Wednesday, July 8, 2009

Too Good to Hide

Every once in a while you encounter a 'comment' that deserves to be 'front paged' so everyone will read it. Tonight's offering is just such a comment in response to last night's post 'It's later than you think'.

Submitted by Paul on Tue, 2009-07-07 20:59.

Have you seen Richard Wolff's site:

Four minute version:
"Capitalism Hits the Fan: A Lecture on the Economic Meltdown - Preview"

Forty minute version of a lecture:
"Capitalism Hits the Fan A Marxian View"

Essentially, he says real wages have not changed much in decades, and the difference in expenditures has been through increasing debt.

I don't agree with all his proposals for solutions, but he addresses a big part of the problem.

As I see it, Here are some of the factors in play in the USA right now, suggesting the jobs are never coming back. They are in the areas of demand loss and productivity gains.

* saturated consumer demand (most families have two good cars and a dryer);
* increasing voluntary simplicity (most realize they might be better off with one car and line drying);
* advertising has reach its limits to drive needless demand (including
people moving away from TV for entertainment);
* informational (cheap) activities replacing material based activities;
* better designs and materials making products that last longer;
* better design making multi-functional devices like the iPhone that are watch, alarm clock, internet tablet, phone, game console, camera, etc.;
* declining US exports as other countries improve their industrial base; and
* failed currency policies (including no basic income) forcing more people out of the currency economy and into making stuff for themselves or doing without.

* the internet and free commons improving productivity by access to timely information;
* the internet is making it possible to share informational goods for
essentially free;
* the internet making easier offshoring of design or production to cheaper producers.
* better design is making it easier to make stuff (like Amory Lovins proposing snap together cars); and
* increasing physical automation, thus increasing productivity.

As I see it, one way out is a basic income guarantee (where everyone gets health care and $10K to $25K a year just for being alive) which could replace all other forms of government assistance as well as the minimum wage. The stimulus package under Bush was a weak form of this. Alaska has something like this. In general, we need to move to a Post-Scarcity society and more towards a gift economy. But a basic income would be one step towards that. Marshall Brain talks about related ideas in Manna and Robotic Nation.

A basic income is a proposed system of social security, that periodically provides each citizen with a sum of money that is sufficient to live on. Except for citizenship, a basic income is entirely unconditional. Furthermore, there is no means test; the richest as well as the poorest citizens would receive it. A basic income is often proposed in the form of a citizen's dividend (a transfer) or a negative income tax (a guarantee). A basic income less than the social minimum is referred to as a partial basic income. A worldwide basic income, typically including income redistribution between nations, is known as a global basic income. The proposal is a specific form of guaranteed minimum income, which is normally conditional and subject to a means test. A form of basic income dates to Thomas Paine's Agrarian Justice of 1795, there paired with asset-based egalitarianism (redistribution of wealth, not simply income).

"American revolutionary Thomas Paine advocated for a basic Income Guarantee to all US citizens as compensation for "loss of his or her natural inheritance, by the introduction of the system of landed property" (Agrarian Justice, 1795)."

Google search:

Related Wikipedia article:

In Brazil:

Debate: Should Feminists Endorse Basic Income?

On artists:
"It can be said that the Dutch (like some other Western-European countries) have established a basic income for some groups. The Algemene Ouderdoms Wet, a government pension act, functions as a basic income for the elderly. Artists (that have to meet certain conditions) also benefit from legislation that provides a type of basic income, courtesy of the WIK, the Wet Inkomensvoorziening Kunstenaars (Artists' Income Act)."



History in the USA:
Richard Nixon presented a guaranteed income plan in 1969, and it passed in the House of Representatives with two-thirds of the vote. In the Senate, however, moderate supporters - Democrats and Republicans - were defeated by the combined votes of extreme conservatives who opposed any aid to the poor and extreme liberals who wanted more generous benefits. (Daniel Patrick Moynihan, the plan’s author, described it, its popular support, and the congressional debates and votes in a 1973 book, The Politics of a Guaranteed Income.) With regard to helping the poor, many people think government should not provide income but only food, shelter, and services. But such programs require large bureaucracies that own and maintain housing; buy, store, and transport food; and monitor recipients’ income, family size, and other eligibility criteria. It’s much easier, more efficient, and more respectful to give people a basic income and let them decide where and how to live, work, and so on. If someone wastes or misuses the money, there will always be the opportunity to make better decisions next month. Including everyone - unlike Nixon’s plan, which was only for the poor - means greater economic security for everyone. Even so, basic income is not socialism. On the contrary: It will preserve markets, private property, and free enterprise. And increase individual freedom. And strengthen democracy, because it will be easier for everyone to afford the time to participate in political decision-making. Everyone will have the means to participate fully - and more equally - in the market.

Who would have thought Nixon had the way out of this disaster so many decades earlier? :-)

Anyway, there are aspects of a basic income on which conservatives and liberals (and others) can all agree for different reasons. For example, instead of funding public schools, a basic income for each child would provide funds for private schools of choice. And some states like New York are spending about $20K per child per year, so the amounts are significant. Between schools, social security, and prisons, the USA is already spending about $10K per year per person for half the population. A basic income for everyone would not even cost that much more, in this sense, and might fix a lot of economic problems. The current problem and this solution were proposed even before Nixon, in 1964, to President Johnson:

The key point there, which Conservatives and mainstream economists are still in denial about (although easy credit and exports and lots of war spending have hid the fact for a long time):
The fundamental problem posed by the cybernation revolution in the U.S. is that it invalidates the general mechanism so far employed to undergird people’s rights as consumers. Up to this time economic resources have been distributed on the basis of contributions to production, with machines and men competing for employment on somewhat equal terms. In the developing cybernated system, potentially unlimited output can be achieved by systems of machines which will require little cooperation from human beings. As machines take over production from men, they absorb an increasing proportion of resources while the men who are displaced become dependent on minimal and unrelated government measures—unemployment insurance, social security, welfare payments. These measures are less and less able to disguise a historic paradox: That a substantial proportion of the population is subsisting on minimal incomes, often below the poverty line, at a time when sufficient productive potential is available to supply the needs of everyone in the U.S.
The existence of this paradox is denied or ignored by conventional economic analysis. The general economic approach argues that potential demand, which if filled would raise the number of jobs and provide incomes to those holding them, is underestimated. Most contemporary economic analysis states that all of the available labor force and industrial capacity is required to meet the needs of consumers and industry and to provide adequate public services: Schools, parks, roads, homes, decent cities, and clean water and air. It is further argued that demand could be increased, by a variety of standard techniques, to any desired extent by providing money and machines to improve the conditions of the billions of impoverished people elsewhere in the world, who need food and shelter, clothes and machinery and everything else the industrial nations take for granted.
There is no question that cybernation does increase the potential for the provision of funds to neglected public sectors. Nor is there any question that cybernation would make possible the abolition of poverty at home and abroad. But the industrial system does not possess any adequate mechanisms to permit these potentials to become realities. The industrial system was designed to produce an ever-increasing quantity of goods as efficiently as possible, and it was assumed that the distribution of the power to purchase these goods would occur almost automatically. The continuance of the income-through jobs link as the only major mechanism for distributing effective demand—for granting the right to consume—now acts as the main brake on the almost unlimited capacity of a cybernated productive system.

Yes, in essence, as the demand for labor shrinks so should the workweek/day. Alternately, there is more to life than being the 'final destination' for automated goods.

Life is about human interaction and work fulfills our need to express ourselves and our creativity. This is why I advocate that everyone be provided with a job so they can more fully participate in society.

I hope this doesn't make anyone's head explode but there really is more to life than simply accumulating a 'pile of money'.

Nor would it be any good to simply exchange one form of poverty for another. Sure there are oceans to sail and mountains to climb but that is not the 'sum' of our ambitions.

There are problems to solve and the stars to reach...ending hunger and material want is not the 'final objective, it's just another step on a road that never ends.

Thanks for this Paul and thanks to all for letting me inside your head,


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