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Mother Pelican
A Journal of Solidarity and Sustainability

Vol. 10, No. 4, April 2014
Luis T. Gutiérrez, Editor
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Do They Owe Us a Living? Seven Reasons
the Universal Basic Income is Worth Fighting For


Andrew Dolan


This article was originally published in Novara Media Wire, 17 February 2014
REPRINTED WITH PERMISSION


UBI7Reasons.png


The Universal Basic Income (UBI) – sometimes called the Unconditional Basic Income, Citizens’ Income or Social Wage – has in recent times become a focus of economic discussion across the political spectrum. While column inches in the Financial Times and The Economist have been racking up, academics such as Stuart White have been articulating how valid cases for the UBI can be made from communist, liberal and republican perspectives. The following are 7 reasons why the UBI should matter to people who want to move beyond capitalism:

1. Wages aren’t working.

Since the 2008 financial crisis it has become increasingly impossible to survive on wage labour. In real terms, wages in the UK have declined 9 percent in the last 5 years, whilst in the same period the cost of living has risen 25 percent. Combined with mass unemployment and the reduction of welfare the situation is worse than any in recent memory. Whether in or out of work, poverty is a reality for millions of people living in the UK, the world’s sixth largest economy.

2. Full employment is neither possible nor desirable.

From Conservative to Labour to the TUC, the solution offered to this problem is reducible to one dominant idea: economic growth. Grow the economy and jobs will follow, or so the logic goes. Yet as automation accelerates and human labour becomes ever more unnecessary for the production of goods a return to full employment is quite simply impossible, with or without growth. As for an expanding service sector, neither Costa nor Credit Suisse can employ everyone and nor is it desirable that they do. A new response is needed, one that recognises and seeks to overcome these contradictions. A universal basic income is one such response.

3. It’s unconditional.

A universal basic income would ensure that everyone, regardless of employment, earnings, age and gender, receives an income from the state: a single weekly or monthly monetary payment with no stipulations as to how it, or the time of its recipients, is spent. A universal basic income would guarantee a minimum standard of living and relief from poverty where work and current welfare cannot. In this sense, it is an extension of the social democratic promise; as a non-reformist reform, however, it sets the stage for the further transformation of society.

4. It undermines the necessity of work.

However it is funded, as a wage separate from production a universal basic income not only recognises the impossibility of full employment but also has the potential to undermine the mythical sanctity of work—a controlling ideology of capitalism—and accelerate the discussion and struggle over what work is necessary, how it will be done, and for whom. More immediately, a universal basic income could provide the money and time with which to collectively create spaces that embody alternative cultural and social values to those currently dominant.

5. UBI is going mainstream.

Admittedly, the introduction of a universal basic income swims against the seemingly unstoppable neoliberal current, which has accelerated the dismantling of the welfare state and elevated an ethic of entrepreneurial individualism. There are, however, a growing number of mainstream politicians and economists, most notably Paul Krugman, who have voiced support for a universal basic income as a possible solution to the impact of automation and a means through which to redistribute some of the gains of capital and stimulate market demand.

6. UBI represents an opportunity.

Although the vision of Krugman et al remains subservient to economic growth, it is the appeal of a universal basic income to those seeking the maintenance of capitalism that renders its implementation relatively feasible. In other words, the requirements of capitalism—in this instance the need for consumers—create opportunities that can be exploited by those looking to transcend it. If capitalism is to be stabilised once more then let it be on terms more favourable to society and with consequences that lay the foundations for a post-capitalist future.

7. We need to make the case for a UBI on our terms.

One cannot, of course, rely on the largesse of economic and political elites, nor mistake opportunity for inevitability. A universal basic income will not simply be given; it must be demanded, as it has been by growing numbers in Berlin, Rome and in particular Switzerland, amongst others. A universal basic income is not a panacea for the social and economic problems of capitalism and its transformative potential is dependent on greater democratic control of the state and a reduction of the working week. Nor should campaigning for it supersede workplace organising; it should, on the other hand, compliment it. Yet organising for a universal basic income presents the possibility of the employed and unemployed uniting around a shared demand that, whilst recognising the inadequacies of work, seeks not its improvement but the creation of a sphere independent from it.


ABOUT THE AUTHOR

Andrew Dolan is a tegestologist and independent researcher/writer on financial, socio-political, and ecological issues.



Bang On The Money: Four More Reasons
to Support the Universal Basic Income


Adam Ramsay


This article was originally published in
Novara Media Wire, 24 February 2014
REPRINTED WITH PERMISSION


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Andrew Dolan recently wrote a list of seven reasons to support a universal basic income. It has been well received and I agree with nearly all of it. Below are four more reasons to support the UBI.

1. We all have a right to the shared bounty of the land.

Wealth is made from a combination of three things: natural resources (known as ‘land’), machines for turning it into stuff (known as ‘capital’) and work done by people (‘labour’). Unless we’re slaves, we each own our own labour. Capitalists own the capital (for now, at least). Who owns the land?

Looking at the British economy in particular, who owns the rain that keeps crops alive? Or the wind that keeps turbines turning? Or the oil in the North Sea? Unless we still think that God gave it to the Queen, or some other archaic nonsense, then the answer, surely, is all of us.

And if that’s the case, then why aren’t we demanding our share of the earth’s bounty? This argument is why there is a basic income in Alaska – they all get a share of the value of their oil. But every country is rich in natural resources of different kinds. So why doesn’t everyone get a share of the wealth from selling them? That’s what a basic income would be.

2.Wealth is created by society – and that means all of us.

Our economy is built on the back of care work. Without people looking after children, there would be no future labour force. Without care work reproducing the labour power of, well, labour, the economy would collapse in a moment. Is this work easy? No. Is it fun? Not always. So our civilisation depends entirely on huge amounts of unpaid, difficult, sometimes miserable labour. And who gets the economic reward for this labour? Well, not the people doing it, that’s for sure.

In fact, if we think about it, it’s not just unpaid care work and cleaning work which the economy depends on. Without human culture, social norms, without co-operation, our economy would fall apart in a moment. We have a word for this vast collective collaboration: civilisation. And who is it who builds civilisation? All of us.

Of course, we do it in different ways. Some people look out for their siblings, or parents. Some make music, or are good at bringing together groups of friends. These things may seem basic, and to have nothing to do with the economy. But the fact that they are the absolute fundamentals of humanity tell us something important: we couldn’t have any kind of economy without them. Neoliberalism may seem to be designed to make us all lonely miserable selfish automatons. But if we were, then the whole system would fall apart. Capitalism as a system subordinates the naturalness of cooperation, which creates absolutely everything, to its own ends.

And so there is at least an extent to which the whole economy is built on the back of a civilisation which we all create and re-create every day. Is it possible to measure our different kinds of contributions to civilisation? Well, no. But I think this does tell us something important: the economy only rewards some kinds of work. But it depends on all kinds of work – and on thousands of things you wouldn’t even think of as work. And if someone else is profiting from your very existence as a social being – if someone else is cashing the cheque from the time you spend cleaning up after your kids or allowing your friend to cry on your shoulder or contributing to the ongoing artistic projects that are human languages, don’t you deserve a share of their profits? 

3. It closes the benefits trap.

Okay, so maybe those points are both kind of abstract. So here’s one from the opposite end of the spectrum. Politicians are very fond of saying that we should ‘make work pay‘. Usually, this is an excuse to cut social security. But the problem they are talking about is a real one. If your benefits are slashed when you start doing a little too much work, then often it isn’t really worth it. And this can be really depressing for people who would like to do some paid work, but can’t find or can’t do a full time job. 

Basic income is a really simple solution to this, which doesn’t require throwing people into destitution. Rather than cutting payment as soon as you start earning more than a certain small amount, pay the money to everyone, then collect it back off the rich through progressive taxation. 

 4. Means testing means divide and rule.

Try cutting social security and they will call you a hero. Try switching to fortnightly bin collections and they will drown you in vitriol.

There’s a simple reason for this. It’s the same reason why the NHS was made for everyone, not just the most vulnerable. Public services for the poor make for poor public services. In Alaska, even right-wingers like Sarah Palin defend their basic income, because everyone gets it. Attacking it would be political suicide. If you only give something to one group, then it’s easy for the powerful to divide some against others through a language of sectional interests. If you give the thing to everyone, it’s much harder.
Means testing has always been a tool to break social solidarity. It’s also, as it happens, always been pretty rubbish at accurately determining who really needs help and who doesn’t. Paying social security to everyone, rather than just those most in need is a great way to ensure that everyone will defend the system, and it’s a great way to make sure that everyone who needs it really gets it.

ABOUT THE AUTHOR

Adam Ramsay is co-editor of Bright Green and works for student campaigning network People & Planet.



The Untaxed Americans: The Speculators,
Hustlers, and Freeloaders of Wall Street


Paul Buchheit


This article was originally published in
Common Dreams, 17 March 2014
under a Creative Commons License


There are at least five good reasons why our country is ready for a financial transaction tax (FTT):

1. The Top Four "Freest Economies" All Have FTTs
2. The Top "Sin Tax" Candidate is Not Taxed At All
3. Quadrillion-Dollar Trader CME Has the Highest Profit Margin in the Corporate World
4. The Wall Street 'Liquidity' Argument is Bull Roar
5. Stocks Gained $4.7 Trillion in 2013 while Schools and Food and Libraries Were Cut

RobinHoodTaxApril2014.jpg
Image by Robin Hood Tax
Purchases of American products generally come with a sales tax, and often an excise tax, and possibly state and local add-on taxes. A consumer can avoid all this by limiting purchases to food and prescription drugs, or by shopping online. There's one more way—by visiting a nearby financial exchange and buying a million dollars worth of derivatives.

There is currently no U.S. tax on the purchase of stocks, derivatives, and other financial instruments. The rest of us pay up to a 10 percent sales tax on the necessities of daily life. A tiny financial transaction tax of perhaps a tenth of a percent on the trading of financial securities would begin to correct this inequity, while generating billions of dollars of revenue.

There are at least five good reasons why our country is ready for such a financial transaction tax (FTT).

1. The Top Four "Freest Economies" All Have FTTs

As of March 2014, Hong Kong and Singapore and Australia and Switzerland were the top four countries on the Heritage Foundation's Index of Economic Freedom, and they ALL have FTTs (Table 2-9). Critics might argue that other non-FTT taxes are lower in Singapore and Hong Kong. But the World Bank dataset shows the U.S. with lower tax revenues as a percentage of GDP, and the CIA World Factbook shows little difference in the same measure. Economic freedom is not restricted by reasonable taxes on financial transactions. Economies may, in fact, be made freer by encouraging small-business investment over high-frequency trading.

2. The Top "Sin Tax" Candidate is Not Taxed At All

Cigarettes and beer are understandably taxed a lot, and then taxed some more. But the most dangerous product out there -- derivatives -- has a ZERO sales tax on it. The trading of high-frequency securities and derivatives and commodities is a quadrillion dollar industry without a sales tax. A quadrillion dollars. That's a billion times a million. It represents the notional value of trading, which is like a trip to Strawberry Fields, where nothing is real. With regard to derivatives it's the sum total of the transitory high-frequency trading that gets so convoluted that no one knows who owns anything anymore. It's the high-risk type of financial chicanery that nearly brought down the entire economy. But purchases are not taxed.

While average Americans pay up to a 10% sales tax on necessities, millionaire investors pay just a .00002% SEC fee (2 cents for every thousand dollars) for a financial instrument. And some Wall Streeters claim, inexplicably after the disastrous trading frenzy in 2008, that an FTT would increase volatility.

3. Quadrillion-Dollar Trader CME Has the Highest Profit Margin in the Corporate World

The annual trading volume for the Chicago Mercantile Group (CME), made up of the Chicago Mercantile Exchange and the Chicago Board of Trade, is over $1 quadrillion. From 2008 to 2010 the company had a profit margin higher than any of the top 100 companies in the nation, and its profit margin has reached new heights since then. The most lucrative buyer-seller arrangement in the nation is not subject to a sales tax.

CME traders use publicly-funded infrastructure, technology, systems of law, and security to process the billions of financial transactions that generate their profits. Yet CME demanded and received an $85 million tax break from the State of Illinois.

4. The Wall Street 'Liquidity' Argument is Bull Roar

Investopedia defines 'liquidity' as "The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity." As the New York Times reports, "The 'liquidity' high-frequency trading provides is long past the point of being helpful. When high-speed trading was new, trading costs for all investors seemed to dip, but that trend has stopped, suggesting a point of diminished returns."

Furthermore, it was the "high level of trading activity" that contributed to the financial meltdown in 2008. With modern-day trades increasingly processed at nanosecond speed by computers, the threat grows larger. In May 2010, nearly $1 trillion was lost in a "flash crash" that resulted, according to the S.E.C., from the high-tech sale of tens of thousands of futures contracts. An FTT would help to restrict this type of irresponsible trading.

5. Stocks Gained $4.7 Trillion in 2013 while Schools and Food and Libraries Were Cut

The stock market grew by $4.7 trillion in 2013. Most of this wealth went to the richest 10%, who own almost 90 percent of stocks excluding pensions (Table 6). According to a Pew Research study, 93 percent of Americans LOST wealth, on average, in the post-recession "recovery."

Most of the $4.7 trillion was made through a non-productive buildup of capital value, by people who already had money well-positioned to make more money. An FTT would help ensure that some of the rewards of a productive society are returned to that society.

What is the Current Status of the FTT?

Senator Tom Harkin and Representative Peter DeFazio have proposed a 0.03 percent tax on stock, bond and derivative trades, with exemptions for retirement funds. Many traders are in favor of such a tax, for the purpose of stemming the "short-term trading mentality that has contributed to instability in our financial markets." In Europe, a coalition of eleven governments is finalizing a proposal for a coordinated FTT.

Any objections? The Wall Street Journal had this to say about an FTT: "The waning investors' wealth as a result of the decline in asset prices will reduce consumption and hinder economic recovery."

The writers at the Wall Street Journal need to get out in the real world once in a while.

ABOUT THE AUTHOR

Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.


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