Wednesday, March 16, 2022

The Environmentalist's Case Against Basic Income

At a recent talk that I was giving about my second book, Our Second Chance, I was sharing my supportive views on the concept of Basic Incomes.  Afterwards, I was reviewing the valuable comments in the Chat room, and found this gem:

"Futurist Douglas Rushkoff had espoused UBI (Universal Basic Income) in two of his books, but has since retracted his endorsement of the idea as he had come to realize that UBI without a deeper paradigm shift will only amount to increasing the rate of extraction, exploitation and consumption of earth's resources.  This is Douglas Rushkoff describing his rationale for no longer supporting the concept of UBI here."

The first 10:30 of the linked podcast is a monologue in which Rushkoff outlines his serious reservations with a Basic Income scheme - namely that it merely amplifies the population's role as consumers. Giving money to the people at the bottom will not create economic justice, he says, since that money will simply pay for increased consumption, thereby (a) continuing to line the pockets of the upper echelon capitalists, and (b) making our resource extraction and environmental degradation even worse.

Knowing that Rushkoff, a well-respected author, was changing his tune on Basic Income, led me to give his new position very careful consideration.  It is indeed a worrying proposition.  We all know that any attempt to raise the overall standard of living for a large number of people will entail a greater consumption of planetary resources - at least in the short-term.  Does that mean we are doomed to choose between widespread social inequity versus resource destruction?

Changing the Rules

Let me first say that I am very much in agreement with his fundamental objective.  In the podcast, he phrased the big picture in this way:

"It's not too late for us to start companies, cooperatives, commons where we all, everyone, owns a stake in the thing.  And then we can change our role in the economy from mere consumers to stakeholders; our role in society from consumers to citizens; and our role with each other from competitors to partners.  Now, the only substantive change we can make to our economic operating system is to distribute ownership, control, and governance of the real world to the people who live in it."

Well said!  I also agree that reinforcing the consumer tendencies of those close to or below the poverty line in our society actually channels that money to those at the top - seemingly defeating the purpose.

However, my Zoom audience member qualified Rushkoff's position more than the podcast does:  A UBI without a deeper paradigm shift, is problematic.  Well of course it is!  But a Basic Income is the best first step to achieving that paradigm shift!

I propose that, as living creatures, we are all consumers, citizens, and stakeholders (investors).  Those are the three value personae that I work from in my books (with a nod to Robert Reich).  We cannot eliminate the Consumer persona - all living creatures must consume.  A Guaranteed Basic Income (GBI) model simply says that consumption needed for survival should be free - a basic human right, based on the abundance that we now enjoy.

I confess that I don't know all of Rushkoff's reasons for turning his back on Basic Incomes, but here are my reactions to what he said in his ten-and-a-half-minute monologue:

1.  A Grand Destination with no Road Map

The proposal that he makes for a new world, with distributed ownership, control, and governance is a wonderful ideal, but that change cannot be wished or even legislated into being.  There must first be a fundamental shift in our value systems and economic models.  The real change must (most likely) come from the bottom up - from the vast swath of consumers - and to do that, you have to first release them from slavery.

(I use the term "slavery" advisedly.  Our current economic model says that, for the overwhelming majority of people, we need income and a job in order to meet our basic survival needs.  Take our job away and we are homeless, hungry, and - if the social safety nets are overwhelmed - dead.  The choice of "to work or to die" is essentially slavery.)

Basic Income is the most fundamental shift in our economic model that currently has a chance of actually being enacted,  The U.S. was two Senate votes shy of a basic income model 50 years ago.  It currently has broad support across the entire political spectrum.  The CoViD-19 pandemic did wonders for showing the general public how the basic principle might work.  A Basic Income is the best first step on the road map to the changes Rushkoff seeks.

2.  The Asset Alternative

I like the idea he mentions of giving people assets instead of income.  Unfortunately, it's not very clear what he means by "assets".  It seems impractical (and demeaning) to give people food instead of the money to buy food.  If you give them other assets, and don't change the paradigm of "money equals survival", those assets will soon be sold and you will be worse off than before.  Again, I agree with the principle of a lot more common wealth.  I don't think land or natural resources should be ownable.  But just giving away assets (if one could even do that), without rethinking the nature of ownership, does not solve the problem.

3.  Beyond the Poverty Line

Contrary to what Rushkoff says in his monologue (and contrary to common belief), UBI is not just a way to take poverty off the table.  A Basic Income alters the way everyone thinks about the future.  It impacts the non-wage-earner in an abusive relationship, the worker replaced by automation, the entrepreneur, the career-changer, the lifetime volunteer, and the new Art graduate (the one that he says usually has to go straight into a job because they can't afford a studio).  People can take risks, get better jobs, and invest in their future because their basic survival is not on the line.  Basic Income is a psychological gamechanger.  And that's what his operating system change calls for - a psychological gamechanger.  It can't happen with anything less.

4.  Follow the Money

I think he oversimplifies the flow of money when he says that the poor consumers will simply give their Basic Income cheque over to the capitalists.  I see the Basic Income scenario as including four major differences from the status quo:

(A)  We already hand out billions in social assistance.  A GBI merely gives that money out without all of the cumbersome application, eligibility, and ongoing oversight costs.  A lot of the money that would be going to those at the bottom of the pyramid is already being doled out.

(B)  In order for governments to afford these programs, they have to stop giving out the other billions of dollars in subsidies and incentives at the top.  They also have to revise tax laws and enforcement to reduce the wealth being stashed away at the highest echelons.  There are counterbalancing factors.  So even if the money eventually goes back to the 1%, it is doing people good on the way, instead of going straight into a corporate profit account.

(C)  The big picture when you level the playing field for the lower and middle classes is that entrepreneurship is increased.  Populations can afford to support local business, and finally have the option of choosing quality over the cheapest survival option.  Many shop at Walmart because that's all they can afford and they measure value by number.  A GBI has the potential to alter how we view money - as a tool rather than a survival imperative.  That paradigm shift will necessarily impact the monolithic corporations more than anything else.

(D)  Rushkoff portrays Basic Income as a very simple circle of money going from the government to the poor and then straight to the corporations.  This suggests that the status quo is preferable because when people can't afford to eat or put a roof over their heads... well, at least the billionaires aren't taking that money.  That is a pretty sad justification.  And if it's true, then where does that same money go now?  Do the governments keep it?  No, it participates in a different cycle, which is...

5. The Economic Growth Conundrum

The richest people in society profit from economic growth.  Economic growth is needed largely to create jobs and income so that we can have economic growth.  It is a vicious circle where those at the top reap the greatest benefit.  We have been told that jobs are good because everyone needs one in order to perpetuate and expand consumption.

We also know that when more money moves around (as would be the case with a GBI), you get serious economic growth - and thus, more of what is damaging the planet.  And yet, I believe that such a cycle is fundamentally different.  When millions of people don't need a job just to survive, they can choose more meaningful occupations.  We don't need to create bullshit jobs just to keep people busy and paid so that they can eat.  A GBI allows people to reconsider what is important to them, and returns consumption to a simple survival imperative instead of an economic one.  It makes it possible for an environmentally sustainable cycle to emerge.


In summary, I think Douglas Rushkoff is correct that a Basic Income, on its own, is not going to solve our flawed economic model.  Yet, I don't think that solution should ever stop there.  A GBI is merely the first game-changing step in a massive paradigm shift about how we value people and what is important to us as a species and as a society.  Yes, the digital behemoths have to be broken up and we have to re-write the myth of commercial corporations.  Yes, we need to reduce our role as consumer, and increase our stakeholder and citizen values.  And yes, we need to revisit asset ownership, control, and governance.

I am convinced that the best and most likely path to making all of that a reality is to change how we think about money and survival, and the most practical, realistic, and currently relevant way of doing that is with a Basic Income.

Friday, February 19, 2021

Basic Income - Where Does the Money Come From?

Believe it or not, back in the 1970s, President Nixon's administration was a heartbeat away from instituting what was effectively a Guaranteed Basic Income (GBI) program for the entire United States (before a few individuals derailed the plan). Today, with 2020 hindsight, everyone is realizing that a Universal Basic Income (UBI) would have been the best possible solution to the CoViD-19 economic crisis. The impact of our global pandemic has thus contributed to a renewed awareness of the power of Basic Income schemes, and many people are now pushing for those programs to be revisited.

The concept of a Basic Income for an entire population raises a lot of questions, but the most prevalent is this one:

Where is the money going to come from?


I believe this is a misleading question. The equivalent, for me, is hearing on the radio that a very significant rainfall is forecast and asking where all that water is going to come from. There won't suddenly be less water in your taps or in your well.  Your cistern won't suddenly be depleted. Nor will the lakes and reservoirs go down - in fact, their water level will obviously rise.

Water is necessary for life, just like money is now necessary for today's economy.  But plants and animals don't really consume water - they use it. Water facilitates the processes of life. Water moves in a cycle, and if that cycle were to stop, all life would soon end.

Money is exactly the same. We don't consume money - we use it. Money facilitates the processes of economic transactions. Money has to move in a cycle, and if that cycle were to stop, all economic activity would soon end. (That's what happened in the Great Depression: money stopped moving.)

One of the key concepts to be grasped for basic income programs is that "income" is not the same as "wealth". When we imagine the government handing out cheques to the population every month, it is a mistake to only consider that step of the cycle and wonder where all that money is going to come from. When money goes to people who really need it, that cash does not get added to Wealth - it gets spent. To use the water metaphor, only rich people have huge reservoirs and sealed aquifers that trap water and don't allow it to flow (wealth). Money, for everyone else, moves as streams and rivers, flowing out so that goods and services can flow in.

Here's how the simplified money cycle looks (to me):


The green lines show the cycles of money. The blue lines are also money (and luxury assets), that represent the discretionary transfers to and from Producers or Consumers that have a stockpile of Wealth.  (Other than bringing in money from Wealth and injecting it into the money cycle, retained Wealth is not part of the flow.) The red lines represent the flow of Goods and Services (materials and energy) - I include them just for completeness.

The major flow of money in our present economy is made up of Purchases and Wages. Both of those flows are Taxed so that the Government can meet society's Infrastructure needs. If you introduce a Basic Income, that money does not get added to Wealth (where it can pool and stagnate) - it gets immediately injected into the monetary flow, increasing economic activity. Purchases go up, demand goes up, production goes up, tax revenue increases correspondingly, and the cycle continues. Taxation is like evaporation - the money/water doesn't disappear; it simply reloads the system!

[NOTE: For those who hate Taxation and call for less Government, it is true that the cycle would still work with nothing in the centre, but the main green circle would soon get smaller, and (since the Producers would control the Natural Resources) the blue arrow on the right would effectively disappear.]

Basic income programs do not reduce the number of people willing to work, any more than rainfall results in plants not growing roots, but a guaranteed living allowance does reduce their dependence on dead-end jobs. (In other words, a GBI eliminates the slavery imperative: find a job or starve.) Over time, a GBI can also facilitate increased automation and shorter work weeks for all.

When the system is in balance, there will be dramatically decreased welfare supplements (which are like costly irrigation systems in areas with no rainfall), lower infrastructure costs (due to better health and lower crime rates), less stress for everyone's future, and a higher quality of life for all citizens. And yes, with all of that extra activity, it is possible that a higher Tax rate on Wealth might be necessary just to keep the revved-up cycle from being entirely diverted into the private reservoirs of the billionaires. Remember, they are not creating the jobs or driving the economy any more (if they ever were) - it's the Basic Income that's now doing that.

A Basic Income program does not demand that a nation have more money - it just moves a lot more of it around, and redistributes the flows in such a way that benefits everyone. (Read about its impact on me, for example.)

Saturday, June 20, 2020

"Gift Economy" is Misleading

There are a growing number of proponents of a gift economy as being a desirable alternative to our status quo monetary economy.  According to Wikipedia:
"a gift economy or gift culture is a mode of exchange where valuables are not traded or sold, but rather given without an explicit agreement for immediate or future rewards."

I like the concept of gift economies and I fully appreciate the advantages that they convey.  However, it is difficult to find modern examples of viable gift economies that make any sense.  Most examples of gift cultures are dated and decidedly anthropological.  Such ideals are never going to be broadly adopted so long as people believe that the alternative to an economic life where you simply buy things with money is an economy where everything is given for free - that is entirely impractical and quite impossible for people to wrap their heads around.

One also finds that more pragmatic descriptions of alternative economic systems go well beyond gifts.  I propose that gift economies are simply one manifestation of a much better alternative paradigm: qualitative economies.

What are Qualitative Economies?


My research is devoted to exploring the differences and consequential impacts of quantitative versus qualitative values.  A quantitative (or number-based) value system is one where, by definition, more is always worth more.  The modern status quo economy is a quantitative economy, in that it uses quantitative values (overwhelmingly, money) to measure its success.  A qualitative economy (a term which I'm essentially creating here) is one measured by qualitative values, such as satisfaction, product longevity and reliability, and the relationships formed between people.  (This is not to be confused with qualitative economics, which is apparently a term in quantitative theory when actual measurements are unavailable - a decidedly inferior appropriation of the term.)  Let's look at some examples:

Gifts - As I said, a gift economy is but one of multiple facets of qualitative economies.  Gifts create joy for both giver and recipient.  They also create desirable social obligations which strengthen human relationships, and furthermore motivate recipients to become givers to new recipients (as well as possibly reciprocating the original gift).

Pay-What-You-Choose - Some entrepreneurs and self-employed service providers prefer a less rigid form of transactions whereby the recipient of the service pays what they believe the service to be worth.  This opens up services to a wider market and allows compensation to be influenced by available wealth as well as quality of work, relationship, etc.  Variations on this model are more common than one might think.

Libraries/Sharing - These days, the term "libraries" extends beyond books into tools, seeds, bicycles, cars - any resources which are shared within a community at little or no charge.  (To be sure, it does NOT include Uber, AirBnB, and other access economy corporations that simply monetize your possessions and are the antithesis of sharing!)  Sharing can also include interest-free loans - money is not forbidden in qualitative economies.

Donations - Donations come in many forms, including volunteerism, charitable giving of funds, unwanted household items going to thrift shops, and even free or open source software.  Wikipedia, for example, is part of a qualitative economy, where many thousands of people donate time, knowledge, and editing skills in order to provide the resource free to everyone on the internet.

Refocused Traditional - For those who still struggle with the above examples, I maintain that simply by shifting the focus of value, one can achieve qualitative economics in what might appear to be a traditional monetary transaction.  The key is to emphasize qualitative values such as longevity, environmental friendliness, and aesthetics over price and market share.  Examples include one-of-a-kind craftsmanship, original artwork transactions, community-sponsored agriculture, and local economies which emphasize relationship over cost.

Barter - Because most barter is unique to each transaction and relationship, and barter is often a win-win where the value on both sides goes up, it could probably be included as yet another facet of a qualitative economy.  (One must take care that it does not get redefined in monetary terms.)

What Distinguishes Quantitative and Qualitative Economies?


Attributes
Quantitative Economy
Qualitative Economy
Value measured by:
Quantity – more is always worth more
Quality – longevity, aesthetics, relationship-building
Basis:
Dead relationship between items in transaction
Living relationship between people in transaction
Key to increasing value:
Scarcity, minimizing investment in individual items, ownership
Abundance, maximizing investment in individual items, sharing
Values after transfer:
Won & lost – zero-sum game
Win-win – transactions build value on both sides
Amounts ('price') determined by:
Seller/Receiver
Buyer/Giver
Motivations:
Enjoying the end result (but unreachable maximum)
Enjoying the journey (but not always positive)
Global measures:
GDP (Gross Domestic Product)
GWI (Genuine Wellness Index), or GNH (Gross National Happiness)
Examples:
Purchases, theft (note how theft fits all of the attributes in this column and none in the other)
Barter, gifts, pay-what-you-choose, donations, libraries, craftsmanship
Benefits:
Massive scalability, accelerated progress, easily mathematized
Sustainability, repairability, open source, satisfies human needs
Disadvantages:
Dissatisfaction, ecological destruction, proprietary
Slower, limited scope, trust-based
End results:
Objective comparisons, inequity, oppression, deception rewarded, monetize and consume global resources, dismissal of human values, race to the bottom
Subjective comparisons, cooperation, deception punished, honours interconnectedness of all things, promotes joy and well-being

In Summary


It should be clear that altering our perception of how our economies must work is not all about giving everything away, trusting in the inherent generosity of strangers, and singing Kumbaya around a communal campfire.  The advantages of qualitative economies are things that we all want: Quality, repairable, aesthetically-pleasing products, in abundance, and with joyful relationships.  And, perhaps most importantly, we don't have to replace our status quo monetary economies across the board.  It is entirely feasible and practical to have both styles of economic activity exist simultaneously within the same population - they do so now!

The key is to allow both value systems equal weight so that money does not always trump human qualities, and also to re-examine the role of single-track entities, such as commercial corporations, which are unable to operate in qualitative economies, and are thus incapable of being part of a balanced society.

Tuesday, June 9, 2020

The Left's Case Against Basic Income

One curious thing about calls for the government to introduce a Guaranteed Basic Income (GBI) for all citizens is that they come from all over the political spectrum, from the far left to the far right.  Most people express surprise that such a seemingly 'socialist' proposal can be supported by some ultra-conservatives, but once you grasp their thinking, it naturally follows that some progressive liberal thinkers are therefore (unexpectedly) opposed to the GBI concept.

I have selected an article that expresses this perspective, and gives a fairly comprehensive list of the objections from the left that I have seen.  I leave it to the reader to first review the article, and then we will try to formulate some kind of response to their concerns and counter-arguments:
A basic income would be a major concession to the capitalist takeover of everyday life  (by Nicholas Erwin-Longstaff, York University graduate student in labour geography)
Before we begin, it should be made clear whether Erwin-Longstaff was comparing a Basic Income system to the status quo, or to his preferable system of government-supplied necessities of life (a la Medicare).  Unfortunately, he does not make this clear , and his various objections seem to waver between the two.  I will attempt to do both comparisons.

I've broken down the primary concerns into three general topics:

Deep Cuts to Social Safety Net

This is perhaps the most easily refuted objection to implementing a GBI.  Erwin-Longstaff says there would be "deep cuts elsewhere in the social safety net, resulting in a deepening of government austerity".  The first part is not only expected - it's desirable.  The second part is absurd.

Could there be a more comprehensive social safety net than a GBI - a program that is available to everyone, at any time, no questions asked?  Realistically, no, there couldn't.  Would the existing social assistance programs be reduced, if not, in some cases, eliminated?  Yes - because they would no longer be needed to the same degree.  If, on the other hand, certain programs were still necessary for those in dire need, there is nothing to say that such programs could not be retained.  The arguments for keeping a particular program under a GBI would be exactly the same as the arguments for having it now.  To say that they would all automatically disappear once a GBI is in place is no different from the panic that they could all disappear tomorrow, even under the status quo.  A GBI is not going to cover every single dire need in our society, so we still have to provide for those situations.  However, a GBI would categorically reduce the need for the vast majority of our social welfare system, along with its administration, assessments, failings, etc.

To then complain that a GBI, where the government is giving a guaranteed subsistence income to every citizen who needs it, amounts to government austerity is ridiculous.  I have seen many ardent supporters of GBI programs, but not one has ever suggested that the government would be spending less on a GBI than it does now on existing social programs.  Giving every person an annual income with no strings attached is a very strange definition of government austerity.

Erwin-Longstaff also fears that the government would "whittle away even the most ambitious BI to a barely subsistence-level support".  Of course, this is a danger for any program implemented by any government using a status quo paradigm.  However, I think it reasonable to insist that any true GBI program has to be implemented very differently from the come-and-go social welfare systems that we create and modify now.  A GBI is a long-term total gamechanger.  The only way that it's going to be truly effective is if it's implemented in such a way that future governments cannot later pull the rug out or whittle it down.  (That's part of the "Guaranteed" in the name.)  Perhaps it even needs to be a Constitutional amendment.  (Yes, it is that significant.)

All that being said, the author is correct that Basic Income programs are not intended to replace all current social provisions, but I don't think they should be viewed as complementing them either.  GBIs simply take survival completely out of the realm of social assistance and even out of standard paycheques - for everyone.

One specific present-day program needs to be addressed here - subsidized daycare.  The author makes the pseudo-liberated assumption that all women should choose to be out their having their own job; that the modern-day necessity of two-income families in order to get by is something to be retained.  When it was noted that some GBI trial outcomes showed more women staying at home to raise children, he highlights the absurdity of this with sarcastic quotes: "women 'choosing'  to remain at home".  And yet the authenticity of that choice is the very essence of a GBI.  He fears the ceaseless pursuit of capitalist growth and profit, and yet he wants more people working to produce those very ends.

I get it:  If you remove subsidized daycare, it would at first appear that fewer families will have the easy choice to have two careers going while the kids are shuffled off to an institutionalized baby-sitting service. However, I tend to think in broader strokes.  With a GBI accessible to everyone, I believe that communities will have numerous and superior alternatives to subsidized daycare.  Subsidized daycare, to my mind, merely perpetuates educational and opportunity inequities when the wealthy will be using vastly superior services like in-home nannies, etc.  Let's be absolutely clear: a GBI increases options - for everyone.

Capitalism will Adjust Negatively

I can appreciate the fear that with a GBI in place, capitalism could then attempt to eradicate its effects by lowering wages and increasing prices.  And yet I fail to see how a GBI newly introduces either this possibility or the motivation behind it.  Erwin-Longstaff says: "a BI would leave people vulnerable to rising rents and prices".  So if there was no basic income, people would somehow not be vulnerable to these?  That makes no sense.  The objection is similar to saying "a pay raise leaves people vulnerable to rising rents and prices" - so we should abolish pay raises.  Ridiculous!

And while we're on that topic - a basic income is not  a pay raise or a wage subsidy; it is something completely different.  Employment and wages would still be there to allow one to set and maintain a standard of living, but they would no longer be the determinants of life or death.  Under a GBI, survival is free - it is a basic human right.

To say it again, a GBI, to my way of thinking, should not  be intended to directly lift everyone out of poverty.   The function of a GBI is to remove the question of having or not having the absolute necessities from the whole poverty/wealth equation.  For other things, there will still be haves and have-nots, but a GBI offers those at the bottom of the ladder what our current social welfare system absolutely does not: the opportunity to lift themselves out of poverty.

Philosophical Impact and Preferable Solutions

Another concern expressed in the referenced article is that a Basic Income program would "commodify all aspects of life".  In other words, under this revised paradigm, food and shelter would still be items bought and sold in a marketplace.  I can't argue with that.  Since this is obviously also the status quo, I presume Erwin-Longstaff is now switching gears and comparing a GBI to an entirely alternate solution - one which would "remove the need for cash altogether - reduce or eliminate the costs associated with other vital human needs, such as housing, education and care work".

That entirely socialist solution might indeed be preferable, but somehow I don't see it as having anything like the realistic opportunities that a GBI has for implementation.  The state handing out all food and shelter?  Not a very attractive near-future prospect.  Let's take things one giant leap at a time, please.

The author also points out that "expanding public services reliably pushes back against the logic of the market, whereas BI represents a deep concession to the ongoing capitalist takeover of every aspect of social life".  Again, there may well be advantages to radically altering how each one of us acquires what we need, and to the core definitions of ownership and commerce, but I don't think that we as a society have evolved to that possibility yet.  Indeed, I continue to argue that a GBI has the very opposite effect from the latter part of the concern expressed.  When everyone can access the necessities of life without having to sell their labour to the capitalist system, I would hardly call that advancing the capitalist takeover.  No, it is in actual fact a complete reversal of the extortionate stranglehold that the marketplace holds over practically every living human on the planet.

The article references another critic, John Clarke (writer and retired organizer for the Ontario Coalition Against Poverty), who wrote another contrary viewpoint in the context of the CoViD-19 pandemic.  As a bonus, I'll give the critics another shot at things:  The False Hope of a Pandemic Basic Income

Left-leaning critics of Basic Income programs seem to continually view the world using the glasses of the right.  They are understandably wary because we have always played by the right's rules, so our social programs have always been vulnerable to their tinkering.

I, on the other hand, believe Guaranteed Basic Income programs create a whole new playing field, and a very real opportunity for society to shift - perhaps even in the direction that those critics dream of.

Saturday, May 16, 2020

My Life on a GBI

When you think of someone whose life would be radically different under a Guaranteed Basic Income (GBI) program, what image springs to mind?  Is it a homeless person, or a single mother with children?  Is it an artist, or someone struggling to learn a new trade?  Here's a suggestion:  Why not think about the ways in which your own life might change?  That's what I've done for this post.

Background and Context

In my most active working years, I made reasonably good money and I saved most of it.  (I was never a great consumer.)  The result was that when I final bought a home, I paid off the mortgage in under 10 years.  I continued to save most of what I earned, but that income started dropping rapidly several years ago.  I now earn less than $10,000 annually, which means I have to rely on some of my savings to eat and pay property taxes and utilities.  I could probably afford to see theatre, eat out occasionally, and treat myself to some nice things, but I am reluctant to draw down on my savings any more than absolutely necessary, since those investments represent my future survival.  It also means that while I donate a very significant number of hours to charity and volunteer work, I do not contribute any cash to any worthy causes.  I don't stress about money, but nor do I take good care of myself financially.

Introducing a GBI

Let us assume that the federal government introduces a GBI program whereby every permanent resident receives a guaranteed basic income of, say, $1,000 per month, tax-free.  (A description of the general benefits, justifications, and responses to most common criticisms of GBI may be found in a previous post.)  A Universal Basic Income (UBI) would give this money to everyone - a GBI might have some system whereby those earning more than, say, $48,000 per year would have a relative amount of the GBI paid back at tax time.  It might thus make sense that anyone can opt in or out of the GBI at any time, no questions asked.

Speaking for myself, I could actually live on such a GBI - as in, pay all of the essential bills for my existing home and feed myself.  That might not apply for everyone, and it would not be a wonderful life if I relied on the GBI alone, but it could work.  Now let's explore what would really change...

Perception of Money

Unfortunately, money in the present reality represents survival.  If I don't have money, I will be living a miserable existence on the street, with dire mental and physical health deficits.  With a GBI in place, that perception changes dramatically.  Money becomes something that I can use to improve my standard of living, or use as a tool of change, for myself or others.  The rewards of earning money go beyond survival, allowing me to let my motivation for earning entirely match the incentive of my expected outcome.

A GBI bestows a healthier perspective on money.

Investments

Because my investments have to fund my future, I can't presently take a chance on funding a friend's new business enterprise or select stocks and bonds based on things I believe in and choose to support.  No, I have to put my money into places that will leverage interest and economic growth - concepts that I generally despise.  A GBI, on the other hand, would mean that my future survival is not at risk.  I can keep a store of savings for my own rainy day, and put the rest into projects I believe in - investments that may or may not preserve the original amount.  Personally, I would be okay with that - if it meant that I wasn't putting my total well-being on the line.

A GBI allows me to invest in what I believe in.

Quality of Life

As I said in the introduction, I don't stress about money, but I don't have a good relationship with it either.  Generally speaking, I don't buy anything (except food).  I don't see shows, I don't buy clothing or coffees, I don't spend a dime online, I don't own a cell phone, and the financial aspect of anything is always a carefully considered factor.  While I would argue that you could still have a high quality of life under such circumstances, that won't be easy in today's world, and you will probably be missing out on a lot.

My default behaviour has always been to only spend money on discretionary items when I have money coming in.  Savings are not for such things.  A GBI would change that perspective, in that money would be coming in, so I would be more relaxed about spending it.  I would no longer feel I have to add to my savings, so if there was money left over from my monthly GBI, it could go out freely.

My quality of life would go up, even if my standard of living did not.

Gifts and Altruism

I am a strong believer in the power of gift economies.  (There's not enough space in one post to go into more about those - I'll cover this separately some time.)  Part of that paradigm is that gifts beget gifts.  There is an increased desire to pay it forward, especially when you are on the receiving end first.

Even though a basic income should (to my mind) be a legislated right for all, it could still very much feel like a gift.  Essentially, the community is saying: "You have a right to be here.  You have value.  And you shouldn't be compelled to work at something that we decide has value for us, in order for you to eat and live.  Your survival, just like this miraculous planet and all the beautiful things inhabiting it, is a gift."

Personally, since I can theoretically live as I do now (without a GBI), that monthly payment would unquestionably inspire me to give most of it away.

Perceiving a GBI as a gift, I would give more.

What about you?

There are lots of amazing ways that a Guaranteed Basic Income could completely alter your life - even if you don't live below the poverty line.  Having a safety net, even when you aren't currently in freefall, can give you the courage to take powerful and worthy risks in order to realize your full potential.  Perhaps my essay on Free Survival would inspire more ideas.  So tell us - how would a GBI change your life?

Monday, May 11, 2020

Money for Nothing

Readers of my work will know that the core of my studies is number-based values.  A key attribute of these values is the absence of any inherent concept of sufficiency - by definition, more is always worth more.  Money is the most obvious example of a number-based value, and in the case of our society, money is structured such that the more money one has, the faster one can accumulate even more of it.  In other words, significant wealth has a positive feedback loop.  The implication for some very fortunate people (in the absence of serious risk-taking) is a lifetime of potential near-guaranteed financial growth.  "Lifetime" is the operative word in this case - nature has its own way of limiting the amount of time one has to accumulate and wield financial wealth.

However, there are two exceptions to nature's mortality constraint: corporations and inheritances.  I have dealt with the endless growth potential of corporations, perhaps most interestingly in this musing on a theoretical corporate endgame.  On the other hand, the concept of inheriting wealth is a new exploration for me, but it should be a significant one.  By some estimates, 60% of the wealth in the United States is inherited, and in 2004 one half of the over $200 billion of inherited wealth was attributed to just the top 7% of the estates. (Those numbers have likely become even more concentrated since then.)  [Critics of these assumptions often point to the anecdotal evidence of the very wealthiest people.  For example, more than half of the world's billionaires are supposedly 'self-made'.  But on closer examination, these are (as we might well expect) anomalies - smart privileged men who managed to leverage the pre-existing infrastructure of the global internet to be the first to get their oligopolies out there.  Contrast this with the data gathered by researchers like Thomas Piketty, which included all incomes, not just a few outliers at the top.]

The first thing to note is that society has a long held precedent that the assets of parents should naturally(?) be passed on to their children after death.  There are several important historical differences at play when considering the applicability of that paradigm to the present day.  Lifespans used to be a lot shorter, and social structure was such that your birth lineage determined your social status and position for life.  As times have obviously changed, I began to wonder what moral justification could possibly be made for offspring to automatically claim their dead parents' assets.  I posed the question to several colleagues, and got a great deal of insightful feedback - possibly because they are of an age where (given today's lifespans) they are both recipients and architects of estate wealth management.

In regards to wealth, the briefest summation of this small survey of diverse and intriguing opinions from an astute and thoughtful circle would be:
  • A parent can say where they want their assets go (before and after death), but beyond that, a child does not have any moral claim to such wealth.
     
  • Parents have a valid biological imperative to offer their child every possible advantage in life.
While I recognize the biological impulses, I will go out on a limb and say that I believe the inheritance of massive wealth is a social injustice – power and assets being conveyed to another simple by nature of birth.  Extremely large inheritances perpetuate and are key to greatly expanding global wealth inequity, using principles with shaky moral foundations.

We already know that the children of wealthy parents start life with very significant advantages.  It also can’t be avoided that rich parents are in the position to give significant gifts of wealth to their kids if they choose.  I don’t believe that inheritance rights are the same thing.  Yes, of course, if society were able to limit wealth inheritance (say, by dramatically increasing estate taxes), the actual transfer could also be accomplished through gifting before death.  However, subtly perhaps, I don’t believe the two transfers are the same, and restricting the first would cause all of society to rethink the second.

One more set of figures might be useful:  A 2011 study by Edward Wolff and Maury Gittleman found that the wealthiest 1% of U.S. families had inherited an average of $2.7 million from their parents.  (447 times more than those with wealth less than $25,000 had inherited.)

So I challenged myself to come up with a theoretical proposal - not something that would ever likely be implemented under society's current paradigm.  Rather, it's an exercise in completing the thoughts surrounding my assertion.  If I'm going to question a global precedent, it is only fair that I eventually turn my mind to an alternative that would address the issues raised.  Here's one possibility:
Imagine, a system with no estate or inheritance taxes.  Instead, estates would only be permitted to bequeath a maximum of $1 million dollars in negotiable assets to any single entity or trust (not including for-profit corporations), and up to an additional $1 million in non-negotiable assets (that were non-negotiable assets at the time of death) to any offspring or dependents.  A higher amount could be willed to a charity or other public institution, subject to a review by a standard community board set-up for such reviews.

Any entitiy could also be granted right of first refusal on the purchase of specified assets at fair market value.

All surplus funds would be used by the community/public sector to pay for important programs like national healthcare and a Guaranteed Basic Income plan.  If this resulted in a surplus of public funds, income tax would be lowered accordingly for all citizens.

Note that, prior to their death, any parent would still be free to gift any asset to anyone, without restriction (although there might have to be some mechanism to review massive gifts transacted within, say, the same window that we use for requests of medically-assisted death when such a death is considered imminent).  Beating the 'deadline' by a day or two is obviously cheating!
By tossing this thought out there, I realize that there will be many who will find fault with the experiment.  And I look forward to hearing from them, so long as their criticism advances the philosophical and ethical objectives.  (To begin with the amounts are somewhat arbitrary but should convey the essential intent.  Feel free to comment.)

To those who would protest that such a system would be 'unfair',
...I challenge them to argue for the 'fairness' of the existing system.
To those who would protest that such a limitation would be meaningless if unlimited gifting before death were still allowed,
...I say: "Well then, what's the problem?"  Personally, as mentioned above, I believe that gifts in-person are NOT the same.  Such gifts carry social obligations and also remove wealth from the still-living parent.  Time would tell how that dynamic would play out. 
To those who protest that such a system could never be enforced - that there would be workarounds just as assuredly as there are billionaires with offshore accounts who pay no tax,
...I remind them that, for the sake of this exploration, let's assume that a society could exist where such a system could be realistic and pragmatic, and work from there.
Your thoughts?

Saturday, April 11, 2020

Where Do We Start?

You see this crisis as an opportunity?  Great!
You got a plan?  No?  Well I do.

Not too surprisingly, my previous post here was similar in nature to a lot of other posts that are showing up in progressive blogs around the globe, all saying essentially the same thing:
"This could be our best chance for a better world!"

"During lockdown, the pollution cleared and the birds were singing, showing us the environment that is possible!"

"We've had to lots of time to think about what's important.  Now we just have to make that happen!"
It's all very heartwarming and uplifting.  It gives us hope for a brighter future while we are trapped in our own homes, unable to socialize, unable to reach out and hug one another, unable to share the joy of being alive in-person with others.  A new world is possible!

Please, don't kid yourself.


Personal changes to your life will be wonderful.  They may bring you happiness and renewed purpose.  They may shine new light in your tiny corner of the world.  Don't get me wrong - that is awesome!  But how are we going to take this opportunity that you see and actually do something with it?  What are you actually going to ask your leaders to do that hasn't fallen on deaf ears before?  What do you think is really going to happen?

Whether we follow China's timetable and end the lockdown by the end of May or whether it drags on into June or July, when we do get the green light to return to normal, we will sprint for it.  The marketing might of every industry on Earth will be pulling us back into their line of thinking with every fibre of their very powerful being.  And we'll go back to the old status quo, not because all of us want to, but because we don't know how to fight that.  We don't know anything else.  The world we want hasn't been done before.  We don't know where to begin.  This is all unprecedented.

Economic catastrophes, on the other hand, are not unprecedented, and governments have been continually refining how to restore their monetary paradigm.  After the economic crisis of 2008, and for the next four years, the U.S. Federal Reserve, the European Central Bank, and others started madly creating money out of thin air in order to avert total economic collapse.  Multiple trillions of dollars were printed with nothing but a prayer for the return of economic growth for decades into the future to back them.  And by their measures, it worked.  Meanwhile, the social values got worse.  Entire countries suffered austerity measures that they have yet to come out from under, millions more displaced peoples wander the globe seeking refuge from conflict and devastation, and populism has made a mockery of democracy and past advances in social justice and environmental protection.

This may be an opportunity to move forward, but all precedents point to a move backward - a loss of past gains and even deeper entrenchment in maniacally obsessive economic growth.  We are nowhere near the end of this crisis and look at what your government has already started.  The business bailouts have begun and the pitches have already started to have our economies roaring back sooner rather than later.  No-one on the news or in authority ever questions that objective as being what we all want.

On the flip side, those who long for change have no meaningful plan.  They are split between climate change activists, environmentalists, social justice seekers, spirituality practitioners, and biodiversity promoters.  Everything that they call for threatens jobs and the economy.  Yes, that is the point, but that point is lost on those that fear for their lives and understand that jobs and the economy are the keys to their survival.  I said it in my previous post, but it's worth saying it again:
The bulk of the world will never change its value system until it sees a real benefit in doing so, but the only way to see that benefit is if you are using a different value system.
I do not doubt that the scope of this pandemic, the pause effect on our lives, and all those other effects on the common person will have an impact.  At best, there will be many more who are drawn to a desire for change.  But chances are, the only real outcome will be a slightly higher proportion of the world population being distressed with the direction we're headed in.  Climate change and all the other global disasters will be back on track in no time.

Except for One Possibility...


Personally, so far, I see one chance for change.  One.

Consider what attributes any real change agent would have to have:
  • Something that did not directly threaten the status quo paradigm.
  • Something that, at face value, might even look like it would support the old status quo.
  • Something that had been tried already and shown to have success potential.
  • Something that does not immediately lower the corporate bottom line or the power of the super-wealthy.
  • Something that already has support on both ends of the political spectrum.
  • Something that could easily gain broad support from all the people.
  • Something that suited the circumstances.
And most importantly...
  • Something that could start small and had the potential of being a total game changer.
To figure out what that might be, I ask you:  What holds us back, every time?  Pandemics aside, what is our universal everyday fear?  What defeats the most progressive decisions of governments the world over?  What is the one thing you see touted on every party platform, regardless of where they lie on the political spectrum?

Jobs.

We must have jobs, preserve jobs, create jobs.  It's a policy with universal appeal because losing our job is the ubiquitous modern-day fear that the non-wealthy have in this country.  What if I lost my income?  What if my savings were wiped out?  What if I want to retire?  Jobs are equated with basic survival.  And so every single decisive move that any government wants to make gets weighed against the all-important job question because they know that's the deal maker or breaker.  So how might we ever escape this paradigm?

With a guaranteed basic income.

I am convinced, more than ever, that a guaranteed basic income (GBI) would be humanity's foot in the door that leads to the change we all want.  Free survival removes the survival imperative of having a job.  It is our best, most pragmatic, most realistic shot at turning this massive cruise ship around.  I see it as a first step towards restoring human values and literally changing our world.  Describing that process would take more time than I have in a single blog post.  I already posted a case for how a GBI might work in Canada, and what the benefits would be.  That article also addresses some of the common objections.  Note that a GBI does not replace jobs - it simply begins to change our relationship with them.  Perhaps in a later post, I will attempt to extract more from my second book-in-progress so that the pathway can be more comprehensively laid out.

Meanwhile, to all of you who have been reading my posts and others, cheering on the visionary writers, and spreading your hopeful optimism - to all of you who can truly see this tragic pandemic for the huge opportunity that it is - where are you going to start?

Let's throw our collective weight behind something that might actually achieve that brave new world.  Demand a federal guaranteed basic income.  That's where I think we should start.  And start now.

That's my idea.  I'd like very much to hear others...