Citizen's Income, Moneybox - Elephant In The Room

[Qetesuesi]

For those who missed it on Wednesday:

http://www.bbc.co.uk/programmes/b06vkj22

Although the panellists were obviously experts on the subject, expounding the standard arguments around simplification, incentives etc., there wasn't even the slightest passing mention of what will surely become the most urgent reason for it: technological unemployment, which we on HPC know (don't we) is set to rise to 47% in 20 years or some such astonishing figure (Great Depression unemployment: 25%).

Long before we get to that figure, public opinion is going to undergo a drastic change from the present Wail-encouraged strivers/skivers dodgy dichotomy. This is because people generally will know, both from various media and directly from their own experience and acquaintances, that TU is proceeding ever quicker apace and that "they could be next". A single simple example: driverless cars, increasingly frequently in the news (and this will rise to crescendo pitch within 5 years), will wipe out 3 million 'jobs' at a stroke; and while that's happening, several other tranches of previously secure employment will be teetering on the brink.

So it's not going to be primarily a case of tidying up the way we run tax and benefits - it'll be more like an essential overhaul to stave off potentially comprehensive social unrest, as others have pointed out here before.

Of course, Radio 4 has discussed the "rise of the robots" before, but if ever there were a subject on which that should have a seminal impact, this is it. Who knows how much longer we need to wait before the producers manage to put 2 and 2 together....

Edited January 15, 2016 by Qetesuesi

[nnails]

the world should be simple

no tax credits,

unemployment benefit - should set at half minimum wage and extra should be paid if you worked and have paid in to system based on how manny years you worked. as clear insentive works is better than dole

[Saving For a Space Ship]

Link not working for me

[Qetesuesi]

Link not working for me

Corrected - try now.

[smiley]

Technological changes could make our society more like an oil rich gulf state - with most revenue flowing from a small number of sources, and most of the population dependent on the goodwill of those who control the resource for their livelihood.

But - as long as there's half-decent democracy - it should come through that, like the gulf states, the welfare state, perhaps with a basic citizens' income for all, redistributes to the majority.

[janch]

Too late for me. It would have been brilliant for me as a stay at home mother. A little amount of income even if not enough for all your needs. There must be a lot of people who would dearly love to be able to stay at home even part-time while their children are small and who feel they are pushed out into the workplace before they or their children are ready.

[giggler000]

the world should be simple

no tax credits,

unemployment benefit - should set at half minimum wage and extra should be paid if you worked and have paid in to system based on how manny years you worked. as clear insentive works is better than dole

Ofcourse they would add to this - credit of the above for those who don't comply. I'm not saying so just that Credit appears everywhere these days and some did say it was sort of free.

[winkie]

Easy.......reduce the cost of living, reduce rents, reduce debt......helicopter money will not benefit the poor only the rich who will increase the prices to get their hands on it.....trickle up.

[wonderpup]

If technology really does start to eat large numbers of jobs as predicted something like this will be tried I think, if only to prevent a collapse in demand. The fly in the ointment however would be the declining margins of all those automated business's whose taxes are supposed to pay for it- contrary to common sense goosing productivity with technology does not lead to higher margins if you have competitors who are doing the same thing- it can lead to less profit all round as your automated outputs trend toward the territory of 'cheap as chips'.

So the technology that puts people out of work will not produce the dividend of higher taxable profits that a 'citizens wage' needs in order to be funded. On a brighter note their shanty town hovels may be fashioned from the stacks of dirt cheap consumer goods pouring out of robot factories.

[spacedin]

Humanity will be more able to get on with more important things like reading books and getting a lifetime education rather than focusing on than driving cars or working in some mind numbingly dull ******** factory job.

Frankly I think it will coincide with a flowering of civilisation because of this. Maybe I'm being a tad naive about peoples abilities. Too optimistic on the whole perhaps...

I'd like go see it happen though. We just need to avoid environmental catastrophe, otherwise life will get very hard indeed particularly given how much we take modern technology for granted. Speaking of which, that's one of the biggest dangers of this brave new world we envisige.

[stuckmojo]

The race for productivity is a zero sum game. Eventually, what we see now as "jobs" will be automated functions. What's left for humans to do? That's an answer that should be addressed now in schools and at governments level. Prepare for an age in which "work" no longer defines a human being.

The theory is that we could be liberated and become creative and focus on the value of things. The reality is that we'll end up as passive depressed drones.

[John51]

I don't buy the argument about manufacturers getting poorer because of automation. They will get poorer only because their products are no longer what people want at the price offered. (Or at any price.)

Disneys Snow White took x man hours to produce. With new technology it could be made for a very small fraction of those man hours. Except that it can't be guaranteed to be successful as there is competition from other movie makers. If they spend the same x man hours that Snow White got plus new tech, then their competition has to spend a similar amount to compete. Unless the competition come up with something special on the cheap. eg. Rocky or My Big Fat Greek Wedding etc.

CI will not put manufacturers in some Soviet era nihilistic void where there is no profit and all goods are bland. Corporations will compete and some will prosper and some will wither and die. One constant that corporate will be able to take advantage of is a stable amount of money in circulation.

I've noticed that CI is getting more attention with each passing year. Objections lately are based on the practicalities of CI. 5 years ago the objections were more politically based. The right wingers couldn't abide the thought of poor people having the freedom to be idle and the lefties couldn't abide the thought of poor people being allowed to take responsibility for their own lives, free from state control.

[EssKay]

The theory is that we could be liberated and become creative and focus on the value of things. The reality is that we'll end up as passive depressed drones.

I don't think a lack of creativity in a post scarcity economy will be the limiting factor - humanity has shown over millennia that we are endlessly creative. Yes scarcity/adversity has helped provide a spur to creative solutions in the past but the view that the majority of people will just flop about and not bother with anything if their basic needs are met is just wrong. There are studies out there which show that given increased leisure time, people end up being MORE creative

I think a much bigger danger is whether the elites will allow the masses to share in the bounty of a post scarcity economy. If current trends are anything to go by, the concentration of wealth at the top will continue/accelerate as technology advances and there will be less and less need for the "useless eaters"

[wherebee]

CI is obviously needed as automation increases. However, you cannot have CI and open borders.

So, until the immigration dragon is slain, expect no real change.

[irrationalactor]

How do you prevent the CI just getting eaten up by inflation, rent, and mortgage payments?

[winkie]

How do you prevent the CI just getting eaten up by inflation, rent, and mortgage payments?

That is what will happen.....in one hand and out to another.....more CI will then be required...

A wage of £500pm once bought far more than a wage today of £1000 buys....

[malk]

Nope. It depends on exactly how the citizen's income is configured but in most cases it doesn't introduced new money into the system so wouldn't stimulate inflation.

Eg, it would replace a benefit rather than adding to one or, for workers, be offset by a removal in the personal allowance.

This is oversimplified (not least as this is from my phone) but there are plenty of articles if you search for "basic income inflation".

There are also some interesting options for potentially removing a minimum wage and it also ties in nicely to land value tax which could lead to significant reduction in income taxes or potentially their removal.

Definitely an idea that's time has come.

[spacedin]

My main concern is that vulnerable people don't end up falling through the cracks but also I think CI would dovetail much better with support from the non-profit sector than the current arrangements here and be more likely to prevent such a scenario. The DWP can be pretty vicious toward the ill and disabled at times, this has got much worse over the last 5 years or so. A CI would I imagine be cheaper, not involve sanctions and hence not make ill and disabled people feel victimised by the state.

[wonderpup]

I don't buy the argument about manufacturers getting poorer because of automation.

Well the argument is often made that increasing efficiency combined with a competitive market will drive down prices- and in a scenario of non infinite demand those price reductions will surely impact on someones bottom line sooner or later.

It's not just a simple zero sum game in which wages saved up front show up as cheaper prices further down the line, it's also the fact that as production technology becomes cheaper and more efficient barriers to entry fall and competition increases- it's this dynamic that puts downward pressure on margins, not so much the lower wage costs.

The reason- for example- that Sony lost it's dominant position as a TV manufacturer was due to the fact that component manufacturing had become so cheap and cheerful that making TV sets was a game that almost anyone could play and a lot of people did- to the point where the sheer volume of competition had made profits for Sony far lower than they liked or needed.

There is- I think- an argument to be made that increasing efficiency via technology in the absence of a monopoly position (or infinite demand) will actually destroy economic value rather than increase it. The reason for this is kind of obvious- if something is easy to do and makes money then a lot of people will be interested in doing it- so the more that technology simplifies both the complexity and the costs of making something the more competitors you are likely to have.

[John51]

Sony hasn't gone bust though, they just make different stuff that gives them a healthy profit. Once their current products become a low profit commodity, they'll come up with something new.

imo the best way to calculate CI is as a % of the national average wage. Wouldn't mind MPs salary linked to NAW too. If they want more pay, they have to make all workers better off.

Qualifying for CI could be x years of proven residence, say 18 years. Then we can have an open border policy as immigrants have to pay their own way for almost 2 decades.

[erat_forte]

CI is obviously needed as automation increases. However, you cannot have CI and open borders.

So, until the immigration dragon is slain, expect no real change.

No need for immigration control, no need for international harmonisation.

Qualifying for CI could be x years of proven residence, say 18 years. Then we can have an open border policy as immigrants have to pay their own way for almost 2 decades.

Who would immigrate here after that?

[wonderpup]

Sony hasn't gone bust though, they just make different stuff that gives them a healthy profit. Once their current products become a low profit commodity, they'll come up with something new.

Yes innovation is one way to create a temporary 'monopoly' position but this is the antithesis of increasing wealth via increasing efficiency since it depends on the inherent inefficiency of IP laws that actively inhibit the rapid deployment of new technologies by competing firms- IP is simply throwing sand in the wheels of market competition in order to allow innovators a 'window' in which to capture the fruits of their efforts.

IP law is an implicit recognition of the reality that left to it's own devices the market will suck the profit out of any innovation via the mechanism of competition faster than the R&D costs can be recouped, which would in the long term kill off the incentive to innovate.

[AC44]

Basic Income is necessary..

It makes sense that even from now not everybody will be able to find a job that allows them to live.

It will make all jobs move above the level the Basic income is.

It will stop people moving near city centres..

And it can be paid with a simple LVT..

Bring it on..

[LiveinHope]

Humanity will be more able to get on with more important things like reading books and getting a lifetime education rather than focusing on than driving cars or working in some mind numbingly dull ******** factory job.

Frankly I think it will coincide with a flowering of civilisation because of this. Maybe I'm being a tad naive about peoples abilities. Too optimistic on the whole perhaps...

I'd like go see it happen though. We just need to avoid environmental catastrophe, otherwise life will get very hard indeed particularly given how much we take modern technology for granted. Speaking of which, that's one of the biggest dangers of this brave new world we envisige.

Who will pay the writers and other artists providing entertainment, and the blue skies scientists such as ecologists, or will they see a renaissance in their value ?

[stuckmojo]

Who will pay the writers and other artists providing entertainment, and the blue skies scientists such as ecologists, or will they see a renaissance in their value ?

This.

we'll turn into depressed fat automatons. We're well on the way already