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Basic Income

Olin wright is a marxist who is after stakeholder as bridge to something else. But the main thing is, get the state to agree to and then enforce stake-holding. Us enforcing stake-holding - good, brilliant. Like communities insisting that if any new places open up there they meet community standards or they will have no workers, no access and not a fucking thing.
 
Olin wright is a marxist who is after stakeholder as bridge to something else. But the main thing is, get the state to agree to and then enforce stake-holding. Us enforcing stake-holding - good, brilliant. Like communities insisting that if any new places open up there they meet community standards or they will have no workers, no access and not a fucking thing.
this post sounds interesting but i dont understand it - could you explain?

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article in teh FT behind paywall so C&P
http://ftalphaville.ft.com/2013/11/21/1697992/guest-post-the-precariat-needs-a-basic-income/?

Guest post: The precariat needs a basic income
Guest writer | Nov 21 10:33 | 21 comments |

By Dr. Guy Standing, professor of development studies at the School of Oriental and African Studies and author of The Precariat: The New Dangerous Class, in which he argues that society must share the rental income gained by finance and capital investment in the global economy.
All over Europe, the precariat has grown sharply since 2008, although this emerging class, which has education but only intermittent, unstable labour, has been growing since the beginning of globalisation. The precariat faces chronic uncertainty, about what to do, about what incomes to expect, about state benefits that might be their due, about their relationships, their homes and about the occupations they can realistically expect.

Many are bewildered by lack of control over their time, suffering from what should be called a precariatised mind, not knowing what to do to give themselves a chance of a dignified life. Worst of all, they are learning that a large class of people habituated to a life of unstable labour is wanted by the globalised market system.

The precariat is not part of the squeezed middle, and accordingly has faced an increasingly hostile social protection system. Across Europe, not just in the UK, the old Beveridge and Bismarckian variants of the welfare state have been dismantled. In their place has been erected a mish-mash of means-tested, behaviour-tested social assistance, with a growing tendency to force young unemployed into workfare schemes, which are helping to depress real wages.

There is the rub. Globalisation began what should be called the Great Convergence, creating a globalising labour market in which wages in emerging market economies slowly converge with wages in rich economies, generating a steady drop in real wages across Europe.
Technological change has helped, by making production more scattered and mobile. But the drop in wages in the lower end of the labour markets of the UK and elsewhere, including Germany, reflects the cruel economic logic stemming from the trebling of global labour supply since the 1980s. Making it more painful is the fact that productivity is rising rapidly in those emerging market economies.

A feature of the globalising labour market is that the old link between productivity and wages stopped in the 1980s. Up to then, a graph of productivity growth and wages showed the two lines moving together. Since then the curves have diverged, leading to economists referring to the opening jaws of the snake – the wage curve has been flat or declining, the productivity growth curve has been accelerating northwards.

Wages-vs-productivity-590x506.png


(Chart courtesy of the Economic Policy Institute.)
Governments have acted like Canute, trying to hold back the waves of downward pressure on real wages, through cheap credit, labour subsidies and the scam of the era, tax credits. But, to mix metaphors, the Faustian bargain this represented, by allowing an orgy of consumption, ended with a bang in 2008.
 
Since then, poverty, inequality and economic uncertainty have all risen remorselessly. Even if economic growth picks up, that will continue until governments change their thinking quite dramatically. Regrettably, there is not much intellectual courage around in our political establishment.
The current great white hope is the living wage. It is a good idea being oversold. In the UK, Ed Miliband has promised to introduce fiscal subsidies for “employers” (probably not including small firms) if they pay new employees the hourly living wage, which is higher than the statutory minimum wage. It sounds attractive to non-economists and politicians. Let me be a spoil-sport and be one of the first to predict it will lumber in for the first round, connect with a few hits and then prove a costly way of generating little benefit to a tiny fraction of the precariat.

Why? First, there are always huge deadweight effects with such subsidies. In other words, many of the tax rebates will go to employers who would have paid that wage anyhow. So, for every job actually created the fiscal cost will rise.

Second, there will be huge substitution effects. Employers will displace some employees with new hires who will entitle them to the tax rebate. That will hardly be fair. But again it will raise the effective cost of each extra job funded by the scheme.
Third, a wage subsidy lowers the dynamic efficiency effects of a normal wage rise. If, for example, labour costs rise as a result of a wage rise induced by bargaining, an employer will be under pressure to raise productivity. If the wage rise is financed by a subsidy, there is no such pressure. It is called the soft budget constraint.

Fourth, increasingly labour is being externalised, so that more and more workers are labouring froma distance, making it harder to ascertain what hours are being worked and what are being remunerated. Already, many workers are paid part-time but expected to labour many more hours. So, if an employer wants to put someone on the living wage, he can simply shorten the contractual hours.

Being entrepreneurial, employers will always stretch the rules. It is possible that the living wage will prove regressive, expensively worsening inequality in the lower rungs of the labour market. One hopes not, but it will not strengthen the bargaining position of the precariat one iota.
Living wage advocates should not misread this. We should favour the campaign. But it should not be oversold or financed by subsidies to employers, to capital. This was the folly of New Labour and its tax credits. It is the inequality that should be the primary target for reforms.
This leads to an option that should tick the boxes of progressives, once they accept that labour subsidies, tax credits and workfare are an ugly concoction that worsens inequalities.

Progressives and disillusioned social democrats should reflect on the thought that each type of economy has a distinctive system of distribution. Twentieth-century welfare state capitalism was historically unique, in that national income was split between wages and profits, labour and capital.
With globalisation, the share going to labour has withered everywhere, in countries as diverse as China, India, the UK, USA and Norway. In the future, the only way those relying on labour could raise their living standards will be by sharing the rental income gained by finance and capital investment in the global economy. We must imagine a new system of distribution, in which the whole of society receives a share of the rental income currently being taken wholly by financial capital.

This could be done by establishing a universal floor of basic security, through provision of a basic income for all resident citizens, or all legalised residents. It could start at a modest level, as it was in Alaska when it set up its Permanent Fund in 1976. It could be built up as subsidies to the rich and to large corporations were phased out.

It could have a fixed component set to rise as national income per capita rose, set by an independent committee, analogous to the current monetary committee. And it could have a second component, perhaps 20 per cent of the total, which could be adjusted counter-cyclically so as to make it a macro-economic stabiliser. It could even be labelled an Economic Stabilisation Credit (ESC), to give it legitimation.

Moves in this direction could be made by phasing out the array of regressive subsidies that never reach the precariat. It could also be partially funded by a Sovereign Wealth Fund, as now exist in over 60 countries. The Norwegians set one up with their North Sea oil, whereas Britain’s oil has ended up largely owned by Chinese state capital. But however funded, nobody should be allowed to deceive us by saying it is unaffordable. Soon it may be essential. Remember the billions given out to the failed banks?

Among the many benefits of moving towards an individual, unconditional basic income, or an ESC, would be that it would provide the precariat with an increased incentive to labour, whereas today millions of people face the opposite, confronted by poverty traps and precarity traps, as discussed in my recent books.

In the UK, the main poverty trap facing the precariat is a marginal tax rate of over 80 per cent, according to the government’s own estimates. If we are to believe Ian Duncan Smith, it might fall to 65 per cent if the ill-fated universal credit is ever implemented successfully. Meanwhile, the government eagerly cuts the tax rate for the rich to below 40 per cent, claiming that anything higher would be a disincentive to work and invest. And they wish to cut corporation tax to 20 per cent.

With a basic income, there would be no poverty trap. All earned income could be taxed at the standard rate, after tax allowances are taken into account. Today, the precariat has no incentive to take low-paying jobs of the type that will proliferate. So Duncan Smith resorts to coercion instead, with heavy-handed sanctions against the precariat, denied any due process. It is a shoddy way to treat people, and all of our major political parties support it.

There are other reasons, ethical and instrumental, for supporting a move towards a basic income. Psychologists (e.g., Frohlich and Oppenheimer, 1992) have shown that people with basic security work harder, are more productive, and are more altruistic and tolerant. They also have more confidence, which means they will be more likely to bargain for decent wages and working conditions, and join organisations that wish to do so. And people with basic security do more work that is not labour, such as caring for relatives and their communities. In having more control over their time, they can be more rational and plan their lives better. Progressives should wake up.
Anybody who thinks this might be a valuable move should sign the European Citizens’ Initiative . With enough signatures, the EU Commission will be obliged to examine its feasibility. https://ec.europa.eu/citizens-initiative/REQ-ECI-2012-000028/public/index.do

 
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more than 1 person in the comments in that piece say that bringing in basic income would just mean rents/house prices go up to eat up the difference.

+ this response

Could someone explain to me why a UBI would directly lead to an increase in rents, while introducing a property tax wouldn't? My thinking is as follows, and I'd be happy to hear if I'm making a mistake somewhere.

I always thought people misunderstood UBI when assuming it increases everyone's income by a fixed amount (which would indeed cause rising prices and major inflation). Instead, total income for most people in the middle-class wouldn't change much, as the basic income they receive will be paid out of a decrease in the effective wages they receive (e.g. through higher income tax).

Sure, landlords could increase rents, but it would be punished by the market since there's no increased demand. UBI would simply give people the security of something to fall back on, stop the rise of a class of working poor by giving workers a stronger bargaining position, and reduce bureaucracy.

I'm definitely not opposed to property tax (tax on wealth seems better than tax on income), but what would it incentivize? The creation of cheaper housing, assuming it's a progressive tax? But wouldn't it also make it even more difficult for young people to get property?

Excuse all the C&P, but it was a paywall thing
 
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this post sounds interesting but i dont understand it - could you explain?

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me said:
I'll be totally honest. I've no interest at all in the idea - and that's not to disparage anyone else's interest.

Guy standing btw sees the 'precariat' as a threatening force - a lumpren mess open to right wing manipulation. Not as the highly skilled educated self-centered workforce that it is.
 
Guy standing btw sees the 'precariat' as a threatening force - a lumpren mess open to right wing manipulation. Not as the highly skilled educated self-centered workforce that it is.
the idea that basic income is attempted to being sold to FT readers here must also play on the fact that they too must feel some sense of threat from the precariat, and basic income might be seen as a sop to that threat whilst allowing capitalism to continue 'unthreatened'. I hope they buy into that and come onside to basic income (which would definitely help get it into law), as I think the mid-term transformative effect on society could be profoundly anti-capitalist.
ive no problem with the basic income bit, but i believe work of some kind should be mandatory
Why do you believe that?
 
Why do you believe that?

a variety of reasons . I suppose im looking at it more from the point of view of a socialist based society . Bottom line though there are numerous essential jobs that need doing and pretty much nobody will do them unless forced or co erced to work by some means .
 
BTW the rate of basic income in this set of figures from page 1 isnt anywhere near high enough to not have to work
http://citizensincome.org/filelibrary/Archived Publications/Student leaflet May 2008.pdf

which is one possible version. the proposed swiss rate is a lot healthier ;)

Someone costed a UK basic income here which gave surprising results. Their implementation is £25k and sees everyone earning up to about £31k better off. There's some seriously dodgy maths going on, though, IMO.

Also, this from the Independent was interesting.
Paying high levels of benefits to the unemployed does not lead to them becoming lazy, or lacking motivation to find a job according to a European-wide study charting the well-being of claimants.
 
The Adam Smith Institute calling for a Basic Income now. Not that they have a clue. They start off saying a basic income is needed, then describe a negative income tax system and derision for a true basic income, followed by an admission that perhaps a basic income is what is needed after all.

:facepalm::D
 
There's a campaign to get the EU to look into a basic income for all citizens. If 1m people sign the petititon then they have to investigate it. It's got nowhere near enough signatures (sign here) so won't make it in time, IMO. But today 26 MEPs have come out in support of it and are trying to drum up interest.

Martin EHRENHAUSER, independent (Austria)
Phillippe LAMBERTS, Greens (Belgium)
Nikola VULJANIĆ, Left (Croatian)
Olga SEHNALOVÁ, Social Democrats (Czech Republic)
Tarja CRONBERG, Greens (Finland)
Satu HASSI, Greens (Finland)
Catherine GREZE, Greens (France)
Eva JOLY, Greens (France)
José BOVÉ, Greens (France)
Karima DELLI, Greens (France)
Yves COCHET, Greens (France)
Malika BENARAB-ATTOU, Greens (France)
Michèle RIVASI, Greens (France)
Gerald HÄFNER, Greens (Germany)
Ska KELLER, Greens (Germany)
Nikos CHRISOGELOS, Greens (Greece)
Brian CROWLEY, ALDE (Ireland)
Emer COSTELLO, Social Democrats (Ireland)
Liam AYLWARD, ALDE (Ireland)
Nessa CHILDERS, independent (Ireland)
Sean KELLY, Christian Democrats (Ireland)
Pat the Cope Callagher, ALDE (Ireland)
Georges BACH, Christian Democrats (Luxembourg)
Claude TURMES, Greens (Luxembourg)
Carl SCHLYTER, Greens (Sweden)
Jean LAMBERT, Greens (UK)

source
 
a variety of reasons . I suppose im looking at it more from the point of view of a socialist based society . Bottom line though there are numerous essential jobs that need doing and pretty much nobody will do them unless forced or co erced to work by some means .

right, just saw your answer. I don't think the essential jobs thing necessarily matches up with everybody must work though, I reckon everybody having to work less would be great.

Reminds me of how Keynes thought we'd eventually have a four day week or something. ho-hum.:(
 
Personally I'd love to sail a canoe down the shit tunnels armed with the equipment to clear fatbergs and condom chandeliers. I like the spaces underground. Gotta be good pay though.
 
its an essential service and as its unpleasant it should be well paid, very .


You heard of Parecon? its not by any means a perfect idea but there are encouraging ideas within it.

http://www.abebooks.co.uk/servlet/BookDetailsPL?bi=5046313393&searchurl=an=albert+michael&sortby=3&tn=moving+forward+program+for+a+participatory+economy

Participatory economics. Someone here once fumed that it would mean being fined an egg cos you didn't flush the bog but thats reductionist...it could work applied properly
 
Yes. This is in line with the more equal 'valuing' of jobs/work I posted about earlier in the thread.


you know what happens when you posit these ideas though don't you? someone asks why a brain surgeon should have to empty a bin every now and then.

You are met with a total denial.
 
i dont believe i mentioned economic co ercion


given that we don't operate work camps that is implicit to your statement.

You know where this is going to end up. More and more people laid off then taken on via the work program to do their former job at dole rates and then fucking cthullu will rise and armed biker gangs will terrorise the few remaining waged people, brother will stab brother for an irradiated grain of rice while sea levels rise and the end of all things comes upon us. The skies will darken and the beasts of the field will roar for justice as they birth three-headed progeny. The fucking minnows will rise from their servitude and kill the stickle backs while we cry 'oh lord oh lord, deliver us from evil' but he won't. He'll just heap more evil, monsanto will copyright all grains and have us all slaving away in dim lit factories fed on a barley and algeal slop and we will fucking thank them for it.
 
i sort of admitted a few posts back i was looking at this issue from the point of view of a preference for a socialist society as opposed to an attempt to put another sticking plaster over capitalism . Ive probably jumped into the wrong debate .
 
given that we don't operate work camps that is implicit to your statement.

You know where this is going to end up. More and more people laid off then taken on via the work program to do their former job at dole rates and then fucking cthullu will rise and armed biker gangs will terrorise the few remaining waged people, brother will stab brother for an irradiated grain of rice while sea levels rise and the end of all things comes upon us. The skies will darken and the beasts of the field will roar for justice as they birth three-headed progeny. The fucking minnows will rise from their servitude and kill the stickle backs while we cry 'oh lord oh lord, deliver us from evil' but he won't. He'll just heap more evil, monsanto will copyright all grains and have us all slaving away in dim lit factories fed on a barley and algeal slop and we will fucking thank them for it.

Barley and algeal slop:D
 
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