Anti-Capitalist Meetup: Thoughts on the Universal Basic Income

One of the hottest discussions we are seeing is the one surrounding the universal basic income (UBI) or citizens’ income (CI); in Britain it has been advocated by the Trade Union Unite (it was adopted at the last convention), it has been incorporated into the Green Party of England and Wales’s manifesto for a sustainable economy, the Labour Party is discussing it (the left wing, not the right surprisingly), some disabled rights activists support it and it is the measure of choice of many anarchist groupings here. In Canada, at its biennial convention in 2016, the Liberal Party passed a resolution in support of basic income. As Leigh Phillips argues, “the UBI is having its moment.” But as he points out, the UBI does not enable to end of capitalism, it actually reinforces it.

How did a measure originally proposed by right wing economists in the US (e.g., Milton Friedman in Capitalism and Freedom, 1962) win the support of the soft and some parts of the hard left? Is this idea, purporting to address poverty and inequality, a progressive or reactionary proposal? Is this a measure that the whole of the hard left should be advocating either as a reform or a transitional measure?

I have been thinking about this for a while; it is an unfortunate preoccupation of mine (which has certainly annoyed many people). I have had the opportunity to discuss this issue with many people who shared their ideas and insights both pro and con and which has helped me organise my thoughts; I have benefitted from wonderful discussions. So what you are seeing here are my preliminary thoughts on the question of the UBI. This will not be the last piece I write on the UBI, poverty and employment; but I am planning to write a piece in defence of full employment as a follow-up.

The Origins of the Measure are Important

Unfortunately this discussion requires some basic economic history and some very basic economic theory; my apologies. Irrespective of the fantasies of mainstream economics that viewed unemployment and poverty as generated by the working class itself (e.g., breeding too much, indolence, dissipation, blah, blah) and market blockages (e.g., insufficient mobility of labour , the existence of trade unions driving up wages and causing unemployment, minimum wages interfering in market determination of wages, blah blah) and who argued that in the long run that all available labour would be employed in the capitalist economic system, the Great Depression finally put the kibosh on this fantasy. Even before that, poverty and unemployment were features of the system; think about the realities of the industrial revolution to understand the creation of persistent unemployment due to the elimination of trades when new technologies were employed, the constant deskilling of labour, and the fact that even in a period of economic growth, workers were still living in poverty (see the 18th and 19th century poor laws in Britain if you did not know this) while capitalism, capital accumulation, economic growth and profitability were rising (clearly Adam Smith got it wrong that workers would automatically benefit from economic growth independently of workers struggling for increased wages). Moreover, these problems were not short-term issues in the system caused by a crisis or a business cycle. They are endemic to the capitalist economic system of production, distribution and growth.

Full Employment

The recognition of persistent unemployment and poverty as brought about by the laws of motion of the capitalist economic system led to the advocacy of the notion of full employment. This was the basis of the creation of the state sector as the private sector alone not only could not create full employment, but it was not in their interest to do so. During the Great Depression and in the post-war period (WWII) as part of the post-war settlement, the choice of full employment policies were initiated following the ideas of hard-core Keynesians and Kalecki. The creation of a state sector and the universal welfare state not only provided employment, but also provided needed services for all. Nationalisation of key industries and services (e.g., coal, energy, steel, water, transport), the creation of the NHS and access to universal health care, investment in education (for all), the development of social housing, et al, not only provided jobs, but guaranteed access to services that were not available for the vast majority. Full employment eliminates some of the worse aspects of capitalism; easy access to jobs means that workers could struggle for better wages and working conditions not only through unionisation, but also leaving their jobs to find ones with better working conditions and wages. It is far easier to pressurise bosses into compliance when you have alternatives and those that paid poorly with bad working conditions would have trouble finding workers willing to accept those situation. Unemployed workers or unemployment could not be used as a stick to beat workers to death. This is not to imply that it was a utopia by any means; workers are still exploited under capitalism, but it is certainly a better situation. Lower levels of exploitation and workers having more control over their wages and working conditions were without a doubt a better situation for the vast majority.

Combined with benefits for periods of unemployment (which does exist even with full employment), pensions for the elderly, additional coverage for those unable to work, sickness benefits, widows benefits, maternity benefits, additional income for those with children, access to health care, good housing, education and training for all ages and a system of support certainly improved the lives of the vast majority.

The situation did not last and there are massive reasons why it was abandoned (some economic, most political). Kalecki anticipated this in 1943 and describes why it will be abandoned in his essay, “The Politics of Full Employment.” Kalecki was correct, this policy was abandoned and in exactly the way he described it; it is almost prophetic.

“What will be the practical outcome of the opposition to a policy of full employment by government spending in a capitalist democracy? We shall try to answer this question on the basis of the analysis of the reasons for this opposition given in section II. We argued there that we may expect the opposition of the leaders of industry on three planes: (i) opposition on principle to government spending based on a budget deficit; (ii) opposition to this spending being directed either towards public investment -- which may foreshadow the intrusion of the state into the new spheres of economic activity -- or towards subsidizing mass consumption; (iii) opposition to maintaining full employment and not merely preventing deep and prolonged slumps (Kalecki, 1943, republished in http://mrzine.monthlyreview.org/2010/kalecki220510.html).”

The universal welfare state in Britain is becoming more and more like that of the US (a direct result of Tory austerity policies) which helps the unemployed, poor and disabled but no one else, labour market flexibility commensurate with crappy wages and work conditions are the norm rather than the exceptions, nationalised sectors and resources were privatised, health care and the welfare state are being privatised.

The Rise of the Notion of the UBI

Back in the early 1960s, even the right-wing economists recognised that persistent unemployment was something that was part and parcel of the capitalist economic system. Addressing both poverty and persistent unemployment was the initial justification for this idea of a universal basic income without the messiness of a public sector or a fully universal welfare state (the US never had a universal welfare state, this was provided for the poor, but not for all in the country). These economists clearly would not support the creation of full employment through the state (or public) sector. For them, those that supported the extension of capitalist relations of production; the state sector was draining valuable capital and areas of profitable investment for the private sector.

The obvious answer for them was to open up areas closed to investment by the private sector and to provide a basic income to stimulate demand to ensure further investment by the private sector; you can see that this has a Keynesian basis (as everyone was a Keynesian at that time, sort of); increase demand to stimulate investment, employment and growth through provision of a basic income for all. For them, more capitalism was the answer to address both unemployment and poverty. The proposal of a “negative income tax” (to ensure a basic income and to starve the government of revenue which would then impact government expenditure) by Friedman would serve to grant sufficient effective demand to the poor to purchase the goods and services of the private sector which would in turn increase investment and hence production of these goods. That is the theory, the idea is to stimulate consumption and leave production decisions up to the private sector.

The revival of the debate on addressing poverty and persistent unemployment

Unsurprisingly as unemployment and poverty are rising in the advanced capitalist world, this debate is again raising its head. How do we address these problems in the context of capitalism in a way to strengthen the vast majority? Both discussions of full employment (see, e.g., Bob Rowthorn, Ozlem Onaran and Engelbert Stockhammer, Dean Baker and Jared Bernstein, and Dmytri Kleiner). There is also a vast amount of literature arguing for basic income from many perspectives (e.g., Kathi Weeks, The Problem with Work, Ben Schiller, look here for some more articles). These debates are creating divisions among economists and political activists.

What is a Citizens’ Income or Universal Basic Income?

“(A Citizen’s Income is sometimes called a Basic Income (BI), a Universal Basic Income (UBI), a Social Dividend, or a Universal Grant)

A Citizen’s Income is

Unconditional’: A Citizen’s Income would vary with age, but there would be no other conditions: so everyone of the same age would receive the same Citizen’s Income, whatever their gender, employment status, family structure, contribution to society, housing costs, or anything else.

Automatic’: Someone’s Citizen’s Income would be paid weekly or monthly, automatically.

Nonwithdrawable’: Citizen’s Incomes would not be means-tested. If someone’s earnings or wealth increased, then their Citizen’s Income would not change.

Individual’: Citizen’s Incomes would be paid on an individual basis, and not on the basis of a couple or household.

As a right of citizenship’: Everybody legally resident in the UK would receive a Citizen’s Income, subject to a minimum period of legal residency in the UK, and continuing residency for most of the year (A Citizen’s Income is sometimes called a Basic Income (BI), a Universal Basic Income (UBI), a Social Dividend, or a Universal Grant) (http://citizensincome.org/citizens-income/what-is-it/).”

To be precise, a UBI is a payment to all citizens (it has been extended to immigrants who are permanent residents in some versions) of a guaranteed amount of money independent of their personal wealth or income; children will receive a smaller amount until they are of a certain age and will then receive the full amount. The amount proposed is fixed irrespective of circumstances; the Green Party of England and Wales advocates £80/week (£4160/year) per adult, £50/week per child (£2600/yearly) and pensioners receiving £155/week (£8060/year); they also advocate supplements for single parents, disabled people (£30/week) and lone pensioners recognising they have extra costs and in some cases, the amount they receive from benefits exceeds the amount proposed as a UBI.

Why are people advocating UBI or a CI?

I will not bother to describe in any detail why the right wing supports the UBI (or CI); that should be obvious. But in short, it destroys the social welfare state in favour of a privatised provision of goods and services to be paid for out of the citizens’ income. It will provide effective demand (that is money to buy goods and services) which is important to realise profitability. Control over production decisions (e.g., what output is produced, how much of each is produced and the manner of production) remains in the hands of the private sector while an income is provided for those without wealth and higher incomes to purchase said goods and services; always a problem for capitalist producers. So they view it as an extension of the free market to cover everything; a win-win for lovers of the free-market and democracy (couldn’t make this up, read Milton Friedman).

I am far more interested in what has drawn so many on the soft and hard left to advocate this as a solution to poverty and unemployment.

Some of those on the left supporting this idea view it as a redistribution of wealth from the wealthy to those without wealth. This is based on a misunderstanding; there is no redistribution of wealth here. No form of wealth is being seized, property, assets and land remains in the hands of their owners. Even if funded by a financial transactions tax, this will be a tax on income and hence a redistribution of income. Essentially, even more so in the absence of a serious progressive income tax, this will be an intra-class transfer of income between the working class like the funding for the social welfare state in the US.

Some on the left argue that a UBI would eliminate poverty; given the pittance of an amount that you would receive on UBI, that is, to me, a somewhat strange argument. There is no way that you would receive an income on UBI to cover basic necessities such as rent (housing benefit is retained in some models), social services, food, water, energy for heating and cooking, clothing and childcare (clearly, I am hoping the NHS still exists as a public system as at least you would not have to cover health care).

For me, it seems to be locking people into poverty as the money received would be insufficient and for those with extra needs (disabled people, women, the elderly) supplements are still insufficient and in the absence of service provision (as benefits would be eliminated) and perhaps inability to work, there is no way that you could survive on the amount afforded by the UBI. So this is an unconvincing argument; this is an insufficient amount of money to actually be called a universal basic income for those that do not have access to wealth or other incomes.

What needs to be understood (and this is quite clear if you examine the arguments in favour of the UBI), is that the UBI is meant to replace the benefits system; in other words, the UBI replaces the social welfare state and the public sector workers that work in there. This is not something to sniff at as the UBI is essentially what you receive (whether or not housing benefit would be retained so that you would not have to cover housing on such a small amount of money depends on models).

Here is what the Green Party says they would do in terms of existing benefits:

“The benefits to be abolished:

existing Child Benefits, estimated to cost £12.5 billion in 2015–16;
all tax credits, estimated to cost £31 billion (£24 billion Child Tax Credits and £7 billion Working Tax Credits) in 2015–16.
We make the following broad assumptions about what benefits we are abolishing and what we are keeping:

We will keep Housing Benefit

In the rest of the working age group we will save all the working age benefits and the employment programmes apart from statutory sick pay and statutory maternity pay

In the pensioners’ section we will save all the cost of State Pensions apart from the contribution Based State Second Pension, which people have paid for unless they have contracted out into a private pension scheme. We will also retain the Winter Fuel Payment and the free bus pass scheme. Free TV licences for the over 75s will become irrelevant because under our manifesto we intend to abolish the TV licence.

We will save nothing on disability

We will keep the Carer’s Allowance because in our view it is payment for work done rather than income replacement (https://policy.greenparty.org.uk/assets/files/Policy%20files/Basic%20Inc..., p. 7).”

Interestingly, the proposed UBI is actually less than what people currently receive as Employment and Support Allowance (which is incredibly stingy) which is given to those unable to work and would require a £30/week supplement to maintain the differential between that and basic Jobseekers Allowance (for the unemployed); this is discussed above where the issue of supplements is raised.

An issue that is not addressed in detail for some reason is the job loss due to the elimination of public sector provided benefits and services; these are unionised workers making a decent standard of living. If the roles are eliminated, their jobs are eliminated and the question of where they would find jobs at decent wages is a very good question. While some of these jobs have already been outsourced (e.g., providing security at job centres), the people working at these job centres will no longer have jobs and if they try to find them in the private sector (which is not unionised), they will suffer a loss of income as well as full-time employment. Maybe I am missing something, but for the life of me, I cannot understand why a public sector union like Unite would want to explore or support this.

What has led to an acceptance of this argument?

The destruction of the universal welfare state into a means-tested welfare system by neoliberals (this includes the Labour Party, the Tories and the Conservative-Liberal Democrat coalition government) has made access to benefits much more difficult and with cuts to the public sector less reliable and over-worked public sector workers (especially in social services which has faced massive cuts), the cracks in the system have become wide with too many falling through the net. Even when operating in a more universal nature, there is the alienation of dealing with the civil service bureaucracy, the lack of individualisation of care and support, people believed that the system was objectifying rather than supportive and the solutions offered were insufficient. Instead of reforming the welfare state and benefits by removing means testing and making it actually a universal welfare state, we should simply provide an income payment to people to purchase goods and services that they need. Disabled people that I have spoken with that support a UBI, think that they are more in control because they can get the services they need directly from private providers with control over exactly what services they get.

The alienating conditions of work in the capitalist economic system unsurprisingly put people off from the idea of work; it is exploitative by definition in a capitalist economic system. Additionally the destruction of conditions of work under capitalism due to deskilling, the undermining of unions means that people view work as part of a Benthamite pleasure-pain principle; that is work is painful and should be eliminated. “We should have what we need to survive without work.” Eliminating the need to work will separate work from income (this is a left libertarian argument); there is no need to work to get the things that we need. If work is not necessary for survival, people that want to work will continue to work anyway. Moreover, the welfare state already has separated income from work (unemployment benefit and welfare benefits), at least partially.

This is a legitimate argument even though simplistic; the productivity of goods and services is high and can easily be accomplished with no need for everyone to work, production of goods and services we need is easily accomplished. Why does everyone need to work? Given unemployment, there is clearly not enough work to go around; so why should everyone have to work? What this begins to address is the idea that the production of surplus value under capitalism only serves the interests of capital and not the needs of the majority. That is a compelling argument for socialists of all stripes.

However, whilst work under the capitalist economic system is deeply alienating and exploitative; what we need to understand is that for people to be able to consume, goods and services must be produced (this is the case in all economic systems, class based or not; the production of use values (things we want and need) is needed in order for people to be able to consume those use values. This argument seems to be ignoring where things that we want and need come from. These things are produced; they require deliberate human labour to produce them, in fact. We cannot have consumption without production; we cannot wave magic wands and have houses appear on the spot. There is no such thing as an “endowment” of houses; they are produced goods. We cannot consume without producing enough to feed ourselves; it is not that food simply appears in supermarkets, there is a whole host of human actions that enable that to happen.

In recognition of this reality, there is a new advance on this argument which says that nobody should have to work, we can produce everything we need using automation (see for example, Kathi Weeks mentioned above and Nick Srnicek and Alex Williams in Inventing the Future: Postcapitalism and a World Without Work; for an excellent refutation of this argument see, Scott Ferguson). One argument that was raised in support of this idea was that it would free people to do other things; this had more of a whiff of Plato’s philosopher’s state in The Republic with automatons replacing the slaves freeing citizens to be philosophers rather than Marx. Marx recognised the importance of human initiative and creativity in all aspects of life; not toiling at work for 10 hours a day in sweat-shops and in industry is one thing, a call for a shorter working day and control over production and consumption decisions is of course the goal of all on the left; having time to study, be with family and friends, for relaxing and fulfilling recreation is what we want.

Surrendering decision making to automation (even if possible, which I do not think it is) is not the future for humanity that I have been fighting for; instead I want a world where the vast majority are in control of their lives, for children to have the chance for a better future, to ensure the planet survives to make that a real possibility.

Having seen Terminator and Blade Runner, the full automation argument makes me extremely nervous. Jokes aside (no, I am not joking really), there is a more serious problem with the idea of full automation which, for me, relates to the issue of removing human decision making and agency, initiative and creativity from the production process (production does not only have to be for the production of exchange values, even under capitalism, the satisfaction of human and social needs has been addressed, a clear example is doctors working for the NHS; again, yes, that is skilled labour and is satisfying, and it is obvious that not all work is like this especially under capitalism but, it is the production for human needs). Then there is my understanding of the fundamental nature of human initiative which then relates to the nature of how work is defined.

While we all want to eliminate alienation and exploitation, the UBI and full automation is not the way to achieve these aims. Labour, in and of itself, is not exploitive; it is who we work for and what we do at work. Exploitation derives from the nature of the class system and the creation and appropriation of surplus value (or the surplus product for non-Marxists), not work or labour inherently.

Moreover, some Marxists that advocate a UBI argue that it is a transitional demand (that is a demand that cannot be provided under capitalism to raise workers’ consciousness) towards a post-capitalist (perhaps an ecosocialist) solution. My problem here is I do not see the socialism element that they are talking about. How does having a UBI engender a demand for socialism? Is that the insufficient income that is supposed to bring that about? Is this the socialism that we want? Or how does a UBI point to or articulate a socialist future?

Certainly, under socialism we will need fewer workers to produce what is required to fulfil the needs of the population; the vast amount of production to ensure profitability will not be required. The creation of a zero growth economy, in and of itself, will cut out a massive amount of unnecessary and environmentally dangerous and wasteful production. But it will not mean that human beings will (or should be) relegated to consumers rather than being able to contribute. But, as socialists we want people to find fulfilment in all parts of their lives; not simply be consumers. For many, that means participation and control over economic and non-economic decisions (see John Bellamy Foster).

Moreover, a UBI does not necessarily mean lower growth contrary to what has been argued. In fact, if it did do you think that Uncle Miltie Friedman would have advocated it as a way to achieve growth? A UBI theoretically would lead to more growth as demand backed by money will bring forth production to satisfy it. You cannot have consumption without production. So, it is not something that will necessarily lead to lower growth. Moreover, since we will no longer control provision of services (as this is a privatisation of the welfare state and public sector) as that is all privatised, we have no control over any production decisions (except in our role as consumers) as that is determined by capitalists based upon their needs for expected demand and profitability.

So are there any other problems (besides UBI being a right-wing idea)?

While proposed as a solution to poverty, the issue that arises is that rather than solving the problem of poverty, it entrenches it. Moreover, all versions of the UBI support the dismantling of the welfare state rather than reforming the welfare state. While the welfare state has problems (and that is the case for both its current means-tested incarnation as well as when it was a universal welfare state), its elimination and the privatisation of services and goods produced by the welfare state will actually have a far worse impact upon those most dependent upon the welfare state, that is, women, disabled people and the unemployed and those in precarious employment. The UBI does not offer sufficient funds to actually ensure provision of needed services and income support. Moreover, it will drain resources for things that are desperately needed (e.g., social housing, government job creation in communities to provide services needed in local areas and regions) as it is expected that these will be provided by the private sector. In fact, it removes government responsibility for ensuring social needs leaving it in the hands of a private sector driven by profitability considerations.

With inflation being so low, the worry about the UBI generating inflation and wiping out the UBI leading to increased poverty that was raised by Dmytri Kleiner is probably not relevant currently due to low levels of inflation in the advanced capitalist world; but it may become relevant in the future. In fact, with inflation so low, there is little to worry about an increase in inflation. A rise in inflation would also be expected if we went for full employment, as the closer we get to full employment, the probability of inflation arising is high. The question that arises is whether this is a positive way forward or an entrenchment of neoliberalism.

Accessing Services

While I completely agree that services must be personalised for those that use them, provision of a monetary payment will not guarantee that those services will be provided. It is a misunderstanding that income will ensure that goods and services which are desired by people are produced. What is produced and available in a privatised system depends on your income and the fact that capitalist producers believe or expect that they can make a profit off of it (no profit, no production; that is basic to capitalism). If you do not have money or health insurance (read income again), you cannot access health care in a privatised system (people in the US should know this). Moreover, the problem is that unless there are sufficient numbers demanding those services with this income payment, there will be little or no motivation to provide them on an individual level. So, if only 10 people in a local area have need of occupational therapy, that may not be enough to justify a private provider to set up for occupational therapy. So, having money that actually cannot be used for purpose does not get you what you want.

One very big problem is that it is an individualised solution to the social problem of poverty and unemployment. Poverty and unemployment derive from the nature of the capitalist system; it is not an individual issue affecting small numbers, it is a social consequence of the economic system in which we live. Eliminating those (even reducing those) requires a social solution.

Addressing Social Disability

If you are disabled (and remember disability is a social condition), getting a monetary payment to pay either an agency that provides assistants or you finding one on your own feels like an empowerment after years of dealing with insufficient and indifferent (and often hostile) social services. While some like the responsibility, others are unable to do it on their own and their family members may find this daunting or are unable to actually get the service that is needed (see the problem of provision above). Moreover, not everyone wants the responsibility of being an employer.

In many senses, you do have some control of your life by getting a worker to provide needed services directly from an agency that provides it; but you do not determine wages and work conditions of these workers unless you are hiring someone directly (if you are hiring someone from an agency, it is the agency that determines wages and working conditions). A real problem if/when public social service provision is eliminated is the need for regulations protecting consumers of and workers in private sector service provision.

In order for the agency to make a profit in this situation, they will take part of your money to cover their administration costs (think of it as their cut over and above payment to workers), those working in the caring sector are paid very low (the cut of the agency) and their conditions of work are not great either. So you, the consumer of services, may actually have some say over what you want, but the workers in the sector are extremely exploited due to the nature of the work (think traditional women’s labour which is paid on exchange value and not use value and which is inaccurately viewed as unskilled) and this will be the case under private provision. Even with unionisation, this will be the case.

To change this situation requires a revaluation of priorities and the nature of the work done to recognise its contribution to society. For this to happen we need to remove provision from the private sector and remove gender segregation and improve conditions of work; this will benefit both workers in the sector and consumers of the services. Provision of funds by the government and allowing those that will utilise the services to determine what services they want and need (rather than politicians) is a far better solution; this can be done by workers cooperatives rather than through a profit oriented model of service provision.

Separating Consumption and Production

Many of the problems of UBI come about due to the separation between production and consumption inherent in the concept. While certainly, impacting grotesquely unequal distribution under capitalism is an important reform which we should support and struggle for, it does not impact on the foundational basis of poverty in capitalism which is brought about by private ownership and control over production, means of production (choice of techniques in use). In fact, by removing control from a state that at least has some minimal accountability to those they rule over and by placing production of social services in the hands of the private sector with no accountability except to investors and owners, you are actually surrendering control and responsibility for what is provided or produced to the private sector. We know the causes of poverty, unemployment and we are handing over control to those that rely on poverty and unemployment to make profits. This is beyond putting the fox in charge of the chicken coop.

One of my deep-seated objections is that this is not something that will shift the real causes underlying poverty in the capitalist system; it is acquiescence to affecting capitalist relations of distribution rather than impacting the root cause which lies in production and the manner in which it is undertaken in a capitalist system. It is submission to capitalism rather than moving beyond it as it leaves production decisions in the hands of those that cause inequality, poverty and unemployment and relies upon them to provide what we need. Since when has that worked in living memory?


Women

One of the things that struck me when I was reading the Green Party’s support for a UBI was the issue of social reproduction and women’s primary responsibility for it; or to be precise the lack of acknowledgement of it. While the manifesto recognised the extra costs of being a lone parent (and provided supplements for them), it wasn’t clear to me that they understood the exact nature of women’s roles in social reproduction. The amount available under the UBI is insufficient to enable single women to actually live on, it also did not address the fact that they either would prefer to work or study or have a social life in addition to being the sole care providers for their children. One of the major problems is provision of childcare that is accessible for all. This is less a demand issue than a supply problem; private childcare is expensive. An income payment (as opposed to the actual provision of childcare facilities and training for those to work there) is certainly not enough to provide the service at a quality where all would have access to the same level. In fact, those with more income and wealth will still have nice crèches while women with less money will be dependent upon what a private provider is willing to provide (in a way in which they can earn a profit; think overworked nursery workers and little stimulation and support for the children) or still dependent upon extended family for support.

More so, this is not a valuation of women’s contribution to social reproduction. A more coherent and useful contribution would be a provision of 24 hour childcare in communities run by local people, trained in caring for children, and paid for by the state (see full employment above). This would provide a socially useful solution to poverty, break down the gender barrier in women’s traditional employments and also enable women to choose what they want to do by offering options to our traditional roles. This is a reform; it does not require a revolutionary transformation. To understand the difference, think of getting the money to pay a babysitter rather than actually being able to have a community of women decide what type of childcare services they actually want and need. It is a question of offering options.

In many senses, while I had problems with the wages for housework campaign; at least it was at least a targeted payment to try to qualify and demonstrate the amount of unpaid labour that women perform in the home and to provide recompense based upon an attempted valuation of contributions to GDP. The UBI is a general income payment to everyone (irrespective of gender) and the idea of women’s unpaid labour is completely hidden. So, this is a shift towards even hiding an issue that feminists have been trying to clarify; the fact that unpaid labour is performed in the home.


Conclusion

In concluding, I want to raise an additional argument which came after reading an interesting and compelling piece by Will Davies that MrJayTee shared with me following the Brexit vote.

The analysis raises an important point that strongly raises questions about the UBI as anything resembling a solution for unemployment and poverty. The vast majority of those of the working class that voted for Brexit were unemployed. The author postulated that they did so because of the sovereignty argument (controlling their future) and with despair at the nature of the notion of handouts especially from the EU (which has subsidised a lot of investment in Britain); this in and of itself should make us think twice about a UBI. The fact that people were unhappy about hand-outs and that they were despairing of a lack of employment make the provision of employment to produce socially needed and useful services, green transformation and housing be of far more value to those that are desperate to work but cannot find employment due to the precarious nature of work in a neoliberal capitalist world. The voices of working class people must be heard and acknowledged, they need to be able to determine their futures; we cannot determine it for them.

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Lenzabi's picture

Well, being on Social Security Disability, i can let you know I do not make more than say 13-14k a year, if the UBI were 2k a month or 2.5k a month that would be a yearly income of 30k a year. I am scraping by on the lower income. at 30k I could live better, and maybe enjoy what time on this world I have left. People on UBI could go make more money if they want more by finding work.

I know for anyone making more than that a year, say 40+k a year, the UBI would be a let down. But if you make the 50+K then you are already inside the ability to live comfortably so long as you do not lump more expenses past that 50K.

But right now, most social safety net programs have been shaved to the bone as the Neo-cons/liberals spend more on wars and their fatcat subsidies, aka corporate welfare, a "handout" not needed by Big Business.

If I had that extra money, they can tax it, and I could spend more, I would love to help restaurants by dining out, theatres by going to movies, (although they need intermissions so I can go pee and not miss the film),

I would be able to travel maybe?

I could feel more like a human being than a shut in

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So long, and thanks for all the fish

ny brit expat's picture

This would be replaced by a basic pensioners income which may actually be lower than what you receive now? What we need is more than what we are getting. The point of a UBI for those on benefits is that your benefits would be replaced by (and not an addition to) the UBI. What we need is a better way of ensuring provision of benefits and a coherent social welfare state. I cannot imagine that you are paying taxes if you are on social security disability.

The proposal I am quoting from is a proposal from the Green Party in England and Wales; in the US, the system is already different and you would need to examine it. Remember that any support you receive is coming out of the UBI pension. So, whether you have more money to go out and participate in life will depend on the system that is put in; the Green Party one is one of the most progressive that I have seen with supplements for the elderly, disabled and women. But it is still not enough for people to live on if they are not working.

The current state pension in Britain is atrocious and you cannot live on it; that needs to be overhauled as well.

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"Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte."

It would be there to replace RSDI, SSI, and any form of public support. Its purpose is to eliminate the system of public support and make you dependent on private entities you would have to negotiate with to get the essentials of life.

Given the way neoliberalism operates, you can bet the people who run those privatized services will be friends of and contributors to the political class, something like private prison corporations and politicians working together to create our very own system of American GULAGs.

UBI devalues work and erodes the power of working people by design. It would bust public sector and public service unions, the last bastions of labor power in this country. And once the neo-liberal system has people dependent on UBI, with workers increasingly devalued and powerless, do you think they won't start cutting workers and disabled people to the bone?

The purpose of UBI is to render you unskilled and powerless. The solution is to make work valuable and fulfilling, not to devalue it. That will not happen under capitalism, and that choice scares a lot of people, enough that they will chose a poor ratty guaranteed powerlessness over a just and dignified state that takes work and risk.

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“If there is no justice for the people, may there be no peace for the government.”

"Well, being on Social Security Disability, i can let you know I do not make more than say 13-14k a year, if the UBI were 2k a month or 2.5k a month that would be a yearly income of 30k a year."

The Charles Murray proposal is a $10,000 annual cash grant, so under that version you'd be 3K to 4K worse off.

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-- Virtually, etc. B)

Lenzabi's picture

so, more of the MIC and BIG OIL getting all the tax bucks, seems Humanity likes stupid. The push for the UBI that I keep reading makes it seem monthly income of 2,000 a month or 2,500 a month.

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So long, and thanks for all the fish

ny brit expat's picture

replaces your social security money; the one proposed by the Greens (which tries to be more progressive) it came out that the UBI was less than the pittance that people receive for ESA (british version of disability) and they had to add a supplement to the basic level of UBI of £30/week.

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"Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte."

ChemBob's picture

due to being laid off at the end of the recession and unable to find a job. $2500 is quite a lot more than I am currently making. Bring it on!

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... leftists can think of it as $2,000 or $2,500 per month, but they are not the main driving forces for it, and by the time it would come out of Congress, it would be more like $750 to $1,000 per month.

Plus no more Medicare, no more food stamps, no more TANF, no more housing support, no more children's lunch programs, no more supplement social insurance (SSI), no more disability, and etc. The trade that the right wingers are proposing is the UBI instead of doing any social safety net.

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-- Virtually, etc. B)

... we get it all the time in transport policy, when an upgraded bus system is always proposed when a light rail system is on the ballot, but when bus upgrades are actually being proposed, they are fought tooth and nail by the same folks.

Murray's UBI was $10,000/year. The explicit argument was that it would force those trying to live on the UBI alone into living together and pooling resources. The fact that this might not be an available option for some, and this would not go far enough to meet basic needs for others, is answered in the typical fashion: by pretending that the inconvenient truths do not exist.

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-- Virtually, etc. B)

a UBI would get funded:

For a country that creates its' own currency like both the U.S. and Britain, but unlike the euro using countries, a UBI does not get funded by tax revenue, as taxes do not fund the sovereign currency issuer - either the U.S. government or the British government.

Rather, the money to pay our taxes comes from government spending. We do not issue the national currency when we pay taxes.

In short, the funding for a UBI would come from the government creating dollars (or pounds) out of thin air.

Personally, I've come down on the side of preferring a jobs guarantee program for 2 reasons:

First, the UBI is putting the horse before the cart in the sense that most of its' supporters assume a lack of jobs due to automation. While I can see the potential for a future where work (if we continue to demand work be done in exchange for money) would at least have to be radically redefined, I don't think we are there yet, and won't get there unless we save the planet first. And saving the planet requires all available labor, both human and smart, agile, robot labor.

The concentration on a future of robot slave labor seems to me to be distracting away from our current emergency: Saving the planet - and all the work that needs doing in order to do so.

Secondly, I suspect that a jobs guarantee program would be more likely to succeed over the long term in that I think there'd have to be a really profound cultural shift for people to support the notion of "something for nothing", especially in times of social stress. Seems to me that people more easily accept the notion of people working - doing something, almost anything - in exchange for social goods, which is what a national currency is.

A jobs guarantee program would also be funded by the government simply entering numbers on a computer key board to mark up private bank accounts.

Once those dollars are in private hands, then the private sector has the ability to pay their taxes : )

In a country that creates its' own currency, taxes are good for things like regulating inflationary pressures by removing excess dollars from circulation.

Everything gets funded either by government spending or bank lending (or by the private sector running down their net savings). Since the positive money folk are big advocates of UBI, especially in the U.K., here's a good article on positive money vs. modern monetary theory from the site "origins of specious" - a great philosophy blog that has concentrated on economics, especially on the origins of money. You might really like it:

https://originofspecious.wordpress.com/2016/04/17/mosler-on-where-does-m...

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... which is only felt during periods of strong growth in economic output, with a sufficiently aggressive progressive income tax rate structure. But we have been stripping that self-stabilizing part of our tax system out of the tax code for thirty years now, so a sudden change of course to support UBI, which would itself be so hard to get through because of the "money for nothing" obstacle, is a very tenuous assumption.

Meanwhile, the Job Guarantee does not have that problem, because in periods of strong growth in economic output, private sector employment rises so spending on the Job Guarantee automatically falls. So rather than requiring a stabilizer to cope with inflation, the Job Guarantee program is a stabilizer that helps to cope with inflation.

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ny brit expat's picture

then it would eventually turn inflationary; the Greens more sensibly replace the current benefit system and shift it over to covering UBI. The article by Dmytri Kleiner in the piece addresses your idea of financing. If you are going to finance it through money creation wouldn't it be more progressive to fund full employment and a universal welfare state instead?

You are talking the privatisation of service provision ... this is not progressive in the least.

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"Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte."

There are 2 separate issues you need to separate out: 1) How anything ever gets paid for. The answer is always through "money creation". And 2) Inflation. Inflation is many things with many causes, from the destruction of productive capacity where even exiting money ends up chasing too few goods = inflation, to outside supply shocks which drives up the price of stuff, to spending past the point of full employment, where either too much government created money can cause inflation or too much private bank lending can cause inflation.

Or, in the case of the housing bubble, too much piling in on one asset class, ie, houses.

While I think a UBI financed by government could cause inflation, the cure for that would be higher taxes on the super wealthy and their gains off rent seeking especially.

Even the super wealthy pay their taxes with government created dollars ; )

Taxes are always paid in government created currency, never private bank created credit/debt. Even if you take out a loan to pay your taxes, the bank makes your payment using government created reserves.

But I sort of doubt a government financed UBI would be inflationary, at least in advanced, wealthy, capitalist economies, where new money ends up chasing new goods because advanced, wealthy, capitalist economies are really good at ramping up production of stuff - from more food to more toys to more wrapping paper ; )

Central governments find it difficult to create inflation, as evidenced by Japans' attempt to do so over the last 25 years.

But mostly: Everything everywhere at all times gets paid for by "money creation". Again, the money to pay taxes comes from money creation on the parts of governments (or central banks).

And what governments (or central banks) don't fund, private bank credit must fund.

That's the 2 sources of our money supply: Governments (central banks) and private banks, both of whom create money/credit.

The phrase "money creation" and the belief that inflation is always everywhere caused by too much government spending is a belief on the part of neoliberals and austerians that needs to be overcome.

Modern Monetary Theory (among others) is a good way to begin overcoming these fallacies:

Here's MMTer, Bill Mitchell on Zimbabwe and hyperinflation:

http://bilbo.economicoutlook.net/blog/?p=3773

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... it would be inflationary when there was not enough capacity to produce additional goods and services.

Saying that it would "eventually" be inflationary makes it sound like a monetarist argument, that all money creation inevitably, and in the long run (and with long and variable lags) leads to an equal percentage increase in inflation.

It is more accurate that it would be inflationary at certain stages in the business cycle, where the Job Guarantee is not. When the private sector outbids Job Guarantee work (through wages, working conditions or a combination of both), then the government spending gives way.

If it was combined with a sufficiently aggressive progressive income tax system, the inflationary impact of a UBI during an inflationary phase of the business cycle could be relatively easily offset ... but in a political economy when right wingers are able to destroy social welfare spending with a UBI and left wingers are left simply fighting for a higher UBI payout, it seems unlikely that it would be accompanied by a sufficiently aggressive progressive income tax system.

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-- Virtually, etc. B)

your analysis makes, because the system you are analyzing makes it.
The flaw is in assuming that the UBI is a supplement to employment income. To work it must be a replacement for drudgery. ("drudgery" defined as employment with little to no social benefit. For example, convenience store clerk. Taxi drivers are a grey area - they would fall into this category, essentially, though taking elderly people to doctor's appointments has an arguable amount of social value. An even greyer area would be excess skilled professions - for example America has a shortage of doctors, but a surplus of stock brokers)
As a supplement it is even worse than you assume. It will simply be sucked up by the rich through inflation and an orgy of consumption - leaving nothing but increased rather than decreased poverty, (albeit less extreme poverty) ecological devastation, and the myriad of social problems that stem from wealth disparity.
As a social policy however, it could have merit. If the UBI were large enough to live on, say, $20k or $25k, (alll numbers for illustration purposes only, not to be taken as serious suggestions) in addition to a tax code that made low paid employment of little benefit, the benefits could be enormous.
Note that this idea requires consideration of both the low and high end. A generous UBI combined with a high and ultimately steeply progressive tax code. There would be a shortage of people willing to work as janitors, so janitors would have to be well paid. Having a tax code that, for a thought, taxed incomes of $150k to $250k at 50% but incomes over that at 80% might create a shift in career decisions to primary care physician from hedge fund manager.

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On to Biden since 1973

Roger Fox's picture

did many things. In general it incentivized good behavior by capital. Specifically it helped stabilize the economy, recessions were of less breadth and width from 1938 to 1988. Swings in employment were of less breadth and width from 1938 to 1988.

Combined with infrastructure spending of 4-6% of GDP, there was an entire sector of good paying jobs, a sector that did not suffer layoffs in a recession. Currently at about 1% of GDP, about 3% of jobs, this sector could be 9-12% of jobs.

Spending an additional 5% of GDP on infrastructure would create 21 million jobs, add 90 billion in FICA revenue. And it would alter the current labor paradigm, opening up jobs for millennials and 50+ yr old managers that got pushed out. This would create competition by employers for employees, driving wages up.

Now that we have jobs for those that want or can work, its time to take care of the rest.

I think thats the crux of the welfare state argument upthread.

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FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

ny brit expat's picture

If you think that you can survive on a UBI without working you are not hearing what the proposals are. I am sorry, no one can survive on a UBI. How would the drudgery be done? You are still paying people to do the work in your discussion. I would argue full employment plus a universal welfare state would be of better service to working people. Income is not the only issue that needs to be considered, look at the section on women as you are missing that completely.

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"Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte."

!. To work a UBI must be large enough to act as a replacement for - a deterrent to - drudgery. I agree that the British UBI proposal is nowhere near high enough; (though that is approximately what I am living - quite happily - on) think more like the roughly $25k proposal the Swiss held a referendum on a couple years ago.
2. All income except the UBI must be taxed prohibitively. The goal is not to give low paid workers enough to support capitalism, but to replace the need to work. If that is done any work done (any work someone is willing to do and someone is willing to pay for) must meet 2 qualifications, it must be necessary and it must be well enough paid to justify the taxes.
My idea might not work, but not because it doesn't sufficiently conform to the present reality. As for your criticism/proposal to replace the present situation with a more generous safety net combined with full employment (in other words an employer of last resort - automation might not replace 100% of workers, it might only replace 80% or 50% - it doesn't matter sociologically) I suggest you read Vonnegut's Player Piano.

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On to Biden since 1973

"To work a UBI must be large enough to act as a replacement for - a deterrent to - drudgery."

If it is large enough to act as a replacement for drudgery, it loses all of its support from the right wing side of the political spectrum.

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-- Virtually, etc. B)

If an idea is bad the right supports it. If you do it right the right stops supporting it.

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... the fact that you would still require a job of some sort to live comfortably, that is the point.

They are not proposing that it is enough to live on "comfortably", they are proposing that it is enough for enough people to live on at least at the bare margin of survival that it would be politically feasible to kill of unemployment insurance, food stamps, the Earned Income Tax Credit, Medicare, Supplementary Social Insurance (SSI), Housing assistance, Temporary Assistance to Needy Families, and etc.

Also to allow the minimum wage to be abolished, because the fact that the "free market" is not giving people enough to live on can be argued to no longer an issue once $4/hr is just "topping up" their UBI ... at least among a large enough margin of people to hopefully kill off the minimum wage.

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-- Virtually, etc. B)

We have been indoctrinated for something like 70 years to believe that any blue collar job - no matter how important and well paid - is undesirable. This leads me to think that infrastructure spending may not have the impact that you predict. You are, however, ontologically correct.

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ny brit expat's picture

I have not advocated in this discussion how full employment would be created. Infrastructure is only a short term answer. What I will be arguing in the piece on full employment is green transformation (energy, housing, transport), socialisation of caring (childcare, support for the elderly, and caring and assistants for the disabled to help them live fulfilling lives), and the creation of vertically integrated cooperatives done locally and regionally. These are long term answers to creation of full employment. Nowhere in this piece have I argued that the answer was infrastructure; that would provide short term job creation only.

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"Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte."

take on Full Employment?

I think they present the best argument for a guaranteed jobs program, which they place at the center of their economic thinking, both for philosophical/ethical reasons as well as "purely" economic ones (to the extent that ethics and economics can be divorced or something).

BTW, a professor and advocate of Modern Monetary Theory, Scott Ferguson, tweeted your article with praise : ) Here's a piece of his on Modern Monetary Theory:

https://critinq.wordpress.com/2015/12/11/bond-treasury-bond-007-is-out-o...

Here's an interesting piece on UBI vs Job Guarantee (JG) by Scott Ferguson on counterpunch:

http://www.counterpunch.org/2015/11/13/universal-basic-income-a-laissez-...

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in saying that money can be created without limits as long as it is only invested in productive sectors, but this leads to two caveats - as long as we have capitalism (in the pejorative definition of the word) no government, no society will accept such uncorrupt implementation, (and BTW, the British government and the pound do not qualify as sovereign. this is not just a quibble, it actually reinforces MMT's point) and to work not only must a sovereign government make sure that the money it creates goes to the right places, but also that it stays there. If the capitalists are allowed to transform unlimited funds into unlimited profits the result - by definition - will be confiscatory inflation and unlimited corruption.

As for Job Guarantee, I repeat my suggestion that you read Player Piano.
Automation will not completely rep;ace human labor, at least until we create robots that can operate and repair and modify complex machines. In fact, there will "always" be jobs (nurses, senior care attendants are obvious examples) that should be done by humans, and there is a much greater need for such than we think. But that will be only a percentage of the population. The vast majority of people will be idle or resentful ditch digging drones.
A society run on my principles might have to coerce people to perform some necessary jobs, but that can be made palatable; say that society needs 25% of its population employed, that's 3 months of drudgery in return for 9 months of living. This is far better sociologically than 12 months of "make work".

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Shockwave's picture

He was one of the founders of the Basic Income Guarantee movement. I think it is a good idea that has never been implemented. The Swiss almost did.

Then again, today we hear about "helicopter money". Helicopter money in Japan a daily affair.

Helicopter money may become a form of Basic Income.

Just thinking aloud.

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The political revolution continues

... how money is spent into existence by the government or lent into existence by commercial banks.

Because if it's helicopter money you don't have to notice that spending it into existence while giving people a job if the private sector does not make one available has substantially different impact than lending it into existence with "Quantitative Easing" to prop up the income of financial market participants.

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-- Virtually, etc. B)

"qualitative easing", in real words injecting unlimited funds into the market, though unlike QE the Japanese government is targeting where they inject in an attempt to promote employment, only injecting - rewarding or bailing out - companies that employ, as opposed to QE, which is solely intended to prop up stock prices regardless of utility. I doubt that it can succeed as a UBI, simply because it is not a UBI, it does not directly address the problem that the UBI is designed to address.
BTW, I suggest that you also read the article on Singapore on the same page. (it looks like an ad, but it isn't) The gist is that there is a global shortage of skilled IT professionals - because technological advances make the existing skill sets obsolete faster than people can learn the new skills. But also read the interviews with a focus on the morality of what they are saying.

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paradigmshift's picture

UBI has merit to me. UBI would enable to elimination of poverty, are you proposing to create Billions of jobs for the entire adult population? Second, there seems to be the claim that funding a UBI through money creation would lead to inflation, well, money creation goes on all of the time through commercial banks and then we have quantitative easing and other experiments going on with central banking right now. I think the assumption of inflation ignores changing the basics of money creation, central banking etc. Maybe there would have to be money extraction through some sort of tax to control money supply, I'm not an economist. But I think the assumption of inflation ignores the possibility of monetary reform.
Next, if UBI was funded appropriately, people could choose to do what they want with their money. People could focus on child care, pursuing their interests/hobbies. I don't see it as encouraging consumption, I see it as allowing people to control their own lives and a reduction of unnecessary production and elimination of undesirable jobs. If you want someone to take care of your trash, pay the trashpeople well or don't create so much trash.
Next, to create a structure for global full employment would be a huge undertaking. Humanity doesn't exactly have a good track record at election good people to run things (public or private), and we would have to elect/appoint/hire a lot of people for the bureaucracy for full employment (is child care a job?, how would they be paid? care for the elderly?). UBI is a big enough undertaking, but requires a simpler structure.

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"First they ignore you, then they laugh at you, then they fight you, then you win."

ChemBob's picture

it is merely a consequence of how money as an exchange for goods and services has always been thought about. We have moved beyond that and the bankers know it, as you allude to in your post. They haven't managed it for us, but for themselves, the war financings for resources (even though we never actually get the resources), etc.

And those above who aren't thinking we are on the verge of being almost utterly replaced by automation need to take a closer look. I think it was Adidas (Nike? one of the major shoe companies anyway), that is going to build a factory that only has enough employees to maintain the robotics. This IS the new paradigm, so where are all these imaginary jobs coming from?

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It doesn't need to occur, but unless accompanied by aggressively progressive income tax policies, it would be inflationary under certain macroeconomic conditions.

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-- Virtually, etc. B)

Consider that in the 1950s we were projecting that people would only have to work for 2 1/2 days to earn enough income to support themselves and their family. Now we have two wage earners, a disappearing middle class, and decreasing home ownership. Hmm, productivity has gone up but real income has gone down. We have to fix this problem first. I fear that UBI would only lock in a nation of poverty.

Now to dispose of all of the excuses.

1)Productivity gains should produce more goods and services with less labor, a good thing. There is no inherent limit, other than natural resources (do substitution with environmentally sustainable sources). You should be able to work 2 1/2 days a week and support your family. To do this you need to eliminate outright theft by the Oligarchy.

2) Trade is a waste of time, unless you can only produce something that you need offshore. If you want to produce something offshore, great, but then produce something else that people need here in America. Trade is an analog of technology; you must produce more, higher paying jobs, with fewer hours here, to offset the gain in productivity (reduction in price) achieved by cheap offshore labor.

3) Capitalism is a sad joke of a system. It can't get out of it's own way. There is little connection between what people want and what is produced, wealth and $1T of guns per year for them and a barely middle class income for us. It can't do anything big and can't respond to the needs of the people.

4) The government is the biggest Oligarch of them all. There is no excess income to spend a $Trillion dollars a year on the military, or even to take 40% of middle class wages, while barely %15 of upper income wages. Sorry, but the government is a pig-trough of political cronyism and theft from the people.

So what is my program? Universal distribution of high productivity jobs at low worker's hours per week. Universal education to qualify for those jobs. Removal of the tax on people from the Oligarchs, sometimes called economic rent. Capital derived from retirement saving of the people themselves, controlled in their interest. Decimation of the Financial sector, replaced by something else.

What the Right doesn't want is the universal right to work. Too scary. They would much rather pay you a subsistence income and let you live in a stink of an urban ghetto. That's where we are inevitable headed. This is really important: Currently, the success of the Oligarchs is the measure of where the economy is headed, almost nothing else.

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Capitalism has always been the rule of the people by the oligarchs. You only have two choices, eliminate them or restrict their power.