democrats find common ground with libertarians?
I believe Libertarians and Economic Democrats can agree to the following:
- Empower entrepreneurs
- Simplify government and make it more effective
- Downsize the military, repeal the Patriot Act and roll back Homeland Security
- Allow for alternative currencies to Federal Reserve Notes that are backed by Gold and/or Infrastructure
- Rethink the role of the Federal Reserve in monetary policy
- Simplify, not eliminate, the social safety net
- Support infrastructure with an eye toward sustainable business growth and prosperity, using resources such as https://m247.com/ to achieve this
- Support BIGness when it’s Goodness
By focusing proposals for Economic Democracy on the level of financial and energy infrastructure, we reconcile the two camps by allowing on one hand a cooperative, aggressive and activist stance that allows for a fair and sustainable economic system that promotes the general welfare, but on the other hand maintains a free and entrepreneurial business environment that can make use of that infrastructure in a fashion that is relatively unencumbered and free.
All of these shared stances I believe could be the basis for common ground where Economic Democrats and Libertarians come to agreement regarding a future America we can all feel good about.
About the author: D.R. Thompson is an award-winning film producer, playwright and essayist. He has also ‘done time’ on Wall Street. A compilation of his essays, A WORLD WITHOUT WAR, is available from Del Sol Press.
by Yannick Vanderborght | May 24, 2012 | Research
This opinion piece was published by the prestigious German daily ‘Frankfurter Allgemeine Zeitung’ (18 May 2012). Frank Rieger, a speaker of the German Chaos Computer Club, discusses an upcoming revolution and the fact that we are able to control its consequences: if robots and algorithms replace us in the labour market, they should also substitute us as taxpayers. The current tax philosophy caused a social and financial collapse of the state and society. Hence, the tax system should be gradually redesigned towards an indirect taxation of non-human work, in order to pay a basic income under the form of an automation dividend.
Rieger writes that if the tax system is designed in a way that more automation leads to more real wealth for all, and hence social peace is kept sustainable because all would benefit from the productivity improvement, the result would be a competitive advantage of historical dimensions.
Within such an automation friendly society nobody has to fear losing a job, since robots and algorithms will pay for our pensions, sparing us from the myriad of pension troubles that people currently face, as well as ensuring a universal basic income. Of course such a model requires significant investments in the technical and social research and development.
Obviously, for most people a job is more than a source of income: it helps to improve our self-confidence and to structure our life. Without a regular, preferably meaningful activity, a lot of people become depressed and bored. Hence, it is important to counter these feelings. Actually there is enough to be done, precisely in social areas, in art and culture, in the revitalisation of the landscape and towns – things that the market does not appropriately reward.
The German Article is available online at: https://www.faz.net/aktuell/automatisierungsdividende-fuer-alle-roboter-muessen-unsere-rente-sichern-11754772.html
