by Yannick Vanderborght | Jun 6, 2012 | Research
In Chapter 7 of his book Cognitive Capitalism (translation of Le Capitalisme cognitif, Paris: Editions Amsterdam, 2007), French economist Yann Moulier-Boutang argues for an unconditionally guaranteed social income as a central component of a “real revolutionary reformism” in the context of “cognitive capitalism”, the form of capitalism that constitutes our new horizon.
Full references: MOULIER-BOUTANG, Yann (2012), Cognitive Capitalism, Cambridge: Polity Press.
Publisher’s page: https://www.polity.co.uk/book.asp?ref=9780745647326
by Karl Widerquist | May 25, 2011 | Research
Red Pepper
Describe by Little as “an economist who occupies the dissident edge of his profession” Shutt is the author of A New Democracy and The Decline of Capitalism. In this interview, Harry Shutt endorses basic income. Answering the question, “You think a citizens’ income is essential. Why?” Shutt replies, “Given the ever growing global surplus of labour noted above, it is no longer possible to pretend, if it ever was, that full employment is a realistic goal. … This points to the necessity of devising a system of income distribution which incentivises people to undertake only work which is necessary – including caring activities which at present are largely unpaid – and does not penalise people for being unemployed. The most obvious benefits of a basic or citizen’s income – paid at a flat rate to every adult irrespective of their income or employment status – would be that every individual would be assured of basic subsistence without the need for means testing. The administrative costs of means testing would be saved, as would the personal irritation and humiliation. People could undertake paid work or start small businesses without losing any benefit, while at the same time they could afford to undertake unpaid work of value to the community – including as carers – which might otherwise not be done.”
The article is online at:
https://www.redpepper.org.uk/economic-crisis-and-post-capitalism/
by Guy Standing | Jan 13, 2024 | News
In 1942, as people started to think about remaking society after the War, William Beveridge wrote a report for the British government that was to shape the welfare state in Europe. He wrote, ‘It is a time for revolutions, not for patching.’ What he meant was that it was useless to make minor changes to the old system. A new system was needed. The evidence was clear.
Today, we are at a similar juncture. The social policies of the 20th century are outdated. Selective schemes for what economists call ‘contingency risks’, such as a spell of unemployment, an illness or an accident, do not deal with the defining challenges of our age. We live at a time of rentier capitalism, in which more income goes to owners of property – physical, financial or intellectual – while less goes to those who rely on labour and work for their incomes.
Read the full article here
by Guy Standing | Sep 15, 2023 | News
In 1942, as people started to think about remaking society after the War, William Beveridge wrote a report for the British government that was to shape the welfare state in Europe. He wrote, ‘It is a time for revolutions, not for patching.’ What he meant was that it was useless to make minor changes to the old system. A new system was needed. The evidence was clear.
Today, we are at a similar juncture. The social policies of the 20th century are outdated. Selective schemes for what economists call ‘contingency risks’, such as a spell of unemployment, an illness or an accident, do not deal with the defining challenges of our age. We live at a time of rentier capitalism, in which more income goes to owners of property – physical, financial or intellectual – while less goes to those who rely on labour and work for their incomes.
To read the full article click here.
by Guest Contributor | Mar 30, 2023 | Opinion
This month Silicon Valley Bank defaulted causing the biggest bank failure since Lehman Brothers in 2008. The US government helped in finding a solution to stop the depositors from losing their money. The main reason for the bank’s failure was a bank run because of the bank’s inability to raise enough capital after miscalculating its investment strategy and not preparing enough for the US Federal Reserve’s interest rate hikes. Credit Suisse also faced a lot of trouble which caused the Swiss government to pressure UBS (Switzerland’s biggest bank) to acquire Credit Suisse. Those two incidents might seem irrelevant to a UBI, but such events show us the importance of UBI now.
The current economic and political scene is unstable. There are a lot of tensions between the main actors USA and China on the global stage as well as the conflict in Ukraine in combination with the aftermath of the Covid crisis which hurt the global economy and supply chains. Especially Russia’s attack and Ukraine and the resulting trade war with Europe caused a supply shock in the Energy sector which led to global inflation hence rising poverty and forcing the Fed to raise interest rates. Those hikes in interest rates, slowing economic growth, and an underperforming tech sector are causing a lot of economic instability and caused recent bank failures. But the question is how that is connected to UBI.
To understand why recent events, show the importance of a Universal Basic Income it is important to think about the potential worst-case scenario. The scenario that happened to SVB and Credit Suisse might repeat. Bank depositors might fear the repetition of such a bank failure in different banks and cause more bank runs as the whole banking sector is based on trust and there is no single bank that would survive a bank run without government support. There is also doubt in the current political climate how much possible bank bailouts are politically doable especially as most people will feel that the government supports the banking gamblers with their tax money while leaving the normal average people who didn’t do anything wrong alone when they struggle because of different reasons.
So, the first connection between UBI and the current banking problems is that the implementation of UBI would increase the population’s trust in the government as people will now feel seen and protected by society and will be less negative towards a potential bank bailout. Although possible bank bailouts would have to come with increased regulation to avoid giving the banks the feeling that they can do whatever they want, and the government will protect them while they screw the people’s money.
Another reason why the current economic situation makes UBI more necessary than before is that in a climate of increasing interest rates and declining trust in banks people will draw money from the economy, hence decreasing demand. Decreasing demand will lead to decreasing supply and will increase unemployment. A lot of economists like Larry Summers confess that and say it is a bitter pill to take to reduce inflation. Let’s assume that’s correct although I’m not sure that this is the best way out of the current situation that would mean that society is sacrificing jobs and hence the wealth of a lot of people to reduce inflation for the rest.
Such action is morally wrong, especially if people aren’t given a social net that protects them after losing their jobs to provide for themselves and their families. And we have to remember that the sole reason for them being unemployed will be that the FED and other Central Banks in other countries decided that higher unemployment is necessary to reduce inflation. This would make those people and their families suffer a lot financially and mentally and they might not find a way back to bring back structure in their life without support that relieves them of the stress of having just lost their livelihood. UBI would be the perfect measure to achieve that
The third argument which highlights the importance of UBI now has to do with the real economy and supply and demand. While a huge part of inflation is caused by the supply shocks from the Ukraine war it can’t be denied that it is also caused partly by a demand that might be higher than the current supply especially as supply chains haven’t recovered completely yet. And while many people might assume that this would be an argument against UBI as UBI would most probably increase demand we have to look at it from the other side too. Giving people a Universal Basic Income would mean giving people more flexibility and more control over their lives. People will choose the jobs they want to do instead of just taking any job. This dynamic might be crucial in overcoming the current crisis. It is expected that UBI will have a positive impact on entrepreneurship and small investments and such effects have been seen partly in previous pilot programs. Giving people a UBI would hence increase supply as smart entrepreneurs will see the gap between supply demand and work on filling that gap to make profits. This will mean a virtuous way out of inflation instead of a vicious way out of inflation. It would be also a way of directly supporting the victims instead of rewarding the gamblers
While a bank crisis is still avoidable, the current situation shows the importance of UBI on multiple fronts to help people in those difficult times. The government has tried to rescue the economy through trickle-down measures often and now it’s time to give people the chance to rescue the economy themselves by giving them a fair chance and promoting entrepreneurship by introducing a UBI and following a spirit of capitalism that left and right will be able to agree on.
Written by: Ahmed Elbas
