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 Karl Widerquist | Jun 8, 2012 | News
An initiative to establish a new federal law known as “For an unconditional basic income” [fr] was formally introduced in Switzerland in April. The idea, which consists quite simply of giving a monthly income to all citizens that is neither means-tested nor work-related, has generated commentary throughout the Swiss blogosphere.
The Swiss referendum process is a system of direct democracy that enables citizens to call for legislative change at the federal or constitutional level. If the initiative to introduce a basic income gathers more than 100,000 signatures before October 11, 2013, the Federal Assembly is required to look into it and can call a referendum if the initiative is judged to be credible.
On his blog, Pascal Holenweg explains what it’s all about [in French, translated here]:
“The grassroots initiative “for an unconditional basic income” proposes that “the establishment of an unconditional universal benefit” be written into the federal constitution which would “allow the entire population to lead a dignified existence and participate in public life”. The law will address financing and set the amount of the benefit (the proposers suggest around 2,000-2,500 Swiss francs per month (or 2,200-2,700 US dollars per month), which is about the same as the maximum current social security payment, but they have not written this into the text of the initiative). The basic income does not come with any conditions attached: it is not subject to any means testing. It is universal (everyone will receive it) and egalitarian (everyone will receive the same amount). It is also personal (it is paid out to individuals, not households). It is not income to replace a lost salary. Rather, it replaces all inferior income support (unemployment benefit, pensions, family allowance, student grants, disability payments). How will it be financed? Through direct taxation of income and wealth, indirect taxation on consumption (VAT), taxing financial transactions, and most especially through the reallocation of resources currently allotted to financing state pensions and unemployment payouts, social security and other welfare payments lower than the amount of the basic income.”
On his blog, Fred Hubleur makes the point [in French translated here]:
“The important thing is that this revenue is fixed for everyone without there being a requirement to work; that’s right, it is income without employment. This might seem shocking. But at its heart it is an entirely defensible idea. On the one hand, we are fighting against poverty and insecurity, there will no longer be a need for social security to bolster other incomes, and dozens of different and unwieldy benefits. This unconditional income is equally good news for innovation and creativity. (…) We have also made a paradigm shift that dyed-in-the-wool capitalists might find alarming: the liberation of working man, returning him to his status as homo sapiens over that of homo travaillus (ed’s note: Homo travaillus is a play on word to describe the working man) which holds such sway in our society.”
The original French version of this article is online at:
https://fr.globalvoicesonline.org/2012/05/05/107126/
The text of the initiative [in French] is online at:
https://www.admin.ch/ch/f/ff/2012/3905.pdf
Another article (in English) on the Swiss BI initiative is online at:
https://www.swissinfo.ch/eng/swiss_news/Initiative_launched_for_guaranteed_income.html?cid=32468670
by Citizens' Income Trust | Jun 3, 2012 | Opinion
Paul Spicker, How Social Security Works: An introduction to benefits in Britain, Policy Press, 2011, xii + 284 pp, hbk 1847428110, £65, pbk, 1847428103, £23.99
This well-organised book is what it says it is: an ‘introduction’ to the ‘design, management, operation and delivery of benefits’ (p.ix). Its careful structure enables Spicker to bring a sense of order to a system which he recognises to be ‘baffling’ (p.x), though he himself admits that ‘there is a limit to how clear it is possible to make things clear – the structure of benefits does not make sense’ (p.x). A further problem identified is the constant and rapid change from which the system suffers, and this reviewer can empathise with Spicker’s statement that his ‘head is cluttered with old rules and regulations dating back through the last thirty-five years’ (p.xi).
The first part of the book asks ‘What is social security?’ and suggests that ‘there is much more to social security than the relief of poverty’ (p.10). The second part details the development of the system from the Poor Law to the present day, and asks whether the new Universal Credit will in practice be a unified benefit. The third part discusses different categories of benefits (National Insurance, means-tested, non-contributory, discretionary, and universal), how claims are processed, and take-up levels. Part IV debates life’s contingencies (retirement, illness, disability, children, parenthood, lone parenthood, unemployment, and poverty); and the fifth covers such issues as cost, targeting, fraud, the meaning and measurement of poverty, and redistribution. A final chapter compares Britain’s system with those of other countries. A particularly interesting chapter is that on complexity in which Spicker concludes that complexity matters when it leads to the system ‘failing to respond to the changing conditions of people in complex circumstances … We cannot ask claimants to live simpler, more orderly lives’. Part of the answer is to address the issues of ‘conditionality, administrative rules and administrative procedures’ (p.145).
Chapter 12 on ‘Universal benefits’ starts with an argument as simple as the benefits themselves:
The general arguments for universality … include basic rights, simplicity and effectiveness. The central criticism of universal benefits is that they spread resources too widely: if benefits are going to everyone, then either they will be very costly, or they will have to be set at very low levels. This dilemma can be avoided. One option is that universal benefits can be reclaimed through the tax system – a process referred to as ‘clawback’. This has an effect similar to means testing, with two important differences: first, that everyone receives the benefit, and second, that the examination of means is also done for everyone. (p.117)
Then follow a history and discussion of Child Benefit, a description of New Zealand’s universal pension, and a discussion of the Coalition Government’s current consideration of a citizen’s pension for the UK. The chapter concludes with an intelligent and nuanced debate of a Citizen’s Income and with another encomium to Child Benefit:
What Child Benefit offers is a modest but secure element of a family’s general income, something that is fairly predictable and secure. It is the only element of income that seems to continue to function reliably in situations where people are moving in and out of work or where their income is unstable and unpredictable. That seems to me something which is valuable and important, and the principle could be more generally extended. (p.124).
In his concluding ‘Postscript: Social Security: a programme for reform’, Spicker’s first recommendation is: ‘extending the scope and value of less conditional benefits, like Child Benefit, which also helps to stabilise the income during transitions’ (p.274); and the first suggestion in a list of ideas for ‘reducing complexity, error and administrative confusion’ is ‘replacing some claims with automatic payments’ (p.274).
Spicker doesn’t put it like this, but it would be perfectly fair to describe his book as a sustained argument for a partial Citizen’s Income.
