Why a Universal Basic Income is a very bad idea
It is difficult to understand how an intelligent, highly trained man like Richard Di Natale could seriously suggest that Australia should introduce a Universal Basic Income.
It was even more surprising to hear channel 10 television host, Waleed Ali give some credence to the idea on The Project, last night, suggesting it was “no lefto pinky nonsense”.
Natale made his announcement at the National Press Club luncheon this week. For those unsure of it, a UBI is a basic, liveable payment to all citizens without any conditions attached.
Economists tell us it could replace all government spending on welfare, as well as housing, health and education. Even if that were true (it isn’t), it would still be a very bad idea.
According to Professor Bill Mitchell, a UBI is nothing more than, “a scam to absolve the government from its responsibility to create full employment.”
An article by Chris Hedges (April 1, 2018) – The Oligarchs’ ‘Guaranteed Basic Income’ Scam – published by Truthdig explains very succinctly, the purpose behind the recent push for a UBI.
He says:
“A number of the reigning oligarchs … are calling for a guaranteed basic income. It looks progressive. They couch their proposals in the moral language of caring for the destitute and the less fortunate. But behind this is the stark awareness, especially in Silicon Valley, that the world these oligarchs have helped create is so lopsided that future consumers, plagued by job insecurity, substandard wages, automation and crippling debt peonage, will be unable to pay for the products and services offered by the big corporations.”
We are being told that we are on the precipice of a technological revolution where robots are being assembled as we speak, to take over 40% of existing jobs. Never mind that those robots will still require human management.
Never mind also that the computer revolution that began 40 years ago was also going to put most of the workforce out of a job. It’s a familiar projection of future trends that keeps us both enthralled and intimidated at the same time.
A UBI would be another win for the top end of town. They are concerned that the downside of the technological revolution is that no one will be able to afford their products in the future. They are positioning themselves to put pressure on governments to spend money for no return, just to keep them in business.
The result is, the rich would continue to get richer as the poorer continued to be the victim. Paying people to do nothing, is as silly as it sounds. It is, as Bill Mitchell says, “a neo-liberal strategy for serfdom without the work.”
“Business leaders want to avoid attacks on their power as they kill off jobs in swathes. But they also will continue to work out ways to maintain control over workers and what better way than dishing out a little consumption bundle and keeping them out of the workplace,” he says.
A UBI would create a society where people become mere consumption units, where the demand for labour goes into decline, wages and conditions suffer and the inequality balance shifts even further in favour of capital.
National GDP levels would fall as people opting not to work, lowered their expectations and their living standards, forcing production rates to spiral downwards, prices to rise, inflation to run amuck and the only winners are guess who?
Little wonder business CEOs support the principle. It would mean more money for them, less overhead and bigger profits. This is not the society we want for the future, it’s the society from which we have been escaping these last 100 years.
If our business leaders were truly keen to care for the destitute and the less fortunate, they would support a job guarantee where the government provided a job for everyone who wanted work but were unable to find it.
A job guarantee would ensure a pool of workers ready to join the mainstream workforce when the economy was in recovery, help maintain production levels, increase taxation revenues and overall GDP.
Strangely sinister, is it not, that the wrong message, sugar-coated to appear electorally popular, is always the one that seems to get the most media attention, while the more beneficial option, the one that best serves the interests of the majority, languishes in the “it won’t work” basket.
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Jennifer Meyer-Smith
Return to home pageYes, it is true that the UBI was supported by the Neoliberal Friedman. Yes, it is also true that the Neoliberals love the UBI provided that it comes with a decrease in Government-provided services, so that the UBI recipients (especially those who don’t have any other source of income) will have to spend their meagre income in getting services from the private sector, rather than from Government…. and there it goes your UBI, into the pockets of the usual suspects.
But what about a Social Democratic UBI: You get a basic income guaranteed (means tested, hence it’s not really universal), but the top 1%, the Big companies and the Multinationals get a tax increase, nominally in order to pay for the UBI, in reality in order to pay for public services that will continue to be provided at low or no cost to the People.
So, let the machines and IT do whatever they like to jobs, the profit produced will be redistributed to everybody through taxes, and then UBI and public services.
…. Listen to the Neoliberals crying in protest!
While the risks described in this post could have some basis in reality, it ignores the fact that governments will have to fund a UBI mostly by taxing companies themselves since fewer people will be in work. Admittedly, this requires governments to become more independent of business but then again so does a job guarantee. I think this article tends towards the conspiracy theory side while pointing to some real problems to consider in the implementation of a UBI.
I was surprised to see you opposed it John, but I can see your point. Of course as Alpo has pointed out there are good versions and bad versions – so the complete opposition to it needs to be qualified by a description of how exactly it would work.
I agree with the earlier posters. We should have open minds to a working blend of both the UBI and Job Guarantee, and insist on strong government oversights of effective processes.
I think a UBI, set at the minimum wage, say, for all those who are on the aged pension or who are on disability support pension. There would have to be strong controls to ensure people do not “game” the system, as Jennifer has indicated.
For those who are capable of work but cannot get it a Job Guarantee is the best way to go.
My understanding is that Everyone gets the UBI, regardless of income. I can’t see the sense of it. It reminds me a bit of the first home owners schemes where money given by governments goes straight into the investor and realtor’s pockets. It hasn’t helped anybody who actually needs it.
The capitalist system is not working and has blown itself out. It relies upon those at the bottom with their meager incomes working for and beholden to, those at the top. The game is not going to be much fun if those at the top just have it all. How will their sense of superiority flourish under such conditions? They’ll be locking themselves away, afraid of the inevitable raid in the middle of the night when the slaves and the downtrodden turn on mass. Science fiction writers, particularly those of the post WW2 era, have written about it. Their imaginings have been used in turn by those in power and those who invent, to fashion the future.
I can’t agree that Di Natalie is an intelligent man. He seems pretty ordinary to me. He lacks vision and is a systems man and although that goes for intelligence in some quarters, it doesn’t cut it for me.
What a terrible headline. It is not a very bad idea. It’s just not quite the best idea. The Job Guarantee is obviously better, but only if it is logistically manageable. If it is not logistically implementable, then the UBI is the second best option. Let’s think in terms of steps towards a goal rather than black and white, all right, all wrong. The Greens have just made a very very brave move to break out of neo-liberalism, and for that they should be commended.
Hmmm. Since when have people been considered anything but units of consumption by the NL Economists? It’s THAT and their other VALUES which leads to serfdom….
I cannot believe people are actually in favour of this ridiculous idea.
It is socialism, plain and simple.
Do you really believe there would be a private sector in the long term?
My god! I cannot understand how educated people, who are supposed to learn from history, can possibly entertain this in the 21st century.
Surely we should learn from the 20th century?
” Finland’s universal basic income experiment launched January 1, 2017 and will run until the end of 2018. Official results from the trial won’t be released until it concludes. Experts said it’s not surprising the Nordic country known for its generous welfare benefits, like universal free education, is at the forefront …”
I’m proud of my old country, and will not pass judgement before finding out how this very progressive experiment goes….
What’s wrong with Socialism, Michael Carter? Please explain.
Saying ‘socialism’ and clearly implying that this is inherently bad is meaningless. 1. a UBI does NOT mean socialism and 2. Socialism has been at least a part of some successful nations in the Scandinavian regions. Also Capitalism which by inference you think is successful has it’s own problems, evident in wealth gaps and failing environment. What you probably mean is that a UBI will kill the desire to work for other people and that has not been shown to be true in general in the experiments done so far. PS the USA set up a UBI at one point but it got killed off by circumstances.
Helvityni, the Finn’s are doing something right. Happiest country 2018. Seems a bit premature but hay, who is gonna argue.
https://nordic.businessinsider.com/finland-tops-world-happiness-rankings-followed-by-nordics–/
UBI seems like a good idea to me.
Very true, mgoul13
johno, it’s good to know that it is safe to send your kids to any local school, they are all good and free, even at Uni level, teachers need to have a Master’s degree, and are well respected in society…
No one should use the label ‘Socialism’ unless they understand what it means. To do so without understanding is simply to reject it as distasteful, flawed, fraudulent, misrepresentative, or whatever.
Arrogant and unsubstantiated assertions that such and such is irrevocably unintelligent is both wrong and demeaning to those who see and can evidence benefits for it.
I reject assertions of that sort as, at the least indicative of laziness and opinionation, rather than an informed view. At worst, they are determined misrepresentation of concepts, ideas, decisions or actions with which someone disagrees and wants all others to feel the same way.
I am not surprised that this is so commonly a tactic used in discussion, both on and offline. After all, we have a political system that depends on polarisation rather consensus or compromise. However, that we live in a nation with a flawed political system and a culture replete with immoral, unethical and prejudiced ethos, is no reason for us to accept its deficiencies, even when they suit our argument. On the contrary, if we are to gain support for our views, which I make the assumption are to achieve a more equitable society, then it is valid and evidenced argument that we must use.
nonsibicunctis,
I agree that you agree…
Socialism is the optimum objective for the Common Good of our society
…in the interests of our Australian People’s socio-economic needs and wants
and for the protection of our Environment which includes Climate Controls.
Johno, As you would know, the Finns also have a universal State provided education system and yet are constantly either at the top of the list of the most effective national educational systems or very close to it.
Why is it, then, that not just the elites and wealthy, but many average Australian parents will put themselves out and even go into debt to put their children into private schools. Not even the results of their time in these schools supports any notion that they are better educationally. Their benefit [if such you can call it] is that they allow substantial indoctrination into two of the worst aspects of humanity: belief in mythical beings and the human dogma and hierarchies who perpetuate and benefit from it, and the concept that capitalism has improved the world and that privatisation is beneficial for all.
A brief view of the distribution of assets and wealth gained by the nation each year and who benefits form them, together with an investigation of the privileges afforded to ‘religious’ institutions, readily evidence the flaws in the beliefs I’ve outline above.
nonsibicunctis has encapsulated the dilemma of the public/private paradigm in the view of parents who seek the best for their kids.
Could, please, someone enlighten me about the differences of the view of the Theaimn (by John Kelly) and that of IPA (https://ipa.org.au/ipa-today/a-universal-basic-income-would-create-a-permanent-underclass) regarding UBI?
For once, I congratulate di Natale for the courage of bringing this issue up into the open. Although UBI has been one of the main policies of the Greens for at least 20 years, it has never been spread sufficiently.
A very coarsely researched and argued article. What about Tomlinson (Towards permanent unemployment) or McDonald 30 years ago, or Russell and Fuller even before? Current BIEN movement in Europe? Or the Finnish experience, still ongoing?
Even the reference to Truthdig’s Hedges is difficult to understand. Only a small part of that article refers to UBS. (“Increasing the minimum wage or creating a basic income will amount to naught if hedge funds buy up foreclosed houses and pharmaceutical patents and raise prices (in some cases astronomically) to line their own pockets out of the increased effective demand exercised by the population,”)
And even here (of David Harvey, a Marxist), the question is on “IF!”.
— Do we expect the transnational criminals (multinationals, banks, the auto lobby,hedge funds, etc) to act any different, UBI or no UBI?
—“a scam to absolve the government from its responsibility to create full employment.”
Since when does the current Transnational Monopolfascist world order cares about full employment, or even classical capitalism, ever?
— “A number of the reigning oligarchs … are calling for a guaranteed basic income.”
So what? In any case, not in Australia, and even in the USA this might just be a smokescreen. Exactly the reigning oligarchs would be the last ones to agree to UBI and will do everything in their power to forestall it (as they have been). With UBI slavery would loose its universal appeal, and wageslaves would have to be paid proper remuneration for services rendered. Exploitation would be reduced so would inequality. In stead of a forced work ethic that nobody believes in (which is a ridiculous concept in the age of total alienation) self actualisation would be a reality for everyone. And, as an added bonus, people wouldn’t be freezing – starving on the streets while lining the meaningful and elevating dole queue.
–“Never mind that those robots will still require human management.”
Just how many manager would control how many robots? 1:100000? How significant a workforce would this be?
–“A UBI would be another win for the top end of town.” Unsubstantiated and not at all likely, but even if true: what would be the difference to today’s system?
–“They are positioning themselves to put pressure on governments to spend money for no return, just to keep them in business.” This is the description of the corporate nanny state’s current practice. The government is in the pockets of the industrialists and they are the industrialists. They serve their own interests and only their own interests. A prominent patriotic figure with a load of Australian values in his hind pocket keeps his wealth offshore (obviously to show a good model for prospective investors) than buys his own election.
–“a neo-liberal strategy for serfdom without the work.” May be. But this solution is far more superior to the neo-liberal strategy for serfdom based on forced labor (job, work, mutual bullshit obligation, whatever you want to call it) and corresponding brain washing. Besides, I’m convinced that this never will be a neo-liberal strategy. With UBI people would have options, they would even start to think and question the merit of representative “democracy” –the best democracy money can buy (Palast).
–“A UBI would create a society where people become mere consumption units, where the demand for labour goes into decline, wages and conditions suffer and the inequality balance shifts even further in favour of capital.”
Perfect description of the current situation started 30 years ago that will deteriorate further if things would continue the same way, would’n you say? The introduction of the UBI would have the power to change all this.
–“National GDP levels would fall as people opting not to work” Again, how can this statement substantiated without details and experimentation? A bit of New Monetary Theory here?
Automation or no automation? On the other hand, national GDP levels seem to be more dependent on world prices or raw materials generally. Besides: a UBI is just basic as its name implies. Some people with more aspiration will have to generate more income for themselves and get (maybe meaningful) employment with less exploitation and alienation, more choices and more work related satisfaction.
–“Little wonder business CEOs support the principle. It would mean more money for them, less overhead and bigger profits.”
Again, how can this be proved? Which CEOs exactly and on what grounds? I see they blocking UBI.
–“If our business leaders were truly keen to care for the destitute and the less fortunate”
Here I tend to agree with you: “IF”. Have you seen this happening in 400 years of capitalism? Whatever benefits the poor-lower-worker classes gained ever was the result of fight and lots of blood lost. It will be so with UBI, too.
–“A job guarantee would ensure a pool of workers ready to join the mainstream workforce when the economy was in recovery, help maintain production levels, increase taxation revenues and overall GDP.”
Again, have you seen this implemented, ever? I (sort of) have. In case of the ex (actually existed) socialist states. Where job was associated with high morals and in any case was compulsory. Where are those states now?
Not to mention the “pool of workers” that will be fighting over each other for the meaningless crumbs. Ideal situation: like now, why change it? 1:17 if statistics are not cheating. They always do. Its more like 1:30, if not more.
__”So, let the machines and IT do whatever they like to jobs, the profit produced will be redistributed to everybody through taxes, and then UBI and public services.…. Listen to the Neoliberals crying in protest!”
Perhaps we think it is only a question of voting. Than the military would move in to curtail excessive democracy…
A bright solution if not the only one: USI, lets work the details out!
Argument: ubi bad because it will come at the expense of public insitutions like health. It will also cause inflation due to productivity decline.
Counter: it can come at the expense of corporate profits via tax if govt has balls/people vote that way. Inflation will cause the value of the ubi to drop, and push people to work more. Also, there will be alot of people (most) who want more than ubi, and will work anyway – keeping productivity up.
2 ways of seeing benefits of UBI/JG divide
UBI assures us of a dignified, livable income
JG assures us of different lines of attaining that income but does NOT guarantee recognition of one’s qualifications and earlier credentials.
That’s why I want a blend of the two coz I won’t clean toilets just cause that’s what’s available
I will however, work hard to bring social justice and socio-economic justice to everyday Aussies who are denied their equitable rights.
I have a high law degree and an education background so I figure I can fight the Good Fight.
It seems to me that the aim of the UBI was to do away with a whole raft of social welfare benefits which are much more complex to manage, and to ensure that everyone had the capacity to afford to LIVE. Currently we have far too many people way below the poverty line – this isn’t good but neither is it good for the economy. Everyone needs to be able to buy food, housing, utilities, and those things keep others in jobs. With casual employment the fastest growing area and the current levels of homelessness, the only people who are still winning are those at the top.
Is this the aim ? Wait till all those at the bottom die off ? Who will be the housekeepers, gardeners, chauffeurs, shop assistants, cleaners and nannies for the wealthy ? Perhaps they haven’t thought of that.
Something has to be done, at least talking about the UBI is a start.
John Kelly, you seem to have become infected with this conspiracy theory being propagated by Bill Mitchell. It’s wrong.
A Universal Basic Income (UBI) is welcomed by many from the Right because they see it as reducing the complexity of social security while solving a lot of the problems caused by means-testing social security payments. (Means-testing payments causes disincentives at each threshold.) Believe it or not, all Conservative people are not automatically evil.
Many from the Left see exactly the same problems and feel the UBI is a more fair way to solve them.
Both groups also see the benefits and problems of a new age of intelligent machines, and how this period of radical change will be completely different to previous industrial revolutions.
Slavery was the ultimate in full employment, but it wasn’t good for the vast bulk of people.
Steam power brought us the first industrial revolution. It destroyed a lot of paid employment and allowed people to grow a conscience about slavery because now much of what was previously done by slaves could be done by machines. We developed new classes of work with engineers and other higher-level jobs because people started to move off farms and into the cities and gain education. Petroleum-based internal combustion engines sped up that change, with more people being employed in retail and service industries as farms were now operated by a mere couple of percent instead of the majority of society.
The next big change was with computers and robots. This caused some dislocation in jobs like factories, printers, secretarial and accounting work, counter staff, and so on, but computers mostly helped people do many things better so the improvements to society greatly outweighed the job losses.
Now we have Artificial Intelligence (AI) about to alter the entire face of work forever. The first casualty is transport. Self-driving cars are already cheaper, safer and more effective than human drivers. They are already here and invading the field at a surprising speed. That will push something like a quarter of the workforce into unemployment. There are many other fields where AIs can work better and cheaper than humans — medicine, help-line, restocking, legal research, computer programming, accounting, for starters. When CEOs and managerial positions are replaced by AIs we will see a big change in the way corporations work. Up til now managers can get away with focussing on the short-term, but AIs will force corporations to look to the long term. It will no longer appear prudent to destroy the planet for short-term profits.
The AI revolution will bring about massive unemployment (in the normal sense of the word). There is no way it can’t. It simply won’t be feasible to hire people to do things that AIs can do better. If most people can no longer get paid employment then how are they to survive in the modern world? A job guarantee will be very important and can help somewhat, but there will be many cases where hiring a human will make as much sense as using horse-drawn buggies. This is why the UBI is so important. It gives us a chance to make a bridge between the present to an age where money is no longer important.
For as long as people have existed they’ve wanted a utopia in which they could do as they wanted, unimpeded by the need to work for someone else. Now we are close to embracing that ideal. AI can deliver it to us if we choose a combination of job guarantee and UBI to make it possible. We can finally begin to define ourselves as human beings rather than slaves to work. We will be able to achieve our own goals instead of repressing our desires to be used by others to reach their ambitions.
AI will lift productivity, letting the government spend larger amounts of money on a job guarantee and a UBI without causing inflation. AI will cause unemployment in the conventional sense, but when combined with job guarantee and UBI will also cause an explosion in creativity and higher-level production.
Bill Mitchell has a very elitist and pessimistic view of humanity. He thinks that while he can order his life properly when major constraints are removed, other people are inferior and must be slaves to a system in order to give them purpose. He thinks that given a UBI most people would become mere time-wasting couch potatoes — passive consumers. He’s wrong. I know countless people whose lives have gone into overdrive when they retired. One such person said to me, “I never knew what ‘busy’ was until I retired.”
The fact is, while traditional paid employment would crash, very few people would be idle. They would start up new businesses, stay at home to look after their kids/parents/grandparents, build a new room on the house, go on their dream tour, write that book they always wanted to, learn a new skill, design new kinds of robots, make new friends, get involved in their community…
If we try to weather the AI revolution without doing anything we will have a new kind of feudal system, with the ultra wealthy and the utterly impoverished, leading to catastrophic social collapse.
If we try to rely only on a job guarantee to see us through, we will be trying to extend the broken system of employment with work that nobody really wants. It will lead to “Work for the Dole” on steroids, open to corruption and misuse, often administered by petty tyrants who will force people to work for peanuts on projects for their pals, like all the worst aspects of capitalism and communism magnified.
Adding a UBI doesn’t guarantee things work out well, but I think it is the only way I can see a good future happening. All other roads lead to disaster.
Seems to me that the worship of Bill Mitchell, or indeed any other economic theorist – Friedman for example, – is simply pathetic. While each theorist contributes (in their own way) with good intent (presumably), the resulting acceptance or not of the theorised outcomes – (the imaginedreality of such recommendations) – remains in the realm of conjecture.
Full employment can be easily achieved. Just ban labour saving devices. Examples include bulldozers, buckets, spades, cars, cranes, vacuum cleaners, computers, cash registers, trains and the like. Get real – it isn’t going to happen.
The fundamental problem is not the elimination of labour saving devices (which should be applauded) but who should be the beneficiaries of same. Currently, it’s the owners of capital that are the beneficiaries. (Hello – we do live in a capitalist society if you haven’t noticed).
At least that’s my (current) construction of reality. No doubt there will be those who respond and tell me that there’s an objective reality free from any construct. As always, I am open to considering their construction free reality.
If we want greater equality then it must come in the form of a more equitable distribution of national income. But if that national income is comprised of fewer people working, then the whole process is counter productive. The only way to ensure a more equitable distribution of the national income is to 1) provide full employment. 2) ensure levels of production meet demand, and 3) contain inflation. A UBI will not provide full employment, or ensure levels of production meet demand. A job guarantee will achieve both 1 and 2, thus containing 3.
Any mamby-pamby ideas about people being set free from the humdrum of work to express their creativity is pure fantasyland stuff.
The population of Finland is 5.5 million, has a GDP of $250 billion with Nokia representing 80% of the value of its stock exchange. It punches above its weight in exports to its Eurozone and EU member countries mostly in technology, but also in mineral wealth disproportionate to its population. It’s welfare system has a long cultural history. The UBI experiment is yet to play out, so citing it as a good example is premature, although because of its comparatively small population, it probably won’t do much harm. Comparing Finland to Australia is not a good argument. Even so, the benefits to the country of a job guarantee would be superior to a UBI.
Matters Not, apart from your jibe about reality, you are spot-on.
As you correctly note, it’s really all about the labor-saving devices. Getting rid of them is counterproductive and silly. The whole point is to make life easier while freeing us to achieve more.
There are a range of versions of basic income. The version that John has described above (what he calls UBI) is presented as an alternative to a job guarantee scheme. However such schemes are not generally mutually exclusive. It is possible to be a supporter of some form of universal job guarantee as well as a supporter of some form of UBI. Incidentally there are also many different job guarantee schemes. John should take the trouble to nail down precisely what he means by both a UBI scheme and a job guarantee scheme, and how they might relate to each other and to the wider economy. For example, how each of them could (should) be handled in relation to the taxation system. Should UBI payments nominally received by the very wealthy be taxed away?
John Kelly, you’re basing your conclusions on false assumptions.
You begin with the idea that access to paid work is the is the only way to ensure a better outcome.
Wrong.
▪ Access to paid work is not the only way forward — we already have the open-source movement where people create things simply because they want to, the gift economy where people donate to those who give away their wares, and crowd-sourcing, where people contribute money for someone to create something. Doubtless more ways to foster creativity will be found in the future.
▪ It’s a mistake to believe that a job guarantee can give everybody meaningful paid work during a new industrial revolution when AIs make most paying work irrelevant. Full employment is not likely, unless you’re paying people to dig holes, then to fill them up again. This could easily become truly soul-destroying, and still might never deliver full employment, especially if a pool of unemployed is kept to ensure wages remain low.
▪ Those unable to work under a job guarantee risk becoming total social pariahs, far worse than unemployed people today.
When you simplistically equate full employment with productivity, you ignore what has been happening ever since the first industrial revolution. Machines increase productivity. A man with a shovel accomplishes more than a man digging with his bare hands. A man with a bulldozer accomplishes even more. AIs are already massively increasing productivity. When they gain full reach, our society will be far more productive than it currently is, even if we have massive unemployment and fall back to a horrifying feudal society.
Containing inflation is not a problem if automated production increases beyond demand.
A job guarantee will have negligible effect upon levels of production because automation will be the major determining factor. (The job guarantee will mostly be needed for those losing their jobs to machines, and those machines will be much more productive than humans.)
Two hundred years ago farmers would have rejecyed the idea of people wanting to go live in cities to become well-educated, emancipated citizens, freed from back-breaking farm-work, and might have described it as namby-pamby fantasyland stuff. The fact is, people have been working toward gaining lives of leisure since leaving the caves, whether you sneer at it or not.
A job guarantee is a good partial solution, but can never take us all the way because it is a centralised way of doing things. It prevents people self-actualising. It forces them to fit in with their “superior’s” idea of what they should be doing. We’ve seen this with “Work for the Dole” and the employment services — often becoming coercive, forcing people to do useless, dead-end work.
As far as I can see, the only safe way forward is to welcome the AI revolution, while softening the impact with a job guarantee and a UBI.
I am surprised you oppose this John. Aren’t you an MMT advocate?
I have a range of concerns. The UBI advocates (ones who promote themselves as experts, not regular punters) I have spoken to online make a range of claims which alarm me as they sound right wing to me.
1. We won’t need unions anymore because people will have more bargaining power. This means individual agreements. Hello John Howard! They can’t explain how this will work in a tight vs over supply of labour. They are assuming bodies not skills matter.
2. Money as the simple solution in a non targeted environment, means that support structures aimed to assist people overcome barriers to employment are ignored and not required. Because any job will do if not you don’t have to work, you can do art, music etc and get paid for it.
3. The reduction in hours to 25 hours per week each, which will affect the lower and middle class the most, creating a larger pool of low income people. The wealthy highly skilled who have the self efficacy to negotiate individual agreements will not be affected.
4. The support of the Gig economy (which apparently cuts out the capitalists, 🙄) they claim offers more of the above type of employment, which we see now is bringing slave or negative wages and very poor conditions.
That is just a few concerns.
Also here is a good article by Andrew Leigh worth reading. It addresses a lot of the above comments. Just getting in first. Don’t attack me over the content, because I am not a Professor of Economics- he is. This is an issue sharing anything against UBI online. In fact, this is one of the tamest threads I’ve come across.
http://www.andrewleigh.com/speech_how_can_we_reduce_inequality_anu_crawford_school_of_public_policy
Leigh makes some good points. Thanks for the link Trish.
As he discusses, a UBI does nothing to address inequality and he gives many ideas which he thinks would be more helpful in doing that.
This thread is an interesting discussion with lots of valid points made from different directions. Great food for thought.
Trish, yes, it alarms me that some people think a job guarantee will end the need for unions — a Universal Basic Income (UBI) shouldn’t affect unionism. The UBI will replace most of the existing social security payments system, so that someone not employed (so not in a union) will still be unemployed, but receiving a reasonable income. People who are in a union will be in a slightly better position, as far as I can see; threatening them with the sack won’t have as much teeth as currently (the dole is seen as largely punitive today). A lower-paid worker will still receive a UBI, as will a higher-paid worker, but the UBI will mean less, the more work-income they receive.
On the other hand the job guarantee might be used to destroy unionism because if used without a UBI it would become a dead-end — a last chance at working. Organising for better wages or better conditions could be more difficult without a UBI because the threat of unemployment in a society in which everybody theoretically has some kind of work becomes a very scary threat. The scorn that could be heaped on such “unemployables” might make “dole bludger” look like a compliment in comparison.
Your point about possible loss of support systems is a good one. We would have to ensure it didn’t happen. I think it’s less likely in a UBI environment because people tend to be more helpful to each other once work, time, and money constraints are lifted. I know a lot of pensioners who volunteer to help others.
The fear of a large pool of low-income people developing is a great danger no matter what path we choose for the future. The UBI doesn’t create that group of people, it would merely ensure they can get by without being thrown on the scrap-heap. We would have to set the UBI at a sensible level, and not be tempted to make it so low it causes hardship. A similar danger is inherent in a job guarantee, with made-up work so undervalued that people get paid slave wages (like “Work for the Dole”). The risk is greater for the job guarantee if it isn’t balanced by a UBI, because there will be a great temptation to cut back on social security — with theoretical full employment the dole would be scrapped, and pensions might become restricted to those who are physically unable to do any kind of work — very dangerous, but easy to rationalise.
I don’t see how the Gig economy is affected by UBI. It is present with or without it, but I can see how a job guarantee could dovetail with it if we were not careful.
No matter what we do, wealthy capitalists will continue to hold most of the cards, however I see the UBI as the beginning of a future in which money gradually loses its importance — a future in which everybody can realise their full potential, regardless of whether they have money or not. After more than a hundred thousand years, we finally have the opportunity to usher in this future.
I did my thesis on the negative income tax, back in the 70s. That was what the UBI was called then. The principle was simple: everybody would get a monthly or fortnightly income, which would be “clawed back” as the recipient earned other income. The “claw-back” rate would be somewhere between 25 and 33.3%. It would replace unemployment benefit, the old age pension. family income supplements etc. Best of all, it would stop bureaucrats having to assess each application for unemployment benefit, the old age pension etc, because everybody would be entitled to it.
In effect, in Oz, we already have a UBI for old people. It’s called the age pension. Everybody is entitled to apply, but actually getting the old age pension is means tested, The claw-back rate is (mostly) 50% after about $8000 a year which is excluded from the claw-back calculation. The age pension was introduced precisely because it is such a powerful tool against poverty.
There is also a similar concept with the dole. Again, some (small) amount can be earned before the dole is withdrawn. However, in keeping with our society’s disdain for the poor, the conditions are much stricter, and as we have seen with the robo-debt debacle, the clear aim is to humiliate and to make the process of claiming so difficult people just give up. My son was so long on the phone to Centrelink that he ran out of battery. The whole bureaucracy around measuring and reducing the age pension and unemployment benefit is expensive and, worse, arbitrary and humiliating. That’s the point, of course.
Wealthy ppl have the wherewithal and therefore the confidence to allow them to stand up to their employers, to look for new jobs, to start new businesses. The poor do not. We are at the mercy of the companies we work for. Saying “I’ve had enough, I’m off” is a very scary and very brave thing to do, unless you have resources. I know this from personal experience. I didn’t receive a pay increase for 7 years, and I had no choice but to accept that.
A UBI would be a very powerful tool to redistribute income to the poor. It wouldn’t be the only tool: minimum wages increases would be part, more money for government schools, good public health–all these would play a role too . And it would be funded by a rise in tax on the rich. I’ve written frequently about it on my blog:
http://volewica.blogspot.com.au/search?q=UBI
I find your arguments against it bizarre.
Nicely said.
I had an open mind on UBI, but then I read an article by an IPA researcher who suggested that it was a bad idea because it would create a permanent underclass. As a general rule, I find that anything that the IPA argue is usually incorrect, so on that basis, I have to conclude that it must be a good idea…
Also, this seems to be the first time that the IPA has ever cared about the “underclasses”!
To everyone who has commented, thank you. Yes, I am a committed advocate for MMT and that is precisely why I support a job guarantee over a UBI. The co-founder of MMT, Bill Mitchell has written several blogs on how a job guarantee would work. It is extensive, but you will find all of them here: http://bilbo.economicoutlook.net/blog/?s=Job+guarantee
Bill has also written extensively on why a UBI would NOT favour a western economy. Bill uses the phrase, Basic Income Guarantee (BIG). Some of those blogs are here: http://bilbo.economicoutlook.net/blog/?s=Basic+income+guarantee+
It’s a lot of reading, but if you take the time to study both sides of the argument, the job guarantee comes up in front.
I realise that people have dreams about their worth, their value and what they would prefer to do in life, but the reality is that in most cases, those dreams are never realised, not because they had to work, but because the dream was just that…a dream.
The aim of MMT which includes a job guarantee, is to reduce inequality, not give people more dream time.
nickthiwerspoon, great comment!
Trish, thanks for the link. I’m still reading the talk, but so far it is one of the best argued cases against Universal Basic Income (UBI) that I’ve read. I suspect his figures for taxation though. If corporations and the most wealthy individuals actually paid the tax they are supposed to, then I think we could easily afford UBI. Also, I don’t see why we need the UBI to be an all-or-none system. I imagine we could introduce it gradually, with the AI revolution ramping up production to pay for it. It would allow us to welcome the advantages of AI instead of dreading the loss of employment that it will bring.
John Kelly, I too am a proponent of Modern Monetary Theory (MMT). It is difficult to see how the job guarantee would reduce inequality, when it would almost certainly amount to putting all unemployed people on “Work for the Dole”. You assume that giving people “more dream time” is actually a bad thing. I think a system that could convince people to use less resources, yet live more happily and in greater luxury is something worth aiming for. A future that requires everybody to work until they drop dead because the economy is the most important thing (instead of people) has kinda lost its point. A work-until-you-drop future is a Puritan’s dream, but a nightmare for most people. The worst part is that focussing on a such a puritanical ideal could actually deliver the most inequitable economy, with a new class of indentured serfs.
I believe in Govt interference in the market to create meaningful work, in conjunction with a commitment to Government supported education and skilling of jobseekers. I don’t believe in a work for the dole type scheme where any job will do. I also reject the concept that we can print money endlessly to support it.
I see the Greens proposal for a UBI, as discussed at the NPC, a lazy fix all to a complex set of problems.
I think the following need responding to individually with measures to counter each one.
1. Retain a targeted system of social security.
2. Entry to this system is far too restrictive and needs an overhaul. If you are out of work you get it. If a doctor says you can’t work, not a bureaucrat, you get disability pension.
3. The JobSearch framework should be voluntary, supportive and not punitive.
4. Vocal leadership to remove stigma from the jobless.
5. Intervention in the market to create jobs. If that means nationalising the railway, or nationalising renewable energy infrastructure etc, well so be it. The people who complain about public sector workers being a hand out, can sod off.
6. National re-skilling program with a strong investment in higher education, research and development.
7. Increase pensions equivalent to minimum wage. Guaranteed to move up with inflation.
8. Increase JobSearch participants payments to above the poverty line.
9. Provide adequate payments for all post secondary students, as coursework learning will be intertwined more and more with practical learning in the future.
10. Introduce quotas for apprenticeships in all Govt contracted work.
11. Change the JobSearch framework to block funding rather than outcome based funding, with quality measures, rather than poor job matching and quick throughput.
12. Unlink JobSearch framework from social security and eradicate all forms of financial breaching.
13. Fund and train specialists in counseling, psychology, career development and organisational behaviour to support jobseekers and move away from the sales focus, which has no desire to understand an individual’s barriers to employment so they can overcome them.
It depends on how one measures inequality. Effort to achieve qualifications is entitled to be valued and to achieve the reward of suitable, meaningful employment not just any old job. That is not a waffly dream; it is a basic right.
Well said Trish: an excellent to-do list.
Trish, I emphatically agree with your 13 points. (I think you’ll probably find the Greens promote them all too.) I see the Universal Basic Income (UBI) as a way to assist in the move to an economy where we can deal with large-scale automation, especially artificial intelligence (AI), without it threatening the fabric of society, but instead benefitting all of us, rather than mainly the wealthiest. It isn’t a lazy fix (I suspect you’re letting your hatred of the Greens distort your view). It is another, important tool we can use to move the future in the direction we want it to go.
Go The Greens/LeftLabor/Progressives ALLiance!
Socialist, leftist, communist, capitalist … every time I hear these words I know I Am hearing a gullible person of a certain vintage that does not have an original thought and does not have the intellect to form one idea for themself – they are destined to repeat what they have been told. The true robots. At least with the young you can see their eyes glaze over when they do not know what they are talking about and are searching their brain for some logic.
Trish, I should mention that Modern Monetary Theory (MMT) doesn’t give government the ability to print money without constraint. It simply shows that the constraint upon spending should be the productivity (or potential productivity) of the economy, not the simplistic ledger book conservative economists use.
If productivity is high then the government should spend big, but spending beyond the nation’s ability to produce goods and services leads to inflation as demand rises beyond availability, causing people to naturally raise prices. But the government can carefully target spending on projects that increase productivity, thus spending big without worry of impacting inflation. It can also spend on things that will significantly increase productivity in the future, such as investing in education, doctors and hospitals, renewable energy (including nationalising most big energy), communications (the internet), public transport, and automation.
It’s funny how discussion is had of one idea as if it were ‘stand alone’. It’s like the current governments attempts to discuss tax policy in ‘silo’s’, rather than look holistically at the problem. We will discuss tax cuts for corporations today, GST levels tomorrow and inequities of tax concessions the day after. As if they were separate or mutually exclusive.
The question that always arises in what’s left of my mind when this conversation comes up is ‘what are you trying to address?’
The imbalance between labour and capital has been around for millennia. The gap between them has been widening since the ‘industrial revolution’ allowed increasing automation on ‘assembly line’ production. In the 70’s we had the introduction of computers, which were going to reduce our work time, in the 90’s we had the introduction of the internet, which would radicalize work in letting us work from remote locations. The current disruption de jour is robotic automation and increasing use of AI.
As but one example, 3D printing was going to change forever the issues of logistics and warehousing, as well as unit costs of production. We are still trying to address that, while our scientists produce a further revolution in terms of 4D printing, which is mind blowing.
https://www.sciencedaily.com/releases/2018/03/180321090938.htm
We continue to address these ‘disruptors’ without ever challenging how to make it work for us, or adjust the way we view ‘work’ and payment for work.
Australians have proven themselves adaptive in their early adoption of technological challenges but repeatedly demonstrate we are really slow in making the technology work for us.
We now refer to a ‘gig economy’, where traditional or conventional ideas of employment are thrown out the window in regard to security of tenure, and legal requirements such as taxation, sick and annual leave, superannuation are left to the individual. All of these things have regressed under the gig economy and the issue of buying a home (let alone funding your retirement) are simply not available to our young, in general, and women in particular.
We are in the process of institutionalizing the ‘gig economy’ and ignoring the massive cost we have just kicked down the road.
That’s before we even start on the ‘volunteeringisation’ (sorry, I made that word up and can only hope you know what I mean) of so many factors that are vital to our social health. Child care becomes prohibitively expensive and grandparents around the country become surrogate child carers. Health care and an inadequate private health insurance scheme become expensive and we make it incumbent on friends and relatives to look after those effected rather than require our government put a value on the free labour. That’s before we even start on unemployment, underemployment and the rampant unpaid overtime our corporations enjoy, which deprive workers of their time off and the tax office the income from pay which is not paid.
It seems to me that all these issues become conflated. We keep giving preeminence to the government and corporate interests without ever establishing how we, as a society, can use all of these factors for our benefit.
Everything is viewed through the sanctity of the market rather than the needs of the people.
If ever you get a chance, Edward De Bono’s book, ‘Future Positive’, is a wonderful explainer of how things that are argued as economic or financial requirements should first be filtered through the social needs of us.
Funnily enough, your comment:
“But if that national income is comprised of fewer people working, then the whole process is counter productive. The only way to ensure a more equitable distribution of the national income is to 1) provide full employment. 2) ensure levels of production meet demand, and 3) contain inflation. A UBI will not provide full employment, or ensure levels of production meet demand. A job guarantee will achieve both 1 and 2, thus containing 3.”
encapsulated the different priority (and therefore perspective) we have. At the moment, on a global basis, everything is looked at in terms of the value of, and contribution to, the economy.
Robert Kennedy, University of Kansas, March 18, 1968;
“Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.
It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.”
https://www.theguardian.com/news/datablog/2012/may/24/robert-kennedy-gdp
What are we trying to address? If we formulate the requirements, we can work out what we call it later. Whether it be UBI or JG, it needs to be designed to accommodate the changing economic, scientific and financial realities, and the gross inequities that occur as a result, from the view of the people, not the economy.
Thank you Mr Kelly and commenters. What a fantastic read. Take care
The idea of ‘provide full employment’ or ‘guarantee employment’ how would this work. Somehow every individual, everyone, would have to be tested in a non judgmental or predertemined result influenced way for their ability for what job they can do. Then you open up the question, did the individual receive the correct education and training for their ability and who is responsible if not. If all above ok then what if what they can do is not available where they live. Do you force them to relocate or do you build the business so they can work. Simple isn’t it.
I think UBI is a great idea. yes, the Elite want us spending more money, thus spending is what drives the economy. Income Protection, forget it, Big Business wouldn’t dream of it! There is mass casualization, large scale under employment, job insecurity. There aren’t enough jobs for the number of people out of work, or in a state of under employment looking for full time work. For the future there is going to be less jobs, shrinking industries, and larger corporations employing less people (look at Netflix for example), more jobs and social or community projects can be created and implemented (to help communities grow and maintain infrastructures and services), instead of making unemployed people applying for jobs where there are hundreds applying for the same position. This Century the nature of business and employment is changing, we have to get with changing times, forget about the past, build futures for the young and those marginalised by long term unemployment and underemployment. UBI can create a huge industry creating mass employment just by maintaining the programs and job creations for communities and participating companies, There are great possibilities, sorry, I find the article short sighted in the same way as saying decades ago computers were going to take away jobs. Under UBI technology can create a lot more jobs, future Governments (certainly not the LNP, a bunch of dinosaurs) with real imagination can do wonders with UBI and systems they create.
Hear, hear Kyran, Ronald Petterson and economicreform.
John, I appreciate your explanation that as a committed advocate of MMT you are therefore a supported of a job guarantee scheme – which is one of the basic proposals put forward by MMTers. I am also an advocate of MMT, and I also support a job guarantee scheme. However neither of these constitute a reason for opposing a universal basic income. As I said previously, it is not a logical position to regard a JG and a UBI as mutually exclusive schemes. They are not opposing positions, irrespective of anything Bill Mitchell might say to the contrary. I respect Bill Mitchell as one of Australia’s best and most informed economists, however I do not agree with him on every issue he turns his attention to. And this issue in particular.
I think it’s a good idea,but ONLY if introduced properly.That is the MAJOR problem.No way I would trust an ultra right wing government like the COALition to introduce it,without just changing other aspects that will just serve themselves,big business mates and screw over the disadvantaged.
Only a Labor government could ever introduce this,to make society fairer and better.I can’t see it happening anytime soon,with the way most of the MSM are,and most of the public too. IE: We can’t even have a proper debate about drug reform,without ultra right extreme lying eg: legalising all drugs according to them will make everyone a drug addict,destroy society,etc,etc…..
To introduce a UBI to truly benefit society,the only real changes and issues to discuss I think should be (Of course don’t count on it.):-
*How much would the exact amount be?
*What would be put in so fraud isn’t committed with people getting multiple payments at once?
*Be the only payment of welfare,with everything else scrapped.
*How would people get it? Etc,etc….
Also,the ONLY real changes that should take place with a payment introduced is:-
*All businesses and rich individual’s much pay the proper rate of tax,and all tax concessions ended eg: No more negative gearing,etc,etc…
*Job Network providers and work for the dole all finished.
*All expensive having to jump through hoops ended. IE: Everyone gets the payment,with the only test being your identity,so everyone gets the payment/s only when it’s paid.So,people can’t get multiple payments.
No lowering changes of services,from health,education,and IR.
This can NOT be another opportunity for businesses to screw workers.In fact all employers will have to treat workers decently,or workers will have the opportunity to either NOT work (If they can survive on this payment?Saved up,etc,etc…),or go to a decent employer. No lowering of the minimum wage,etc,etc……
Finally,what passes for political debate in this country 🙁 I will be dead,before this was braught in to truly benefit most people.
Another article well debated by the readership who have demonstrated an excellent understanding of the principles.
Now consider: Rutger Bregman, “Utopia for Realists and how we can get there”, Bloomsbury, 2017, 316 pp, pb, ISBN978-1-4088-9026-4. $21.99.
This is an analysis of five years of sociological data from Canada where small regional communities were given “a living wage(?)” without the need to work, in return for detailed data collection. The final analysis found that the government savings over the duration of the project were greater than the alternative of the people worrying about where your next dollar was coming from. Generally there was greater quality of living and less dependence upon the health and medical services, which created the savings.
In Australia it would mean that any Federal government with sufficient courage for real economic reform in a society professing capitalism could revoke the about $150 BILLION PER YEAR gifted free gratis and for nothing to the undeserving wealthy and corporates, thus bringing the horribly bungled NLP financial policies out of debt and into surplus within the life of a single Parliament.
AlpoApril 6, 2018 at 5:14 pm I couldn’t agree more with your suggestion lets have the UBI on our terms and make each and every multinational corporation pay a minimum taxation contribution of 15%, instead of naught, and pull the 3 million plus Aussies who are living in poverty, out of it. Minimize the list of taxation deductions that these parasites can make, and put “the people” in the driver chair for a change!
Yes also to townsvilleblog and Alpo.
John Kelly, that is the most rspecious comment I’ve yet read in opposition to a UBI.
The major problem behind the views of those who oppose such an idea, (indeed one that has already been proven to work), and even some that lobby for it, is the welded in notion, reinforced by political commentary and talk and the socialised ideas of generations, that “jobs” are the significant factor.
I would like to see the evidence that such is true.
Perhaps it is if we wish to regress society to a feudal system. We are certainly well along that road under right-wing policies. Kyran has alluded to this in his comment. Zoltan has missed the point altogether.
Our goal, should be to produce an equitable society and one in which well-being, genuine satisfaction, motivation and appreciation of circumstance are the goals. That goal – a goal that is based on how people feel, what obligations they understand that they owe to their fellows in society, and aspirations that recognise real “success” as having nothing whatsoever to do with jobs, position, wealth & assets, it what we ought to want for others, for ourselves and for our children.
Taking care of the impediment of inheritance and shackles of social class and social stratification is fundamental to achieving a society where people are equal in opportunity and resources are shared equitably. [Two concepts the difference of which most don’t seem to appreciate.)
A UBI is one of the ways that could be the foundations of such a society. In its implementations around the world, so far, it appears to be having a positive result.
The continuation of anachronistic, almost feudal, notions of “welfare”, ie. hand-outs to the poor and disadvantaged, given reluctantly and with the implication, almost always, that they brought their disadvantage on themselves and don’t really deserve assistance, ignore the very reality of the society and global economic structures that dictate inequity and rely on it for the privileged to retain their privilege – a privilege, for the large part, never earned and rarely doing anything to improve society for all.
Nonsib … do you read what people say or do you read what you assumed beforehand. I Zoltan do not advocate a dog it dog world and your worth is not judged by some kid that has his mother wipe his nose and his arse – I Zoltan advicate a world where you are good until you piss me off. And you are pissing me off.
Michael Carter seems to overlook that the current stacked system is socialism for the rich?
It has to be universal for it to have any chance of working. Clever use taxation system could claw much back. Has to be able to provide minimum standard of living. I don’t see it as welfare but something that props up capitalism. The welfare system we have now actually discourages people at the bottom from working. I believe that not many would want more than the payment gives them. To be able to work without having a penalty attached allows more to better themselves.
Government would be smaller. No need for welfare or pensions.
Zoltan, I don’t accept your concept of a world where people are good until, as you say, they “[piss [you] me off. Neither, therefore, do I accept your implication that because you claim that I am “pissing you off”, I am not “good”. It may not please you but I don’t regard you as the arbiter of what or who is “good”, whatever that word happens to mean to you.
Clearly you have a problem with English and, given your name, I assume that is because English is a second or non-native language for you. If that is the case then you write it fairly well and if you do speak and write more than one language, I admire that. I wish that I could.
However, when meaning is poorly expressed it means that the listener or reader has to sometimes make assumptions or “leaps of faith”. I’m assuming therefore, and perhaps falsely, that you are now saying that you “do not advocate a dog eat dog world…” If that is the case, then your claim is contradicted by the the “dog eat dog” fashion in which you continue.
In order to avoid this type of contradiction and belligerence, in the future, you may find it helpful to think carefully before you act, rather than simply reacting because someone has disagreed with you.
I didn’t consider your comment to have added anything to the discussion and, in fact, felt that you displayed little understanding, if any, of the concept of Basic Guaranteed Income or, indeed, of “Full employment” which, at least in the Australian context, is considered to be a level of around 5% unemployment, as opposed to the 100% employment implied by your post.
However, clearly my remark upset you and for that, I apologise. At the same time as I make that apology I feel that I should also advise you that I no longer succumb to bullying, such as your response constituted. I have received too much of it in my life and particularly since online communication became available. In the past I would often have left the forum in which it happened, as I did from this one, a few years ago. Now, I will not be silenced by bullying, whether it is done consciously or not. Where I see what I take to be a false, inaccurate or misleading statement I will point it out and I will not accept abuse without exposing its character, though I won’t do so in the same tone or language that is often used towards me.
You may comment again and have the last word in this matter if that pleases you but, as far as I am concerned, I do not wish to block the column with personal dispute that offers nothing to the discussion other than irritation for the others involved. Therefore, I have nothing more to say on this matter between us in this thread. If you wish to contact me directly, you can do so by emailing me at gandalph@trollmagic.net
It is hard to compare apples with oranges at the best of times, but at the same time it is necessary if you want to attain your objectives.
From the article and comments it seems we are in furious agreement about a lot of things, albeit tacitly. At a very base and fundamental level, does a UBI or JG get introduced as a ‘welfare’ issue or an ‘economic’ or ‘taxation issue’? What is the motive and what is the objective?
At present, we don’t have a taxation system, we have a taxation industry. The ‘Big 4’ accounting businesses inform our government on making ‘policy’ and their clients on getting around ‘policy’. We have gutted the independent treasury advisers and replaced them with consultants, usually provided with an outcome and instructed to devise a path to that outcome.
Years back, the ‘tax industry’ was valued at $4bill, due to the complexity of our taxation law. Since then, it has grown in the most ridiculous fashion as it is both the inventor of the loopholes and defender of the resultant inequity. Seriously, have we all forgotten about the Panama papers this quickly?
If a UBI or JG is a welfare issue, it would require a government ‘payment’ to those eligible. The criteria then becomes clearer as to establishing its intent, which would, presumably, draw a line about a minimum level of income for everyone, regardless of work capacity, ability, opportunity or willingness. If it is regarded as an economic issue, it would presumably be argued that the money provided will be recouped by GST income, increased spending (particularly in the ‘lower income’ group) and removal of many different ‘welfare’ payments below whatever level is settled upon.
At the moment, our ‘average wage’ sits at $80k. What if we set the ‘minimum’ bar at $80k by way of tax free threshold? For those earning less than that, the government makes up the difference.
As an offset, no ‘welfare payments’. Against the increased cost to the government, think of the number of agencies, government departments and private providers that would disappear overnight.
Then have a look at the provision of those services (health, education and childcare) or the establishment of infrastructure (NBN, road/rail, environmental protections, etc) that will promote ‘wellbeing’ for all of us. And, most particularly, provide at least some attempt to increase our prospects of having a ‘tomorrow’ for our kids of today.
By more carefully defining where the bottom is, we can then look at putting a ‘ceiling’ in place, to increase the active participation of those at the top, who currently enjoy a level of largesse that is unsustainable.
Cap the income of executives at no more than ten times the income of their lowest paid worker. Enforce the ATO’s 80/20 rule to dismantle the ‘gig economy’. Ensure that corporations have a competitive ‘effective taxation’ rate (as opposed to headline rate) but stop the rorting through deductions and subsidies. That’s before we even start on negative gearing, capital gains, offsets, etc..
As other contributors have noted, there is a lot we can do to merge economic and welfare issues, that enhance and enforce, rather than endanger, our ‘minimum’ standards. By making the ‘minimum’ a universal guarantee, we can at least start comparing apples with apples (or oranges, if you’d prefer).
The ‘disruptors’ introduced through environmental factors, technological advances, or shifts in the costs and allocation of resources towards production, can be addressed more rationally without social upheaval and reallocation of wealth being distractions.
This really is a fascinating thread, Thank you AIMN and contributors.
How many languages I can speak or write is not as important as how many I can think in. Nonsi… do you try to understand the concepts of someones thaughts or do you look for errors in the grammar and spelling (are you an ex teacher). By the lenght of your reply you pontificate about the subject for your own amusement. Do not try to tell others why they are wrong just tell them you do not agree. And thanks for your analysis of who and what I am.
I have to join the general consensus of surprise at this piece particularly coming as it does from the AIMN
“A UBI would create a society where people become mere consumption units, where the demand for labour goes into decline, wages and conditions suffer and the inequality balance shifts even further in favour of capital.” …we are already ‘mere consumption units’ under the current system and conditions are worsening with vulnerable suffering hugely, and number of vulnerable on the increase, while nothing is done to improve matters for these people
“National GDP levels would fall as people opting not to work, lowered their expectations and their living standards, forcing production rates to spiral downwards, prices to rise, inflation to run amuck and the only winners are guess who?” …the old ‘people opting not to work chestnut’ – really? People currently have ‘lowered their expectations and their living standards’ horribly and not by choice and often while working more than one job – so why would anyone expect the current path to be the answer to our problems. It is high time for change and this looks more promising than anything else currently on the table aimed at improving the lot of true battlers.
Productivity has become a grossly misused word
The Serfs are out here on this. I recall reading about emancipated slaves, at the end of the US Civil War “Please Messer, let me stay, I have no where else to go”
Stop reifying Work as salvation. Within a capitalist money dependent society, work is just bonded labour…….. slavery.
It was trialled in a state in Canada for a couple of years with a reasonable amount of success till a conservative govt came into power and ditched the trial. Google UBI Canada.
Just who will clean the toilets? Perhaps a roster, starting with Bank Executives? Then anyone with a law degree… they think they’re so smart.
Meg, that’s an example of the kind of job that nobody should be forced to do. AI and robotics will eventually take over all those kinds of menial tasks.
Until then, we can begin by paying people what such repellent work should really be paid, instead of forcing people into almost the equivalent of slavery.
Or, yes, your roster idea sounds like a good one. It would begin to democratise work. At the moment, most jobs are little dictatorships.
A very important talk by Scott Santens on the Universal/Unconditional Basic Income (UBI).
Cutting the Gordian Knot of Technological Unemployment
read the text:
It’s Time for Technology to Serve all Humankind with Unconditional Basic Income
https://medium.com/basic-income/its-time-for-technology-to-serve-all-humankind-with-unconditional-basic-income-e46329764d28
Jennifer Meyer-Smith
Go The Greens/LeftLabor/Progressives ALLiance!
Yes please.
So (hypothetically) we might have a Greens/LeftLabor/Progressives ALLiance versus a Liberal National coalition. Sounds promising – but there are any number of practical difficulties. Years ago, the Libs and the Nats reached an agreement of sorts regarding which party will (and won’t) contest certain seats. So a minimum wastage of political capital and financial expenditure via unnecessary contests became the reality. Achievable in their case – because electorates are based on geography – as are their respective political basses.
Not so with this Alliance. Indeed the opposite seems the case. The Greens see their best chance in geographic locations that traditionally were Labor heartland. So how might this very practical problem be resolved? A toss of the coin? A lucky dip? Or perhaps a complete rethink of how electorates are conceptualised? After all, in this day and age, there is the potential to lessen or even eliminate the tyranny of distance via technology. In its stead we might identify communities of interest, that are above and beyond geography, and which elect representatives accordingly.
That’s the idea.
‘Keep it simple, Stupid’, as they say.