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Bureaucracy-Ridden Welfare System vs. Guaranteed Income

Started by Geolibertarian, Dec 08, 2013, 01:47:57 AM

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It is a decades-old tradition among right-wing ideologues (particularly from the Austrian School) to rail self-righteously against the "welfare state" that was instituted by FDR and then expanded by LBJ. And while much of this right-wing criticism is rooted in Malthusianism and in simple class bias -- and is thus, to that extent, invalid and self-discrediting -- what few on the political "Left" seem to realize is the significant extent to which this criticism is actually valid and justified.

In fact, the most devastating critique of federal welfare programs I know of is not even from a right-wing source, but from a source that may surprise most progressives and left-leaning independents. To illustrate what I mean, consider the following excerpt:


"Welfare as we know it cannot be fixed. Tinkering with it for decades has accomplished little of value. Bureaucracies within bureaucracies have bloomed, mutations of a polluted society. Too many contradictory interests compete at the public trough in the name of poor people....Poor people of our inner cities, small towns, and rural countryside exist in a sprawling banana republic where fighting factions of outsiders -- institutionalized poverty pimps -- battle over which issue, which treatment, what cabal will dominate at any given point in time....

"A major impediment to dismantling the existing social welfare programs is the extent to which they have degenerated into patronage troughs. The government contracts to 'help' are first and foremost political tools to strengthen the base of elected officials at all levels of government."


The above is from page 261 of Tyranny of Kindness: Dismantling the Welfare System to End Poverty in America -- a book written by Theresa Funiciello, a former recipient of welfare. It was this book (large portions of which can be read here) more than any other that made me realize just how horribly flawed and shamefully corrupt the federal welfare system truly is.

Now, at this point some of you are probably wondering: what (if anything) does Ms. Funiciello propose replacing these ridiculously bureaucratized "social welfare programs" with? What again may surprise some to learn is that she proposes none other than Milton Friedman's negative income tax.

On page 278 of the same book, she writes:


"People unfamiliar with the history of income maintenance are often surprised to learn that a conservative economist, Milton Friedman, developed the negative income tax model and a Republican president, Nixon, first proposed a bill to implement it. As a practical and political matter, though, it makes sense. In theory, this plan wiped out much of the entrenched multilayered, self-perpetuating welfare bureaucracy." [Emphasis Funiciello's]


I agree with Ms. Funiciello that instituting a guaranteed income via the negative income tax has, over the current system, the advantage of eliminating from the social safety net equation the "entrenched multilayered, self-perpetuating welfare bureaucracy" she rightly criticizes, and hence all of the "institutionalized poverty pimps" who, as such, do far more to exploit poverty for their own personal gain than they ever do to eliminate it. Unfortunately, however, it retains the self-defeating disadvantage of being financed by a tax on labor.

To eliminate the job-destroying, poverty-increasing wage tax from the equation as well, I propose that -- instead of a negative income tax -- we institute a hybrid system consisting of both (a) the credit-based "National Dividend" advocated by author and monetary reformer, Richard C. Cook, and (b) the rent-based "Citizen's Dividend" advocated by many Georgists.

In the following two posts I'll provide a brief introduction to each.
"Abolish all taxation save that upon land values." -- Henry George



In his excellent book, We Hold These Truths: The Hope of Monetary Reform, Richard C. Cook advocates as a solution to "poverty in the midst of plenty" what he calls the "National Dividend."

What, specifically, is this Dividend?

It is a "cash stipend" drawn from our national credit and paid out equally to all the legal residents of the U.S. (or, if you live in England, Canada, or some other country, from the national credit -- and to the legal residents -- of that nation).

If you're now asking, "What is our national credit?", the answer is that it's the very same abstract (yet unquestionably real) source that private banks as a whole currently draw from -- in effect -- when they "extend" financial credit to cash-strapped loan customers.

More specifically, and in the words of Richard C. Cook, national credit refers to "the total ability of a nation to produce goods and services through increasing efficient use of science and technology."

As he puts it on page 57 of We Hold These Truths:

    "The idea of credit when viewed from a macroeconomic perspective refers to the ability of an economy to produce goods and services of value to the members of that community. It refers to the potential value of that economy to support life."

And from page 32:

    "Viewed from a philosophical level, the nation's credit, including that portion from which the National Dividend would be drawn, is the monetization of an intangible; i.e., the totality of the nation's real wealth as expressed by its laws, history, physical plant, land, resources, and the education, skills, and character of its people. Without all of these, the government could print dollars--or the banks could lend them--from here to eternity, and they would be totally useless."

On what basis will the size of the National Dividend be determined?

In short, on the basis of the objectively assessed "gap" between (a) the total market value of the goods and services that are produced in the aggregate and (b) what society, as a whole, is able to purchase.

From pages 18-19:


"In 2006, our Gross Domestic Product was about $12.98 trillion, with the enormous trade deficit of $726 billion figured in. Our total national income was $10.23 trillion, including wages, salaries, interest, dividends, personal business earnings, and capital gains. Of this amount, at least 10 percent, or $1.02 trillion, was reinvested either at home or abroad, including retirement savings, leaving total available purchasing power of $9.21 trillion.

"The $12.98 trillion GDP minus $9.21 trillion of purchasing power equals $3.77 trillion. That's what the figures indicate was the shortfall that would have been required to consume the entire GDP.

"Simply put, we do not earn enough to buy what we produce. What does this mean, and who, or what, is to blame?

"Despite the high CEO compensation, the huge Wall Street salaries and bonuses, and the wealth and income disparities between high and low earners, we should not blame the "capitalists," i.e., the business owners, for the entire problem. Business profit taken as dividends is only about seven percent of GDP.

"Besides, many of the 'capitalists' are us! Forty-five million Americans have some measure of stock ownership, including a multitude of tax-deferred retirement plans and mutual funds. This is one of the strengths of our economy--the 'ownership society'--for  which we deserve a pat on the back. Also, the dividends we earn are mostly spent, so most of it finds its way back into the economy.

"Let's look at the situation from a slightly different standpoint, starting with the $12.98 trillion GDP. It's said that the U.S. economy is the most powerful and productive in the history of the world. This is true, even with our trade deficit and our decline in manufacturing due to relocating so much of our factory production abroad. So we should be dancing in the streets. There should be festivals, celebrations! Obviously that's not happening. Why not?

"It's not happening because of how we define the $3.77 trillion gap between GDP and earnings. Since we produce the value of our entire GDP with such lower labor costs, the $3.77 trillion differential really should be viewed as the total societal dividend, right?

"Wrong! It's not defined as a dividend; rather it's defined as a shortfall. This is because it still appears in prices. And with the stagnation of wages and salaries, combined with the current slowdown in appreciation of housing values, resulting in lower capital gains, the shortfall is growing.

"Obviously, those goods and services still have to be paid for--the entire $12.98 trillion. The way they are paid for is through income and through debt. Purchasing power covers three-fourths of it. The rest is covered by borrowing. Yes, you, the consumer must go out and borrow to cover the $3.77 trillion gap between GDP and purchasing power. This is how much our debt increased in 2006--the amount of new debt less what we paid off. This new debt was 29 percent of GDP last year.

"Note that this analysis deals with gross numbers, so does not dwell on the major social problem that income disparities are growing within the U.S., with a higher proportion of income each year going to the wealthiest segments of society. Conversely, the debt burden which fills the gap between GDP and income falls disproportionately on the lower income brackets.

"But the point is undeniable. Our ability to produce our incredible GDP with relatively little labor means that, under the existing system, we have to borrow money from financial institutions and pay with interest to enjoy what really should be the leisure dividend mentioned at the start of this report....

"Finally, these numbers shouldn't surprise anyone. Every responsible analyst has made the point that ours is a consumer-based economy and that consumer borrowing keeps it afloat. It's why economists and politicians keep such a close eye on the "consumer confidence" polls. It's why President George W. Bush, after the 9/11 tragedy, told us to 'go shopping.'"


What is the cause of this production/consumption gap Mr. Cook speaks of?

As hinted to above, it is the unavoidable fact that a significant portion of the business costs that show up in the prices of the goods and services we buy is not paid out in individual earnings (particularly wages and returns on capital goods).

From pages 26-27:


"In 1920, Scottish industrial engineer Major C.H. Douglas published a book entitled Economic Democracy, where he wrote that several major factors associated with modern mechanized production result in a gap between the value of manufactured goods and the purchasing power distributed through wages, salaries, and dividends. That is, he addressed the exact problem the U.S. and other developed economies were facing both then and now.

"After more than a decade of continuously writing on the subject, Douglas, in a 1932 publication, The Old and New Economics, listed several systemic causes 'of a deficiency of purchasing power as compared with collective prices of goods for sale.' These included business profits not distributed as dividends (retained earnings); individual savings, i.e., 'mere abstention from buying'; 'investment of savings in new works, which create a new cost without fresh purchasing power'; accounting factors, where costs previously incurred are carried over into current prices; and 'deflation', i.e., 'sale of securities by banks and recall of loans.'

"Other elements not mentioned by Douglas include insurance, which is costly in the U.S., maintenance of unused plant capacity, which is extensive due to the decline of U.S. manufacturing output, employer retirement contributions, and the cumulative sum of retained earnings and other cost factors when businesses buy from each other.

"These factors all show up in the prices of goods and services but are not paid as earnings to individuals. A simple way to understand what happens is that prices that a business charges must not only pay for labor costs but must also cover all non-labor costs, as well as equip the firm to perform in the future.

"Also, while the financial and accounting systems force consumers to pay for the costs of capital depreciation, they do not give them credit for appreciation of the value of the business that will appear through future capital gains. This applies particularly to technology-intensive companies where high R&D costs much be recovered in prices but do not show up proportionately in employees' immediate take-home pay.

"Taken together, the impact of all these factors is devastating to consumers and the economy at-large, because we cannot possibly earn enough to compensate for what the tax and accounting systems label as costs."


Thus, at a macroeconomic level, the National Dividend will merely delink the "extension" of socially-created credit from institutionalized indebtedness to private banks. So instead of borrowing our own credit from private bankers as we do now, we (through our elected representatives in government) will simply issue it to ourselves. It will be comparable to the amount of credit being "extended" to us already via fractional reserve lending, except that, unlike now, we won't owe it all back -- plus compound interest -- to private banks.

For a more detailed explanation, see:

"Abolish all taxation save that upon land values." -- Henry George



There are many Georgists and Neo-Georgists who advocate instituting a "Citizen's Dividend."

What, specifically, is this dividend?

It is a dividend paid on an equal per capita basis to all the citizens of a nation out of the surplus revenue generated by a tax on the economic rent of land (otherwise known as the land value tax or Single Tax).

What is the economic rent of land?

To any relative newcomer wishing to fully understand the answer to that question, I first offer the following ten-page visual illustration (which takes only about five minutes to read through):



Assuming the reader has carefully examined the above illustration, I now offer to him or her the following article by economist Fred Foldvary (all emphasis original):



See The Cat

by Fred E. Foldvary, Senior Editor

A man was walking down a shopping street and came to a store window where there was a big drawing full of lines and squiggles. A sign by the drawing asked, "Can you see the picture?"

All the man could see was a chaos of lines going every which way. He stared at it and tried to make out some kind of design, but it was all a jumble. Then he saw that some of the lines formed ears, and whiskers, and a tail. Suddenly he realized that there was a cat in the picture. Once he saw the cat, it was unmistakable. When he looked away and then looked back at the drawing, the cat was quite evident now.


The man then realized that the economy is like the cat. It seems to be a jumble of workers, consumers, enterprises, taxes, regulations, imports and exports, profits and losses - a chaos of all kinds of activities. Here are fine houses and shops full of goods, but yonder is poverty and slums. It doesn't make any sense unless we understand the basic principles of economics. Once we have this understanding, the economy becomes clear - we see the cat instead of a jumble. We then know the cause of poverty and its remedy. But since most folks don't see the cat, social policy just treats the symptoms without applying the remedies that would eliminate the problem.

What is this economics cat? It starts with the three factors or resource inputs of production: land, labor, and capital goods. Land includes all natural resources and opportunities. Labor is all human exertion in the production of wealth. Capital goods are tools (such as machines and buildings) used to produce wealth. The owners of land get rent, workers get wages, and the owners of capital goods get a capital return.

Picture an unpopulated island where we're going to produce one good, corn, and there are eleven grades of land. On the best land, we can grow ten bushels of corn per week; the second land grows nine bushels, and so on to the worst land that grows zero bushels. We'll ignore capital goods at first. The first settlers go the best land. While there is free ten-bushel land, rent is zero, so wages are 10. When the 10-bushel land is all settled, immigrants go to the 9-bushel land.

Wages in the 9-bushel land equal 9 while free land is available. What then are wages in the 10-bushel land? They must also be 9, since labor is mobile. If you offer less, nobody will come, and if you offer a bit more than 9, everybody in the 9-bushel land will want to work for you. Competition among workers makes wages the same all over (we assume all workers are alike). So that extra bushel in the 10-bushel land, after paying 9 for labor, is rent.

That border line where the best free land is being settled is called the "margin of production." When the margin moves to the 8- bushel land, wages drop to 8. Rent is now 1 on the 9-bushel land and 2 on the 10-bushel land. Do you see what the trend is? As the margin moves to less productive lands, wages are going down and rent is going up. We can also now see that wages are determined at the margin of production. That is the "law of wages." The wage at the margin sets the wage for all lands. The production in the better lands left after paying wages goes to rent. That is the "law of rent." If you understand the law of wages and the law of rent, you see the cat! To complete our cat story, suppose folks can get land to rent and sell for higher prices later rather than using it now. This land speculation will hog up lands and make the margin move further out than without speculation, lowering wages and raising rent even more.

Now we have good news and bad news. The good news is that when we put in the capital goods we first left out from the example above, the tools and technology increase the productivity of all the lands. If production doubles, rent doubles, and wages go up. Wages won't double, because workers have to pay for the tools, but even if wages go up 50 percent, that's good news, and why industrialized economies have a high standard of living. Also, high skills enable educated workers to have a wage premium above the basic wage level. The bad news is that the technology enables us to extend the margin to less productive land, which lowers wages again. So there is this constant race between technology raising wages and lower margins reducing wages.

It's bad enough that a low margin sets the wage level at the poverty level, especially in countries with low technology and low skills. Government then taxes away a large chunk of those wages, which hurts those workers with higher wages. The result is a highly unequal distribution of income. Workers have the low wage set at the margin and reduced further by taxes, while the owners of land get all the extra production as rent, but pay less in taxes because of tax breaks to landowners. (Capital-goods returns boil down to wages and rents, because capital goods are ultimately produced using land and labor.)

Behold the cat! The margin at the least productive land sets low wages, and the rest goes to rent, resulting in inequality, with poverty for low-skilled workers. If we see the cat, the remedy is also clear: stop taxing workers, and let everybody share the rent. If we get public revenues from the rent instead of wages, the public benefits equally from the rent, while workers get the full product of their labor. And wages will be higher, too, because by collecting the rent, we eliminate land speculation, moving the margin up to more productive lands, which raises the wage level. The economy grows faster too, since the government no longer punishes enterprise and investment with taxes, so wages go up faster over time. We all become fat cats.

Those who see the cat have a clear picture of how the economy works. They can see why we have social problems, and what the remedy is. Those who don't see the cat keep trying treat the symptoms with welfare, but they never cure the economic disease. Others see the welfare as not curing anything, and think they can just get rid of the welfare. Only those who see the cat realize that the remedy is a shift of public revenue from labor to land so that we eliminate poverty and thus any need for the welfare state.


For those who haven't already seen it, the following YouTube clip dovetails quite nicely with the above:

       http://www.youtube.com/watch?v=6ZkfmY1PMng (The Great Tax Clawback Scam)

For answers to common objections, see:

"Abolish all taxation save that upon land values." -- Henry George



Quote from: Geolibertarian on Jan 29, 2010, 12:47:54 PM
I propose that...we institute a hybrid system consisting of both (a) the credit-based "National Dividend" advocated by author and monetary reformer, Richard C. Cook, and (b) the rent-based "Citizen's Dividend" advocated by many Georgists.

I'd like to elaborate on the above. Based on his estimation that the production/consumption "gap" is approximately $3.8 trillion, Mr. Cook advocates closing this gap by paying out to every U.S. citizen an annual dividend of $12,000 (give or take a little, depending on how large the "gap" is that year).

Yet according to his own argument, much if not most of this "gap" could be closed simply by instituting both a Greenback money system and a Georgist tax system. Allow me to explain.

On page 26 of his book, We Hold These Truths, Mr. Cook writes:


"After more than a decade of continuously writing on the subject, Douglas, in a 1932 publication, The Old and New Economics, listed several systemic causes 'of a deficiency of purchasing power as compared with collective prices of goods for sale.' These included business profits not distributed as dividends (retained earnings); individual savings, i.e., 'mere abstention from buying'; 'investment of savings in new works, which create a new cost without fresh purchasing power'; accounting factors, where costs previously incurred are carried over into current prices; and 'deflation', i.e., 'sale of securities by banks and recall of loans.'

"Other elements not mentioned by Douglas include insurance, which is costly in the U.S., maintenance of unused plant capacity, which is extensive due to the decline of U.S. manufacturing output, employer retirement contributions, and the cumulative sum of retained earnings and other cost factors when businesses buy from each other.

"These factors all show up in the prices of goods and services but are not paid as earnings to individuals. A simple way to understand what happens is that prices that a business charges must not only pay for labor costs but must also cover all non-labor costs, as well as equip the firm to perform in the future." [Emphasis added]


Of all the "non-labor costs" that add to the prices of goods and services, the three most costly to business owners as a whole are

(a) usurious interest (which business owners pay not just directly through debt service to private banks, but indirectly as a result of the silent incorporation of usurious interest costs into the selling price of all the capital goods they buy -- higher prices being the only way that the indebted producers of those capital goods can capture the necessary portion of other people's loan principal to service their interest-bearing debts to private banks);

(b) the deadweight loss imposed by taxes on labor and capital goods (see this and this); and

(c) speculative rents and land prices ("rack-renting" for short).

A Greenback money system will delink the issuance of new money from the lending of it. In doing so, it will greatly reduce the need that most (if not all) business owners currently have to incur usurious interest costs in the first place, and thereby reduce the aforementioned "gap" to a considerable degree.

A Georgist tax system will reduce this gap still further by simultaneously eliminating both the deadweight loss imposed by taxes on wages, sales and capital goods and the parasitic rack-renting to which land speculation invariably and inevitably gives rise.

Thus, by implementing those two reforms, the "gap" between our gross domestic product and what each of us, on average, is able to purchase will be much smaller than it is now. Consequently, although there might still be a need for the size of the gap-closing National Dividend to be several hundred billion, it will not be necessary to resort to the multi-trillion dollar cash outlay that Mr. Cook calls for.

It is for this reason that the "hybrid system" I advocate contains a much more modest version of Mr. Cook's "National Dividend."
"Abolish all taxation save that upon land values." -- Henry George



Quote from: Geolibertarian on Jan 29, 2010, 01:04:22 PM
In his excellent book, We Hold These Truths: The Hope of Monetary Reform, Richard C. Cook advocates as a solution to "poverty in the midst of plenty" what he calls the "National Dividend."

If a grassroots push for the National Dividend -- whether the all-out version proposed by Richard C. Cook, or the more modest version proposed by me -- ever attracts serious media attention, it will be met by all sorts of objections (including the usual hysterical reactions by monetary flat-earthers from the Austrian School). Below are responses by Cook himself to what I predict will be the two most common.

Wouldn't even a modest version of the National Dividend cause runaway hyperinflation?

From pages 33-34 of We Hold These Truths:

    "Bankers and their apologists have always argued that any program that publicly-generated credit would cause inflation. This is nothing but propaganda.

    "Because a National Dividend would replace bank-credit of the same amount, it would bring the total monetary supply of the nation only up to the level of the GDP. It would not result in 'more dollars chasing the same amount of goods,' but would simply bridge the gap. Not only would the National Dividend be non-inflationary, it could even be counter-inflationary. It would allow businesses to liquidate previous financial costs incurred when they borrow from banks without creating new ones to the same extent.

    "Besides, what is truly inflationary is the Federal Reserve's policy of creating, then deflating, asset bubbles, the latest being the housing bubble. With such bubbles, prices inflate on the way up but stay well above their original level on the way down. This can do irreversible structural damage to the economy and is in fact a wealth transfer mechanism from ordinary consumers to wealthier people who own more assets.

    "Inflation due to the housing bubble has affected not only home prices--it has also escalated rents and business leases, made it harder for people to start small businesses, and increased the difficulty for young people even to find a rented room. Meanwhile, home and property ownership is becoming a high-priced commodity available only to the rich.

    "This type of inflation has an immense ripple effect. What it means is that the dollars people earn purchase less throughout the economy, because every business must operate in a building and on a parcel of land which now costs much more....

    "Also, bank interest by itself is inflationary, because it adds to the cost of doing business at many points in the production-consumption stream. The Federal Reserve claims it is fighting inflation when it raises interest rates, but what it actually does is slow down economic activity by suppressing wages and salaries or throwing people out of work. The higher interest itself pulls in the other direction by adding to costs. Thus inflation has continued even during periods of monetary contraction, as in the 1979-83 recession when the Consumer Price Index rose almost 20 percent."

Isn't the National Dividend just "socialism" or "communism" in disguise?

From pages 31-32 of We Hold These Truths:

    "A National Dividend would represent the truth wealth of the community, the bounty of our incredible GDP and our amazing efficiency, of which all citizens should be the beneficiaries once the business owners receive a reasonable profit. Again, it's important to realize that Social Credit is not a socialist system. Rather it is 'democratic capitalism,' in contrast to the 'finance capitalism' that has become so destructive that it threatens to destroy the world rather than submit to reform."

And from pages 84-85:

    "The idea current today of the individual and community in conflict is a sign of an unbalanced, even sociopathic, frame of mind. Thus we have in our own time two extreme views. One is that individuals should be able to do just about anything they want and that society is a hindrance—the mind-set that has fostered free-market capitalist economics. The other is that the individual should be totally subservient to the group as in state communism.

    "Curiously, though, neither ideology upholds the same ideals for all members of the culture. Free-market capitalists see nothing wrong if a handful of oligarchs holds everyone else in thrall to debt. The commissars of communism find it perfectly natural if their position in the party grants them privileges the rank-and-file will never attain. So both systems are rife with oppression, brutality, and hypocrisy."
"Abolish all taxation save that upon land values." -- Henry George



Quote from: Geolibertarian on Feb 25, 2010, 06:20:56 PM
There are many Georgists and Neo-Georgists who advocate instituting a "Citizen's Dividend."

What, specifically, is this Dividend?

It is a dividend paid on an equal per capita basis to all the citizens of a nation out of the surplus revenue generated by a tax on the economic rent of land (otherwise known as the land value tax or Single Tax).

Below are my responses to two questions that many are likely to have about the Citizen's Dividend.

Will it be either necessary or desirable for the federal LVT (land value tax) to be levied directly on individuals?

No and no. A Georgist author explains it this way:

    "The question naturally arises: How should Federal, state, and local governments obtain the rental value of land? The practical answer is that we should return to the constitutional provision that requires our Federal government to apportion direct land taxes among the states according to their respective populations. The states, in turn, should obtain this revenue and the revenue for their own support by apportionment among their counties, in the way Nebraska, Texas, Montana, and a number of other states still do. The counties, as agents of the states, should collect their revenue, and the revenue needed by state and Federal governments, from the rental value of their lands, using existing property tax collection machinery. These changes would reverse the trend of the last 50 years. Instead of lower levels of government becoming increasingly dependent upon higher levels of government for aid, thereby losing their independence, the higher levels of government would return to dependence upon the lower. That is as it should be if we wish to preserve our liberties."

-- Robert De Fremery, Rights vs. Privileges, pp. 39-40

How large will this rent-based Citizen's Dividend ("Rent Dividend" for short) be?

This will depend on (a) what (if any) cuts are made to the federal budget, and (b) the rate at which land rent is taxed.

According to a study conducted by economist Michael Hudson in 1997 -- and subsequently cited by economist Fred Harrison in the book, The Losses of Nations -- land rent makes up roughly 14% of the national income, or what in 2009 was approximately $1.7 trillion. Even higher estimates have been made by economists such as Fred Foldvary and Mason Gaffney, but for now I'll work with Dr. Hudson's more conservative estimate.

Now, even if that $1.7 trillion had been federally taxed at a full 100% rate, then, all else being equal, it still would not have been enough to replace all other federal taxes.

However, if combined with both (a) the National Dividend discussed earlier, and (b) urgently-needed spending cuts, then even at a more modest tax rate of, say, 50%, it would easily have allowed for the complete elimination of what are by far the two most costliest and burdensome of all federal taxes -- the individual income tax and the payroll tax.

Now, what may surprise some to learn is that, of those two, the one that hits most American households the hardest is actually the payroll tax, not the income tax. And since much of the payroll tax goes to pay what is, in effect, a "dividend" of sorts (whatever actual money was once in the so-called Social Security "trust fund" was raided long ago and replaced with government IOUs), it only makes sense that this horribly regressive, job-destroying tax be replaced with the National Dividend. (This of course means that, during the transition period, the National Dividend will apply only to qualified recipients of Social Security and Medicare. But everyone else will benefit from it as well -- albeit indirectly -- due to the consequent elimination of the payroll tax.)

This leaves only the individual income tax to contend with, and that in turn brings us to the issue of spending cuts.

What again may surprise some to learn is the extent to which federal spending can be reduced without so much as touching Social Security, Medicare, Medicaid, or any of the poverty assistance programs (e.g., TANF) administered by the Department of Health and Human Services.

First of all, with regard to the so-called "Troubled Asset Relief Program" (TARP), although for obvious political reasons the actual cost of this program has yet to appear in the official budget, virtually no one (except, of course, for Wall Street bankers and both their puppet politicians in Washington D.C. and their lapdog apologists in the corporate whore "news" media) disputes that it has put taxpayers on the line for literally tens of trillions of dollars.

To understand just how outrageous and criminal the TARP really is, consider the following analogy. Let's say that a casino gambler incurs a gambling debt that is so fraudulent that it exceeds not only the entire U.S. money supply, but the annual productive output of the entire planet. Since the gambler is obviously unable to pay, let's further assume that he proceeds to have bought-off politicians use their taxing power to steal most of your future money on his behalf in order to pay down his gambling debt, and that he then adds insult to injury by saying you shouldn't complain since he'll likely "loan" some of your own money back to you at interest.

Would you consider that an even semi-"legitimate" use of your tax dollars? Neither would I.

Yet that is exactly what bought-off politicians from both major parties (including John McCain and Barack Obama) essentially did when they instituted and subsequently expanded the TARP, because the quadrillion-dollar derivatives bubble that created the apparent "need" for the TARP in the first place was (and is) nothing more than the accumulated gambling debt of Wall Street speculators. That's why, in my "Monetary Reform" thread, I call for putting all derivatives-infected mega-banks through Chapter 11 bankruptcy and legally voiding all of their derivatives contracts. That, coupled with both the abolition of fractional reserve lending and the institution of a debt-free money supply in place of the current debt-based money supply, would render the TARP meaningless, and thus allow for its quick, unconditional and long-overdue repeal.

Second, with regard to our imperialist, terroristic, hornets' nest-stirring foreign policy, by putting an immediate end to this policy, we can (and must!) reduce the parasitic war budget by at least $400 billion.

Third, the institution of a Greenback money system will, by eliminating the need for a "national debt," free taxpayers from the burden of servicing the interest on such debt. This will generate an additional savings of at least $164 billion.

Other key cuts I advocate include the following:

* Abolish both FEMA and the CIA.

* In view of the fact that 9/11 was an inside job orchestrated by traitors within our own government (see this, this and this), abolish all post-9/11 police state expansion measures -- including the "Patriot" Act, Homeland "Security" Act, Military Commissions Act, and Presidential Directive 51 -- and with them the entire "Homeland Security Monstrosity."

* Abolish the DEA (while ending the insane drug war).

* Abolish the BATFE (while repealing all federal gun control laws).

* Abolish the so-called Department of "Education" (while eliminating any and all federal involvement in education).

* Abolish corporate welfare.

* Delink the "ground transportation" function of the Department of Transportation from taxation, since this function will be financed instead via the process of "monetizing" (free of debt) the construction and renovation of roads, bridges and rail lines.

When combined with the minimum savings afforded by a non-interventionist foreign policy ($400 billion) and a Greenback money system ($164 billion), the above cuts yield a total savings of at least $861 billion.

Subtract this from the $1.061 trillion in revenue that the individual income tax is expected to generate in 2010, and we have a mere $200 billion in federal outlays (not counting those outlays currently financed by other federal taxes) to fund from a tax on land rent. Thus, if we assume a tax rate of 50% -- and hence a minimum of $850 billion in revenue -- we have a revenue surplus of at least $650 billion.

In the interest of making the transition to a Georgist tax system as smooth and graceful as possible, the first spending priority for that surplus will be to fund emergency relief tax credits to "fixed income" homeowners (i.e., retirees dependent entirely upon government transfer payments) who experience a net increase in their overall tax burden. But this will only be needed as a temporary transition measure, because the combined economic effect of a Georgist tax system and Greenback money system will (among other things) make it many times easier for the average wage-earner to save for his or her own retirement. So much so, in fact, that within 20 to 30 years there will be little if any need to devote most of the rent surplus to a mere segment of the population, because by then general prosperity will have been so much greater than now for so long, that it will be virtually impossible for anyone to be property "rich" yet monetarily "poor" (as is the case now among many "seniors").

As to the question of homeowners still in the workforce, they will need no such "relief" during the transition phase. Why? Two reasons. First, because -- unlike low-income retirees on Social Security (who pay comparatively very little in federal taxes) -- the savings that workers and small business owners will incur from no longer having to pay either the federal payroll tax or individual income tax will completely offset the cost of paying a higher tax on land rent. Second, because the surge in pre-tax income they'll experience as a result of the LVT-induced economic boom will offset said cost even further.

In light of all this, it follows that, once the transition phase is complete, the entire surplus can be safely distributed equally among everyone (not just retirees), and thereby become a true "Citizen's Dividend."

Returning now to the original question of how large the Rent Dividend will be, if we divide the aforementioned minimum surplus of $650 billion by the current number of adult U.S. citizens -- roughly 230 million -- we have a relatively modest figure of about $3,000. (Note: at the start of the aforementioned transition phase, it will of course be much more than that for fixed income homeowners and zero for those still in the workforce; but upon completion of said phase, the surplus will be distributed equally among all adult citizens, thus reducing the per person figure by 2/3 to 3/4). However, when we take into account the estimate made by economist Nicolaus Tideman on page 147 of The Losses of Nations -- that the U.S. economy would produce nearly 25 percent more than it does now if land rent were the primary source of public revenue -- and how this, in turn, would dramatically increase the market-based rental value of land -- and hence the tax base, and hence the surplus -- we find that the Dividend will (upon completion of the transition phase) start out closer to $4,000 per person, then rise slowly over time as the economy continues to grow.

Thus, if we assume the aformentioned National Dividend is $800 billion, then when we combine these two dividends we have a guaranteed minimum income of at least $7,000. That may not sound like much at first, but it must always be remembered how much lower housing costs will be under a Georgist tax system (see this and this).
"Abolish all taxation save that upon land values." -- Henry George



Of the many Pavlovian reactions and emotion-driven objections that the advocates of a Guaranteed Income are certain to encounter from the countless armchair critics, reactionary naysayers and do-nothing ideologues who always come out of the woodwork whenever someone proposes a meaningful, non-partisan solution to a major social problem, one of the most common will be the usual Chicken Little prediction that it will unleash a nationwide epidemic of chronic laziness and leech-like behavior.

Yet in most if not all cases this is nothing more than a desperate and shameless appeal to either class prejudice or, worse, racial prejudice.

In my view, no one in world history has ever provided a more eloquent response to this age-old objection (in all its variants) than Henry George:


"But it may be said, to banish want and the fear of want, would be to destroy the stimulus to exertion; men would become simply idlers, and such a happy state of general comfort and content would be the death of progress. This is the old slaveholders' argument, that men can be driven to labor only with the lash. Nothing is more untrue.

"Want might be banished, but desire would remain. Man is the unsatisfied animal. He has but begun to explore, and the universe lies before him. Each step that he takes opens new vistas and kindles new desires. He is the constructive animal; he builds, he improves, he invents, and puts together, and the greater the thing he does, the greater the thing he wants to do. He is more than an animal. Whatever be the intelligence that breathes through nature, it is in that likeness that man is made. The steamship, driven by her throbbing engines through the sea, is in kind, though not in degree, as much a creation as the whale that swims beneath. The telescope and the microscope, what are they but added eyes, which man has made for himself; the soft webs and fair colors in which our women array themselves, do they not answer to the plumage that nature gives the bird? Man must be doing something, or fancy that he is doing something, for in him throbs the creative impulse; the mere basker in the sunshine is not a natural, but an abnormal man.

"As soon as a child can command its muscles, it will begin to make mud pies or dress a doll; its play is but the imitation of the work of its elders; its very destructiveness arises from the desire to be doing something, from the satisfaction of seeing itself accomplish something. There is no such thing as the pursuit of pleasure for the sake of pleasure. Our very amusements amuse only as they are, or simulate, the learning or the doing of something. The moment they cease to appeal either to our inquisitive or to our constructive powers, they cease to amuse. It will spoil the interest of the novel reader to be told just how the story will end; it is only the chance and the skill involved in the game that enable the card-player to 'kill time' by shuffling bits of pasteboard....People who lead what are called lives of fashion and pleasure must have some other object in view, or they would die of ennui; they support it only because they imagine that they are gaining position, making friends, or improving the chances of their children. Shut a man up, and deny him employment, and he must either die or go mad.

"It is not labor in itself that is repugnant to man; it is not the natural necessity for exertion which is a curse. It is only labor which produces nothing—exertion of which he cannot see the results. To toil day after day, and yet get but the necessaries of life, this is indeed hard; it is like the infernal punishment of compelling a man to pump lest he be drowned, or to trudge on a treadmill lest he be crushed. But, released from this necessity, men would but work the harder and the better, for then they would work as their inclinations led them; then would they seem to be really doing something for themselves or for others. Was Humboldt's life an idle one? Did Franklin find no occupation when he retired from the printing business with enough to live on? Is Herbert Spencer a laggard? Did Michael Angelo paint for board and clothes?

"The fact is that the work which improves the condition of mankind, the work which extends knowledge and increases power, and enriches literature, and elevates thought, is not done to secure a living. It is not the work of slaves, driven to their task either by the lash of a master or by animal necessities. It is the work of men who perform it for its own sake, and not that they may get more to eat or drink, or wear, or display. In a state of society where want was abolished, work of this sort would be enormously increased."

-- Henry George, Progress and Poverty, pp. 466-68

"Abolish all taxation save that upon land values." -- Henry George




The Crime of Poverty

by Henry George

An address delivered in the Opera House,
Burlington, Iowa, April 1, 1885

Ladies and Gentlemen:

I PROPOSE to talk to you tonight of the Crime of Poverty. I cannot, in a short time, hope to convince you of much; but the thing of things I should like to show you is that poverty is a crime. I do not mean that it is a crime to be poor. Murder is a crime; but it is not a crime to be murdered; and a man who is in poverty, I look upon, not as a criminal in himself, so much as the victim of a crime for which others, as well perhaps as himself, are responsible. That poverty is a curse, the bitterest of curses, we all know. Carlyle was right when he said that the hell of which Englishmen are most afraid is the hell of poverty; and this is true, not of Englishmen alone, but of people all over the civilised world, no matter what their nationality. It is to escape this hell that we strive and strain and struggle; and work on oftentimes in blind habit long after the necessity for work is gone.

The curse born of poverty is not confined to the poor alone; it runs through all classes, even to the very rich. They, too, suffer; they must suffer; for there cannot be suffering in a community from which any class can totally escape. The vice, the crime, the ignorance, the meanness born of poverty, poison, so to speak, the very air which rich and poor alike must breathe.

Poverty is the mother of ignorance, the breeder of crime. I walked down one of your streets this morning, and I saw three men going along with their hands chained together. I knew for certain that those men were not rich men; and, although I do not know the offence for which they were carried in chains through your streets, this I think I can safely say, that, if you trace it up you will find it in some way to spring from poverty. Nine tenths of human misery, I think you will find, if you look, to be due to poverty. If a man chooses to be poor, he commits no crime in being poor, provided his poverty hurts no one but himself. If a man has others dependent upon him; if there are a wife and children whom it is his duty to support, then, if he voluntarily chooses poverty, it is a crime — aye, and I think that, in most cases, the men who have no one to support but themselves are men that are shirking their duty. A woman comes into the world for every man; and for every man who lives a single life, caring only for himself, there is some woman who is deprived of her natural supporter. But while a man who chooses to be poor cannot be charged with crime, it is certainly a crime to force poverty on others. And it seems to me clear that the great majority of those who suffer from poverty are poor not from their own particular faults, but because of conditions imposed by society at large. Therefore I hold that poverty is a crime – not an individual crime, but a social crime, a crime for which we all, poor as well as rich, are responsible.

Two or three weeks ago I went one Sunday evening to the church of a famous Brooklyn preacher. Mr. Sankey was singing and something like a revival was going on there. The clergyman told some anecdotes connected with the revival, and recounted some of the reasons why men failed to become Christians. One case he mentioned struck me. He said that he had noticed on the outskirts of the congregation, night after night, a man who listened intently and who gradually moved forward. One night, the clergyman said, he went to him, saying: "My brother, are you not ready to become a Christian?" The man said, no, he was not. He said it, not in a defiant tone, but in a sorrowful tone; the clergyman asked him why, whether he did not believe in the truths he had been hearing? Yes, he believed them all. Why, then, wouldn't he become a Christian? "Well," he said, "I can't join the church without giving up my business; and it is necessary for the support of my wife and children. If I give that up, I don't know how in the world I can get along. I had a hard time before I found my present business, and I cannot afford to give it up. Yet I can't become a Christian without giving it up." The clergyman asked, "are you a rum-seller?" No, he was not a rum-seller. Well, the clergyman said, he didn't know what in the world the man could be; it seemed to him that a rum-seller was the only man who does a business that would prevent his becoming a Christian; and he finally said: "What is your business?" The man said, "I sell soap." "Soap!" exclaimed the clergyman, "you sell soap? How in the world does that prevent your becoming a Christian?" "Well," the man said, "it is this way; the soap I sell is one of these patent soaps that are extensively advertised as enabling you to clean clothes very quickly, as containing no deleterious compound whatever. Every cake of the soap that I sell is wrapped in a paper on which is printed a statement that it contains no injurious chemicals, whereas the truth of the matter is that it does, and that though it will take the dirt out of clothes pretty quickly, it will, in a little while, rot them completely. I have to make my living in this way; and I cannot feel that I can become a Christian if I sell that soap." The minister went on, describing how he labored unsuccessfully with that man, and finally wound up by saying: "He stuck to his soap and lost his soul."

But, if that man lost his soul, was it his fault alone? Whose fault is it that social conditions are such that men have to make that terrible choice between what conscience tells them is right, and the necessity of earning a living? I hold that it is the fault of society; that it is the fault of us all. Pestilence is a curse. The man who would bring cholera to this country, or the man who, having the power to prevent its coming here, would make no effort to do so, would be guilty of a crime. Poverty is worse than cholera; poverty kills more people than pestilence, even in the best of times. Look at the death statistics of our cities; see where the deaths come quickest; see where it is that the little children die like flies – it is in the poorer quarters. And the man who looks with careless eyes upon the ravages of this pestilence, the man who does not set himself to stay and eradicate it, he, I say, is guilty of a crime.

If poverty is appointed by the power which is above us all, then it is no crime; but if poverty is unnecessary, then it is a crime for which society is responsible and for which society must suffer. I hold, and I think no one who looks at the facts can fail to see, that poverty is utterly unnecessary. It is not by the decree of the Almighty, but it is because of our own injustice, our own selfishness, our own ignorance, that this scourge, worse than any pestilence, ravages our civilisation, bringing want and suffering and degradation, destroying souls as well as bodies.  Look over the world, in this heyday of nineteenth century civilisation. In every civilised country under the sun you will find men and women whose condition is worse than that of the savage: men and women and little children with whom the veriest savage could not afford to exchange. Even in this new city of yours with virgin soil around you, you have had this winter to institute a relief society. Your roads have been filled with tramps, fifteen, I am told, at one time taking shelter in a round-house here. As here, so everywhere; and poverty is deepest where wealth most abounds.

What more unnatural than this? There is nothing in nature like this poverty which today curses us. We see rapine in nature; we see one species destroying another; but as a general thing animals do not feed on their own kind; and, wherever we see one kind enjoying plenty, all creatures of that kind share it. No man, I think, ever saw a herd of buffalo, of which a few were fat and the great majority lean. No man ever saw a flock of birds, of which two or three were swimming in grease and the others all skin and bone. Nor in savage life is there anything like the poverty that festers in our civilisation.

In a rude state of society there are seasons of want, seasons when people starve; but they are seasons when the earth has refused to yield her increase, when the rain has not fallen from the heavens, or when the land has been swept by some foe – not when there is plenty. And yet the peculiar characteristic of this modern poverty of ours is that it is deepest where wealth most abounds.

Why, today, while over the civilised world there is so much distress, so much want, what is the cry that goes up? What is the current explanation of the hard times? Overproduction! There are so many clothes that men must go ragged, so much coal that in the bitter winters people have to shiver, such over-filled granaries that people actually die by starvation! Want due to over-production! Was a greater absurdity ever uttered? How can there be over-production till all have enough? It is not over-production; it is unjust distribution.

Poverty necessary! Why, think of the enormous powers that are latent in the human brain! Think how invention enables us to do with the power of one man what not long ago could not be done by the power of a thousand. Think that in England alone the steam machinery in operation is said to exert a productive force greater than the physical force of the population of the world, were they all adults. And yet we have only begun to invent and discover. We have not yet utilised all that has already been invented and discovered. And look at the powers of the earth. They have hardly been touched. In every direction as we look new resources seem to open. Man's ability to produce wealth seems almost infinite—we can set no bounds to it. Look at the power that is flowing by your city in the current of the Mississippi that might be set at work for you. So in every direction energy that we might utilise goes to waste; resources that we might draw upon are untouched. Yet men are delving and straining to satisfy mere animal wants; women are working, working, working their lives away, and too frequently turning in despair from that hard struggle to cast away all that makes the charm of woman.

If the animals can reason what must they think of us? Look at one of those great ocean steamers ploughing her way across the Atlantic, against wind, against wave, absolutely setting at defiance the utmost power of the elements. If the gulls that hover over her were thinking beings could they imagine that the animal that could create such a structure as that could actually want for enough to eat? Yet, so it is. How many even of those of us who find life easiest are there who really live a rational life? Think of it, you who believe that there is only one life for man — what a fool at the very best is a man to pass his life in this struggle to merely live? And you who believe, as I believe, that this is not the last of man, that this is a life that opens but another life, think how nine tenths, aye, I do not know but ninety-nine-hundredths of all our vital powers are spent in a mere effort to get a living; or to heap together that which we cannot by any possibility take away. Take the life of the average workingman. Is that the life for which the human brain was intended and the human heart was made? Look at the factories scattered through our country. They are little better than penitentiaries.

I read in the New York papers a while ago that the girls at the Yonkers factories had struck. The papers said that the girls did not seem to know why they had struck, and intimated that it must be just for the fun of striking. Then came out the girls' side of the story and it appeared that they had struck against the rules in force. They were fined if they spoke to one another, and they were fined still more heavily if they laughed. There was a heavy fine for being a minute late. I visited a lady in Philadelphia who had been a forewoman in various factories, and I asked her, "Is it possible that such rules are enforced?" She said it was so in Philadelphia. There is a fine for speaking to your next neighbour, a fine for laughing; and she told me that the girls in one place where she was employed were fined ten cents a minute for being late, though many of them had to come for miles in winter storms. She told me of one poor girl who really worked hard one week and made $3.50; but the fines against her were $5.25. That seems ridiculous; it is ridiculous, but it is pathetic and it is shameful.

But take the cases of those even who are comparatively independent and well off. Here is a man working hour after hour, day after day, week after week, in doing one thing over and over again, and for what? Just to live! He is working ten hours a day in order that he may sleep eight and may have two or three hours for himself when he is tired out and all his faculties are exhausted. That is not a reasonable life; that is not a life for a being possessed of the powers that are in man, and I think every man must have felt it for himself. I know that when I first went to my trade I thought to myself that it was incredible that a man was created to work all day long just to live. I used to read the "Scientific American," and as invention after invention was heralded in that paper I used to think to myself that when I became a man it would not be necessary to work so hard. But on the contrary, the struggle for existence has become more and more intense. People who want to prove the contrary get up masses of statistics to show that the condition of the working classes is improving. Improvement that you have to take a statistical microscope to discover does not amount to anything. But there is not improvement.

Improvement! Why, according to the last report of the Michigan Bureau of Labor Statistics, as I read yesterday in a Detroit paper, taking all the trades, including some of the very high priced ones, where the wages are from $6 to $7 a day, the average earnings amount to $1.77, and, taking out waste time, to $1.40. Now, when you consider how a man can live and bring up a family on $1.40 a day, even in Michigan, I do not think you will conclude that the condition of the working classes can have very much improved.

Here is a broad general fact that is asserted by all who have investigated the question, by such men as Hallam, the historian, and Professor Thorold Rogers, who has made a study of the history of prices as they were five centuries ago. When all the productive arts were in the most primitive state, when the most prolific of our modern vegetables had not been introduced, when the breeds of cattle were small and poor, when there were hardly any roads and transportation was exceedingly difficult, when all manufacturing was done by hand — in that rude time the condition of the laborers of England was far better than it is today. In those rude times no man need fear want save when actual famine came, and owing to the difficulties of transportation the plenty of one district could not relieve the scarcity of another. Save in such times, no man need fear want. Pauperism, such as exists in modern times, was absolutely unknown. Everyone, save the physically disabled, could make a living, and the poorest lived in rude plenty. But perhaps the most astonishing fact brought to light by this investigation is that at that time, under those conditions in those "dark ages," as we call them, the working day was only eight hours. While with all our modern inventions and improvements, our working classes have been agitating and struggling in vain to get the working day reduced to eight hours.

Do these facts show improvement? Why, in the rudest state of society in the most primitive state of the arts the labor of the natural bread-winner will suffice to provide a living for himself and for those who are dependent upon him. Amid all our inventions there are large bodies of men who cannot do this. What is the most astonishing thing in our civilisation? Why, the most astonishing thing to those Sioux chiefs who were recently brought from the Far West and taken through our manufacturing cities in the East, was not the marvellous inventions that enabled machinery to act almost as if it had intellect; it was not the growth of our cities; it was not the speed with which the railway car whirled along; it was not the telegraph or the telephone that most astonished them; but the fact that amid this marvellous development of productive power they found little children at work. And astonishing that ought to be to us; a most astounding thing!

Talk about improvement in the condition of the working classes, when the facts are that a larger and larger proportion of women and children are forced to toil. Why, I am told that, even here in your own city, there are children of thirteen and fourteen working in factories. In Detroit, according to the report of the Michigan Bureau of Labor Statistics, one half of the children of school age do not go to school. In New Jersey, the report made to the legislature discloses an amount of misery and ignorance that is appalling. Children are growing up there, compelled to monotonous toil when they ought to be at play, children who do not know how to play; children who have been so long accustomed to work that they have become used to it; children growing up in such ignorance that they do not know what country New Jersey is in, that they never heard of George Washington, that some of them think Europe is in New York. Such facts are appalling; they mean that the very foundations of the Republic are being sapped. The dangerous man is not the man who tries to excite discontent; the dangerous man is the man who says that all is as it ought to be. Such a state of things cannot continue; such tendencies as we see at work here cannot go on without bringing at last an overwhelming crash.

I say that all this poverty and the ignorance that flows from it is unnecessary; I say that there is no natural reason why we should not all be rich, in the sense, not of having more than each other, but in the sense of all having enough to completely satisfy all physical wants; of all having enough to get such an easy living that we could develop the better part of humanity. There is no reason why wealth should not be so abundant, that no one should think of such a thing as little children at work, or a woman compelled to a toil that nature never intended her to perform; wealth so abundant that there would be no cause for that harassing fear that sometimes paralyses even those who are not considered "the poor," the fear that every man of us has probably felt, that if sickness should smite him, or if he should be taken away, those whom he loves better than his life would become charges upon charity. "Consider the lilies of the field, how they grow; they toil not, neither do they spin." I believe that in a really Christian community, in a society that honored not with the lips but with the act, the doctrines of Jesus, no one would have occasion to worry about physical needs any more than do the lilies of the field. There is enough and to spare. The trouble is that, in this mad struggle, we trample in the mire what has been provided in sufficiency for us all; trample it in the mire while we tear and rend each other.

There is a cause for this poverty; and, if you trace it down, you will find its root in a primary injustice. Look over the world today—poverty everywhere. The cause must be a common one. You cannot attribute it to the tariff, or to the form of government, or to this thing or to that in which nations differ; because, as deep poverty is common to them all the cause that produces it must be a common cause. What is that common cause?

"Abolish all taxation save that upon land values." -- Henry George




"Job Creation"–Stupid Is as Stupid Does

by Richard C. Cook

Global Research, April 9, 2010
Richard C. Cook - 2010-04-06

No one can seriously doubt that the huge amounts of borrowed federal dollars poured into the economy since Barack Obama became president has prevented even more jobs from being lost than might otherwise have been the case in the current devastating recession. It's impossible, however, to come up with a "real" number, because no economist has a good enough handle on matters to sort out all the variables at play, including readjustments due to the fall of housing prices, low interest rates, a slightly improved export environment, rebounding of depleted inventories, new highway construction resulting from stimulus spending, etc. Still, let's look at some facts about the current so-called "recovery":

*  Un- and under-employment remains high–officially over 17 percent, not including people who have given up looking for work.

*  The cost to create (or save) jobs has been ludicrously high. Estimates of what it has cost the federal government–meaning the taxpayer–to create a single job range from $70,000 to $500,000, depending on whether bailouts lavished on the failed banking system are included.

*  While Wall Street rakes in record profits and the stock market creeps back  with the DJIA now approaching 11,000, the rest of the economy is sputtering. Public service jobs at the state and local level, including teacher positions, are disappearing like shredded newspaper in a blast furnace. The best the Obama administration can come up with for the next phase is some extremely convoluted encouragement for more bank lending to small businesses, even though these businesses are operating in an environment of crippled consumer demand that may last for years to come.

*  The two economic sectors that are reasonably "strong"–the military and health care–are essentially non-productive. The military uses Keynesian deficit-spending to support its gargantuan job base, while the health care industry feasts at the public trough through the ever-increasing cost of Medicare and other spending programs. But like the bailouts and stimulus, it's being done by both sectors with borrowed or printed money through marketing of Treasury bonds whose value becomes more precarious by the day.

*  What stimulus there is has been is coming to an end as the Federal Reserve reduces "quantitative easing" and the Obama administration launches its bipartisan deficit reduction commission.

Many commentators have said, as a joke, that it would have been cheaper if the government had just printed the money and given it away. But such an approach would not be a joke at all. It would be enlightened public policy.

The real joke is that in a technological age job-creation is a completely wrong approach to distributing consumer purchasing power, because the world does not need everyone to have a job in order to produce what is needed for the population to live a decent, comfortable life. This is the great fallacy of Keynesian economics, which aims at full employment and endless economic growth.

Not only does the fruitless quest for a full-employment economy put the entire population under the most brutal forms of financial and psychological stress, it also erodes the value of a constantly inflating currency and puts entirely too much money in the hands of the big banking and government institutions which spend it for their own aggrandizement on financial bubbles and wars.

America is the most wasteful, bloated, materialistic, and violent culture on the planet precisely because the economic treadmill we are racing along moves constantly faster all the time. This treadmill has been created on purpose by the only people who benefit from it–the ones at the very top of the heap.

The solution is simple though paradoxical: sufficient numbers of adult persons should be given enough money to purchase the necessities of life without having to work at all.

This is so because the benefits of technology have brought us to the point where distribution of purchasing power without reference to labor is the most efficient and least wasteful economic model available. The borrowed or printed federal dollars currently lavished on the banks, the armed forces, and the government bureaucracies that implement stimulus programs would be much more efficiently spent if simply given away.

Call it a basic income guarantee or a national dividend or whatever you like and pay for however much of it you want to through fair taxation of the obscenely wealthy–it really doesn't matter. You could even establish an optional retirement age of 40 or 45. The important thing is that such a program would recognize that with productivity as high as it is today, too many workers get in each other's way. Those who don't have to work shouldn't be required to do so. Instead, they can create, do volunteer service, or work at low-paying jobs that are still socially desirable such as teaching or the arts.

An adjunct to such a program would be to provide local producers' cooperatives the legal authority to create credit on their own either by utilizing the national currency or by use of trading credits that not only would circulate locally but could also be used to pay taxes. Such legislation at the national level would free small business from bank usury much more effectively than current government proposals and create more jobs.

Today's economic crisis is actually the mismanagement of nature's bounty in an age where technology has solved the problem of scarcity if it is properly viewed as the heritage of all mankind, not the cartel of financiers, corporate oligarchs, military strongmen, and politicians who have the world at the throat in order to safeguard their own wealth and power. Instead they should relax their grip and realize that they too would benefit from a world where all could breathe freely in an economic environment of peace, dignity, and sharing.

Believe me, it could happen and someday probably will.
"Abolish all taxation save that upon land values." -- Henry George




Why Australians deserve a universal minimum income

I'd like to see every citizen receive a basic income of AUD$30,000 per year. No exceptions, no means testing. This is why

Godfrey Moase for Overland   
June 19, 2013

'What strikes me about a dirty job isn't that it needs doing – it's that someone has to
do it to get by'. Photograph: Andreas Rentz/Getty Images

I once worked in a call centre where a few of the interviewers would be regularly rostered to do phone surveys about female incontinence products. Asking strangers whether they lost a teaspoon, a tablespoon or more in volume per occasion is a tough gig. Then again, the horror of the role was somewhat less visceral than that experienced by a worker I'd once represented who had to manually slit the throats of chickens at a poultry factory. At Centrelink, he had listed his occupation as "killer".

What strikes me about a dirty job isn't that it needs doing – it's that someone has to do it to get by. There's no other choice for them. And it's getting more difficult to find a job to make a living off. In the midst of a (still) growing economy, 2.1m Australians are unemployed or underemployed, Ford and SPC Ardmona (to name but a few corporates) are laying off thousands of jobs, Adecco chief Patrick De Maeseneire is calling for the abolition of the minimum wage, and in the tech community there's a raging debate about when (not if) robots will replace most jobs we know of today. For labour market entrants facing an economy with 40% of us in insecure work, the choices (for those aside from a lucky few) are largely between waiting to be notified of shifts via text message, rolling short-term contracts in the public sector, or studying for years and years to end up in the same trap anyway. And that's all before the economy really tanks.

This shouldn't be our legacy. Australia is one of the richest countries in a world that has never been richer. Our GDP is on track to reach AUD$73,123.05 per capita this year. That we live with poverty, insecurity and economic anxiety is a matter of political choice, not necessity. We create enough value for everyone to have a basic living income. That's why I'd like to propose every citizen, every permanent resident, receive a basic income of AUD$30,000 per year. No exceptions. No means testing. A universal minimum income.

Imagine the creativity, innovation and enterprise that would be unleashed if every citizen were guaranteed a living. Universal income provides the material basis for a fuller development of human potential. Social enterprises, cooperatives and small businesses could be started without participants worrying where the next pay cheque would come from. Artists and musicians could focus on their work. More of us would be freed to volunteer our time for the public good. Some workers would no longer be faced with the unenviable position of having to choose between supporting their families and degrading their local environment. And all of us would have the option to pursue further education. Universal income won't solve all our problems, but it puts us in a stronger position from which to start to solve them.

"Abolish all taxation save that upon land values." -- Henry George




Don't Blame the Work Force

Jobs are Not the Answer

Jobs go unfilled not because people lack skills but because employers pay too little. If not the boss, who or what else could increase income? These three 2013 excerpts are from: (1) New York Times, Jun 15, on skill sets by the Editors; (2) Good Jobs 1st, Jun 19, on subsidies by Clawback; and (3) Politic 365, Jun 15, on income by A. Sheahen.

by NYT Editors, by Clawback, and by Allan Sheahen

Don't Blame the Work Force

April had a ratio of 3.1 job seekers, or 11.7 million people, for every opening. No category has been spared: unemployed workers outnumber openings in all of the 17 major sectors. The biggest problem in the labor market is not a skills shortage; rather, businesses do not have sufficient demand to justify adding employees.

When there are many more applicants than jobs, employers tend to impose overexacting criteria and then wait for the perfect match. They also offer tightfisted pay packages. What employers describe as talent shortages are often failures to agree on salary. If a business really needed workers, it would pay up.

Corporate executives want schools and, by extension, the government to take on more of the costs of training workers that used to be covered by companies as part of on-the-job employee development. They also want more immigration, both low and high skilled, because immigrants may be willing to work for less than their American counterparts.

To read more

JJS: Under the guise of creating jobs, politicians step in and give public money to rich and powerful insiders.

Giant Job Subsidy Packages Grow More Common and Costly

In recent years, state and local governments have been awarding giant economic development subsidy packages to corporations more frequently than ever before. The packages frequently reach nine and even ten figures, and the cost per job averages $456,000 and often exceeds $1 million.

In dollar terms, New York is spending the most, with megadeals totaling $11.4 billion. Next is Michigan with $7.1 billion, followed by five states in the $3 billion range: Oregon, New Mexico, Washington, Louisiana, and Texas.

"Despite their high costs, some of the deals involve little if any new-job creation," said Good Jobs First executive director Greg LeRoy. "Some are instances of job blackmail, in which a company threatens to move and gets paid to stay put. Others involve interstate job piracy, in which a company gets subsidies to move existing jobs across a state border, sometimes within the same metropolitan area."

The most expensive single listing is a 30-year discounted-electricity deal worth an estimated $5.6 billion given to aluminum producer Alcoa by the New York Power Authority. Taking all of a company's megadeals into account, Alcoa is at the top with its single $5.6 billion deal, followed by Boeing (four deals worth a total of $4.4 billion), Intel (six deals worth $3.6 billion), General Motors (11 deals worth $2.7 billion), Ford Motor (9 deals worth $2.1 billion), Nike (1 deal worth $2 billion) and Nissan (four deals worth $1.8 billion).

Fifty-six megadeals went to corporations with parents based outside the United States and seven more went to joint ventures of domestic and foreign companies.

To read more

JJS: Yet humans don't need mindless work so much as they do need an ample amount of money.

Jobs are Not the Answer

The marketplace has changed and there will never again be enough jobs for everyone who wants one — no matter who is in the White House or in Congress.

Fifty years ago, economists predicted that automation and technology would displace thousands of workers a year. Now we even have robots doing human work.

Global capital will continue to move jobs to places on the planet that have the lowest labor costs. Technology will continue to improve, eliminating countless jobs.

"Work" and jobs are not the answer to ending poverty. To end poverty and to achieve true economic freedom, we need to break the link between work and income.

Job creation is a completely wrong approach because the world doesn't need everyone to have a job in order to produce what is needed for us to live a decent, comfortable life.

When we say we need more jobs, what we really mean is we need is more money to live on.

One answer is to establish a basic income guarantee (BIG), enough at least to get by on — just above the poverty level — for everyone. Each of us could then try to find work to earn more.

To read more

JJS: As usual, the well-meaning author wants to tax the rich and give to the poor -- plus save public money by abolishing job programs. But is that just as much in-the-box thinking as the critiqued belief in jobs? Why create the rich in the first place?

Must the money for an extra income come only from individual income or property? Couldn't the money come from our common wealth? Yes, we do have a common wealth. It's all the money that all members of society spend for goods never created by anyone's labor or capital, goods such as land, resources, airwaves, and ecosystem services. That spending is trillions. The fact that society does not recover it but instead leaves it on the table is what creates the rich in the first place.

So, by redirecting such spending from the few to everyone, we'd catch the money upstream rather than downstream and preclude the accumulation of undue fortunes in the first place. At last, we could get over the Protestant Work Ethic and embrace the Polynesian Play Ethic. Economists and economic reformers, if still hanging around, could find something useful to do.
"Abolish all taxation save that upon land values." -- Henry George




There are many convincing arguments in favour of a Citizen's Income

British Politics and Policy blog
July 8, 2013

Malcolm Torry discusses a new book that argues for a Universal Basic Income, or as it is termed here, a Citizen's Income. He discusses the different approaches the book uses in arguing for the policy, concluding that every mainstream political ideology generates arguments for a Citizen's Income.

A Citizen's Income is an unconditional, nonwithdrawable income paid to every individual as a right of citizenship. It is unconditional in the sense that the same amount would be paid to everyone of the same age: the same amount for every child, the same amount for every working age adult, and the same amount for every pensioner, whatever the individual's income, household structure, marital status, or employment status. It is nonwithdrawable: so if someone earns additional income then their Citizen's Income does not change. It is paid to the individual: so two people living together would each receive the same amount as if they were living separately.

Money for Everyone: Why we need a Citizen's Income, of which I am the author, is the first general book on the subject for over a decade and offers a variety of arguments for a Citizen's Income. But perhaps more importantly in relation to this blog, it offers a number of different ways of arguing for a social policy: a thought experiment, a historical method, a pilot project, comparison against criteria, and arguments from political ideology.

1. A thought experiment: This method asks what kind of social policy we might implement if we were starting from scratch. If we imagine ourselves constructing a tax and benefits system for a country that does not have one then we might decide to calculate how much each person should give to the government on the basis of their earned income. Would we then undertake a similar calculation to decide how much the government should give to each individual? This thought experiment shows how unnecessary and wasteful means-testing is, and that we only do it because our tax and benefits systems evolved separately rather than together.

2. A historical method: This method asks what we might learn about the political feasibility of a proposed reform from the history of similar reforms. If we study the history of the UK's benefits system, and of attempts to reform it, then we can draw the following conclusions: a) that those reforms that have succeeded have generally been for defined demographic groups, and b) that they have not reduced the number of civil servants. Those proposed reforms that have failed would have been for the population as a whole and would have reduced the number of civil servants. The politics of the benefits and tax system would appear to be as much about the internal politics of Whitehall as about the ideas and strategies of political parties.

Someone wishing to argue for the implementation of a Citizen's Income (which is for everyone, and would reduce the number of civil servants), would need to take the conclusions of this argument into account. Two implementation methods remain practical possibilities. The first would be a Citizen's Income for one demographic group at a time: starting with an enhanced Child Benefit, then turning the proposed Single Tier State Pension into a Citizen's Income; next establishing a young adult's unconditional income (to incentivise education and training); then an older worker's unconditional income (to ease the transition into part-time employment and retirement); and finally a working adult's unconditional income. A second method would be to start with a small Citizen's Income for everyone and then let it grow. The latter method would not greatly reduce the number of civil servants at the beginning of its implementation, but it would be a reform related to the whole of the population, so it might be less viable politically. Also, it would be less likely to generate the benefits of a Citizen's Income in a sufficiently obvious fashion to facilitate public understanding of those benefits. The former method would be for one demographic group at a time, and it would reduce the number of civil servants only gradually; and because each demographic group would receive a Citizen's Income of a reasonable size, its benefits would be more easily understood and appreciated. It is therefore the latter option that would be more likely to succeed.

3. A pilot project: A useful way of arguing for a social policy reform is to study examples of similar reforms in other contexts. The Alaska Permanent Fund pays an annual dividend equally to every citizen of Alaska. From being the least equal state in the USA in terms of disposable income, it is now the most equal. The payment of a small Citizen's Incomes in two Namibian communities and in several Indian ones (both urban and rural) has shown substantial improvements in wellbeing indicators and in economic activity, particularly amongst the lowest earnings deciles. A household-based universal benefit in Iran would be interesting to watch if close study of its effects was more of a possibility.

4. Comparison against criteria: This method constructs a list of criteria for an ideal social policy and measures both current and proposed policies against the criteria. A list of criteria against which to evaluate benefits systems could look like this:

1.  Our tax and benefits system should be coherent: that is, its different parts should fit together;
2.  Our tax and benefits system should be simple to administer: to reduce employment disincentives, for cost reasons, and because democratic accountability requires comprehensibility;
3.  Our tax and benefits system should reflect today's family and household patterns, and should remain serviceable as household and family patterns continue to change.
4.  Our tax and benefits system should not disincentivise public goods such as enterprise, training, long-term relationships between parents of children, and providing financially for oneself and one's dependents.
5.  Our tax and benefits system should incentivise the efficient allocation of resources and so contribute to an efficient economy.
6.  Our tax and benefits system should treat people with dignity and not stigmatize individuals involved in any part of the system.
7.  Our tax and benefits system should reflect the labour market of today, and should remain serviceable as the labour market changes in the future;
8.  Our tax and benefits system should reduce poverty and injustice, and it should redistribute from rich to poor.

Our current income maintenance structure is made up of tax and benefits systems that are incoherent, are complex and expensive to administer, assume a stable family headed by a breadwinner with full-time stable employment, disincentivise enterprise and training, provide no incentive for people to live together (because means-tested benefits pay less to two people living together than they pay in total to the two individuals if they are living apart), are inefficient in relation to the market in labour, stigmatize recipients, assume that each worker has stable full-time employment and rarely changes their employment, and prevent people from climbing out of poverty.

A Citizen's Income, on the other hand, would be coherent with any tax system or continuing contributory, means-tested or universal benefits, would be simple and cheap to administer, would suit any current or future household or family structure, would incentivise training and enterprise, would enable people who live together to retain economies of scale, would contribute to labour market efficiency, would stigmatise nobody (because everybody would be a recipient), would suit any current or future labour market and any household employment pattern, and would make it far easier for individuals and households to climb out of poverty.

How we word the evaluation tests matters, particularly in relation to a benefits system's impact on poverty. For instance: Does the benefits system redistribute from rich to poor? The current system passes this test, and a Citizen's Income does not in absolute terms, by definition, but does in terms of percentage of disposable income. Both systems unambiguously pass a differently worded test: Does the tax and benefits structure as a whole redistribute from rich to poor? This is surely a more relevant test. A similar question is this: Does a benefits system reduce poverty? Both a means-tested system and a Citizen's Income do reduce poverty if we are looking at the cash sums received by the poor. However, a Citizen's Income would be more effective at enabling people to climb out of poverty, because marginal deduction rates would be lower, and the secure income floor provided by the Citizen's Income would be much larger as a percentage of disposable income for people in the lowest earnings decile than for people in the highest.

5. Arguments from political ideology: We can ask the questions: what arguments does a political ideology generate for and against a policy option? And what arguments have people who have espoused the ideology offered for and against a Citizen's Income?

In relation to a Citizen's Income: the New Right values the fact that a Citizen's Income does not disincentivise enterprise in the way that means-tested benefits do; One Nation conservatives valued the combination of social cohesion and more efficient labour market offered by a Citizen's Income; liberals value the freedom that a Citizen's Income would give to people to make choices about their employment patterns and relationships; social democracy values the combination of economic efficiency and redistribution offered by a Citizen's Income; and the Third Way could value a Citizen's Income as a means of reducing poverty in a globalizing economy. A secure income floor could provide people with a greater desire and a greater ability to consume more responsibly and to undertake work that preserves scarce resources and does not pollute our environment, thus making a Citizen's Income coherent with green concerns.

As for the arguments against: These tend to be more generic, and not related closely to particular political ideologies: The rich don't need it. (There is no reason why the rich should not receive a Citizen's Income if they are paying more than that in tax.) We should not give people something for nothing. (We are doing already that, and we are doing it badly. A Citizen's Income would not disincentivise employment, as means-tested benefits do.) A Citizen's Income would be too expensive. (How much the Citizen's Income would cost depends on the details of the scheme. If a Citizen's Income were to be paid for by reducing tax allowances and means-tested and contributory benefits, then revenue neutrality would be possible.) People would no longer work. (People would be more likely to seek to increase their earned income if they were receiving a Citizen's Income than they would be today if they were in receipt of in-work or out-of-work means-tested benefits.)

Our conclusion has to be that every mainstream political ideology generates arguments for a Citizen's Income, and that arguments against are more generic, are not generated by the political ideologies themselves, and are easily answered.

All of these different ways of arguing and more can be found in Money for Everyone: Why we need a Citizen's Income, which offers both a wide-ranging study of a Citizen's Income and an education in the politics of the policy process, available from the Policy Press. One of the book's unusual features is that the appendices are on a related website, both because there is not room in the book for the appendices, and because detailed costings material will need to be updated more regularly than the content of the book itself. To take an example: one of the appendices doubles as the Citizen's Income Trust's new introductory booklet, and offers detailed costings of the following revenue neutral Citizen's Income funded by reducing tax allowances and existing means-tested and contributory benefits:

"Abolish all taxation save that upon land values." -- Henry George




Where Was Martin Luther King Heading?

by Dan Sullivan
Saving Communities
August 2013

An intelligent approach to the problems of poverty and racism will cause us to see that the words of the psalmist — "The earth is the Lord's and the fullness thereof" — are still a judgment upon our use and abuse of the wealth and resources with which we have been endowed.

-- "Where Do We Go From Here?," A Testament of Hope: The essential Writings and Speeches of Martin Luther King, Jr

Italicized passages are quotations.
All unattributed quotes are from Martin Luther King, Jr.

What do we know about King's aspirations?

Martin Luther King's approach was to inspire with a vision of justice, not to merely prescribe. He understood that "I have a dream" would unite us, but "I have a plan" would divide us. He also understood that, in a fluid struggle with combative opponents, a plan becomes a fixation for supporters and a target for opponents. A dream, on the other hand, inspires us not only to act, but to aspire, to plan, to think for ourselves, and to have faith. "Faith is taking the first step even when you don't see the whole staircase."

Yet King clearly had a strategy — of pushing against boundaries, going deeper, and taking us out of our comfort zones — politically, intellectually, and spiritually.

He was a master at staying just far enough ahead of his own movement to challenge it without losing it. He carefully deduced what we didn't realize we were ready for and took us there. Clues in his speeches and writings suggest where he was going to take us next.

Beyond Race

No sooner had Martin Luther King become famous as our leading opponent of racism than he began to address poverty among all races. He saw that the most racist whites were themselves held down by an unjust economic system — that even those who reviled him and spit on him were victims. Without leaving race behind, he tackled poverty.

Beyond Poverty's Symptoms

Treating symptoms of poverty was not enough for King; more and more, he examined causes of poverty, asking why "people in the other America find themselves perishing on a lonely island of poverty in the midst of a vast ocean of material prosperity."  He began to question, not only why those who worked hardest were poor, but why great concentrations of wealth and privilege kept all working people, and even small business owners, poorer than they ought to be. Even if he didn't "see the whole staircase," at least at first, he saw more with each step. He got many of his supporters, still smarting from abuse they had received because of their race, to look beyond their own plight and work to end poverty for all.

Beyond American Poverty

His volunteers were American; his funding was American; his network and contacts were American; even his expertise was about America; and although his fame was worldwide, it was greatest in America. Yet after seeing poverty abroad, he led us out of our comfort zone once again, asking us to address the causes of worldwide poverty.

Beyond War

His commitment to non-violence took him beyond the question of why poor black men were fighting a rich white man's war, beyond Vietnam, and even beyond warfare itself in the hope of building foundations for peace.

It is not enough to say "We must not wage war." It is necessary to love peace and sacrifice for it. We must concentrate not merely on the negative expulsion of war, but on the positive affirmation of peace.
- Speech in Oslo On receiving the Nobel Peace Prize

Beyond Left, Right, and Middle

King frequently criticized the materialism, lack of spirituality and "the end justifies the means" mentality of the far left, while being careful to similarly criticize these same attributes as prevailing in capitalism. Over and over, he stated that, Truth is found neither in traditional capitalism nor in classical communism. Capitalism fails to realize that life is social. Communism fails to realize that life is personal. The good and just society is neither the thesis of capitalism nor the antithesis of communism, but a socially conscious democracy which reconciles the truths of individualism and collectivism.

The key word for King was "reconciles," which is entirely different from "compromises." Reconciliation is based on truth, on going deeper, on being truly radical. Compromises have been based on retaining power, avoiding conflict, and treating symptoms. King was impatient with "moderates" who would limit the movement to charitable programs for the poor.

True compassion is more than flinging a coin to the beggar; it understands that an edifice which produces beggars needs restructuring.

A true revolution of values will soon look uneasily on the glaring contrast of poverty and wealth. With righteous indignation, it will say: "This is not just." It will look across the oceans, and see individual capitalists of the West investing huge sums of money in Asia, Africa and South America, only to take the profits out with no concern for the social betterment of those countries, and say: "This is not just." It will look at our alliance with the landed gentry of Latin America and say: "This is not just."

The Guaranteed Income

There is nothing except shortsightedness to prevent us from guaranteeing an annual minimum — and livable — income for every American family.

King increasingly pressed for a guaranteed income to every citizen.

But, if he was against charity as a substitute for justice, where was this income to come from? A strong hint appears in his quote on the cover of this brochure:

"The Earth is the Lord's and the Fullness Thereof"

If the earth is the Lord's gift to all His people, by what right do we go around the world, grabbing it for ourselves? Why, by the "right of conquest"! By that same "right," some in our own country live off land rent they collect from others. Didn't our own system of land titles begin with conquest and political intrigue? How is it that Hispanics are mostly renting from whites in states with Spanish names? How is it that so many blacks rent from whites, not only in America, but even in Africa? Here is a problem that underlies racism, poverty, imperialism, war, and even the folly of left vs. right. For as the left so often tries to socialize what is rightly private, the right privatizes the earth itself, which is naturally social.

Reviving a Repressed Truth

The idea that the earth belongs to all of us equally, and that the rental value of land should be shared as a guaranteed income, is not new to Martin Luther King. It is a repressed truth that has been rediscovered over and over, only to be stifled, dismissed and co-opted by those who enjoyed the fruits of other people's labor. King's view resonates, not only with the Bible, but with Aristotle, the classical liberals, American revolutionaries, and even with Nobel laureates in economics. But the concept was most famously pressed by Henry George, America's first progressive economist. King began paraphrasing and quoting George, at least by 1965, and his approach became more and more "Georgist" as he delved into the question of why the great strides his civil rights movement had made were not abolishing poverty.

Without This Reform, Nothing Else Will Succeed

Up to recently we have proceeded from a premise that poverty is a consequence of multiple evils: lack of education restricting job opportunities; poor housing which stultified home life and suppressed initiative; fragile family relationships which distorted personality development. The logic of this approach suggested that each of these causes be attacked one by one. Hence a housing program to transform living conditions, improved educational facilities to furnish tools for better job opportunities, and family counseling to create better personal adjustments were designed. In combination these measures were intended to remove the causes of poverty....

In addition to the absence of coordination and sufficiency, the programs of the past have all had another failing - they are indirect. Each seeks to solve poverty by first solving something else.

In this statement, King was beginning to lay out the sad realization that, when the poor earn more because they are educated, their rents go up; that when the poor have stronger families and can earn more money, their rents go up, that even when the poor organize into unions, which he passionately supported, their gains in higher wages are met with higher rents and higher purchase prices for homes -  that landlords and banks operate in tandem to rob them. Even giving the poor public housing has turned out to be a cold, half-hearted effort at best, and a house of cards when speculators wanted land occupied by housing projects.

Only a basic income, a share of the Lord's earth and the fullness thereof, would go to the root of the matter. It would not only provide an income to the poor, but would break up the monopoly that constantly drives up rents.

This is the radicalism toward which Martin Luther King was headed. It is a radicalism that has been suppressed many times, but has resurfaced in the thinking of history's greatest thinkers. It is a radicalism we must embrace to honor Martin Luther King's legacy.

What Others Have Said:

Henry George: "The Crime of Poverty" 1885

"'No taxes and a pension for everybody;' and why should it not be? To take land values for public purposes is not really to impose a tax, but to take for public purposes a value created by the community. And out of the fund which would thus accrue from the common property, we might, without degradation to anybody, provide enough to actually secure from want all who were deprived of their natural protectors or met with accident, or any man who should grow so old that he could not work. All prating that is heard from some quarters about its hurting the common people to give them what they do not work for is humbug. The truth is, that anything that injures self-respect, degrades, does harm; but if you give it as a right, as something to which every citizen is entitled to, it does not degrade. Charity schools do degrade children that are sent to them, but public schools do not.

Tom Paine: "Agrarian Justice" 1796

"Man did not make the earth, and, though he had a natural right to occupy it, he had no right to locate as his property in perpetuity any part of it; neither did the Creator of the earth open a land-office, from whence the first title-deeds should issue.... Every proprietor, therefore, of cultivated lands, owes to the community a ground-rent (for I know of no better term to express the idea) for the land which he holds; and it is from this ground-rent that the fund proposed in this plan is to issue.... In advocating the case of the persons thus dispossessed, it is a right, and not a charity, that I am pleading for....

"To create a national fund, out of which there shall be paid to every person, when arrived at the age of twenty-one years, the sum of fifteen pounds sterling, as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property:

And also, the sum of ten pounds per annum, during life, to every person now living, of the age of fifty years, and to all others as they shall arrive at that age."

Milton Friedman: two interviews

"The proposal for a negative income tax is a proposal to help poor people by giving them money, which is what they need, rather than as now, by requiring them to come before a government official to tally all their assets and liabilities and be told that you may spend X dollars on rent, Y dollars on food, etc., and then be given a handout.... Once [the poor] get on welfare, we make it almost impossible for them to get off. In order for somebody who gets on to get off, he or she has to have a really good job, because to get off gradually, to earn a little bit, now doesn't pay...."

"Governments can collect taxes best on things that don't move. Land is an ideal basis of taxation because you can't take it away."

Abraham Lincoln: letter to law partner Gridley

"The land, the earth God gave to man for his home, sustenance and support, should never be in the possession of any man, corporation, society or unfriendly government any more than air or water -- if as much. An individual or company, or enterprise, acquiring land should hold no more than is required for their home and sustenance, and never more than they have in actual use in the prudent management of their legitimate business, and this much should not be permitted when it creates an exclusive monopoly. All that is not so used should be held for the free use of every family to make homesteads and to hold them as long as they are so occupied."

Winston Churchill:

"Some years ago in London there was a toll bar on a bridge across the Thames, and all the working people who lived on the south side of the river had to pay a daily toll of one penny for going and returning from their work. The spectacle of these poor people thus mulcted of so large a proportion of their earnings offended the public conscience, and agitation was set on foot, municipal authorities were roused, and at the cost of the taxpayers, the bridge was freed and the toll removed. All those people who used the bridge were saved sixpence a week, but within a very short time rents on the south side of the river were found to have risen about sixpence a week, or the amount of the toll which had been remitted!

"And a friend of mine was telling me the other day that, in the parish of Southwark, about 350 pounds a year was given away in doles of bread by charitable people in connection with one of the churches. As a consequence of this charity, the competition for small houses and single-room tenements is so great that rents are considerably higher in the parish!  

"All goes back to the land, and the land owner is able to absorb to himself a share of almost every public and every private benefit, however important or however pitiful those benefits may be."

Terence Powderly (Head of the Knights of Labor)

"The believer in absolute ownership must also be a believer in no ownership. He believes in absolute ownership for himself and no ownership for others....

"It is plain, then, that the use of the earth is all that man can lay claim to, and it is but equity that he should pay for the privilege of using it for his own purposes. Some do not want to use their portion, and may allow others to do so. These others should pay for that use, and pay for it in proportion as its possession benefits them, that the remainder may be recompensed for that which they surrendered to them....

"Everything erected upon the earth's surface is the result of labor, but the industry displayed does not confer ownership on the workman. The land made more valuable as the result of man's industry, escapes taxation, while he whose labor enriched it is taxed, and receives no part of the wealth his labor creates, save enough to keep body and soul in union with each other...."

Green Party Platform of 2013: Livable Income and Eco-taxes to help save the planet

"We affirm the importance of access to a livable income.

"We call for a universal basic income (sometimes called a guaranteed income, negative income tax, citizen's income, or citizen dividend). This would go to every adult regardless of health, employment, or marital status, in order to minimize government bureaucracy and intrusiveness into people's lives. The amount should be sufficient so that anyone who is unemployed can afford basic food and shelter. State or local governments should supplement that amount from local revenues where the cost of living is high."

"Enact a system of Community Ground Rent/Land Value Taxation that distinguishes between the socially and privately created wealth of land, by increasing the taxes on the former to retain for society the value that it collectively creates and lowers them on the latter to reward individuals for their initiative and work."

Maryland Libertarian Party Program:

Encourage efficient land use by reducing the tax on buildings and property improvements, leaving only assessments on land itself.

Clarence Darrow:

"The 'single tax' [on land value] is so simple, so fundamental, and so easy to carry into effect that I have no doubt that it will be about the last land reform the world will ever get. People in this world are not often logical."


"Woe unto them that join house to house,
that lay field to field, till there be no place,
that they may be placed alone in the midst of the earth!
In mine ears said the Lord of hosts,
Of a truth many houses shall be desolate,
even great and fair, without inhabitant."


"The land shall not be sold forever, for the land is Mine."

Archbishop Desmond Tutu:

"When the missionaries first came, they had the bible and we had the land. Now we have the bible and they have the land."

What to do now?

Those who wish to advance Martin Luther King's dream about sharing the earth and giving every citizen a basic income should contact Saving Communities (below), or any of the organizations listed at:

http://cgocouncil.org/ (click on "Georgist Organizations")
"Abolish all taxation save that upon land values." -- Henry George




Rethinking the Idea of a Basic Income for All

Bruce Bartlett
The New York Times
December 10, 2013

In October, Swiss voters submitted sufficient signatures to put an initiative on the ballot that would pay every citizen of Switzerland $2,800 per month, no strings attached. Similar efforts are under way throughout Europe. And there is growing talk of establishing a basic income for Americans as well. Interestingly, support comes mainly from those on the political right, including libertarians.

The recent debate was kicked off in an April 30, 2012, post, by Jessica M. Flanigan of the University of Richmond, who said all libertarians should support a universal basic income on the grounds of social justice. Professor Flanigan, a self-described anarchist, opposes a system of property rights "that causes innocent people to starve."

She cited a paper by the philosopher Matt Zwolinski of the University of San Diego in the December 2011 issue of the journal Basic Income Studies, which also contained other papers by libertarians supporting the basic income concept. While acknowledging that most libertarians would reject explicit redistribution of income, he pointed to several libertarians, including the economists F.A. Hayek and Milton Friedman, who favored the idea of a basic universal income.

Friedman's argument appeared in his 1962 book, "Capitalism and Freedom," based on lectures given in 1956, and was called a negative income tax. His view was that the concept of progressivity ought to work in both directions and would be based on the existing tax code. Thus if the standard deduction and personal exemption exceeded one's gross income, one would receive a subsidy equal to what would have been paid if one had comparable positive taxable income.

In 1965, Sargent Shriver, director of the Office of Economic Opportunity, recommended to President Lyndon Johnson that he support Friedman's idea of a negative income tax. Friedman provided illustrative figures to The New York Times showing how his plan would work. The maximum benefit would be $1,500 per year for someone with zero gross income, which would be about $11,500 in today's dollars.

"Abolish all taxation save that upon land values." -- Henry George



"Abolish all taxation save that upon land values." -- Henry George



At last, a critique of the minimum wage from a non-reactionary perspective...


To End Poverty: Minimum Wage? Basic Income? Or ... ?

The Progress Report
Posted by Staff under Editorials
December 14, 2013

These two 2013 excerpts are from (1) USA Today, Spt 23, on minimum wage by Michael Saltsman, and (2) TheWeek, Dec 6, on basic income by John Aziz.

The Wrong Way to Reduce Poverty

The last thing the poor need is a well-intentioned policy that sets them further behind. The net impact of a wage hike on poverty is negligible at best, and can often make the poor worse off.

A majority of those living at or below the poverty line can't benefit from a mandated raise because they don't have a job.

Overall, the economists found that the "losers" from a higher minimum wage outnumbered the "winners". On net, a wage hike can actually make the poor worse off.

Between 2003 and 2007, twenty-eight states raised their minimum wage. However, these hikes did not reduce state poverty rates.

Further, those who received a bump in hourly pay and kept their jobs were better off. Yet those who lost hours at work found themselves with less take-home pay. Others even lost their jobs entirely.

See source

A Better Alternative to the Minimum Wage

The vast majority of Americans — 91 percent of Democrats, but also 76 percent of Independents and even 58 percent of Republicans — are in favor of raising the minimum wage.

Minimum wage laws are a price control. They dictate the minimum level that a company can pay a worker. If the minimum wage is $10, and a company wants to take on a new employee that they determine will be worth $8 an hour, they have a choice — either pay $10 an hour, or not hire the employee. Sometimes, the company will accept a hit to their profit margin, and pay the employee $10 an hour. Sometimes they will just not hire a new employee at all. Or, increasingly, sometimes they will go overseas and hire an employee elsewhere — like China — where wages are far lower.

Right now, America has over three jobseekers for every available job. And worker productivity in America has risen, yet the minimum wage has not.

I propose abolishing the minimum wage, and replacing it with a basic income policy.

A basic income is basic. It does not make you rich or successful — it simply ensures a minimum standard, with a minimum of bureaucracy and without setting any price controls. People would still have many personal and financial incentives to work and to become entrepreneurs. If anything, the fact that there is no longer a minimum wage would probably create more employment, not less.

See source

Ed. Notes: With progress, the workweek is supposed to be shrinking, people are not supposed to be addicted to jobs. What else is an economy for, if not to lavish upon us great amounts of leisure?

The second writer proposes taxing the rich. But that accepts great fortunes, no matter how they're made, and just demands a slice of them ... hmm.

If you don't want the rich to have so much money, don't give it to them. It's not theirs anyway. What they're getting rich off of is common wealth, or society's surplus, which should be common wealth, a wealth stream we should all share.

The way to turn off the spigot is to redirect all of society's spending for nature and privilege, all the money we spend for the land and resources we use, and the money we must spend due to some corporation with a government-gratned privilege, like a patent monopoly on drugs, squeezing the consumer. Instead, use taxes, fees, dues, and leases to suck those immense flows into the public treasury. Then have government disburse the lion's share of those funds back out to the citizenry.

Such spending is plenty of money — the biggest stream in the GDP — and it will only get bigger as technology advances and society prospers. Sharing society's surplus is sort of like the Alaska oil dividend or Singapore's land dividend or Aspen Colorado's housing assistance to all working families. Just as a basic income is a more humane idea than a minimum wage, so is a Citizen's Dividend a vastly more fair and efficient form of an extra income for everyone. Help it along at Progress.org.
"Abolish all taxation save that upon land values." -- Henry George



Conservatives are losing their minds over economic reforms that already exist

When reforms like a universal basic income are proposed, the right claims they're crazy. Milton Friedman disagrees!

Matthew Bruenig
January 6, 2014

Jesse Myerson has a piece at Rolling Stone detailing five economic reforms he believes millennials should be fighting for. His proposed reforms are a job guarantee, a universal basic income, a land value tax, a sovereign wealth fund and state banks. I do not generally care for framing that talks about what millennials should be fighting for because it does not really make any sense, but the five reforms he lists are basically doable and have been written about here and elsewhere before.

Nonetheless, a massive conservative backlash ensued on Twitter in response to the piece. On some level, this kind of reaction is to be expected. Conservatives prefer our institutions as they exist and the way they distribute power, income and wealth in society. But the conservative backlash did not center around how they just prefer another system. Instead, it was almost universally premised on the idea that these reforms are fundamentally impossible. This is a popular conservative rhetorical move because declaring impossible all of the things that are so much more appealing than what they have to offer is the only real way to advocate the terrible things they support.

Nonetheless, with the exception of Myerson's call for a job guarantee, all of the other reforms he proposes — a universal basic income, a land value tax, a sovereign wealth fund and public banks — are clearly possible because they already exist in the world.

Universal Basic Income

The U.S. already has a basic income system called Social Security. Every month, a check is sent to every qualifying elderly person in the country. The program pulled 22 million people out of poverty last year and overwhelmingly accounts for the 71 percent reduction in elderly poverty we have seen in this country since 1960. It is the most successful anti-poverty cash transfer program in the history of the country. There is no reason why you cannot, at least on some scale, replicate this program in the country as a whole. Just as the federal government can send checks to elderly people each month, it can send checks to everyone else each month.

I think Myerson may overstate how far we can actually push such a program when he suggests we could construct it in a way that allows a lot of people to drop out of the formal labor force. Too big of a reduction in the size of the paid labor force would cause a UBI program to descend into a death spiral and unravel. But this is a quibble about how big to make the UBI, not with the UBI itself. At some UBI benefit level, the program is entirely doable. To avoid pushing it too far and causing a labor supply death spiral, I have advocated starting such a program at a relatively modest benefit level and then building it up from there.

Although the ignorant but deep bench of conservate Twitter users reacted to this proposal as if it is some sort of manifestly absurd impossibility, conservative superstars Charles Murray, Milton Friedman and F.A. Hayek have registered support for it in the past.

Land Value Tax

Land value taxes of one form or another already exist in this country as well. Pennsylvania seems especially fond of them. Most recently, the city of Altoona, Pa., switched over to a pure land value tax, replacing the more conventional property tax it used to levy. The proposal to levy a land value tax should be the most non-controversial on the list. Municipalities already tax land value to some degree because property taxes are levied against land value as well as the buildings that sit on top of the land. Obviously it is not absurdly impossible to change from assessing taxes on land plus buildings to assessing taxes on just land.

Implementing this tax has some normative appeal insofar as nobody makes land and so taxing its value does not run afoul of any notion that people should not be deprived of the product of their labor. But more than that, most arguments for the land tax center around its ability to encourage economic production and growth. Taxing land allows you to reduce taxes on things like the construction of buildings (subjected to property taxes), work (subjected to income taxes) and investment (subjected to capital gains taxes). If conservatives believe their own arguments about how devastating to growth such taxes are, switching to a land value tax should be a huge priority for them.

As with the UBI, this proposal has also scored substantial support from those on the right side of the political perspective. The person credited with coming up with and popularizing it, Henry George, was a libertarian.

"Abolish all taxation save that upon land values." -- Henry George




The Swiss Join the Fight Against Inequality

By Stephan Faris
Bloomberg Businessweek
January 16, 2014

Marilola Wili braces her foot against the wall to pull open a vault door inside a former bank building in downtown Basel. In the darkness inside, 15 tons of coins glint like dragon treasure. "It's something everybody's dreamed about, swimming in money," says Wili, a waitress and musician as well as a member of Generation Basic Income. That's an activist group trying to persuade voters to amend Switzerland's constitution to guarantee every citizen a yearly income of 30,000 Swiss francs ($33,000)—whether they work or not.

The vault is part publicity stunt, part fundraising effort. Switzerland's system of direct democracy offers anybody who can gather at least 100,000 signatures the chance to put a ballot initiative before the country's voters. Wili and her comrades celebrated reaching that milestone in October by dumping 8 million coins, one for every Swiss resident, in front of the Parliament building in Bern. Wili's chief occupation these days is to find a buyer for the five-centime coins along with the vault in which they're displayed, as a sort of art installation. Proceeds will fund a campaign to persuade voters to approve their initiative in a referendum that will be held in two or three years.

Unease about income inequality and concerns about out-of-control capitalism are rising even in Switzerland, a nation long regarded as a business-friendly bastion—welcoming even the most questionable forms of wealth. At $80,000 per year, Switzerland's income per capita is the third-highest in Europe after Luxembourg and Norway. But confidence in the economy was rocked at the beginning of the global financial crisis in 2008, when UBS, the nation's largest bank, required a $60 billion government bailout. The anger and anxiety that led to demonstrations and riots in other countries have been channeled into a flurry of mostly populist referendums.

"Abolish all taxation save that upon land values." -- Henry George




Should the government pay you to be alive?

It sounds radical, but the 'guaranteed basic income' almost became law in the United States—and it's having a revival now, with some surprising supporters.

By Leon Neyfakh
The Boston Globe
February 09, 2014

IT WAS SUPPOSED to be better by now—maybe not all the way better, but definitely better than it is. With the unemployment rate still nearly 7 percent and more than 46 million Americans living below the poverty line, the recovery that was supposed to follow the Great Recession has been slow, frustrating, and increasingly worrisome.

It's a problem that has bedeviled the country's leading economists and its most powerful policy makers. But explain the whole mess to an 8-year-old, and you might hear a solution that will sound laughably obvious: Why not just give everyone some money? That way, even poor people could afford to feed their families and pay rent.

If that feels naive in its simplicity, prepare to be surprised. The notion of a government paying its people just for being alive has a name—"guaranteed basic income"—and has recently been making headway as a legitimate policy proposal in countries all over the world.

Activists in Europe, most notably in Switzerland, have succeeded at injecting the idea into mainstream political debate. A recent poll showed that it has the support of nearly half of Canadians. The president of Cyprus says he'll launch a limited version of the scheme this summer. Brazil has been giving direct cash transfers to poor families ever since passing a basic income law in 2004; pilot programs have in recent years been carried out in India and Namibia.

In the United States, the idea of handing out unconditional government allowances is seen, understandably, as a nonstarter, despite enjoying some recent buzz among policy wonks. If nothing else, in today's political environment, it just sounds too much like a socialist fantasy. But the idea has a deep legacy in the United States that almost uniquely stitches together figures on the left and right: Its prominent supporters have included Martin Luther King Jr. and John Kenneth Galbraith, and a version initially suggested by free-market economist Milton Friedman nearly became law under President Nixon. Recently, conservatives like Veronique de Rugy, a senior research fellow at George Mason University's Mercatus Center, and Charles Murray, author of "The Bell Curve" and a scholar at the American Enterprise Institute, have stepped forward to support the idea; it's also been embraced by the "Occupy"-affiliated academic David Graeber.

"You usually don't have people from different ends of the political spectrum getting on board with the same sort of program," said Brian Steensland, an associate professor of sociology at Indiana University and the author of the book "The Failed Welfare Revolution," about how basic income went from being a marginal academic idea to a congressional bill and back again. "There's just something in there that's really appealing for people from a whole range of intellectual, philosophical, and economic perspectives."



In the following clip populist, Dick Eastman, explains how "American Social Credit" -- a system whereby money is treated as a "public utility" -- would allow for the financing of a guaranteed income without either raising the tax burden or increasing indebtedness to private banks. Both Keynesians and Austrians, despite being supposed "opposites," are equally hostile to this idea. Perhaps it's time for those who pride themselves in being intellectually free from "false paradigms" to start asking themselves why.

"Abolish all taxation save that upon land values." -- Henry George




5 Reasons to Consider a No-Strings-Attached, Basic Income for All Americans

An idea whose time has finally come.

By Lynn Stuart Parramore
March 17, 2014

What if you could receive a guaranteed basic yearly income with no strings attached? Didn't matter how much money you made now, or in the future. Nobody would ask about your job status or how many kids you have. The check would arrive in the mailbox, no matter what.

Sounds like a far-fetched idea, right? Wrong. All over the world, people are talking guaranteeing basic incomes for citizens as a viable policy.

Half of all Canadians want it. The Swiss have had a referendum on it. The American media is all over it: The New York Times' Annie Lowrey considered basic income as an answer to an economy that leaves too many people behind, while Matt Bruenig and Elizabeth Stoker of the Atlantic wrote about it as a way to reduce poverty.

The idea is not new: In his final book, Martin Luther King Jr. suggested that guaranteeing people money without requiring them to do anything in exchange was a good way for Americans to share in prosperity. In the 1960s and early 1970s, many in the U.S. gave the idea serious consideration. Even Richard Nixon supported a version of it. But by 1980, the political tide shifted to the right and politicians moved their talking points to unfettered markets and individual gain from sharing the wealth and evening the playing field.  

Advocates say it's an idea whose time has finally come. In a world of chronic job insecurity, stagnant wages, boom-and-bust cycles that wipe out ordinary people through no fault of their own, and shredded social safety nets, proponents warn that we have to come up with a way to make sure people can survive regardless of work status or economic conditions. Here are five reasons they give as to why a guaranteed basic income might just be the answer.

1. It would help fight poverty: America is the richest country in the world, yet widespread poverty continues to afflict us. Social Security has arguably been the most successful program for reducing poverty in American history, dramatically cutting poverty among the elderly and keeping tens of millions above the poverty threshold. Why not expand it to all?

Matt Bruenig calculated that by giving everybody a mere $3,000 a year, including children (who would receive the money through their parents), we could potentially cut poverty in half. The program would be simple: you get it no matter how much money you make, which would prevent poor people from having to worry about losing the benefit. With everybody in it together, you get a much larger base of political support (one of the reasons means-testing has always been a back-door way of killing Social Security— it reduces support).

In the 1970s, the small Canadian town of Dauphin ran an experiment through a social policy called " Mincome." Everybody in the town was allowed to get a minimum cash benefit during the duration of the program. Poverty was eliminated, because people living below the poverty line saw their income boosted through monthly checks. But the results were about more than an official line marking the poverty threshold. Mincome positively impacted the horrible conditions associated with the cycle of poverty. When people had a basic income, they were able to better care for their families, stay healthy and improve their education — all the things that help people stay out of poverty in the future.

2. It could be good for the economy: A basic guaranteed income has the potential to positively impact the economy in several ways, which is why economists from John Kenneth Galbraith to Milton Friedman have advocated it.

For one thing, it could help solve the problem of demand. The great driver of the economy in a capitalist system is something economists call "aggregate demand." The Econ 101 lesson is simple: when ordinary people have money in their pockets, they spend it on goods and services, which in turn allows businesses to thrive because they are able to invest and to hire more people. Proponents argue that a basic guaranteed income would increase demand, which would help the economy to prosper.

But wait, wouldn't people get lazy if they had a basic income? One of the things the Mincome researchers wanted to know was whether a guaranteed basic income would cause people to stop working. Despite all the dire predictions that had circulated in academic literature before the experiment, the Mincome effect on number of hours worked was actually quite small — hours dropped 1 percent for men, 3 percent for married women and 5 percent for unmarried women.

The decrease in hours was mostly the result of people taking the time to raise newborns, care for family members, and pursue their education — people did not cut back on work just to loaf around. In addition to activities which would serve as economic investments for the future, the experiment also resulted in things like fewer hospital visits and illnesses, all of which reduce public health costs.

Many argue that a guaranteed basic income is also potentially good for entrepreneurship, making it easier for people to start a small business or switch careers.

3. It could have many benefits to society: Clearly, we want policies that help us create a more stable society where more people can reach their potential and fewer people resort to crime and violence. Advocates say a guaranteed basic income does just that.

Researchers found that during the Mincome years, more people in Dauphin finished high school, more adults pursued education, and students achieved higher test scores. As noted, people got healthier, too: Fewer people visited the hospital, mental illness decreased, and the number of work-related injuries went down. Plus, social ills like domestic abuse dropped.

As a recession hit and the center-left politics of the 1970s shifted rightward in Canada, interest in the Mincome experiment waned. However, Canadian economic researcher Evylen Forget notes that most people who participated in Mincome wish the program had continued, citing benefits like increased opportunity to pursue an education.

Candadians are now reviving the idea, many arguing that such programs would actually encourage people to work because they would eliminate welfare provisions that penalize the poor who take very low-paying or part-time jobs. In Brazil, advocates have pointed out that a basic guaranteed income could help guard against such scourges as child labor, while Swiss activists make the case that it would help people do more meaningful work, making for happier and better workers.

Philippe Van Parijs, a Belgian philosopher, argues that a basic income is a powerful tool for social justice, allowing everyone, no matter what their circumstances, the possibility to pursue their conception of a good life. He notes that a guaranteed basic income could address some of the issues associated with sexist divisions of labor in which women are expected to do more of unpaid, care-giving work in our society.

4. It might be more efficient than present systems: In the current patchwork of systems confronting poverty, like welfare, food stamps and vouchers, people can fall through the cracks. A guaranteed income could help solve problems caused by rules and restrictions that leave some without subsistence income when they need it.

It's not just liberals and progressives who like the sound of a simple basic guaranteed income. Something streamlined appeals to conservatives who like versions that could replace existing tax credits and social assistance programs — though it's important to note that most advocates don't propose it as a full substitute for existing programs. The American Enterprise Institute's Charles Murray points out that a streamlined system would obviate the need for people to fill out multiple forms and visit myriad offices to receive benefits. (In his book In Our Hands: A Plan to Replace the Welfare State, Murray suggested an income of $10,000 a year to anyone who was American, over 21 and out of jail.)

"Abolish all taxation save that upon land values." -- Henry George




Will a guaranteed income ever come to America?

By Felix Oberholzer-Gee
PBS NewsHour
April 7, 2014

Editor's Note: When activists in Switzerland dumped 8 million Swiss coins – one for each citizen – in front of the Parliament building in Bern last fall, the rest of the world took notice. Not just because it was a compelling publicity stunt, but because the activists secured enough signatures to get a referendum on an unconditional basic income on the ballot. If it's adopted as part of the Swiss constitution, citizens, regardless of whether they work, would receive 30,000 Swiss Francs (about $34,000) a year.

The idea has intellectual legs, at least, in the United States with renewed support from the political left and right. Hear some of those voices, including libertarian economist Charles Murray, in our Making Sen$e report below.

[Video clip omitted - see original article]

The conservatives we spoke to would replace all other social welfare programs with a guaranteed basic income to make government aid more self-directed and efficient. Some on the right support a slightly different guaranteed minimum income as a means-tested form of public assistance. Many liberals see the guaranteed income as a tool to combat economic inequality, which, by most accounts, is far more extreme in America than in Europe.

But adopting a measure similar to the one in Switzerland – let alone putting it to a popular vote – in America is still widely considered a far-flung idea. Here to explain why this kind of wealth redistribution is much more palatable in more economically equal countries like Switzerland is someone familiar with both societies: Swiss native and Harvard Business School professor Felix Oberholzer-Gee. He also appears in the Making Sen$e segment on Monday night.

Will a guaranteed income pass in Switzerland? He'd be surprised if it did — and even more surprised if the idea ever seriously took root in America.

– Simone Pathe, Making Sen$e Editor


In Western Europe, there is a lively debate about proposals to guarantee every citizen a basic income. The idea, which has a long history dating back to the 1920s (at least), is increasingly popular in policy circles and the broader population. The German and Spanish parliaments explored it. The Swiss will soon vote on an initiative that would guarantee everyone $2,800 each month — no questions asked, irrespective of whether a person works. Early polls indicate that more than 45 percent of Swiss voters will support the initiative.

The supporters of a guaranteed income are a varied lot. They range from unreconstructed communists to humanists with a strong sense of dignity and the wealthy. One concern that many of them share, however, is the global rise in income inequality. In the past few decades, economic growth lifted hundreds of millions out of poverty. But, at the same time, the distribution of income became increasingly skewed in favor of wealthy individuals.

The current situation is exceptional from a historical point of view. For example, the top 10 percent of earners in the U.S. captured 35 percent of income through the 1950s and 1960s. Today, this share stands at 50 percent. Rising inequality reflects gains at the top in all sources of income: salaries and business income, as well as capital income and capital gains.

There are many reasons why income inequality has risen.

"Abolish all taxation save that upon land values." -- Henry George




Why America's favorite anarchist thinks most American workers are slaves

By David Graeber
PBS NewsHour
April 17, 2014

Editor's Note: Conservative proponents of the guaranteed income want a lump sum payment (Charles Murray suggests about $11,000 to all adults) to replace existing social welfare programs and downsize American bureaucracy. But some leftists oppose those government welfare agencies, too, London School of Economics professor David Graeber says. The leftist critique of private and public bureaucracies, Graeber explains, is that they "employ thousands of people to make us feel bad about ourselves."

Bureaucrats pushing paper decide what we and our work are worth. But somewhat ironically, Graeber suggests, it's those bureaucrats who perform the most meaningless work of all. If we gave everyone a lump sum basic income and eliminated those bureaucratic jobs, we'd all be better off, he says.

Graeber doesn't self-identify as an anarchist ("anarchism is something you do"), but as an activist in the Occupy and student loan movements, this is all part of his concern that workers today are "wage slaves."

With a basic income, everyone would have access to the market. Workers (including those government paper-pushers) could pursue the work they want, while society as a whole would benefit from their scientific breakthroughs and artistic talents. From the Beatles to Derrida, Graeber says, this form of public assistance has supported people who would otherwise be "lifting boxes," or performing some other mundane job as a condition of welfare.

Graeber appears in our Making Sen$e segment on Switzerland's basic income debate and its appeal in the United States, below. Paul Solman's extended conversation with him about how a basic income would liberate wage slaves follows.

"Abolish all taxation save that upon land values." -- Henry George




The Pragmatic Libertarian Case for a Basic Income Guarantee

By Matt Zwolinski
Cato Unbound
August 4, 2014

From the perspective of anyone concerned with limiting government and encouraging individual responsibility, the contemporary American welfare state is a disaster. According to a report by the Cato Institute's Michael Tanner, welfare programs at the federal level alone cost more than $668 billion annually, spread across at least 126 different programs. Add another $284 of welfare spending at the state and local level, and you've got almost $1 trillion dollars of government spending on welfare - over $20,000 for every poor person in the United States.

Not only does the U.S. welfare state spend a lot; it spends it badly. Poor Americans receiving assistance face a bewildering variety of phase-outs and benefit cliffs that combine to create extremely high effective marginal tax rates on their labor. As a result, poor families often find that working more (or having a second adult work) simply doesn't pay. And still, despite massive expenditures by the welfare state, some 16% of Americans are left living in poverty.

Wouldn't it be better just to scrap the whole system and write the poor a check?

In what follows, I will make the case for a Basic Income Guarantee (BIG) as a replacement for the current welfare state. There are a number of distinct ways of arguing from libertarian premises to a BIG, some of which I have discussed in the past. In this essay, however, I will focus on what I take to be the strongest and most persuasive libertarian argument. I will argue that a BIG, even if it is not ideal from a libertarian perspective, is significantly better on libertarian grounds than our current welfare state, and has a much higher likelihood of being achieved in a world in which most people reject libertarian views.

I begin in the next section by explaining what I mean by a BIG. I then proceed to set out four reasons why libertarians should support a BIG over the current American welfare state. I close with some reflections on libertarian ideals and political compromise.

"Abolish all taxation save that upon land values." -- Henry George



I can hear Austrian School reactionaries already: "OMG! Finland is being turned into Venezuela!"  ::)


Finland finds basic income reduces stress

By Beata Stur
New Europe
May 9, 2017

Citizens in Finland who receive a basic monthly income – part of a radical Finnish pilot programme – have experienced a reduction in their stress levels.

Under the scheme, which is the first of its kind in Europe, 2,000 people receive €560 every month for two years. According to government data, the average private sector income in Finland is €3,500.

Recipients do not have to report whether they are seeking employment or how they are spending the money, which is deducted from any benefits they are already receiving.

As reported by The Independent, Marjukka Turunen, head of KELA, the legal unit at Finland's social insurance agency, said as well as cutting bureaucracy, reducing costs and tackling poverty, the scheme was having an indirectly positive effect on people's mental health.

"There was this one woman who said: 'I was afraid every time the phone would ring, that unemployment services are calling to offer me a job,'" Turunen told US-based broadcaster Kera News.

The woman was not able to work because she was caring for elderly parents.

She added: "This experiment really has an indirect impact, also, on the stress levels [of people] and the mental health and so on."

Under the pilot, if a participant finds work, they will continue to receive the stipend, easing claimants' fears they will lose out by finding employment.


David Icke Bot

The Daily Telegraph

Finland basic income trial 'increased well-being but not employment'

'A nationwide experiment with basic income in Finland has not increased employment among those participating in the two-year trial, but their general well-being seems to have increased, a report said on Friday.

The Social Insurance Institution of Finland, or Kela, said "it was not yet possible to draw any firm conclusions" from the first half of the experiment, where about 2,000 randomly selected, unemployed people aged 25-58 got tax-free income of 560 euros ((£490) a month with no questions asked.

Finland is looking into ways to reshape its social security system and became in January 2017 the first European country to launch the trial, which will end in 2020.

Critics say universal basic income reduces incentives for people to look for work. Proponents say it can empower people to start new businesses, knowing that they would continue to receive monthly income no matter how well their new venture does. It can also encourage people to try a new job without the fear of losing their unemployment checks or having to go through the paperwork of reapplying for benefits.

"Earlier, I didn't accept all small jobs out of fear of losing my benefits and having to reapply for them," said writer Tuomas Muraja as he was on his way to a sauna before heading out for an evening at the opera.

"I feel much more secure now that short-term jobs no longer reduce my benefits or delay their payment."

In the Finnish experiment, the basic income is below what unemployment benefits pay, which is 32.40 euros a day, or almost 1,000 euros a month - subject to income tax of about 30 percent. The basic income is tax free, but barely enough to live on for someone paying rent, so it keeps pressure on the recipients to join the work force.'

Read More : Finland basic income trial 'increased well-being but not employment'


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