Basic Income

[ska invita]

"Under Swiss law, citizens can organize popular initiatives that allow the channeling of public anger into direct political action. The country usually holds several referenda a year.
In March, Swiss voters backed some of the world's strictest controls on executive pay, forcing public companies to give shareholders a binding vote on compensation.
A separate proposal to limit monthly executive pay to no more than what the company's lowest-paid staff earn in a year, the so-called 1:12 initiative, faces a popular vote on November 24.
http://www.reuters.com/article/2013/10/04/us-swiss-pay-idUSBRE9930O620131004

the future....

 

[revol68]

the proceeds of nazi gold

You should read the Holocaust Industry, puts paid to that common misconception, not that it didn't happen but that many other nations including the US were involved in that.

 

[Ultimate]

This is a good discussion. I'm generally in favour of BI but, as is clear from everything that's been said in this thread, it's more complicated than it seems and there are certain problems that would have to be worked out before the idea could be put into practice.

On the question of how to account for the great variation in housing costs, I think the most practical approach would be to do what they do now with housing benefit: each local authority area has a different ceiling amount according to the cost of housing in the area. And how much you get would depend on the size of your household. But it would all be paid out as one payment, like Universal Credit will be (if the government can ever get it off the ground).

It would compromise the principal that BI should be a universal benefit - it would take a certain amount of means testing - but that's a sacrifice that has to be made.

 

[Fez909]

It would compromise the principal that BI should be a universal benefit - it would take a certain amount of means testing - but that's a sacrifice that has to be made.

I disagree with this completely. Without making it universal you're enabling the kind of divisive tactics we see now with existing benefits. Who gets what and why not me and how much would dominate the debate, rather than a simple "how much is it?"

Also, the problem of housing costs differing have been discussed and the universal/same payment actually solves that problem by keeping money in areas with housing but no jobs and removing the economic incentive to migrate to cities and areas of high employment which inevitably means higher housing costs. By reversing this trend, perhaps the jobs would spread out too, so in time we'd have a more harmonious balance between different regions, instead of everything being concentrated in the South East.

 

[Ultimate]

Valid point, but it's a big IF. You say PERHAPS jobs would spread out. But suppose they don't? And I think there will always be more work in the cities than in the rural areas, unless there's a huge increase in working from home.

 

[Fez909]

Valid point, but it's a big IF. You say PERHAPS jobs would spread out. But suppose they don't? And I think there will always be more work in the cities than in the rural areas, unless there's a huge increase in working from home.

I'm not even talking rural vs urban. I'm talking about the powerhouse cities vs failing towns & cities. Middlesbrough, Wakefield, Hull, Burnley, Sunderland, Bradford. These were all thriving urban areas in the past, and most of them are in decline now. People leave them for other places because there's no jobs and it sets off a spiral of despair with falling house prices, fewer skilled workers to even begin to rebuild and shrinking populations.

Whatever the rate was set at, it would mean that areas like Middlesbrough - which has some of the cheapest housing in the country - would become so affordable to people that you would have residents with excess cash after paying all their bills. This is because the rate would have to be high enough that everyone in the country can afford to pay for their essentials. So you'd be getting enough money to live in London, but paying boro prices!

That excess cash would be spent locally and the economy would thrive. People would be attracted to the cheap living and bustling trade and the population decline would reverse. Housing costs would increase with demand. Then once prices approached the more desirable places like the Northern cities, then it would no longer be an attractive option to move to boro. We'd reach an equilibrium.

 

[8ball]

I disagree with this completely. Without making it universal you're enabling the kind of divisive tactics we see now with existing benefits. Who gets what and why not me and how much would dominate the debate, rather than a simple "how much is it?"

This very much reminds me of the housing benefit debate where I was against 'rich people' getting the benefit. There's a plausible-sounding logic to the means-testing argument but it falls down for several entirely practical reasons and a few moral ones. Not sure if it was butchers or maybe DLR or another poster that set things out really squarely, but I was dead wrong on that one. We should make a thread with all the arguments and use it as an 'FAQ'.

 

[Ultimate]

I'm not sure that I agree with your theory. It would take more than cheap housing to attract people to places where there's no work. And if places like Middlesborough don't attract business, it would stay poor. Unless you are optimistic enough to think a lot of those unemployed people would set up businesses, which I doubt.

(Sorry, I'm addressing Fez - you beat me to it, 8ball.)

 

[8ball]

(Sorry, I'm addressing Fez - you beat me to it, 8ball.)

No prob. Hope the horse is well.

 

[Treacle Toes]

I think that people are very resourceful and can/do respond very well to needing to/opportunities to do for themselves.

Unless you are optimistic enough to think a lot of those unemployed people would set up businesses, which I doubt.

Unemployed people are people without jobs, not necessarily without skills/aspirations and the abilities to do business. Your statement implies otherwise.

 

[Fez909]

I'm not sure that I agree with your theory. It would take more than cheap housing to attract people to places where there's no work. And if places like Middlesborough don't attract business, it would stay poor. Unless you are optimistic enough to think a lot of those unemployed people would set up businesses, which I doubt.

Why would it stay poor? Let's assume the basic income is set at £100 a week and that's enough for everyone to live in London and pay for essentials. Housing is going to be a large chunk of that, say £70. And the other £30 is food and bills etc.

Bills are slightly cheaper in boro, but it's not significant, so we'll say it also costs £30 for food and bills in boro. Let's say housing is half the price of London (it's much less in reality). So £35 a week for that. That leaves every resident with £35 left over to spend on what they like. And they get it every week. It's a subsidy for areas with cheap housing which are inevitably areas with no work.

If there's an area which has a lot of spare cash floating about, you can bet that business will be moving into those areas in no time. So now there's more work.

Can you imagine a scenario where people in Middlesbrough have this excess cash and yet no businesses move in to exploit that?

 

[Fez909]

I think that people are very resourceful and can/do respond very well to needing to/opportunities to do for themselves.



Unemployed people are people without jobs, not necessarily without skills/aspirations and the abilities to do business. Your statement implies otherwise.

Very good point and not one I'd even been thinking about above. If people in boro have lots of money but no jobs, then they can just set their own businesses up. If they fail, so what? They've got the basic income to fall back on.

 

[8ball]

Unemployed people are people without jobs, not necessarily without skills/aspirations and the abilities to do business. Your statement implies otherwise.

To be fair, I think you need a bunch of things to come together in the right person, the right place, the right time, to be able to set up a successful business.

 

[Treacle Toes]

Failure is not a forever thing either. People tend to try again and/or try something else.

 

[Treacle Toes]

To be fair, I think you need a bunch of things to come together in the right person, the right place, the right time, to be able to set up a successful business.

I don't disagree but what is a successful business? How do we define that? Surely that depends on the needs/aspirations of the person doing it?

 

[8ball]

Very good point and not one I'd even been thinking about above. If people in boro have lots of money but no jobs, then they can just set their own businesses up. If they fail, so what? They've got the basic income to fall back on.

That's a really good point - it's so much harder to set up your own enterprise when you stand to lose everything, even your access to healthcare, if things go tits up (unless your business is so large you can dictate to the Government that you should be bailed out by the taxpayer).

 

[8ball]

What is a successful business? How do we define that? Surely that depends on the needs/aspirations of the person doing it?

Yes, I'd agree totally with that. Unfortunately the model of a 'successful business' we live in these days is one where you build something up just enough that you are noticed by the 'big boys' who buy you out and give you enough money to live out the rest of your days in the fat house.

 

[Fez909]

To be fair, I think you need a bunch of things to come together in the right person, the right place, the right time, to be able to set up a successful business.

But the right time and the right place are things which currently never arrive due to the risks and costs of starting your own business. If you could afford to not earn anything at all while you were setting up, then the time scales between success and failure become much more forgiving.

That's a really good point - it's so much harder to set up your own enterprise when you stand to lose everything, even your access to healthcare, if things go tits up (unless your business is so large you can dictate to the Government that you should be bailed out by the taxpayer).

Yep, same point!

If you had a basic income, you could afford to sell 1 thing at a profit of a pound and still be in business. Next week you might make 2 quid. No bother, you've still got enough to pay the bills. Slowly ramping up to making decent money. If you only made a quid a week currently, you'd be fucked after 1 week.

 

[Treacle Toes]

Yes, I'd agree totally with that. Unfortunately the model of a 'successful business' we live in these days is one where you build something up just enough that you are noticed by the 'big boys' who buy you out and give you enough money to live out the rest of your days in the fat house.

But with BI that model/values that come along with it would change that for many i imagine. It's an attitude shift yes, but I don't think it's undoable!

 

[8ball]

If you had a basic income, you could afford to sell 1 thing at a profit of a pound and still be in business. Next week you might make 2 quid. No bother, you've still got enough to pay the bills. Slowly ramping up to making decent money. If you only made a quid a week currently, you'd be fucked after 1 week.

Ok, devil's advocate time, but it could be argued that a business is not viable if it is not covering the cost of all its inputs. Sure, if it's a hobby you might be happy to cover some of the costs yourself, but in the 'basic income' model you are expecting the *really* viable enterprises to cover the shortfall by guaranteeing basic income, and I'm not sure you get a viable economy composed of people who want society in general to cover the fiscal deficits inherent to their hobbies.

edit: that reads horribly but I'm a bit drunk - happy to rephrase if its incoherent (hic)

 

[8ball]

But with BI that model/values that come along with it would change that for many i imagine. It's an attitude shift yes, but I don't think it's undoable!

Me neither. I've always had an issue with the way 99.999% of business have the sole focus of becoming bigger, when becoming better is only of tangential relevance.

 

[Treacle Toes]

Me neither. I've always had an issue with the way 99.999% of business have the sole focus of becoming bigger, when becoming better is only of tangential relevance.

I share the same issue. IME the compromises made and impact of this attitude is the problem.

 

[8ball]

I share the same issue. IME the compromises made and impact of this attitude is the problem.

It always sticks in my mind how the day after Levi Roots got his contract on Dragons Den his Mum's kitchen was closed to business and production was moved to Poland.

 

[Fez909]

Ok, devil's advocate time, but it could be argued that a business is not viable if it is not covering the cost of all its inputs. Sure, if it's a hobby you might be happy to cover some of the costs yourself, but in the 'basic income' model you are expecting the *really* viable enterprises to cover the shortfall by guaranteeing basic income, and I'm not sure you get a viable economy composed of people who want society in general to cover the fiscal deficits inherent to their hobbies.

OK, a few points:

Not everyone is going to want to start their own business. It's just an option. If everyone who does want to start a business makes £1 in profit, then there's nothing wrong with that. Profit is profit. It means the owner has got more out than she put in.

Then there are the people who just don't want to work at all. They will be few, and perhaps it will be different people at different times. But it's OK, as there's not enough work for everyone as it is. And with increased mechanization and automation of previously manual and even skilled work, this trend will only increase. So there will have to be people unemployed or having 'hobby' businesses. Full employment isn't going to happen. Unless we change working practices to have more part-time workers? That'd be a good outcome, I suppose.

Then there will be people - the majority - who work for others. Just like now. They'll be at profitable businesses and they'll have more money than those who don't work and those who have new businesses. They'll pay taxes and contribute to society just like now. Only their taxes will be put to better use than ever before.

 

[8ball]

. If everyone who does want to start a business makes £1 in profit, then there's nothing wrong with that. Profit is profit. It means the owner has got more out than she put in.

More than SHE put in. It's not a generalised profit if others have been compelled to put in too.

Then there are the people who just don't want to work at all. They will be few, and perhaps it will be different people are different times. But it's OK, as there's not enough work for everyone as it is.

This is the 'lump of labour' fallacy. There is not a finite amount of 'work'.

And with increased mechanization and automation of previously manual and even skilled work, this trend will only increase..

Yeah, this was a big idea 50 years ago - what has actually happened is that the nature of economic resources has changed - 'process' (in terms of information) and 'energy' (for now) remain cheap ('process' more than ever), but human attention has come under massively increased demand, hence the profitability of call centres and other service industries.

As for more part-time workers - that's an interesting point. A few years ago I suggested that I could reduce my hours and job share with someone else - the company wasn't into the idea. Could probably make a whole new thread over the likely reasons behind that...

 

[Ultimate]

OK, a few points:

Not everyone is going to want to start their own business. It's just an option. If everyone who does want to start a business makes £1 in profit, then there's nothing wrong with that. Profit is profit. ...
Then there will be people - the majority - who work for others. Just like now. They'll be at profitable businesses and they'll have more money than those who don't work and those who have new businesses. They'll pay taxes and contribute to society just like now. Only their taxes will be put to better use than ever before.

I agree with all that, but I think we're back to the problem of how much should be paid out, and how it would be funded. I'm not saying it's not economically feasible - as I said, I support the idea - but I'm still undecided about the practicalities.

 

[Ultimate]

More than SHE put in. It's not a generalised profit if others have been compelled to put in too.



This is the 'lump of labour' fallacy. There is not a finite amount of 'work'.



Yeah, this was a big idea 50 years ago - what has actually happened is that the nature of economic resources has changed - 'process' (in terms of information) and 'energy' (for now) remain cheap ('process' more than ever), but human attention has come under massively increased demand, hence the profitability of call centres and other service industries.

As for more part-time workers - that's an interesting point. A few years ago I suggested that I could reduce my hours and job share with someone else - the company wasn't into the idea. Could probably make a whole new thread over the likely reasons behind that...

We also have to take into account, as Fez has been saying, what BI itself would do to the economy. Also, we have to look beyond the UK, because we're in a global economy and it's probably here to stay. If BI was introduced in the UK, it would probably spread across most of the rest of the developed world as well.Who knows what effect that would have on the economy? But hopefully it would help spread wealth more evenly around the world as well as around individual countries.

 

[8ball]

We also have to take into account, as Fez has been saying, what BI itself would do to the economy. Also, we have to look beyond the UK, because we're in a global economy and it's probably here to stay. If BI was introduced in the UK, it would probably spread across most of the rest of the developed world as well.

I think with predatory capitalism working the way it does, if it was adopted in just one country it would be exploited as a weakness.

 

[Fez909]

We also have to take into account, as Fez has been saying, what BI itself would do to the economy. Also, we have to look beyond the UK, because we're in a global economy and it's probably here to stay. If BI was introduced in the UK, it would probably spread across most of the rest of the developed world as well.Who knows what effect that would have on the economy? But hopefully it would help spread wealth more evenly around the world as well as around individual countries.

It's unlikely to begin here, but you're right that it would spread to other countries if it was a success. Switzerland is voting on it soon and it is set a fairly high rate. Alaska already runs a semi-related scheme: They share money from the oil revenues with every citizen, but it varies and isn't enough to live on. It has changed the state from one of the most unequal to one of the most equal, though, even though it's not a true BI.

I'd imagine a Scandinavian country would be first to introduce it. Although their flavour of capitalism seems to be doing OK at the minute, so I guess they have fewer reasons to change.

More than SHE put in. It's not a generalised profit if others have been compelled to put in too.

This is the 'lump of labour' fallacy. There is not a finite amount of 'work'.

Yeah, this was a big idea 50 years ago - what has actually happened is that the nature of economic resources has changed - 'process' (in terms of information) and 'energy' (for now) remain cheap ('process' more than ever), but human attention has come under massively increased demand, hence the profitability of call centres and other service industries.

As for more part-time workers - that's an interesting point. A few years ago I suggested that I could reduce my hours and job share with someone else - the company wasn't into the idea. Could probably make a whole new thread over the likely reasons behind that...

You saying a woman can't own a business?

I don't get what you mean by generalised profit and others being compelled to put in. Could you explain, please?

Finite work doesn't exist, sure. But there is only so much we are prepared to pay people to do to keep themselves busy. We wouldn't pay people to go around cleaning paving slabs, for instance, but it exists as one avenue of work. So we have a de facto limit, IMO.

I think part time work/sharing is one of the main benefits of a BI along with the eradication of poverty. I mentioned it in the first or second post on here.

 

[Fez909]

I agree with all that, but I think we're back to the problem of how much should be paid out, and how it would be funded. I'm not saying it's not economically feasible - as I said, I support the idea - but I'm still undecided about the practicalities.

kabbes said he knew the numbers stacked up. Perhaps he could help out here?

I don't mean calculate them btw! Just you mentioned it recently that you knew it could be done economically.