> Anyone receiving the "dividends" would not be able to claim any tax allowances, which the RSA says would act as a disincentive to wealthier earners wanting to apply for the handout.
Does "tax allowances" just mean the tax-free Personal Allowance of £11500? No one pays £10000 of tax on £11500, so it doesn't seem like it would actually stop anyone from claiming.
If the government is saying the cost will be £14.5B then they must think only 1.5M people will sign up, a tiny portion of the population. I don't quite see how they're expecting this to work.
I think they mean more that if you're already above the tax threshold then you wouldn't get £10k, you'd get £10k minus the prevailing rate of tax - so if you already earned £11500-£34500 then you'd get £8000 (£10k-20%). If you earned £34500-£150,000 then you'd get £6000(£10k-40%), and over £150k you'd get £5500(£10k-45%).
Do they really mean "We're going to make this money so tedious and bureaucratic to apply for that a middle class person wouldn't bother to do it even for £6000"?
Wow, now that is out of touch. If you think 6000 isnt enough money to do some paperwork then you're exactly the kind of person that shouldnt be allowed to have the money.
That's hardly 'universal' then, is it? It seems this is more a way of changing how benefits are paid to low earners, rather than a real attempt at UBI.
Which is a shame; 10k could still make a significant difference to someone earning, for example, £35k (not a high earner by any stretch) - starting a business, paying for childcare etc.
The National Audit Office must publish the model for this system, forthwith.
Only then can debate begin.
And political parties must be compelled to publish their proposals both normalised to the NAO model specification and atomically for the inputs and outputs of specific effects of the rules, especially of housing rules.
In this way I could throw about ideas like my"basement benefit" contribution to a ring fenced home deposit scheme for all mature children living with parents whilst in work. This could be extended for those with parents over the age of fifty five, to build a capital cushion cover for care for parents, meeting with needs such as home modification and such things as mobility. Specifically I like the idea of subsidy for a station wagon or similar practical vehicle, for the adult carer if parents who are willing to give up their driving license.
> If the government is saying the cost will be £14.5B then they must think only 1.5M people will sign up
It's not a government proposal. It's not even a proposal of the opposition, or anyone who would potentially be in a position to actually enact it.
The headline isn't wrong, but the prominence the BBC has given it could trick people into thinking its an official (or at least serious unofficial) proposal.
Several friends of mine and a family member get disability benefits and the assessment process is horrendous. We've encountered lots of variants of "if you're able to attend this interview there can't be anything wrong which would prevent you from getting a job, so no money for you".
There's a semi-famous case where the person had a heart attack during the medical interview(in a way he was lucky that the attending nurse recognized the heart attack and called an ambulance straight away) - but because they had to stop the interview half-way through, he was declared no-show and had all his payments cut to zero.
You're aware there's a mass of evidence that the DWP is, at best, ineffective and trending towards excessively cruel in its capability assessments? It's not exactly something that's gone unreported.
Your friend is lucky, I know several people personally who have been dragged through the courts for months before they were able to get their incorrect assessment overturned.
I used to be a welfare benefits adviser. Even under the old system, I saw absurd decisions that were overturned on appeal. Under the new system of ESA and PIP, assessments have become a complete farce. ATOS/Maximus assessors have no real training in health and social care and appear to be incentivised to reject claims.
The stricter regime for both ESA and JSA has created a dreadful gap in the benefits system - people who aren't sick enough to claim ESA, but too sick to claim JSA. Many people with health conditions that vary over time are refused ESA because their condition is quite mild at the time of assessment, then repeatedly sanctioned on JSA because they become too sick to keep up with their jobseeking activity obligations. There appears to have been a particularly severe impact on people with mental health conditions and learning disabilities.
Our benefits system has become overly complex and extremely unforgiving. A relatively minor error can leave someone completely destitute. The services that help people navigate the benefits system are under severe pressure due to austerity cuts. I'm no bleeding-heart liberal, but I think that our benefits system has become callous, unreasonable and ineffective in preventing poverty.
Even if there were govt reports on the topic they would be too dangerous to publish and if the parliament dares to force govt to publish them there weren't any reports in the first place...
Man, I'm happy not to live in the UK.
And (to address your other comment) I assume you aren't being literal with your specific example (because the guy you were responding to didn't literally mean people were assessed on their ability to walk to a shop specifically), but yeah there have been reports of people who can't walk very far getting told they're fit for work (For instance this guy: https://www.cornwalllive.com/news/cornwall-news/photographer... from earlier this week)
'...and claim this doesn't count as real evidence?'
If the guy had replied saying he actually did know the person I would have to accept that as true. He didn't.
Despite recent evidence, this isn't The Guardian and I am willing to believe that most people here are honest and don't just make stuff up to suit their political agenda.
To answer your question, two lefty news articles and fakenews.com don't count as evidence, no. His word would have been good enough for me.
This reminds me of jobstart, basically I got turfed of benefits at about the time I needed them. I kindly got a grant towards some transportation fees, if I'd go self-employed (0hrs contract, no guaranteed employment). What I really could have done with is a little hand holding and support in a work or volunteer placement - rather than feeling stigmatised. In the UK Government's eyes: one less unemployed. I could have spent the money on a suit and shoes. Money doesn't go that far, at the time I could barely afford to clothe, feed myself and had tenuous accommodation. Stability of housing and the other bare essentials put you in a better position to job. It's all a bit chicken and egg.
Given the way WFTC works, some people believe that a lot of people moved from being "on benefits" to being "self employed for zero hours for zero money"; with a bit of tax planning this could provide a better income without having to deal with the jobcentre jobsworths.
Gutted to find that perhaps I could have been buoyed by working tax credits. That I have never claimed. Self-employment hasn't worked out for me - just left me with more and more debt.
Years ago I think the LSE ran a study, that concluded, you may as well just close all job centres, and give a no questions asked hand-out instead. There's a stigma attached to bad jobs, benefits, and poor income - and with some of that lifted, it might provide a better seed-bed for some business.
Benefits are generally designed for short-term-ism, you can survive on not a lot, but opportunities are removed. Even basic socialisation becomes hard: you can't afford a drink in the pub.
That being said, I've never been poorer than being self-employed. I know it works for some, and there are benefits, but it doesn't work for all.
And so by people having to demonstrate what they will use the money for will kill one of the benefits of UBI, the low administration cost. That and you can be sure that once they collect this information sooner or later some politician will come along and put the clamp on it for certain people as soon as the economy turns a little for the worse (which no doubt will make things even more worse).
What's with the "sovereign wealth fund" idea? What's the advantage of raising taxes to pay for a sovereign wealth fund the interest on which pays for the UBI? Why not just pay for the UBI with the taxes?
People don't seem to understand that you can't create money just by randomly moving it around.
Unlike with taxes , the sovereign wealth fund could invest the money it holds onto to earn some interest
It's the same reason universities have endowments being managed as their own thing.
Also if it's a fund, the money is pre-earmarked for this usage. Taxes -> UBI end up being more easily messed up by politics (see social security vs. your 401(k))
>Unlike with taxes , the sovereign wealth fund could invest the money it holds onto to earn some interest
The people the money was taken from could also have invested it profitably. They know that their taxes will be higher down-the-line so it's up to them whether they want to save or spend it.
>'s the same reason universities have endowments being managed as their own thing.
University endowments also seem far to big to me (at least the largest ones do). I suspect it's mostly a prestige/signalling thing. It might be rational on the part of the university if it attracts more donors, but in that case it isn't rational on the part of the donors. They view saving money as the responsible thing to do because it is the responsible thing to do for a human who will eventually retire. The same logic doesn't apply to Harvard.
> if it's a fund, the money is pre-earmarked for this usage. Taxes -> UBI end up being more easily messed up by politics (see social security vs. your 401(k))
I guess this is partly true, but it's easy to get the money out of there with accounting trickery. Just say "To make the fund's investments safer we are going to invest them in government bonds" and then as-if-by-magic you have the money.
In order to pay 10k a year from interested the funds would need lets say 1'000'000 under management per person.
It is hard to say where that money would come from - will it be printed? Taxed? Borrowed (interest?)?
To do any of these things at the required scale would surely have unintended effects.
Also as ability to pay for unemployment during a crisis now depends on cyclical income from investments, rather than countercyclical government bonds, it feels like this would collapse when it is needed most.
You can create money, it just exerts an inflationary pressure that is commensurate with the rate at which it is spent (minus the offsetting effect of industrial slack).
Issuing more public debt and spending it is (in a low interest environment) not so very different to printing cash and spending it. The creation of highly liquid assets backed by cash that don't pay interest = might as well be cash.
The "sovereign wealth fund" idea is weird though. I don't see the point of the UK creating one - it's not like it has vast quantities of oil wealth it needs to sequester.
There hasn't been inflationary pressure in the last 20 years. We can print money till the cows come home and we'll still be stuck in this economic nadir.
What's weird about sovereign wealth funds? It's very straightforward. Wealth should be shared more equally and that's what building a sovereign wealth fund achieves.
There's nothing weird about them per se, it's just that the UK really has no reason to build one.
It's simply a way of taking a country's wealth and instead of spending it on infrastructure, public services, industry or welfare - it gets spent on assets (usually foreign).
The good parts:
* It lets a small country (e.g. Singapore) exert a stabilizing influence on its economy when it is buffeted by large external economic forces outside of its control.
* It lets a country that has natural resources (e.g. Norway) both A) set some of that wealth aside for the future and B) mitigate the massively damaging effects of dutch disease (a seriously underrated economic effect). This is termed "sterilization".
The bad parts:
* If you buy overseas assets they can be seized. I think this is why Venezuela isn't really capable of building a sovereign wealth fund. If they bought a shopping mall in New York state 10 years ago with their oil wealth it is likely it would simply have been seized.
* If you're putting money into a sovereign wealth fund you're not spending it on the welfare of your citizens. I used to live in Singapore and the contrast between the way it treated its poorest citizens and the amount of money pushed into Temasek is disgusting and shameful.
* Sovereign wealth funds attract corruption like flies on shit and the management of it is where the principal/agent problem reaches its nadir because it's so easy to surreptitiously suck wealth out if you exert control or influence over it. I think Norway's is probably the only sovereign wealth fund in the world that is free from corruption. Even then I wonder.
Since the UK is not a small economy and can absorb external shocks more easily than Singapore and it's not going to suffer from dutch disease what's the point? Creating yet another entry point for financial parasites in the City of London to extract taxpayer wealth?
The growth in money supply that already happens is on this order of magnitude per capita. Most of this money creation is, as we know, by the commercial banks simply magicking it into being as loans. That's topped up by central bank activities.
This is offset by money being destroyed e.g. by repayment of loans (otherwise the money supply would simply explode in a catastrophic inflationary fountain), but overall, it's not impossible to imagine money being created directly into everyone's bank account instead.
Not claiming I can see how to get to that scenario from here, of course.
Commercial banks create money with private loans continuously but that money is also extinguished when those loans are paid back - which also happens continuously.
When there is a lower demand for private debt - usually because people already feel overindebted - money creation is throttled.
Politicians often balance the competing desires of their rich donors (who, however liberal, still want the money supply throttled to preserve their wealth) with that of the electorate (who want a healthy economy that can only be driven by spending) by stimulating the creation of ever more private debt.
This isn't a sustainable compromise and the consequent systemic and societal risks of a huge overhang of unpayable private debts are pretty terrifying.
Economic humiliation correlates strongly with a societal attraction to charismatic "strong man" leaders and, ultimately, fascism. I believe we're watching the beginning of this story and it's about to get a whole lot worse.
The obvious difference is that the collected taxes aren't just gone when putting them into a souvereign wealth fund. Over the years you'll have significantly more money to put into UBI, because of the compounded interest.
Compound interest is not, in fact, magic - the money has to come from somewhere. The safest investment is government bonds, in which case it literally comes out of future tax payments. Alternatively, you can invest in corporate bonds and stocks, in which case - in the current economic climate at least - you're providing economic stimulus that pumps the bubble a little higher and drives down long-term returns for everyone else who's looking to retire in the future.
For compound interest to make a difference, you need to leave the money alone for quite a bit of time. That does not seem to be be plan here.
Sovereign wealth funds are generally endowed with some kind of income stream, typically the revenue from natural resources, which it then invests and spends the proceeds from. The UK doesn't have such revenue streams lying around, that aren't already paying into the treasury, thus any such funding will deprive the treasury of the same amount, and so the wealth fund won't really do anything, as least on the short term.
And that's without considering the fact that the government runs at a deficit and continously borrows money. Taking a loan to boost your savings is an interesting strategy.
There are all sorts of paths the UK could take to transfer things around and build up a sovereign wealth fund over time, but getting it to a stage where it would be able to pay out billions a year would take decades in the absolute best case scenario (that excludes any of the 99.9% of scenarios where the government "temporarily" taps the fund for some very important political goal that absolutely coincidentally have to be met in an election year).
The US elects a lot of people that are great at giving lip-service in front of the camera and at sucking down the not-quite actual bribes in back rooms.
Naturally they don't do budgets the rational way: by writing in the funding at the same time that the actual law/regulation is being enacted. I really don't understand how's it's feasible to pass such unfunded mandates. If something costs more it should be clearly added, hopefully with limits or automatic scaling (in the case of something like say, requiring that every X see a 'full' response (E.G. natural disasters, murders, etc).
"A low-skilled worker might reduce their working hours to attain skills enabling career progression."
It this based on anything? Are we hoping they'll do this, or do we know how people typically use unexpected sources of income? Or, is it: "The more stitches the less riches" ?
Appendix 1 of the paper is a hard-to-read "fictionalised accounts" of how the money can be used. I like #2, Kathryn the government debt collector who already felt a great sense of accomplishment is now able to provide even more help.
(I did a quick google and found some analysis of how IETC is spent. It seems that transportation is the biggest thing, but that might be a US-specific pattern).
"
The report says the fund could help people: "A low-skilled worker might reduce their working hours to attain skills enabling career progression.
"The fund could provide the impetus to turn an entrepreneurial idea into a reality. It could be the support that enables a carer to be there for a loved one."
"
I'm skeptical of the long term implications of this logic, and this reads as a very neoliberal solution. 416 pounds a month for two years is not a lot of money. Job training and child/elderly care are difficult, time consuming, and expensive. This seems to be why they are prime tasks to be run by the state. Giving people a small cash sum, and telling them to teach themselves new skills so that they're ready for the economy of the future feels ignorant and wasteful.
If you're working a part time retail job that is about to be automated, what type of "job training" can this realistically provide. Or, if you're taking care of an elderly parent, or a young child, this is far from a replacement for more robust social services.
I truly want to believe in a UBI in some form, but I find the language of "entrepreneurial idea[s]" to be a little repulsive. Not everyone can be a successful entrepreneur. Not every poor and middle class citizen can become a successful start up founder and small business owner. UBI could be fantastic but is not a replacement for the once robust social safety nets that are being chipped away at (or decimated) in the US/UK. I am not saying it is the case in this article -- I know little about the Royal Society for the encouragement of the Arts, Manufactures and Commerce -- but anytime I see someone advocating for UBI I think it is worthwhile to interrogate their positionality and their imagination of the future. The silicon valley libertarian billionaire dream of a UBI seems different from someone with a genuine commitment to improving the quality of life for everyone.
There are no quick fixes to poverty, skill gap, and the problems wrought by automation. Looking towards UBI as a panacea feels dangerous in that it can prevent addressing the more structural problems at play.
Or to put it in simple numbers, every startup founder needs ten employees, who themselves have to not be startup founders. Unless 90% of the people who reach age ~35 die, and then 90% of the survivors die at ~50, there is no way to guarantee an entrepreneurial career path to everybody. Or, I guess, robots waves arms.
What I suspect will happen is that people will be able to leave dead-end jobs that are stressful and provide little to no value to them. Which in turn might crash the economy, because while not having the next Juicero isn't that big of a deal, not having anyone picking up the garbage on time is a real issue. Or, it might end up with employers offering a fair salary that fairly redistributes the gains in productivity afforded by modern civilization (I almost wrote this with a straight face). In any case, UBI is not just a money redistribution scheme, it's also a power redistribution scheme, because it gives you fuck-you-money, or at least the next closest equivalent.
> I suspect will happen is that people will be able to leave dead-end jobs that are stressful and provide little to no value to them. Which in turn might crash the economy, because while not having the next Juicero isn't that big of a deal, not having anyone picking up the garbage on time is a real issue. Or, it might end up with employers offering a fair salary that fairly redistributes the gains in productivity afforded by modern civilization (I almost wrote this with a straight face). In any case, UBI is not just a money redistribution scheme, it's also a power redistribution scheme, because it gives you fuck-you-money, or at least the next closest equivalent.
This is the main reason I want a basic income. I want persons who have a job to be the same persons who want that job. If nobody wants that job then there is something wrong about that job - maybe it doesn't pay well or maybe the job conditions are horrible. But in any case, I think we will all be better off if our workers are people who want that particular job rather than people who are stuck with that job and can't afford to quit.
I like to think of it as making up for the fact that there isn't any other place someone that doesn't want to be part of the current status quo can just say "I've had it, I'm going off on my own way".
All the land is taken, owned, and occupied; and all of the best places for starting your own settlement were /long/ ago occupied, let alone the marginal ones.
I don't want to do any of the above, but having that /option/ gave a default alternative to being an employee and thus meant that there had to be actual benefit in such a relationship.
> because it gives you fuck-you-money, or at least the next closest equivalent.
Has anyone studied potential impacts for health and safety related incidents alone for this? How many tired lorry drivers can be stopped blocking the motorway for 5 hours before it pays off economically.
> I truly want to believe in a UBI in some form, but I find the language of "entrepreneurial idea[s]" to be a little repulsive.
I agree. I mean, it would certainly enable some people to become entrepreneurs, and that's awesome! But it shouldn't be phrased in a way that people feel forced to become entrepreneurs, and feel worthless if they don't manage to. (That's one of the problems with unemployment "benefits" in many places, which are tied to pressure to find a job, any job, and lose the "benefits" if you "succeed". No wonder many people crack under this pressure and become depressed alcoholics.)
The same goes for worries a UBI might decrease "employment". Um, yes? If there were a UBI I could live off, I might well drop my job and do research/develop free software full time. That would be a decrease in employment but quite possibly a net win for society.
We need to stop viewing everything through the lens of (paid) work ethics.
Cash transfers are neoliberal now? I'm starting to think this word means "whatever I don't like" or "moderate liberal" - it's certainly not within the politics or Reagan and Thatcher (the typical definition of neoliberalism) to redistribute income like this.
Yep. But that somewhat matches recent UK policy (lifetime ISAs, for instance). I think the logic goes that the (currently) middle-aged have benefitted disproportionately from house price rises. Which might on average have a degree of truth to it, but such gains are far-from-uniformly distributed, and mostly still locked up in illiquid assets...
>Jonathan Reynolds MP, Labour's shadow Treasury minister, said: "This new report from the RSA raises the right questions about the future of work and the long-term challenges we face, including making sure automation and the changing nature of work deliver a fairer, more prosperous society."
Instead of pretending that our iPhones were all just built by magic Chinese robots (or soon will be), the UK could instead decide to enact policy changes that grows rather than bleeds our manufacturing sector.
I don't think policymakers understand the long term risks associated with trade and currency policy pushing manufacturing to places like China. Building a dense industrial ecosystem - exhibited in all its glory in markets like Huaquingbei - is simply impossible in the UK under current "free" trade policy. This means startups like OnePlus (which grew out of Huaquingbei) won't and can't work in the UK - which should worry people.
One day we're going to wake up and find out that China can switch off the flow of hi tech goods to the UK overnight - components and finished goods alike - and the rude surprise will be that industrial ecosystems take decades to build. Neoclassical economic models buries this problem in assumptions, so most economists are just as blind to this risk as they were to 2008.
The fact that we let our industrial ecosystem rot while they steadily built theirs up will come, if we get cut off, in the form of a highly inflationary shock and ultimately a shortage of hi tech goods.
Perhaps then the notion that trade and currency policy created to appease banks and landowners ('unfettered trade'), rather than companies that actually make things and created jobs ('protectionism'), wasn't such a great idea.
Enacting basic income (which will, by its nature, also be very inflationary) with those kinds of medium term risks hanging over us seems unwise when its impetus - the shortage of good jobs - was artificially driven by bank friendly trade policy that can't last forever.
>The central proposition is the creation of a Universal Basic Opportunity Fund (UBOF): an effort to reimagine how society supports people to live meaningful, contributory lives.
>Its premise is simple: fund every citizen under the age of 55 with a £5,000 opportunity dividend for up to two years, taken at a time of their choosing over the course of a decade.
>The fund would initially last for ten years, with dependent children also eligible for the payment in the year a parent, or both, were receiving it.
EDIT: I didn't see the direct link to the PDF in the original article, not that it is particularly visible, the first sentence is in bold (and is not a link, and the initial part of the second sentence is also bold, but it is a link) removed initial sentence that read:
How nice of the BBC guys to provide not the source.
:) The BBC are usually quite good with directly linking their sources, when it's reports or studies (or anything in PDF form). The Guardian are similarly good in that regard, too.
For science articles, yes. That took a lot of lobbying and complaining.
On law/crime articles, they don't link to legal judgments. That's partly the fault of the British legal system for not publishing a lot of that material. But there are plenty of times when it is available and it doesn't get linked to.
Hypertext is a thing. One day people will work out all the amazing possibilities.
Exactly, this article is just one big disappointment when you read the title and actual article. It's basically some extra money to help it's citizens for the short term.
Even being clear about what help is available, provided by simple and not retrospectively reviewed permission, as benefits are in the UK, would be a immense improvement.
Little known, and I found this too late to help my friend, the Employment Support Allowance (ESA) is the only self declarable benefit available. You must have paid national insurance for the previous two years. But it is not exclusively the formal (de facto) gateway to disability benefits. If you're paid up to your contributions to the state pension, for six months you are able to forgo formalities. This sounds open to abuse, but in practice it's not: if you continued to claim after six months, supplying a medical certificate suddenly, the first six months would be still subject to review, when you are required to attend the popularly dreaded (for arbitrary and unknown application of rules) at which time the question about your illness will be simply, for what reason would you not attend a doctor, if symptoms denied you working capacity?
I was very surprised by this self declaration option, and on visiting the employment buro to assist, the queue I briefly canvassed all strenuously advised me I am deluded. (Later a very helpful manager told me her biggest problem with claimants in disputes, is the reality she declared to be no claimant appears to think the documentation is higher authority than advice from friends. She humorously related a fantastic Chinese Whispers tale of woe and unreason. She paused somewhat shocked, however, and changed the subject when I asked if this was the clear sign that curriculum changes introduced to allow schools with English as pupils 1st:2nd:3rd language, in one Birmingham UK highschool I read being 5:80:15 percent, to not fail national examination standards. I was _terrible at English grammar in the same years,my Latin master grit his teeth "you're only good at Latin because the English language you learned from aged parents is sufficiently formal to provide you the grammar automatically." In this way, I later realised I was first introduced to the value of input type checking and implicit function declaration... Today, children lack the rigorous and emphatic teaching of less overtly strict language. (English is incredibly formally strict, my late co-founder was a nonsense poetry lover and expert, and musical arranger and manager, where deprecated grammars are essential to composition, and much art is long lost. -- here is a exceptional response to anyone who asks me why I wanted a non technical co-founder; there is always immense pleasure in the architecture of the humanities, but the sad fact is few universities have still the capacities, my co-founder at Cambridge in the sixties on scholarship and once housed in the same cottage on the Lambeth Palace grounds as I saw a Syrian refugee mother and child, was succoured by a most amazing system which is, to my view, necessary to rekindle if we are to re-establish the international respect our* country once was accorded and for generations rudely has presumed. *Co-founder and I both second generation immigrants)
- - -
But what purpose does a UBI pursue, if not then it must necessarily undo the travesty of Zero Hours Contracts?
My father told me every night, how he watched silently while his mother cried over her sewing machine, ground down by Piece Work, the shoulder you've stitched in error of exhaustion made a debt for the final sale value, the reason my father understood when my grandmother made jokes and made up games to exhaust her two fatherless boys, why there was no dinner the following evening.
Even the qualification that propelled my father into employability, the then city and guilds secretarial matriculation, was a embodiment of the formal capabilities required by grammar: the questions including manipulation of perfect participles in subordinate clauses couched in the safety of future perfect conditions, to assure your future employer that you should never misinterpret a letter of contract or possibility of variati...
It's not? I had doubts about the first occurrence of "two payments of £5,000 paid over two years", which can be parsed various ways. But then later it does say "two annual £5,000 dividends", which is clear. Or are you objecting to the fact that it's limited to two years?
Edit: No, reading this yet one more time, I come to the opposite conclusion: I think it really is £5,000 in the first year, then £5,000 in the second year. That sucks.
I read the "two annual £5,000 dividends" as getting 5000 every six months.
Instead, you get 5000 in one year and 5000 in the next.
Like OP said, this isn't universal, it is only temporary and it's not 10000 a year but 5000 a year.
So Milton Friedman was wrong and Marx was right? There is such a thing as a free lunch after all?
(It's easy when your central bank is free to print money while developing countries and the working class in large countries like India, Brazil, USA and China pay the bill. Globalization is a beauty indeed.)
Income/salary is a large one time payment (once a month, or bi-weekly), for work you do every day.
I don't disagree with your assessment of this being a problem, but increasing overhead by splitting up payments to solve an issue that's inherently behavioral seems counterproductive to me.
A payment which is once a month is not a one time payment. A grant which is once a lifetime is. Someone squandering the former has an opportunity to rectify their mistake the following month.
And more generally, if the once a lifetime universal grants are competing for budget and theoretical purpose with hardship funds, unemployment benefits and entitlement to free government services, the distributional effects are going to heavily favour the lucky and financially secure over the unlucky and financially insecure.
> A payment which is once a month is not a one time payment. A grant which is once a lifetime is.
What I responded to that you wrote, and what the article suggests, is:
> This is going to replace what was regular income with large one time payments.
If they are plural they are no longer one time. And if they are no longer one time, it's just a matter of scope size when discussing frequency. I'm not trying to sound robotic, but there's no functional difference between getting 6x twice a year and getting 1x 12 times a year. The difference is psychological.
"Anyone receiving the "dividends" would not be able to claim any tax allowances, which the RSA says would act as a disincentive to wealthier earners wanting to apply for the handout."
It's also a disincentive from becoming a wealthier earner, which is _exactly_ what UBI is meant to address (among other things).
In addition to the contradictions already highlighted by many posters, I don't like the way the only economist they've quoted is Patrick Minford.
Not because he says UBI won't work (I'm on the fence about this, because I'd love it to work, but I don't see how you can stop it triggering inflation to the point that the UBI sum becomes useless to live on - but I'm no economist), but because he's really quite far out of the mainstream of economists and it's as if they've picked him solely because he's the only big name pro-Brexit economist - and I'm sick of the BBC dragging pro-Brexit commentators on to speak unopposed regardless of whether they know anything about the subject or how out-there their views are.
It's an illogical argument though - the concept of true UBI, not the thing cited in the article, is that everyone receives the living wage and can afford basics like food and housing. If everyone being able to afford food and housing changes the rate of inflation, then that's an acceptable side-effect of ending poverty, it's certainly not something to be feared or cited as an argument against UBI :)
The argument (which I don’t necessarily subscribe to, but I too, am no economist) would be that the inflation leapt by such bounds that it directly cancelled out the entire UBI grant.
There's a special case on housing expenses. There aren't enough housing units in many areas for everybody who wants to live in those areas. So, the price goes up, and this acts a as a crude filter for how bad you want to live in an area. There is no rate of UBI that will cover housing expenses in such an area -- the rent will always be what everybody can afford + n, where n is large enough that only enough people who can fit can afford it. This dynamic is basically inflation. Increasing supply or redirecting demand is the only way to lower n. n can also manifest itself as a waiting list.
(This is not, by the way, a normative statement, it's merely descriptive)
This inflationary pressure probably won't apply to food, because the supply of food is a lot more elastic than the supply of housing. That more people can afford better probably means that more good food gets sold, and perhaps some scarcer foods might come under pressure, but the supply, and thus price, of things like rice and carrots is unlikely to go up.
>There's a special case on housing expenses. There aren't enough housing units in many areas for everybody who wants to live in those areas. So, the price goes up, and this acts a as a crude filter for how bad you want to live in an area. There is no rate of UBI that will cover housing expenses in such an area
No, but UBI would enable people to move out of that area to areas with cheaper housing and fewer jobs.
I can imagine quite a number of economic migrants from the North of England who currently live in London would decide to return home and live closer to family in cheaper locales if their overall economic situation was a bit more secure.
That would, in turn, put relieve pressure on the housing market in London and provide some economic stimulus for more deprived areas.
>This inflationary pressure probably won't apply to food, because the supply of food is a lot more elastic than the supply of housing. That more people can afford better probably means that more good food gets sold, and perhaps some scarcer foods might come under pressure, but the supply, and thus price, of things like rice and carrots is unlikely to go up.
I think the price of organic carrots and rice would probably go up a lot. Their supply isn't particularly elastic (and is constrained by access to cheap labor... whose price would go up under UBI). If you give poor people more money one of the first things they will do is try and buy better quality food.
McDonalds would probably take a hit and would likely have to shake their image up to attract clientele in much the same way they did in Australia (where, thanks to a high minimum wage, people at the lower end of the economic spectrum have a higher disposable income): https://www.businessinsider.com.au/mcdonalds-in-australia-vs...
It only triggers inflation if the money supply goes up. If you pay for UBI with taxes, it has no effect on inflation.
In theory.
The problem is that this amounts to taxing the super-rich to a much greater extent than we do now. The super-rich tend to hoard their money (that's part of the problem!) so even if you manage to do that successfully, you do end probably end up increasing the effective money supply. But not to the extent that the income becomes worthless.
You don’t need to tax the rich more. The US could pay for UBI by raising taxes to the level of Germany. It could do that by simply adopting German tax rates, which don’t really tax the rich more but tax the middle class a lot more.
How about just creating money and giving the same amount to everyone?
It would have the effect that the value of each individual dollar would go down to a small extent, but everyone would have say 10,000 dollars extra. The effect would be negative for the rich, but positive for the poor.
Quantitative easing seemed similar, but the money was given to the banks who just kept asset prices high - not great for the poor but good for the rich.
Anyone want to "explain it like I am 5" to to why thats such a bad idea?
During QE they didn't just give the money to the banks, they bought stuff from the banks. This introduced new money into the system without being unduly unfair (although by the nature of buying a lot of things at once the price was lower than it would otherwise have been).
This means that when the BoE wants to contract the money suply (as it's doing now) it has assets to sell off.
If it printed money and then gave it away then it would be in a sticky situation if it wanted to shrink the money supply again.
Also producing that much extra cash every year would produce a high rate of inflation. This would have very weird effects and would probably be highly unpleasant for everyone.
I don't really see it as especially fair. I had done my calculations and worked out that a house price correction was well overdue. Instead my taxpayer money was used to keep the prices artificially high, while the bankers kept their huge bonuses and I got next to no interest on the money II had saved for a deposit. How exactly was that fair?
I agree that it would probably cause innflation, but why not just repeat every ten years? As I say it would devalue money for everyone. It would also give a lump some to everyone. That is going to be positive for the people who need it the most and worst for the people that need it the least.
I think describing what happens to inflation is very, very difficult, because it's difficult to predict what happens to wages.
At a guess, low/medium skilled labour becomes more expensive, because it's no longer required for subsistence, so the labour becomes more about luxury goods, than basic living costs
About inflation - cash transfers are going to trigger inflation, the question is does a UBI raise inflation enough to erode the UBI itself? There's basically no evidence that a cash transfer program like that is going to raise inflation enough to erode it. Here's a study I found this study, it talks about price effects of cash give-away, they're existent but marginal.
That's exactly my worry: not that it causes inflation, but that if everyone is given a sum to cover the cost of accommodation then accommodation prices will just get pushed up to beyond the reach of UBI. As I say, I like the idea of UBI a lot, so will be very glad if that doesn't happen, and interested to read (later on) this and any other studies on this topic!
Note that the UK already has a system of housing benefit which covers (most of) the cost of accomodation for people on low incomes. That may be a separate issue.
Housing benefits would have to be eliminated to make UBI viable cost-wise -- and indeed that is one of the biggest reasons why UBI or negative income tax as a replacement to benefits is politically unpopular.
While UBI would be more efficient (everybody gets a minimum amount of money that they can use towards housing or whatever else), that would mean HUGE losses among the welfare recipients in expensive places -- in London, housing benefit (LHA) can amount to $18k a year for a small family or $30k a year for a big one, and UBI will not fully replace that. The laments about social cleansing will be loud.
Think about it this way: from the perspective of inflation increases it doesn't matter whether people are getting money from the private sector or public. If inflation always worked to offset increases in income then society would never become better off. Obviously this isn't the case so inflation must be less than perfectly offsetting, how much less can still be disputed though.
>I don't see how you can stop it triggering inflation to the point that the UBI sum becomes useless to live on
It will trigger inflation not only because there will be more money chasing the same goods, but also because wages will rise (if UBI is enough people now have fuck you money) which will have knock on effects on the price of goods up the value chain.
However, the idea that it necessarily has to trigger inflation to the point that the UBI sum is not enough to live on is wrongheaded.
First of all, it might never be set at a level that is enough to live on. E.g., typically when a Silicon Valley billionaire talks about UBI they almost always mean "take all welfare and redistribute it to everybody in the country". That will do jack shit - it will neither raise inflation nor give anybody enough to live on. If it were set at a level that was enough to live on it would hurt - for them. They'll fight that (I dont think people realize that this means that the political support for "real" BI is really very low).
Secondly, rich countries with rich economies would be very likely capable of absorbing the economic shock of everybody having fuck you money - economically I'd do more or less the same thing I do now (write software) if I had fuck you money and I'll bet most other people would too. People aren't going to sit on the couch and vegetate. They will largely still want to build, to be useful and to contribute to society - but hey, iPhones might cost $1,400. Meh.
I don't doubt that inequality would go down and that that would be a good thing.
It would be difficult to ascertain exactly where the inflationary impact would hit though - there are way too many variables to account for - aggregate housebuilding, inflows of foreign capital, desirability of UK as a place to park capital and live, availability of arable land, potential future availability of oil, etc.
All you could really say is that it would be inflationary. Not how much, not where.
If it were to be brought in it should be brought in at a low level with automatic increases until it's enough to live on. If the inflationary impact is too much for the electorate to bear they ought to be able to vote it down.
This is a way of tricking the stupid and poor into lowering the population by taking away regular money and giving you a lump sum that you will blow leaving you with no way to survive. Most wont train or use it to make more money. Its a simple tactic for the government to elliminate the people the no longer need.
One aspect of Universal Basic Income (UBI) debate which remain unanswered for me is the question of meaning & purpose.
Most of us derive our sense of purpose from our jobs. In a future with UBI and Automation where will derive our purpose in life. I think this will dictate the future of UBI more than the intrinsic merit of the underlying idea.
> Most of us derive our sense of purpose from our jobs.
Most of "us", as in your peers, those visible to you. Nothing wrong with feeling a sense of purpose.
Most of "us", as in bus drivers, bored security guards with nothing to do, McDonald's cashiers, cleaning personnel who clean in your office between 4 a.m. and 6 a.m. so you never have to encounter them, would they be depressed and forlorn without the "purpose" of their awesome jobs?
Nothing's going to stop you from holding onto your job if it brings you meaning & purpose. We would merely stop forcing others to hold onto theirs when it doesn't.
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[ 5.6 ms ] story [ 214 ms ] threadThis is an obvious way to align incentives that I haven't seen before. Negative income tax (NIT) is also something that might be worth looking into: https://en.wikipedia.org/wiki/Negative_income_tax#Implementa...
If the government is saying the cost will be £14.5B then they must think only 1.5M people will sign up, a tiny portion of the population. I don't quite see how they're expecting this to work.
Which is a shame; 10k could still make a significant difference to someone earning, for example, £35k (not a high earner by any stretch) - starting a business, paying for childcare etc.
Only then can debate begin.
And political parties must be compelled to publish their proposals both normalised to the NAO model specification and atomically for the inputs and outputs of specific effects of the rules, especially of housing rules.
In this way I could throw about ideas like my"basement benefit" contribution to a ring fenced home deposit scheme for all mature children living with parents whilst in work. This could be extended for those with parents over the age of fifty five, to build a capital cushion cover for care for parents, meeting with needs such as home modification and such things as mobility. Specifically I like the idea of subsidy for a station wagon or similar practical vehicle, for the adult carer if parents who are willing to give up their driving license.
EDIT: oh, what's a million or a billion between friends?
It's not a government proposal. It's not even a proposal of the opposition, or anyone who would potentially be in a position to actually enact it.
The headline isn't wrong, but the prominence the BBC has given it could trick people into thinking its an official (or at least serious unofficial) proposal.
> The idea sees two payments of £5,000 paid over two years, but certain state benefits and tax reliefs would be removed at the same time.
> Payments would come from a British sovereign wealth fund in the form of two annual £5,000 dividends, the RSA proposes.
It's not really Universal either:
> applicants would only have to demonstrate how they intended to use the money
Can't walk more the 10 minutes to the shops? No money!
Your friend is lucky, I know several people personally who have been dragged through the courts for months before they were able to get their incorrect assessment overturned.
The stricter regime for both ESA and JSA has created a dreadful gap in the benefits system - people who aren't sick enough to claim ESA, but too sick to claim JSA. Many people with health conditions that vary over time are refused ESA because their condition is quite mild at the time of assessment, then repeatedly sanctioned on JSA because they become too sick to keep up with their jobseeking activity obligations. There appears to have been a particularly severe impact on people with mental health conditions and learning disabilities.
Our benefits system has become overly complex and extremely unforgiving. A relatively minor error can leave someone completely destitute. The services that help people navigate the benefits system are under severe pressure due to austerity cuts. I'm no bleeding-heart liberal, but I think that our benefits system has become callous, unreasonable and ineffective in preventing poverty.
Granted: Nobody’s linked to any papers or studies. But neither have you.
As I said it's not exactly under-reported, that was your cue to search and find something like: https://fullfact.org/news/how-many-fit-work-assessments-are-...
And (to address your other comment) I assume you aren't being literal with your specific example (because the guy you were responding to didn't literally mean people were assessed on their ability to walk to a shop specifically), but yeah there have been reports of people who can't walk very far getting told they're fit for work (For instance this guy: https://www.cornwalllive.com/news/cornwall-news/photographer... from earlier this week)
Where's your evidence?
http://www.independent.co.uk/news/uk/politics/dwp-disabled-p...
https://www.theguardian.com/politics/2018/feb/12/disability-...
Happy now? Or are you perhaps going to try to play the no true Scotsman PR game and claim this doesn't count as real evidence?
If the guy had replied saying he actually did know the person I would have to accept that as true. He didn't.
Despite recent evidence, this isn't The Guardian and I am willing to believe that most people here are honest and don't just make stuff up to suit their political agenda.
To answer your question, two lefty news articles and fakenews.com don't count as evidence, no. His word would have been good enough for me.
http://www.harrowell.org.uk/blog/2013/03/03/the-transition-t...
Years ago I think the LSE ran a study, that concluded, you may as well just close all job centres, and give a no questions asked hand-out instead. There's a stigma attached to bad jobs, benefits, and poor income - and with some of that lifted, it might provide a better seed-bed for some business.
Benefits are generally designed for short-term-ism, you can survive on not a lot, but opportunities are removed. Even basic socialisation becomes hard: you can't afford a drink in the pub.
That being said, I've never been poorer than being self-employed. I know it works for some, and there are benefits, but it doesn't work for all.
The benefits of my ISA (id hit the dividend tax on a single one of my ISA investments)
Pension relief at my top rate - hopefully 40% at my next gig
5 Years NI contributions towards state pension
People don't seem to understand that you can't create money just by randomly moving it around.
It's the same reason universities have endowments being managed as their own thing.
Also if it's a fund, the money is pre-earmarked for this usage. Taxes -> UBI end up being more easily messed up by politics (see social security vs. your 401(k))
The people the money was taken from could also have invested it profitably. They know that their taxes will be higher down-the-line so it's up to them whether they want to save or spend it.
>'s the same reason universities have endowments being managed as their own thing.
University endowments also seem far to big to me (at least the largest ones do). I suspect it's mostly a prestige/signalling thing. It might be rational on the part of the university if it attracts more donors, but in that case it isn't rational on the part of the donors. They view saving money as the responsible thing to do because it is the responsible thing to do for a human who will eventually retire. The same logic doesn't apply to Harvard.
> if it's a fund, the money is pre-earmarked for this usage. Taxes -> UBI end up being more easily messed up by politics (see social security vs. your 401(k))
I guess this is partly true, but it's easy to get the money out of there with accounting trickery. Just say "To make the fund's investments safer we are going to invest them in government bonds" and then as-if-by-magic you have the money.
It is hard to say where that money would come from - will it be printed? Taxed? Borrowed (interest?)?
To do any of these things at the required scale would surely have unintended effects.
Also as ability to pay for unemployment during a crisis now depends on cyclical income from investments, rather than countercyclical government bonds, it feels like this would collapse when it is needed most.
Issuing more public debt and spending it is (in a low interest environment) not so very different to printing cash and spending it. The creation of highly liquid assets backed by cash that don't pay interest = might as well be cash.
The "sovereign wealth fund" idea is weird though. I don't see the point of the UK creating one - it's not like it has vast quantities of oil wealth it needs to sequester.
Printing money isn't really the issue - it's what is done with it once printed that matters.
It's simply a way of taking a country's wealth and instead of spending it on infrastructure, public services, industry or welfare - it gets spent on assets (usually foreign).
The good parts:
* It lets a small country (e.g. Singapore) exert a stabilizing influence on its economy when it is buffeted by large external economic forces outside of its control.
* It lets a country that has natural resources (e.g. Norway) both A) set some of that wealth aside for the future and B) mitigate the massively damaging effects of dutch disease (a seriously underrated economic effect). This is termed "sterilization".
The bad parts:
* If you buy overseas assets they can be seized. I think this is why Venezuela isn't really capable of building a sovereign wealth fund. If they bought a shopping mall in New York state 10 years ago with their oil wealth it is likely it would simply have been seized.
* If you're putting money into a sovereign wealth fund you're not spending it on the welfare of your citizens. I used to live in Singapore and the contrast between the way it treated its poorest citizens and the amount of money pushed into Temasek is disgusting and shameful.
* Sovereign wealth funds attract corruption like flies on shit and the management of it is where the principal/agent problem reaches its nadir because it's so easy to surreptitiously suck wealth out if you exert control or influence over it. I think Norway's is probably the only sovereign wealth fund in the world that is free from corruption. Even then I wonder.
Since the UK is not a small economy and can absorb external shocks more easily than Singapore and it's not going to suffer from dutch disease what's the point? Creating yet another entry point for financial parasites in the City of London to extract taxpayer wealth?
This is offset by money being destroyed e.g. by repayment of loans (otherwise the money supply would simply explode in a catastrophic inflationary fountain), but overall, it's not impossible to imagine money being created directly into everyone's bank account instead.
Not claiming I can see how to get to that scenario from here, of course.
When there is a lower demand for private debt - usually because people already feel overindebted - money creation is throttled.
Politicians often balance the competing desires of their rich donors (who, however liberal, still want the money supply throttled to preserve their wealth) with that of the electorate (who want a healthy economy that can only be driven by spending) by stimulating the creation of ever more private debt.
This isn't a sustainable compromise and the consequent systemic and societal risks of a huge overhang of unpayable private debts are pretty terrifying.
Economic humiliation correlates strongly with a societal attraction to charismatic "strong man" leaders and, ultimately, fascism. I believe we're watching the beginning of this story and it's about to get a whole lot worse.
Sovereign wealth funds are generally endowed with some kind of income stream, typically the revenue from natural resources, which it then invests and spends the proceeds from. The UK doesn't have such revenue streams lying around, that aren't already paying into the treasury, thus any such funding will deprive the treasury of the same amount, and so the wealth fund won't really do anything, as least on the short term.
And that's without considering the fact that the government runs at a deficit and continously borrows money. Taking a loan to boost your savings is an interesting strategy.
There are all sorts of paths the UK could take to transfer things around and build up a sovereign wealth fund over time, but getting it to a stage where it would be able to pay out billions a year would take decades in the absolute best case scenario (that excludes any of the 99.9% of scenarios where the government "temporarily" taps the fund for some very important political goal that absolutely coincidentally have to be met in an election year).
Naturally they don't do budgets the rational way: by writing in the funding at the same time that the actual law/regulation is being enacted. I really don't understand how's it's feasible to pass such unfunded mandates. If something costs more it should be clearly added, hopefully with limits or automatic scaling (in the case of something like say, requiring that every X see a 'full' response (E.G. natural disasters, murders, etc).
I don't see the financial sense in it.
It this based on anything? Are we hoping they'll do this, or do we know how people typically use unexpected sources of income? Or, is it: "The more stitches the less riches" ?
Appendix 1 of the paper is a hard-to-read "fictionalised accounts" of how the money can be used. I like #2, Kathryn the government debt collector who already felt a great sense of accomplishment is now able to provide even more help.
(I did a quick google and found some analysis of how IETC is spent. It seems that transportation is the biggest thing, but that might be a US-specific pattern).
More likely the fund will be squandered (if cash). If it's in the form of a voucher, it will be ignored.
But let's say every low skilled worker actually wanted to become a skilled-worker, then who will perform the low skilled work?
"The fund could provide the impetus to turn an entrepreneurial idea into a reality. It could be the support that enables a carer to be there for a loved one." "
I'm skeptical of the long term implications of this logic, and this reads as a very neoliberal solution. 416 pounds a month for two years is not a lot of money. Job training and child/elderly care are difficult, time consuming, and expensive. This seems to be why they are prime tasks to be run by the state. Giving people a small cash sum, and telling them to teach themselves new skills so that they're ready for the economy of the future feels ignorant and wasteful.
If you're working a part time retail job that is about to be automated, what type of "job training" can this realistically provide. Or, if you're taking care of an elderly parent, or a young child, this is far from a replacement for more robust social services.
I truly want to believe in a UBI in some form, but I find the language of "entrepreneurial idea[s]" to be a little repulsive. Not everyone can be a successful entrepreneur. Not every poor and middle class citizen can become a successful start up founder and small business owner. UBI could be fantastic but is not a replacement for the once robust social safety nets that are being chipped away at (or decimated) in the US/UK. I am not saying it is the case in this article -- I know little about the Royal Society for the encouragement of the Arts, Manufactures and Commerce -- but anytime I see someone advocating for UBI I think it is worthwhile to interrogate their positionality and their imagination of the future. The silicon valley libertarian billionaire dream of a UBI seems different from someone with a genuine commitment to improving the quality of life for everyone.
There are no quick fixes to poverty, skill gap, and the problems wrought by automation. Looking towards UBI as a panacea feels dangerous in that it can prevent addressing the more structural problems at play.
What I suspect will happen is that people will be able to leave dead-end jobs that are stressful and provide little to no value to them. Which in turn might crash the economy, because while not having the next Juicero isn't that big of a deal, not having anyone picking up the garbage on time is a real issue. Or, it might end up with employers offering a fair salary that fairly redistributes the gains in productivity afforded by modern civilization (I almost wrote this with a straight face). In any case, UBI is not just a money redistribution scheme, it's also a power redistribution scheme, because it gives you fuck-you-money, or at least the next closest equivalent.
This is the main reason I want a basic income. I want persons who have a job to be the same persons who want that job. If nobody wants that job then there is something wrong about that job - maybe it doesn't pay well or maybe the job conditions are horrible. But in any case, I think we will all be better off if our workers are people who want that particular job rather than people who are stuck with that job and can't afford to quit.
All the land is taken, owned, and occupied; and all of the best places for starting your own settlement were /long/ ago occupied, let alone the marginal ones.
I don't want to do any of the above, but having that /option/ gave a default alternative to being an employee and thus meant that there had to be actual benefit in such a relationship.
Has anyone studied potential impacts for health and safety related incidents alone for this? How many tired lorry drivers can be stopped blocking the motorway for 5 hours before it pays off economically.
I agree. I mean, it would certainly enable some people to become entrepreneurs, and that's awesome! But it shouldn't be phrased in a way that people feel forced to become entrepreneurs, and feel worthless if they don't manage to. (That's one of the problems with unemployment "benefits" in many places, which are tied to pressure to find a job, any job, and lose the "benefits" if you "succeed". No wonder many people crack under this pressure and become depressed alcoholics.)
The same goes for worries a UBI might decrease "employment". Um, yes? If there were a UBI I could live off, I might well drop my job and do research/develop free software full time. That would be a decrease in employment but quite possibly a net win for society.
We need to stop viewing everything through the lens of (paid) work ethics.
Cash transfers are neoliberal now? I'm starting to think this word means "whatever I don't like" or "moderate liberal" - it's certainly not within the politics or Reagan and Thatcher (the typical definition of neoliberalism) to redistribute income like this.
Instead of pretending that our iPhones were all just built by magic Chinese robots (or soon will be), the UK could instead decide to enact policy changes that grows rather than bleeds our manufacturing sector.
I don't think policymakers understand the long term risks associated with trade and currency policy pushing manufacturing to places like China. Building a dense industrial ecosystem - exhibited in all its glory in markets like Huaquingbei - is simply impossible in the UK under current "free" trade policy. This means startups like OnePlus (which grew out of Huaquingbei) won't and can't work in the UK - which should worry people.
One day we're going to wake up and find out that China can switch off the flow of hi tech goods to the UK overnight - components and finished goods alike - and the rude surprise will be that industrial ecosystems take decades to build. Neoclassical economic models buries this problem in assumptions, so most economists are just as blind to this risk as they were to 2008.
The fact that we let our industrial ecosystem rot while they steadily built theirs up will come, if we get cut off, in the form of a highly inflationary shock and ultimately a shortage of hi tech goods.
Perhaps then the notion that trade and currency policy created to appease banks and landowners ('unfettered trade'), rather than companies that actually make things and created jobs ('protectionism'), wasn't such a great idea.
Enacting basic income (which will, by its nature, also be very inflationary) with those kinds of medium term risks hanging over us seems unwise when its impetus - the shortage of good jobs - was artificially driven by bank friendly trade policy that can't last forever.
https://www.thersa.org/discover/publications-and-articles/rs...
Link to PDF: https://www.thersa.org/globalassets/pdfs/reports/rsa_pathway...
Online (on Medium):
https://medium.com/pathways-to-universal-basic-income
Seemingly the path to UBI leads to UBOF:
>The central proposition is the creation of a Universal Basic Opportunity Fund (UBOF): an effort to reimagine how society supports people to live meaningful, contributory lives.
>Its premise is simple: fund every citizen under the age of 55 with a £5,000 opportunity dividend for up to two years, taken at a time of their choosing over the course of a decade.
>The fund would initially last for ten years, with dependent children also eligible for the payment in the year a parent, or both, were receiving it.
EDIT: I didn't see the direct link to the PDF in the original article, not that it is particularly visible, the first sentence is in bold (and is not a link, and the initial part of the second sentence is also bold, but it is a link) removed initial sentence that read:
How nice of the BBC guys to provide not the source.
The article's second sentence is the source - a link to the PDF - and it has been in the article since it was published.
Correcting my post.
On law/crime articles, they don't link to legal judgments. That's partly the fault of the British legal system for not publishing a lot of that material. But there are plenty of times when it is available and it doesn't get linked to.
Hypertext is a thing. One day people will work out all the amazing possibilities.
Little known, and I found this too late to help my friend, the Employment Support Allowance (ESA) is the only self declarable benefit available. You must have paid national insurance for the previous two years. But it is not exclusively the formal (de facto) gateway to disability benefits. If you're paid up to your contributions to the state pension, for six months you are able to forgo formalities. This sounds open to abuse, but in practice it's not: if you continued to claim after six months, supplying a medical certificate suddenly, the first six months would be still subject to review, when you are required to attend the popularly dreaded (for arbitrary and unknown application of rules) at which time the question about your illness will be simply, for what reason would you not attend a doctor, if symptoms denied you working capacity?
I was very surprised by this self declaration option, and on visiting the employment buro to assist, the queue I briefly canvassed all strenuously advised me I am deluded. (Later a very helpful manager told me her biggest problem with claimants in disputes, is the reality she declared to be no claimant appears to think the documentation is higher authority than advice from friends. She humorously related a fantastic Chinese Whispers tale of woe and unreason. She paused somewhat shocked, however, and changed the subject when I asked if this was the clear sign that curriculum changes introduced to allow schools with English as pupils 1st:2nd:3rd language, in one Birmingham UK highschool I read being 5:80:15 percent, to not fail national examination standards. I was _terrible at English grammar in the same years,my Latin master grit his teeth "you're only good at Latin because the English language you learned from aged parents is sufficiently formal to provide you the grammar automatically." In this way, I later realised I was first introduced to the value of input type checking and implicit function declaration... Today, children lack the rigorous and emphatic teaching of less overtly strict language. (English is incredibly formally strict, my late co-founder was a nonsense poetry lover and expert, and musical arranger and manager, where deprecated grammars are essential to composition, and much art is long lost. -- here is a exceptional response to anyone who asks me why I wanted a non technical co-founder; there is always immense pleasure in the architecture of the humanities, but the sad fact is few universities have still the capacities, my co-founder at Cambridge in the sixties on scholarship and once housed in the same cottage on the Lambeth Palace grounds as I saw a Syrian refugee mother and child, was succoured by a most amazing system which is, to my view, necessary to rekindle if we are to re-establish the international respect our* country once was accorded and for generations rudely has presumed. *Co-founder and I both second generation immigrants)
- - -
But what purpose does a UBI pursue, if not then it must necessarily undo the travesty of Zero Hours Contracts?
My father told me every night, how he watched silently while his mother cried over her sewing machine, ground down by Piece Work, the shoulder you've stitched in error of exhaustion made a debt for the final sale value, the reason my father understood when my grandmother made jokes and made up games to exhaust her two fatherless boys, why there was no dinner the following evening.
Even the qualification that propelled my father into employability, the then city and guilds secretarial matriculation, was a embodiment of the formal capabilities required by grammar: the questions including manipulation of perfect participles in subordinate clauses couched in the safety of future perfect conditions, to assure your future employer that you should never misinterpret a letter of contract or possibility of variati...
It's not? I had doubts about the first occurrence of "two payments of £5,000 paid over two years", which can be parsed various ways. But then later it does say "two annual £5,000 dividends", which is clear. Or are you objecting to the fact that it's limited to two years?
Edit: No, reading this yet one more time, I come to the opposite conclusion: I think it really is £5,000 in the first year, then £5,000 in the second year. That sucks.
Instead, you get 5000 in one year and 5000 in the next. Like OP said, this isn't universal, it is only temporary and it's not 10000 a year but 5000 a year.
(It's easy when your central bank is free to print money while developing countries and the working class in large countries like India, Brazil, USA and China pay the bill. Globalization is a beauty indeed.)
This is like giving small lottery wins. People will think they're rich in the beginning, blow it all and then have nothing to fall back on.
Basic income should be the same as regular work income that comes in once a month for living off.
I don't disagree with your assessment of this being a problem, but increasing overhead by splitting up payments to solve an issue that's inherently behavioral seems counterproductive to me.
And more generally, if the once a lifetime universal grants are competing for budget and theoretical purpose with hardship funds, unemployment benefits and entitlement to free government services, the distributional effects are going to heavily favour the lucky and financially secure over the unlucky and financially insecure.
What I responded to that you wrote, and what the article suggests, is:
> This is going to replace what was regular income with large one time payments.
If they are plural they are no longer one time. And if they are no longer one time, it's just a matter of scope size when discussing frequency. I'm not trying to sound robotic, but there's no functional difference between getting 6x twice a year and getting 1x 12 times a year. The difference is psychological.
So it's 1 payment per year.
Yes it's psychological, but that's the problem people are weak at saving for the future.
It's allowing people to make a mistake 12x bigger.
It's also a disincentive from becoming a wealthier earner, which is _exactly_ what UBI is meant to address (among other things).
Not because he says UBI won't work (I'm on the fence about this, because I'd love it to work, but I don't see how you can stop it triggering inflation to the point that the UBI sum becomes useless to live on - but I'm no economist), but because he's really quite far out of the mainstream of economists and it's as if they've picked him solely because he's the only big name pro-Brexit economist - and I'm sick of the BBC dragging pro-Brexit commentators on to speak unopposed regardless of whether they know anything about the subject or how out-there their views are.
Some prior references on Minford: http://www.huffingtonpost.co.uk/entry/brexit-minford-economi... https://www.economist.com/news/britain/21727078-patrick-minf...
That's something I don't get either. But maybe thinking is that it would induce some needed inflation in deflationary times?
If that happens, then UBI is pointless.
(This is not, by the way, a normative statement, it's merely descriptive)
This inflationary pressure probably won't apply to food, because the supply of food is a lot more elastic than the supply of housing. That more people can afford better probably means that more good food gets sold, and perhaps some scarcer foods might come under pressure, but the supply, and thus price, of things like rice and carrots is unlikely to go up.
No, but UBI would enable people to move out of that area to areas with cheaper housing and fewer jobs.
I can imagine quite a number of economic migrants from the North of England who currently live in London would decide to return home and live closer to family in cheaper locales if their overall economic situation was a bit more secure.
That would, in turn, put relieve pressure on the housing market in London and provide some economic stimulus for more deprived areas.
>This inflationary pressure probably won't apply to food, because the supply of food is a lot more elastic than the supply of housing. That more people can afford better probably means that more good food gets sold, and perhaps some scarcer foods might come under pressure, but the supply, and thus price, of things like rice and carrots is unlikely to go up.
I think the price of organic carrots and rice would probably go up a lot. Their supply isn't particularly elastic (and is constrained by access to cheap labor... whose price would go up under UBI). If you give poor people more money one of the first things they will do is try and buy better quality food.
McDonalds would probably take a hit and would likely have to shake their image up to attract clientele in much the same way they did in Australia (where, thanks to a high minimum wage, people at the lower end of the economic spectrum have a higher disposable income): https://www.businessinsider.com.au/mcdonalds-in-australia-vs...
In theory.
The problem is that this amounts to taxing the super-rich to a much greater extent than we do now. The super-rich tend to hoard their money (that's part of the problem!) so even if you manage to do that successfully, you do end probably end up increasing the effective money supply. But not to the extent that the income becomes worthless.
It would have the effect that the value of each individual dollar would go down to a small extent, but everyone would have say 10,000 dollars extra. The effect would be negative for the rich, but positive for the poor.
Quantitative easing seemed similar, but the money was given to the banks who just kept asset prices high - not great for the poor but good for the rich.
Anyone want to "explain it like I am 5" to to why thats such a bad idea?
This means that when the BoE wants to contract the money suply (as it's doing now) it has assets to sell off.
If it printed money and then gave it away then it would be in a sticky situation if it wanted to shrink the money supply again.
Also producing that much extra cash every year would produce a high rate of inflation. This would have very weird effects and would probably be highly unpleasant for everyone.
I agree that it would probably cause innflation, but why not just repeat every ten years? As I say it would devalue money for everyone. It would also give a lump some to everyone. That is going to be positive for the people who need it the most and worst for the people that need it the least.
At a guess, low/medium skilled labour becomes more expensive, because it's no longer required for subsistence, so the labour becomes more about luxury goods, than basic living costs
https://www.povertyactionlab.org/sites/default/files/publica...
That's exactly my worry: not that it causes inflation, but that if everyone is given a sum to cover the cost of accommodation then accommodation prices will just get pushed up to beyond the reach of UBI. As I say, I like the idea of UBI a lot, so will be very glad if that doesn't happen, and interested to read (later on) this and any other studies on this topic!
While UBI would be more efficient (everybody gets a minimum amount of money that they can use towards housing or whatever else), that would mean HUGE losses among the welfare recipients in expensive places -- in London, housing benefit (LHA) can amount to $18k a year for a small family or $30k a year for a big one, and UBI will not fully replace that. The laments about social cleansing will be loud.
It will trigger inflation not only because there will be more money chasing the same goods, but also because wages will rise (if UBI is enough people now have fuck you money) which will have knock on effects on the price of goods up the value chain.
However, the idea that it necessarily has to trigger inflation to the point that the UBI sum is not enough to live on is wrongheaded.
First of all, it might never be set at a level that is enough to live on. E.g., typically when a Silicon Valley billionaire talks about UBI they almost always mean "take all welfare and redistribute it to everybody in the country". That will do jack shit - it will neither raise inflation nor give anybody enough to live on. If it were set at a level that was enough to live on it would hurt - for them. They'll fight that (I dont think people realize that this means that the political support for "real" BI is really very low).
Secondly, rich countries with rich economies would be very likely capable of absorbing the economic shock of everybody having fuck you money - economically I'd do more or less the same thing I do now (write software) if I had fuck you money and I'll bet most other people would too. People aren't going to sit on the couch and vegetate. They will largely still want to build, to be useful and to contribute to society - but hey, iPhones might cost $1,400. Meh.
A a poor person earning 10k a year gets 10k. total: 20k A rich person earning 100k a year gets 10k. total: 110k
Inequality has shrunk from 10x to 5.5x. That's a massive improvement.
It would be difficult to ascertain exactly where the inflationary impact would hit though - there are way too many variables to account for - aggregate housebuilding, inflows of foreign capital, desirability of UK as a place to park capital and live, availability of arable land, potential future availability of oil, etc.
All you could really say is that it would be inflationary. Not how much, not where.
If it were to be brought in it should be brought in at a low level with automatic increases until it's enough to live on. If the inflationary impact is too much for the electorate to bear they ought to be able to vote it down.
Most of "us", as in your peers, those visible to you. Nothing wrong with feeling a sense of purpose.
Most of "us", as in bus drivers, bored security guards with nothing to do, McDonald's cashiers, cleaning personnel who clean in your office between 4 a.m. and 6 a.m. so you never have to encounter them, would they be depressed and forlorn without the "purpose" of their awesome jobs?