Sunday, 11 May 2014

Basic Income?

Politically, I'm neither right or left, but enjoy being a free thinker [OK, I admit I am a Conservative voter, am more on the conservative side of things &, said that I'd vote UKIP in the Euro elections, but this is as much a 'protest vote' than slavishly agreeing or defending everything UKIP stands for-  neither care enough about them to do so and I don't belong to any political party. Plus my own faith plays an important part of my overall world view & overrides 'secular' political philosophy anyways].

One thing which attracted my attention was the Swiss vote on paying their citizens a minimum income of 2,500 francs a month.

I don't think it passed in the vote, but the idea intrigues me. Could we do the same thing in the UK? So in exchange for abolishing all other welfare payments & abolishing the minimum wage,  we simply pay everyone in the country a basic living cost. If  there minimum wage is £6.30 an hour, for a 40 hour week that would be about £13,100 a year  or £1091 a month. 

Allocated for the UK electorate as a whole, that is 46,107,000 (according to the office of national statistics, here) and assuming this is gifted tax free ( i.e. you'd pay tax as usual on your other income/salary, as you would now, but this basic income wouldn't be taxed) the cost would be £604 billion a year or roughly the amount of cash that the bank of England has printed via Quantitative Easing, which has benefited  banks, hedge funds and insurance companies,  and the current welfare bill combined. And if everyone earned more, a healthy chunk would go on spending (thus increasing tax  revenue & GDP, via the multiplier effect) or paying down the colossal personal debt people have in the UK (itself a good thing).

I'm with this idea in principle. I am sure that the practicalities are more difficult, but where there is a will there is a way.

What do readers think?

32 comments:

  1. Paying people to breathe is a very bad idea. Remember you have to account for the 'cash value' of indolence. How much marginal income would it require to induce someone to work when he could lay about all day? Especially when people start combining the guaranteed income in households. You are assuming that people want to work. In fact, people want to collect rent and that is what guaranteed income is - a form of rent. It is welfare by any other name except the condition of entitlement has changed. Now people receive it because they have a right to a certain standard of living independent of their behavior. Well, someone has to generate the economic activity to sustain that income, and you won't get it by subjecting work to a tragedy of the Commons.

    People resist the idea of necessity and want as motivators of human behavior as cruel. But going hungry is an excellent motivator to get your backside out of bed in the morning to go do something you would rather not do. A guaranteed income interrupts that necessary corrective on human behavior. We aren't angels, you see. We are corrupt, venal, and selfish. The last thing you want to do is indulge that corrupt nature by giving it the freedom to live off the effort of another.

    The world doesn't owe you a living.

    carl

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    1. Carl Jacobs ,

      Milton Friedman, a classical conservative economist from the University of Chicago, suggested this. While President, Richard Nixon gave it serious consideration but it never got to proposed legislation because of Watergate.

      Liberals hated Richard Nixon, but they did not realize at the time that he was a lot closer to their beliefs than the conservative wing of the Republican Party which took over with Ronald Reagan.

      Ted Kennedy said the biggest mistake he ever made was not reaching agreement with President Nixon on national health insurance. Kennedy wanted the government to fund it and Nixon wanted employers. Kennedy later said what difference did it make if all Americans were covered.

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    2. Peter Horst

      Milton Friedman suggested a Negative Income Tax which was nowhere near as generous as this proposal, and was specifically designed to address the concerns I raised. And even so, it couldn't be made to work in the real world. The prototyping revealed systemic flaws that are still unsolved.

      carl

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    4. Carl,
      I shall have to look up Milton Friedman's ideas.... when I first read about this, I thought it was a crazy Swiss idea, but worth a thought. It depends on whether or not people will actually work or just live off it as money, which is your thought. I have to admit that this did cross my mind. Except the govt pays a lot more than £13K a year to the minority who do claim benefits -

      In the UK, people on welfare earn far more than £13k, which the current govt has capped at a total of £20k, before people could earn a lot more from welfare, which meant they didn't want to work (£30 k being the average UK salary). So under my proposal, those on benefits already -i.e. those who are more likely to not /don't/refuse work, would have a £7k cut in their standard of living. So it might actually force those who don't work at present to earn that extra £7k. It would also benefit those in work as well as retired people.

      This would also have to be a part of a reform of the welfare state, e.g. end of council houses for life/cheap rent/ all other welfare payments etc. Perhaps even a shakeup of the NHS, but a hint of people have to pay,say, an excess for treatment is politically not possible. At present.

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  2. Hi David

    It is an interesting proposal and unlike Carl, I have a bit more faith in humanity, so I do think people do want to work, if there was a government in place who'd facilitate job creation, rather than running the country in the interests of city minions or big Pharma's wanting to asset strip British businesses in order to get a better corporate tax rate.

    And also, where is the money going to come from?

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    1. Samuel Kavanagh11 May 2014 at 22:16

      Hey Hannah, babe,

      1. Where's the money?
      2. Agree with you on city boys & companies doing stuff to take advantage of tax loopholes

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    2. Hannah wrote:

      I have a bit more faith in humanity

      Optimists are so touchingly naive.

      No one ever went broke over- estimating the depravity of man.

      carl

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    3. Fritz Wondabar11 May 2014 at 23:58

      Carl Jacobs/Samuel Kavanagh

      That would be true if literally everyone decided to do nothing but take the subsidy and live on their couch, which is a very dim outlook on humanity and our motivations. However, that's not the point of the guaranteed income. Sure, it provides a baseline subsistence existence, but think how far $1700 per month will take you. Rent/mortgage, groceries, utility bills, and not much else.

      But that's enough for someone to take a risk. Maybe start a new business and not worry that failure will mire them in poverty.

      It's enough for someone to work part time and go to school, so that they can devote more time to actually mastering new skills and not go hungry while paying for textbooks and tuition.

      It's enough that new parents can stay home with their infant longer, or that a worker could leave their job to stay home with an ailing parent. It might even herald the return of a "one income" (in this case, one supplemental income) household, since one working parent wouldn't carry the entire burden of providing for the family.

      For the highly motivated and frugal, it could just be a lump sum deposit into a retirement account, or to invest in all those new business ventures.

      As I understand them, most current benefits programs are limited in how long and under which conditions you can remain on the public dole. As an example, if you have unemployment benefits, get a job, and are then layed off again the next week - you've gotta get back in line and refile - and that can take months. It's the same for most forms of welfare.

      This, in contrast, would be a permanent subsidy, such that those taking steps to re-enter the workforce don't lose all the support they had, and should you lose your job, their are no applications, agents, or bureaucratic red tape to get through to start receiving help.

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    4. Well at least my glass is half full, rather than half empty...!

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  3. OMG it's SOCIALISM!!!!!

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  4. Atheist Shrugged11 May 2014 at 18:37

    Yeah, death to minimum wage! If only we could repeal such law and force people to fight over jobs and accept wage of $1/hr, imagine the PROFIT…imagine the boom to the ECONOMY…a new age of slavery without having to house and feed the people!

    Conservative assholes...

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    1. Onward to the Inevitable Victory of Serfdom .. Uh ...Socialism! Its good to part of the nomenklatura.

      carl

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    2. Samuel Kavanagh11 May 2014 at 22:18

      Atheist,

      The ONLY asshole here is YOU, that's for sure!

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    3. Atheist,

      Not sure if that comment was directed at me or Carl?

      Yes, I'm a capitalist through and through, but that doesn't mean that I don't think or want to help others...

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    4. conspiracy theory 10111 May 2014 at 23:33

      Samuel Kavanagh

      So, by the tone of your statement, I would presume that you were for the bank bailouts, the quantitative easing (to the tune of $1T per year), weakened regulatory structure, and the TPP, and all the other bennies that the wealthy class has managed to carve out for itself with the help of their bribed politicians. Really, things are going really good the way they are, if I read your view correctly?

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    5. Socialist Worker11 May 2014 at 23:35

      I am cognizant of the fact that mega corporations are whittling away at the middle class by hiring only the smallest size work force they can, thereby maximizing their already bloated incomes, leaving the crumbs to the proletariat. I say we take that power away from them with a mandatory wage for all.

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    6. Socialist Worker

      I say we take that power away from them with a mandatory wage for all.

      Good plan. We could call it the Omnibus Disemployment Act of 2014. Socialists never seem to grasp that what you should be paid is not what you think you need, but what others are willing to pay you.

      carl

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  5. I think that this is a good idea. There would be less scapegoating of people who claim benefits if everyone took this money, it would also cap welfare for those who DO take a lot more than £13k in benefits. So it would be a mixture of paternalism, address the RW concern over the welfare bill & also provide a minimum, not a maximum for people.

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    1. Samuel Kavanagh11 May 2014 at 22:14

      But sis, it JUST WOULDN'T WORK!!

      Isn't it better to get rid of the "social" and replace it with charity and help ups, rather than hand outs? That's what I needed when I was in need. I got it and am doing much better now!

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  6. This plan is a crazy as it sounds. Anyone who thinks the government is ever going to pay you a middle class salary just for breathing has no common sense.

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  7. Samuel Kavanagh11 May 2014 at 22:13

    Dude,

    It just won't work. For every person like you or I, who would take it as a bonus, there would be others who would take it and live off this, then moan about not being given enough.

    Good one for bringing it up, but you are better off without this idea, bud.

    BTW, dude, if you doubt me, look at Israel and the issues surrounding the underemployed Haredi, who get money to study Torah all day, but are extremely poor. And are getting even more poor, as the govt cuts back on this welfare.

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    1. Shoom,

      Good point regarding Israel.

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    2. Justinas Bonaventure12 May 2014 at 00:28

      Israel considers the Goy to be a slave caste for the master race of Jews. This is true as a rabbi once said this, the Jewish holy book, the talmud says so and it is written in the protocols of the elders of zion.

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    4. Justinas

      You realize the Protocols are a fraud, correct? Tell me you are being ironic. Tell you aren't dumb enough to believe them.

      carl
      Who is not a Jew

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    5. JB,

      laughable trolling.

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    6. Justinas,

      I bet you are going to start quoting Gilad Atzmon next?

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  8. Let's get rid of the deadbeat shareholders, trust fund kids, landlords, and anyone that isn't putting in 40 hours a week of honest work. Stop the insanity of 'I let my money work for me'. Right now someone is teeing up at Pebble Beach laughing at people that put a day's honest labor. Jesus help us.

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  9. Where I live with state and local taxes I'm paying 44.5% effective income tax... and I only earned 83K... (I'm self employed) NOT $250,000. That is pretty close to working 1/2 my time as a slave to the government. You hit the nail on the head with those rich folks not paying any taxes... making millions. Now if I was making 500,000.00 a year I could deal with paying 1/2 in taxes... IF the tax money was being used wisely, it was helping others in a constructive way.

    The problem is I can't afford lobbyists... people like me have no say in congress. The rich people in the country have me by the throat, with unlimited campaign contributions. The Government is so bloated and corrupt. The current political 2-party system, it's like trying to pick the best of two thieves in an election. This country is on such a steep slope to self destruction... I don't think Jesus could stop it.

    I'm seriously thinking about starting a business in the caribbean, just like all the big corporations that are keeping their international business money OFF SHORE!

    For a moment I get the feeling that would be so 'un-american'... but then I think wait... I'm a slave to the government for 1/2 my work week... there is little of freedom and liberty left here for the hard working citizen.

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  10. There are over 100 billionaires in the UK. Why should ordinary folk not be allowed to be given 14,000 a year?

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  11. Dave,

    Thanks. And do you see why it won't work? I like the sound of the idea, but I just don't think it will.

    Justinas

    What a prat you are !

    Fritz wonderbar

    Interesting comments there, but my objection is practical, rather than Carl's philosophical . I'm all into making us a better society etc.

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