he American economy has been improving for about eight years, reported unemployment — ignoring the different ways to interpret this data point — is at an acceptable level, and inflation is surprisingly low: historically, sharp growth in the money supply has led to higher inflation.

Yet, more than half of all people were reportedly unhappy with their jobs even before the recent Presidential election. And there is a growing body of thought that contrary to the historical pattern wherein jobs lost to robots were not a net negative, as other jobs were created, the situation will be different with the advent of collaborative robots.

Suicide rates are rising for every age bracket except that of your lowly writer, whose cohort always has had a much higher disposition to ending life voluntarily.

Maybe it is time to think radically.

Enter the idea of an unconditional basic income (UBI), cash paid by the government to each and every individual regardless of income or wealth.

A UBI would facilitate the type of freedom which can lead some recipients to:

*go surfing as a full-time activity

*refuse to work at the minimum wage level offered by many current businesses

*move ahead with that entrepreneurial idea they heretofore could not pursue because of the financial risk pertinent to simply starting up

*be able to avoid the dehumanizing aspect of the current welfare system

*no longer engage in petty crime

*rethink the financial interplay between parent and child

*ignore the UBI because it is a small fraction of their financial aspirations and/or accomplishments.

Accompanying a UBI would be these programmatic initiatives:

*a more progressive income tax schedule, coupled with a wealth tax, and a reduction in the estate size which can escape taxation

*a slow phasing down of many aspects of the current welfare apparatus, the emphasis being on more  direct means of assisting those in need – debit cards and trust, with verification annually. Note that no reduction in welfare monies would be caused by receipt of UBI.

*legalized marijuana, with a similar, but modified, set of restrictions akin to those of alcohol and cigarettes, which kill a multiple of the people who die from illegal substances

*other drugs would remain illegal, but the response to use/abuse would be rehabilitation programs, inclusive of educational curricula aimed at career building

*extensive in-prison educational programs

*increased educational programs in the middle skills area, jobs which combine manual skills with a level of computer or technical expertise

*a re-thinking of the educational system so that the focus is on students and lifelong learning

*a recasting of the immigration system to incorporate the following principles:

• current holders of DACA status would receive green cards
• a point system for prospective immmigrants
• no tolerance for undocumented individuals with criminal records
• annual rates for temporary visas like H-1B would only be revisited every ten years
• a two-year window during which undocumented immigrants can obtain a green card by:
• filing a tax return and pledging to do so annually
• passing a rudimentary English test
• paying a fine of $10,000 per tax-filing unit

These are some envisioned results:

*because the tax elements are not draconian — while generating sufficient funds for the UBI (in the context of gradual reductions in the current mishmash of welfare programs, thereby creating less of a budget requirement than otherwise), there would be a decrease in the perception that the American economic system is no longer fair in terms of upward mobility.  There would still be substantial income inequality, but when people know they can do okay for their families, they are less irritated by the visible divergence.

*because of the legalization of marijuana and extensive in-prison educational programs, there would be a reduction in both the initial crime rate and the recidivism rate

*with the above changes and the shift to a rehabilitation policy on illegal drugs, there should be an increase in the proportion of intact families

*with reduced crime, more intact families and a reorientation of the education system, all of which are mutually reinforcing factors, there would be reduced racial tension when it comes to policing, there would be a decreased need for non-profit entities which at present essentially only provide “band-aids for broken legs,” and fewer irritating photo ops of white benefactors with arms around minority kids

*for all but a few, standard diplomas would be replaced by resumes listing credentials pertinent to skills gained and tasks done. With more flexibility through education institution partnerships, both vertical and horizontal, students will be better to evaluate their options and pursue their goals

*a greater sense of freedom and personal control than is currently the case

*If you believe that the surfer to striver ratio will be heavily weighted in favor of the former, yes, a UBI would not be useful to society as a whole, but how many strivers would ratchet down their pace simply because they had a UBI.

 

“Basic Income … A Radical Proposal for a Free Society and a Sane Economy,”

by Philippe Van Parijs and Yannick Vanderborght, Harvard University Press, 2017,

is the inspiration for the above thought process.

The authors propose a UBI of 25% of per capita GDP. In the USA, this would mean $14,400 (GDP of $18.6 trillion divided by 323 million people is $57,600 GDP/capita.)

Selected background material and comments from the book (page numbers) are below:

(85-88) Milton Friedman, an economist closely associated with the free enterprise system, favored a negative income tax in place of what he called “illfare,” i.e., welfare (which destroys incentives), with the rate set low enough to push the person to find work.  Part of his reasoning for the tax was also that the government had put so many regulatory roadblocks in front of people who wanted to start businesses that it owed them something He preferred private charity over said tax, but did not believe it would generate the required funds.

Fredreich Hayek, similarly an advocate of economic freedom, believed that a minimum income should be a permanent part of a free society.

(106-9) Important to the logic of a UBI is that differences in social capital — stored knowledge: technology, organizational know-how, government skills – are accumulated over long periods of time  and represent inherent advantages to those lucky enough to be born into positive circumstances. The offsetting policy idea to the resulting socioeconomic imbalance centers on distributive justice. Note, however, that UBI is not aimed at equalizing incomes but at distributing more fairly the characteristics of real freedom, possibilities, opportunities.

“UBI weakens the cash nexus, de-commodifies labor power, boosts socially useful yet unpaid activities, protects against forced mobility and destructive globalization, and emancipates from the despotism of the market.”

(119) An additional  underpinning for the logic of distributive justice is that all material goods ultimately derive from natural resources which initially were not owned by anyone. The collectivity of these assets justifies the use of a UBI.

(137) In terms of affordability of a UBI, in the United States, non-social public expenditures = 13% GNP, public expenditures on education and health = 12%, and other social expenditures = 10% (pensions are 6% of this). In France, the respective numbers are 17%, 12%, and 22% (12% being pensions).

“If half of the cash part of social expenditures is eliminated with a UBI of 25% of GNP, then the required tax rate [using the above data, which definitionally equate expenditures with tax rate] is 55% of GDP in USA and 65% in France. [55% in the USA represents a 57% increase versus the base of 35%; 65% is only a 28% boost from the current level in France.]

(147-167) As has been pointed out in numerous places [elsewhere in policy circles], capital is taxed at an advantageous rate compared with that applied to labor. This needs to be redressed; moreover, tax policies need to be global or regional because of the mobility of capital. One idea, admittedly a political non-starter in most countries, is that of state ownership of industries, but with said companies privately managed. Another related concept is public ownership of natural resources.

UBI could be partially financed through the printing of additional money (the European Community actually floated such a concept, not connected to a UBI, as a way to dig its countries out of the recent financial crisis). There could be a tax on the circulation of money and an expanded VAT.

The UBI could be modified based on age or type of occupation or cohort group. It could begin with a partial amount. Accompanying a UBI should be enhanced childcare provisions and the complete portability of pensions.

(173) In 2016, Switzerland held a referendum regarding UBI: 23% were for and  77% against. Support was only 10% among >70 years old; it was 22% for <30 years old. There was no significant difference by income level or gender; city dwellers were 32% in favor, compared with 19% for those in rural areas.  Self-employed respondents were 36% in favor.  Those voting Yes believed a UBI discussion should be started; the No voters did not believe that a UBI could be financed.

A 2011 poll in the United States elicited a decidedly negative response, 82% to be specific. On the other hand, a 2015 poll in France had a positive response of 60%. As always, phrasing of survey questions is critical; the French query indicated that UBI would replace most existing benefits.

Added Comment

For every five-year age cohort from 80-85 down to 0-5, the white percentage declines and the non-white percentage rises. At the lowest age bracket, the composition of population is roughly 50-50. These data are not dependent on the beneficial changes to immigration suggested above. The real question then is whether power is transferred peacefully, a rather important factor!

Historians might well be skeptical about our ability to avoid a revolution, as inconceivable as that might seem from the vantage point of 2017. Alternatively, what is taking place without much publicity is that billionaire members of The Giving Pledge (who are as likely to be Democrat as Republican) are dictating much of the social/education reform agenda of this country.

It is not completely clear which alternative is preferable, given the long-term record of smart people attempting to plan the lives of the masses.  Perhaps a UBI would be quite useful as a restraint on “good” ideas carried to disastrous consequences. Note that a UBI itself is not connected to anybody’s Utopian fantasy but aimed at expanding the range of life choices among people who at present are limited in that regard. Living solely on a UBI would be difficult for the vast majority of individuals.

 

BobHowittBooks.com/?page_id=22