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November 05, 2014

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Luis Enrique

"Libertarians because the state in a free society should be neutral between ways of life"

really? what role does the state have for a Libertarian? A limited one, but one that requires real resources. So should the state really be neutral about 'ways of life' the generate real resources, in comparison to those that demand them?

Luis Enrique

and does this "Marxists .. don't think the state should be capitalism's human resources department" mean you are opposed to any vocational state education, all active labour market policies, training schemes, tax incentives etc.?

If so, I am not sure you are on the side of the angels

Luis Enrique

and sorry to repeat myself but I am going to anyway:

if the BI isn't enough to live on, then it will not be politically acceptable because it will be condemning the unemployed to a life of destitution.

That means it has to cover housing costs in the South East.

So either you need very steep regional weighting or if the national BI covers London housing costs everybody north of Watford is going to give up work and live a life of luxury

If you cover London housing costs, how do Marxists feel about subsidising private landlords?

So we need BI, and citizens basic housing and maybe the expropriation of private housing

Brendan

How much different is the 'stakeholder society' from one in which every person in the country is granted £50,000+ when they turn 16 - but they must repay it from future earnings, and spend that sum on education and subsistence?

Student loans and state pensions are practically a badly run citizens income already.

SK

Well Done!

There is a need for this discussion to take place asap.
People should not be stressed about surviving and they should be given means to a basic survival income.
This will then allow them to examine what they want to create/ focus .. Education is much easier then and this will allow the wages to lift off from the current very low bottom.

Again wel done for pushing Basic Income.

SK

@Louis,
A basic income will remove pressure for housing in London. When people have the means to survive then they will look for jobs/hobbies which can provide some additional means further away from London.

Then they wont be so much competition for the London housing resources and rents/prices will drop..

Jackart

That's it. A Basic income could be raised or lowered (thus altering the redistributive nature of tax and benefit) at will. All decent, thoughtful people think it's a good idea, and we can argue about the level later.

Luis Enrique

SK

what would happen to unemployed people in London paid BI if it does not come close to covering housing costs? Let's not assume they will happily migrate to Hull

if you keep a means tested housing benefit, then you undermine the whole logic of BI

From Arse To Elbow

The differences between right and left extend beyond the level of a basic income. For the right, a parsimonious sharing of wealth is better than sharing time by reducing the working week across the board, while the left has traditionally seen a BI and a reduced working week going hand-in-hand. The right seeks to maintain the ideological gulf between workers and workless while the left seeks to bridge it.

Another difference is the mechanism by which the level of the BI is adjusted over time. The left tends to see the BI as a "social dividend" and would thus hitch it to GDP. The right tends to prefer either elite control (e.g. a commission that would bias productivity gains to profits over wages) or to tie the level of income to median wages as a matter of "fairness" (in fact, this acts as a drag on wage growth while a GDP link would help push wages up).

Anarcho

They are not "libertarians", they are propertarians!

Libertarian was first used by a communist-anarchist in 1857 and became an internationally known alternative to "anarchist" (i.e., anti-state socialist) by the 1890s.

Right-wing attempts to appropriate the word "libertarian" date from the 1950s. They knew it was a word used by the left but when for it anyway.

Please don't help the right degrade the good name "libertarian"!

Icarus Green

I think a guaranteed living standard in some shape or form will eventually be enacted. But it will be after a momentous struggle where advances in productivity and technology (particularly in AI) have made it abundantly clear that an economy generates enough resources without too much human input (either physically or intellectually) but when conservatives still want to inflict pain on people and make them sweat for the good life.

Its a bit like a desert island where a man owns a machine that creates food and drink but lives on the island with 10 other people. He can keep the food for himself and make other people have sex with him, do his chores, do whatever he wants and reward them with some food from this machine or the rest of the people on the island can gang up and take the machine and live in utopia, perhaps even still sharing food with the former owner. Of course it gets messy when he starts paying some of the people to protect his machine and beat up would be rabble rousers.

The history of the 20th century is already a precursor, the welfare state was introduced after advances in machinery, agriculture and factory production generated enough resources that people didn't have to work all the time to feed themselves. What needed to happen though was a struggle between socialists and conservatives before we got things like child benefit, unemployment benefit and the like.

I hope I live to see the day when people don't have to waste hours in the office trying to make the scanner work or lay bricks in the rain and they can be free.

SK

@Luis,
Most people are in London in order to find jobs.
They wont need to stay in London if BI is implemented. A large % of London residents will leave then and this will remove pressure from housing costs.

A

Luis Enrique

SK have you noticed left wing reaction to housing benefit cap cleansing of poor fron London? How do you think left will react to defacto eviction of unemlpied Londoners?

Ben

My reticence to a basic income is that it feels like we are being fed scraps again by the establishment. What is basic income supposed to represent? An equitable share of the countries proceeds.

What creates true wealth? What would the establishment like to share less than basic income? You can be sure if they like it less it's because it transfers more wealth. The answer to both is "land".

The UK's problems and inequality are all down to unequal access to land. Let's take back all land from the establishment, ramp up inheritance tax *and* make it a right of every citizen to have access to land at a fair value plus have LVT.

The main issue in the UK is the extraction of real wealth through land via house prices. I feel like basic income falls short by making no attempt to fix this.

Luis Enrique

In fact if BI replaces housing benefit it will expel entire working class from London. This is the sort of policy chris usually refers to as persecution of the poor

Luke

Luis, how about keeping (perhaps slightly mean) housing benefit *and* having BI? Having your rent paid on a slightly shit home plus something like JSA still gives plenty of incentive to make *some* extra money, ie work.

The requirement for some local connection means you won't have northerners flocking to London unless they've got some reasonable expectation of a job. I haven't thought through what is the effect on Londoners with low earning potential, whether through bad luck or laziness (if those are different), nor what a desirable effect would be.

From Arse To Elbow

BI advocates on the right envisage it providing only a "social minimum", i.e. enough to avoid outright destitution. It would cover food, fuel, clothing etc, but not the infamous flat-screen TV. As this would be below the minimum wage, to ensure that "work always pays", the idea that it could cover current housing costs (anywhere, not just in London) is a non-starter.

The problem that Luis highlights is that housing is now a near luxury even though shelter is a basic need. While the state could continue to shovel money to private landlords, it's more likely that the introduction of a BI would see a reversal in housing policy with councils obliged to provide "basic" accomodation for BI recipients.

This would not be a return to the halcyon pre-Thatcher era because council housing then was (at least originally) intended for all income levels. Instead, the current social housing apartheid would become even more entrenched, which would maintain the value of private housing and thus keep the "propertarians" happy.

Churm Rincewind

Luis - I'm not sure why you think an exception should be made for London housing costs. It might equally be argued that an exception should be made for any area with high housing costs, such as Edinburgh, Bath, or indeed Mayfair, which in my view would be absurd.

Nor do I think that BI replacing housing benefit would necessarily expel the entire working class from London since it would then cease to function and presumably wages for unskilled labour would increase accordingly.

London already claims the lion's share of Government expenditure (7% higher than the UK average) and I can see no reason to subsidise it further.

Luis Enrique

I love the idea of BI, I just think it's ndemined by large regional inequalities in housing costs, and high value means tested housing benefit would negate most of its benefit. I wish I could see an easy way out. Maybe much more basic social housing for all those who want it, but that's easier said than done. I really don't want to work hard to struggle to get by because of cripplng rents if people are living in comparable housing for free, so unless either existing housing stock nationalised or new basic social houses, meaning inferior, are built, I can't see it working. I don't like my job and would quit if I could get by, spend more time with my kids, do odd bits of work here and there. I don't think economy could stand too many workers quitting and still generate real resources to redistribute by BI. So I don't think this is a policy that can be easily enacted, Iain Duncan smith on a gigantic scale.

reason

Luis, I agree with you, but it just means that the BI has to be phased in so people have time to move. I think one greatly underappreciated aspect of BI is its regional impact.

UberLibertarian

Housing is easily the most awkward aspect of UBI systems. £10k is enough ex-housing, esp. if folks can supplement their income. Further to which the minimum wage has to go - in fact UBI can't really work with a MI. But it ain't enough to be housed. Land taxes would help to free up a lot of land, but that has to be slowly phased in to give the economy time to adjust. And it should be acreage not value. Also, the market failure of unaffordable housing can only be cleared by govt providing some housing, that way housing benefit recipients can be charged £50 per week say and pay that out of the UBI. You'll also need a supplement for kids but decreasing for each extra kid.
Also, sorry but it has to be linked to work - a wage subsidy in effect, and means tested. We only have the wealth that we produce.
Finally, Icarus Green - listen up, you need to hear this - there actually isn't a machine that makes food for free - there really isn't. The universe doesn't work like that - it's the laws of thermodynamics. You have to put something in to get something back that you value more.

AllanW

CD; "A lowish basic income satisfies the right's desire that there be only limited redistribution. But it would compel people to find low-paid and unpleasant work."

Hence the sensible alternative that the state adopt a scheme of job guarantee with an income set at the Living Wage level for all. No-one excluded, every citizen eligible as a fundamental human right.

The cost, you say? Massively repaid by the reductions in social costs to cope with the problems of non-engagement, alienation and lack of hope that we currently pay in hospitals, prisons and welfare budgets. And in the short-run before the benefits flow in? Why direct QE bypassing the banks, of course.

Our economic prospects including growth, aggregate demand and ability to invest would place us as the most attractive country in the world.

That's a real safety net and would, at a stroke, offer the prospect of strangling all organisations that only wish to exploit not employ.

Brendan

"The universe doesn't work like that - it's the laws of thermodynamics. You have to put something in to get something back that you value more."

Sorry, thermodynamics doesn't work like you think it works. There's plenty of low entropy arrangements of matter for us to make use of - that's what we call energy sources. It won't last forever, but what does? And forever is a long time. There are better arguments against this idealised scenario being plausible than from thermodynamics.

From Arse To Elbow

@UberLibertarian, I think you'll find that the universe is a machine (i.e. a process, rather than a Newtonian mechanism), with lots of "free lunches". The most obvious is solar energy which creates food via photosynthesis.

It is anthrocentric to imagine that "wealth" is only the tiny speck of matter than man has managed to transform. Of course, this attitude is just an extension of the belief that wealth should be limited to the small subset of humankind who claim responsibility for that transformation.

@AllanW, a job guarantee is not a straight alternative to a basic income as they tackle different problems. A job guarantee attempts to address a surplus of labour, while a citizen's basic income attempts to address a surplus of wealth.

For more, see http://fromarsetoelbow.blogspot.co.uk/2013/07/scoubidou-and-protestant-work-ethic.html

AllanW

FATE; " a job guarantee is not a straight alternative to a basic income as they tackle different problems. A job guarantee attempts to address a surplus of labour, while a citizen's basic income attempts to address a surplus of wealth."

No. There is no 'surplus' only people who deserve our most basic solidarity and don't currently have it. Which also has the benefit of reinforcing the primacy of people over material. It establishes a commitment to a different future, one more human and concerned with sufficiency not maximisation; not a small difference.

A much better goal than rearranging the deckchairs on the titanic.

Icarus Green

@Uberlibertarian

As great man once said: "Metaphor Jim, its only a metaphor".

@Others
I would love to know if any thinktanks or other academics have done any theoretical or CBA work on the various options like higher minimum wages/jobs guarantee/basic income/negative income tax. I hope Switzerland eventually passes BI and we get an experiment.

More generally I think the epistemological problem in economics is that we can't do experiments or more accurately controlled ones. I think Chris has mentioned in the past how social sciences suffer the problem that a point can be argued both ways justifiably when restrained to the realm of theory.

Icarus Green

And f*k it, while we're promoting blogs, I have a somewhat relevant piece on this on the post-scarcity economy of the (distant?) future:

http://www.theicarusgreen.com/?p=209

Igor Belanov

@ Allan W

I don't see how a job guarantee would provide a more human future than UBI. Surely the idea of a job guarantee is linked to compulsory work and labour as an end in itself? A basic income would potentially improve workers' bargaining power and thereby improve freedom and dignity at work.

Senior Ramboz

@Anarcho: You can have the term "Libertarian" back when the social democrats give us the term "Liberal" back.

AllanW

IB; " Surely the idea of a job guarantee is linked to compulsory work and labour as an end in itself?"

No, it isn't, in either case. Your error here probably provides much of the reason why you say 'I don't see how a job guarantee would provide a more human future than UBI'.

Ralph Musgrave

"capitalism cannot provide full employment." What, so the workers' paradise that was the old USSR brought full employment?

Second, the free market's mechanism for reducing if no eliminating unemployment, i.e. having the price of different types of labor vary in response to changes in supply and demand, is messed by a "socialist" or non-free market phenomenon, namely trade unions. Thus it is not entirely capitalism's fault that in the real world it does not bring full employment.

Of course the political left may be right to object to wages varying in response to supply and demand, but in that case they need to come up with some alternative method of allocating labour if the free market's method of allocating labour is messed up. But that's too much like hard work for the political left. Just whinging about capitalism is more emotionally satisfying.

From Arse To Elbow

AllanW,

The job guarantee is a regulating mechanism that expands and contracts a buffer-stock of workers in the public sector depending on the health of the private sector. That's not my terminology, its what designers of the JG employ. In practice, both the JG and BI can be implemented in either a punitive or humane fashion. The decision is political, however there are structural features that make the JG more likely to be punitive.

A fundamental difference between the two is that the JG must be paid at a sufficiently low level to encourage migration to private-sector jobs once the economy improves (workers must find these new roles for themselves - you can't just terminate JG schemes and hope for the best). This level would have to be less than the minimum wage to avoid inertia.

A non-compulsory JG scheme would have to maintain a significant pay differential between JG jobs and unemployment benefit to be attractive. As the JG wage is bounded upwards by the NMW, this is likely to mean unemployment benefits becoming even more parsimonious, which is hardly humane. De facto, a national JG scheme would eventually lead to coercion either because of refuseniks starving to death or widespread grumbling about skivers.

Given its temporary nature (and political self-delusion about the duration of recessions), there is a built-in caution against investing in long-run projects that might provide skill development, or indeed in formal training that might not be completed. In other words, most JG work will be manual and its organisation will look a lot like a labour battalion.

The chief modern argument against the job guarantee is that it is based on traditional assumptions about cyclicality: the periodic move from full employment to unemployment and back again. It does not address secular trends in respect of automation and commodity deflation, and is thus guilty of "fighting the last war", being more appropriate as a response to the temporary depressions of the 20th century than the structural unemployment of the 21st.

El

What is really needed is a worldwide UBI. Why should somebody be entitled to disproportionate share of the worlds worth via a UBI just because they happen to be born in a wealthy country.

That will separate the real egalitarians from the gimme gimme's.

AllanW

I have the deepest respect for your contributions here and elsewhere FATE but on this topic you need to carefully walk back to the first position from the place at the end of the gangplank you now occupy. I don't deny your enthusiastic interest but may I suggest a little more careful and detailed comprehension BEFORE launch?

All of your following points are incorrect, as a more careful reading of my first post and subsequent questioning could have made plain to you.

FATE; "The job guarantee is a regulating mechanism that expands and contracts a buffer-stock of workers in the public sector depending on the health of the private sector."

No. Not any sort of labelling as inanimate buffer is appropriate for people, my friend. And there is no dependency on private sector employment to regulate the size and shape of the composition of people taking advantage of the job guarantee. Individuals chose whether to be a part of it or not; THEY choose not the market forces operating in the private sector. Them, no-one else.

FATE; "That's not my terminology, its what designers of the JG employ."

There is not only one 'approved' version of this idea. Maybe this error fully explains your stance so far out on that limb.

FATE; "there are structural features that make the JG more likely to be punitive."

No, the actual case is completely the opposite. With no compulsion to accept the guaranteed job opportunities this route is far more humane and rewarding compared to the onerous strictures necessary to be adopted under any of the basic income schemes existing currently.

FATE; "the JG must be paid at a sufficiently low level to encourage migration to private-sector jobs once the economy improves"

Multiple 'wrongs' here; the end-point or goal of the job guarantee scheme IS NOT to teem and ladle labour units on behalf of the private sector between the highs and lows of the economic cycle. It's to offer a real alternative to people without sufficient work at a rate that enables continual survival for those involved and also offer a ready pool of skills, motivation and physical resource that would enable public initiatives to be implemented more quickly than currently possible. For this reason the job guarantee must NOT be paid at a low enough level to be punitive; 180 degrees wrong there.

FATE; "This level would have to be less than the minimum wage to avoid inertia."

Again, you state the mirror image of what is planned; the job guarantee could be exercised by some people for the whole of their working lives. At their discretion. It is not intended to be temporary or inadequate in order to grease any stickiness in the 'labour markets'. I repeat, the remuneration will be at least at Living Wage levels precisely to give substance to the real offer of the human dignity of active engagement in our society that is currently denied to more than 9 million people who have some degree of job wish unfulfilled in the UK.

FATE; "As the JG wage is bounded upwards by the NMW, this is likely to mean unemployment benefits becoming even more parsimonious, which is hardly humane."

There is no NMW upper boundary for the job guarantee remuneration level; you misunderstand completely and I hope, as I did in the first post, that you are clear that the wage levels are AT OR ABOVE Living Wage levels. The operation of any benefits or welfare system beyond the job guarantee levels of remuneration will surely become unnecessary over time, not as a result of any ideological inhumanity (as now) but because they become increasingly redundant levers in enabling many people to live their lives outside the strictures of poverty.

FATE; "a national JG scheme would eventually lead to coercion either because of refuseniks starving to death or widespread grumbling about skivers."

Coercion of whom? People unwilling to enter the job guarantee scheme? Why the hell would we wish to coerce them into it? They either accept the offer or don't, at any time, their choice. If they become homeless or destitute as a result they will be catered for by the charitable sector as now or fall into the legal or health systems. Always with the option of taking a guaranteed job whenever they wish. The very small number of people who would choose to live their lives this way given a real alternative to participate fully in our society are perfectly able to be accommodated, indeed far better than we can look after them now.

'Skivers'? Do you mean that Daily Mail types would denigrate those taking advantage of the job guarantee scheme work? Or do you mean something else, I'm unclear on your point. I'd have thought it abundantly stupid to attempt to criticise people choosing to work rather than picking some unearned basic income route towards supporting themselves ...

FATE; "Given its temporary nature .."

Wrong, it would be a permanent feature of our society. As much a part of the fabric of our lives as the NHS and taxes.

FATE; "most JG work will be manual and its organisation will look a lot like a labour battalion."

Wrong, it would not. For the very reason that most of the work we could envisage doing is not digging roads but consists of clerical work; call-centre work, data gathering and manipulation, regulatory oversight, investigative, care etc. 'Labour battalion' forsooth ..

FATE; "The chief modern argument against the job guarantee is that it is based on traditional assumptions about cyclicality"

Then I dealt with that point in my original post; the job guarantee is permanent, a very real offer for the whole working life of every man, woman and otherkin in the country. Glad we have that main objection out of the way now :)

FATE; "It does not address secular trends in respect of automation and commodity deflation, and is thus guilty of "fighting the last war"

This last point of yours is yet another illustration of you getting the wrong end of the stick; entirely avoidable with a little more careful reading of the original post and more judicious questioning rather than assumption. Whoever said people on the job guarantee scheme would be herded into labour battalions to dig roads or into typing pool? How very Fifties of you! I think it entirely possible to develop potential skills, utilise and extend existing capabilities and organise projects, some quite long and otherwise intractable, with this method. Unless your view of state and local government skills remains stuck at 'Dad's Army' levels, that is.

I repeat, I value your contributions normally, look forward to reading them but you've gone off half-cocked here I'm afraid. I'm sure it won't remain that way for long :)

Best wishes.

TickyW

A negative income tax (NIT) is not the same as basic income (BI). NIT is a means of delivering BI should that be desired. BI is unconditional. NIT need not be unconditional and can tie payment to activity and so make income conditional.

http://theuxbridgegraduate.wordpress.com/2014/10/04/using-the-tax-system-to-deliver-a-living-wage/

Igor Belanov

I think there is a certain degree of cross-purposes here.

FATE is clearly discussing the situation were a 'job guarantee' to be applied in the political, social and economic context we are in at the moment. He also states that a UBI could vary in type and might well be very basic in the hands of a state under heavy neo-liberal influence.

Allan W is obviously talking about a 'job guarantee' in something of a political vacuum where the state is willing and able to force employers, or act as employer itself, to provide work at living wage levels for anyone who wants a job.

Now I would have thought that, all things being equal and there are no barriers from rapacious capitalists and stingy bureaucrats, a basic income would still be better at enhancing freedom and humanity than a job guarantee. When you bring aforementioned capitalists, bureaucrats and politicians into the equation, then a UBI still seems a better option because Allan W's job guarantee scheme is a complete non-starter.

From Arse To Elbow

AllanW,

Mention of gangplanks reminds me of Captain Rum in Blackadder on the subject of whether a ship needs a crew: opinion is divided.

You're obviously entitled to your own vision of a job guarantee, but I was pointing out the common features of the theoretical schemes advanced by the majority of its advocates, such as Bill Mitchell and Randy Wray, plus the current policy proposals of the Labour Party.

The latter are promising a limited job guarantee (25 hours a week) for the long-term unemployed (+24 months or +12 months for 18-24 year olds), that would be compulsory and paid at the NMW.
See http://press.labour.org.uk/post/79110402681/next-labour-government-will-guarantee-starter-jobs-for

AllanW

FATE; "I was pointing out the common features of the theoretical schemes advanced by the majority of its advocates, such as Bill Mitchell and Randy Wray, plus the current policy proposals of the Labour Party. "

Understood. Your criticisms of those schemes is entirely valid and I agree with them. You, however, posted them in response to the version I mentioned for which the criticisms are invalid.

Do you have any views on that?

AllanW

IB; "Allan W's job guarantee scheme is a complete non-starter. "

Yeeeeees. It's always better to fail to examine a notion than to understand it, isn't it?

From Arse To Elbow

AllanW,

Insofar as I've understood it, your JG scheme would have the following features:

1. An income set at the level of the Living Wage.
2. Assuming #1, "any benefits or welfare system beyond the job guarantee levels of remuneration will surely become unnecessary over time".
3. Every citizen to be eligible (i.e. the currently employed as well as the unemployed).
4. Not compulsory, which implies alternative income support for those who don't participate and remain jobless.
5. The scheme to be permanent and available on demand ("the job guarantee could be exercised by some people for the whole of their working lives").
6. The scheme to be pro-social rather than a subsidy to the private sector ("a ready pool of skills, motivation and physical resource that would enable public initiatives to be implemented more quickly than currently possible").

Correct me if I've got anything wrong here.

There is an obvious conflict between #4 and #2. This highlight one of the persistent problems with all JG schemes, which is whether they should be compulsory or not. If not, this implies #1 (an attractive wage) but rules out #2, which means that the scheme could not be fiscally-neutral (i.e. no change in overall spending).

This doesn't rule it out, by any means, but a key claim made for both BI and JG schemes (and crucial to any chance of popular acceptance) is that they can be implemented by better using existing resources. Your proposal implies both an increase in taxation and a shrinking of the private sector relative to the public.

It might be possible to make it fiscally neutral by abolishing housing benefit (and child benefit) immediately, but this just returns us to the issue that Luis raised, which is that the scheme may prompt massive social engineering, with the poor being decanted out of London & SE.

Your scheme also implies a significant "deadweight loss", i.e. resources doing JG jobs that might be more productive doing jobs in the private sector. This is not a criticism of public sector jobs per se, but a recognition that employment churn is "sticky" - i.e. people don't move job at the point that is optimal for both them and employers, and they tend to bias towards sitting tight. This is why most JG schemes are designed to be either temporary and/or have wage incentives to encourage exit.

Re "skivers", most skiving in society is done at work, which is why the denigration of the jobless is hypocritical. It is also more prevalent among whitecollar roles rather than bluecollar, because the latter tends to be subject to more workplace discipline, however it is deemed to be easier to spot among the latter - i.e. manual workers tend not to be granted the privilege of excusing their idling with "I'm thinking".

Regardless of the reality, any JG scheme will be assumed by DM readers to be a hotbed of skiving. This prejudice, which is the ideological descendant of attitudes that gave us workhouses, is also likely to result in the scheme being limited to jobs that are easier to monitor and discipline, so call-centre and care work rather than data manipulation or investigation. A JG scheme is inescapably a class issue, in a way that the universal BI isn't.

I admire the ethical basis of your scheme, but I don't think it would work in practice.

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