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June 30, 2016

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magistra

Interesting on control - might fit with the finding that authoritarians were more likely to vote Out: see http://www.fabians.org.uk/brexit-voters-not-the-left-behind/. I'd presumed that was an artifact of other underlying demographics, but maybe not.

You'd also need policies for care in old age, since control may be a powerful idea for them: see https://www.theguardian.com/society/2016/jun/21/brexit-visceral-appeal-older-people-eu-referendum.

Alex

Hmm. Will Davies' piece singles out the fact a lot of people in ex-industrial or ex-seaside places have been on benefits for years as part of the problem. I would suggest that if you've been on incapacity benefit since the pit closed, by now you've pretty much had the experience of the basic income!

From Arse To Elbow

A citizens' basic income could potentially "address voters' concerns over immigration", if it were limited to UK citizens (which could be done outside the EU). To do this, pay rates would be dropped substantially but made up through the CBI. For example, if we assume a decent BI of £150 a week, that would equate to £4 an hour for workers, allowing the minimum wage to be dropped to £3.20.

Whether through calculated generosity or simply through improved worker bargaining power, that minimum might be set higher, say £5, but that would still serve to undercut pay rates for non-citizens who wouldn't get the BI. A more authoritarian approach would be to implement a separate and higher non-citizens' minimum wage of £10 (i.e. biasing the employment of non-citizens to more skilled, higher-pay roles).

I'm not outlining this because I personally think it's a good idea, but to point to a dog that has yet to bark. Rightist proposals for a BI usually see it as a substitute for the welfare state, but this means they tend to be parsimonious (in the UK, most proposals, from both right and left, suggest £75 - i.e. the same as the JSA).

There seems to be little interest as yet in a "nationalist BI", even though that would probably find favour among working class voters both because of its sense of control and its (positive) sense of entitlement. It might even appeal more to employers than a bureaucratic points system.

If UKIP ditch their commitment to a "basic cash benefit" to replace JSA/Incapacity (i.e. fuck-off money) and suggest a generous CBI, they really could make significant electoral inroads.

Bob

What is needed is a Job Guarantee at the living wage and controlled immigration.

If the living wage was set at £10 per hour and you worked 37.5 hours a week you would get a gross wage of £375 per week. Way better than basic income, and since it is an auto stabiliser no need to hike tax rates.

An immigration system that excludes EU immigrants that wouldn’t otherwise get a work visa instantly removes all those people who come here and compete with the working-class sub-median wage earners. These were the people who voted in the largest numbers for Brexit. These people have paid the heaviest price for EU membership.

Reintroducing a work visa system that is on same lines as every other civilised advanced nation outside the EU, solves that problem.

Then only higher waged, higher skilled individuals come into the country from all over the world, but they compete with a different class of people and compete less because they are in areas with genuine skill shortage.

From the point of view of the sub-median wage earner, immigration has ended. So they are happy.

And importantly you need to send out higher skilled individuals from this country to the rest of the world to balance those you take in (long run, at the moment we need to train more people.)

Otherwise you are stealing skills from other nations which they need to develop internally That is a ‘beggar-thy-neighbour’ attitude and morally unacceptable. Immigration should be more of an informal exchange process than a capitalist ‘free market’.

This is a civilised solution that addresses all the concerns. Eminently reasonable and fair to all who believe in nations and borders. A win-win all round.

"For example, if we assume a decent BI of £150 a week, that would equate to £4 an hour for workers, allowing the minimum wage to be dropped to £3.20."

What an awesome way to raise productivity. Even better than the last idea of open borders and tax credits.

gastro george

I'd have a lot more time for the MMT crowd if they didn't seem to be falling into a Fortress Britain mentality. I mean I can understand why it might be needed with a JG, but it disturbs me.

Churm Rincewind

"When faced with uncertainty – not just about their economic lives but about cultural change too – people want a sense of control.

Of course, mainstream economists will see a flaw in these demands."

So, direct me to any mainstream economist who has addressed the question of cultural change. That's right, none. Including this blog.

As long as economists disregard all considerations outside their own, their views are likely to be discounted.

And that's why CD's proposals have no real traction, regardless of their merit.

Neil Wilson

I once spoke to an air traffic control system designer who showed me data proving that the most effective and statistically safest ATC system was one where planes flew at random heights in random directions and landed when they felt like it.

I presume you'll be pushing for that to be implemented as well. It would of course save millions of pounds a year.

Keith

Off course mainstream economists might be wrong. Lots of voters seem to think "expert" is a term of abuse for nerdy fools. The nerds need to be more convincing about why they are right.

Also a lot of this brexit vote is clearly emotional projection, mixed in with economic discontent. The discontent seems unfocused and inconsistent which played into the hands of the Brexit campaign as they were equally inconsistent. There is apparently no plan, as the outters were not required to agree one.

Finally, are rent controls such a bad idea? The reason why lots of people seem to have voted for Brexit is the fact they assume that housing, health care, welfare benefits etc are a right, and some how the immigrants are fucking them all up. Taking control may be just a matter of asserting the idea in however distorted a form that the Nation should be a community where people are looked after. Why should you or your sister have to move out of your traditional neighbourhood because of rent levels inflated by permanent supply shortages and the Bedroom tax? The right wing Tory party may do nothing about this but Labour are just as much to blame if not more so. The whole direction of Labour for twenty years has been to embrace competition and meritocracy and markets and to treat the idea of the nation as a solidaristic community as outdated. Let the market rip and cut the safety net by making it meaner, to cut tax for Capital, and increase the supply of low paid Labour. The logic of New Labour and Camerons Tory party have created the desire to "take control". An ironic situation. Cameron called a plebiscite for tactical reasons and austerity lost it in the English regions and wales of all places.

oldcobbler

Has any country ever tried implementing a comprehensive Job Guarantee scheme and, if so, what were the results ? Doesn't a capitalist economy generally need some unemployment (or the threat of it) to control inflation and keep the profit share up ?

Endrew

"Of course, mainstream economists will see a flaw in these demands. The economy is a complex process which can’t necessarily be controlled for the better."

Haha! Doesn't stop them trying, does it? Unless central bank economists are no longer considered mainstream.

Endrew

Good post Chris, it is indeed all about a sense of control.

You will be familiar with the psychology literature "showing" people will tolerate quite high risks so long as they have a sense of control. Driving, gun ownership etc.

Endrew

We already have a generous basic income scheme for part timers called tax credits.

It bankrupts the country, subsidises large employers, is no help to the unemployed and makes sure the lower paid don't work more than 16 hours a week.

Economic genius from Gordon Brown.

Endrew

It's even better than the 60% marginal tax rate above 100k.

Bob

"Has any country ever tried implementing a comprehensive Job Guarantee scheme and, if so, what were the results ?"

No, because it is still a relatively new idea. A mini-Job Guarantee has been implemented in the US:

http://bilbo.economicoutlook.net/blog/?p=32287

Also check out the impact of G. Brown's Future Jobs Fund and the design of the Community Payback system. The main problem with FJF is its ideological obsession with the private sector getting involved.

http://touchstoneblog.org.uk/2012/11/the-terrible-truth-about-the-future-jobs-fund/

And they have implemented a partial JG in India:

https://en.wikipedia.org/wiki/National_Rural_Employment_Guarantee_Act,_2005

Ralph Musgrave

I like Bob's claim no country has "ever tried implementing a comprehensive JG scheme". Actually there was a scheme of that sort in the US in the 1930s: the WPA. That employed several million. And going back into history, Pericles in Ancient Greece implemented a JG scheme (about 500 BC).

At least according to John Garatty's book "Unemployment in History", Pericles decided to have the unemployed DO SOMETHING instead of give them dole money. So he put them onto public construction projects.

Bob

"I like Bob's claim no country has "ever tried implementing a comprehensive JG scheme"."

What? It is true. No country ever has yet.

"Actually there was a scheme of that sort"

Yes, of the sort and I gave more examples in my comment.

Calgacus

Gastro George:I'd have a lot more time for the MMT crowd if they didn't seem to be falling into a Fortress Britain mentality. I mean I can understand why it might be needed with a JG, but it disturbs me.

A "Fortress Britain" wouldn't really be needed for a British JG (or Fortress America etc.). The idea that it is in some way necessary is from the from some fellow members of the internet MMT crowd. The MMT academics do not say this. Bill Mitchell explicitly disagrees with the idea that a single country JG would necessitate new immigration controls.
________

oldcobbler: Doesn't a capitalist economy generally need some unemployment (or the threat of it) to control inflation and keep the profit share up?

The MMT point is that a JG would control inflation significantly better than unemployment does.
____________

I agree largely with Ralph on the history. The US's WPA etc were big and long enough to provide very good evidence for the (large, positive) effects of a full JG. The JG is in some forms an ancient idea. One can trace the lineage of modern thought and proposals back to the French Revolution, the politicians & philosophers of that time at the latest.

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