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article imageOp-Ed: Universal Basic Income vs old ideas: The future vs insanity

By Paul Wallis     Jan 2, 2017 in World
Sydney - The idea of a universal basic income (UBI), aka a living wage, has been around for a long time. The main problem with the idea is that people keep trying to graft it on to old economics.
In Switzerland, the idea was rejected by a referendum. In Canada and Scotland, it’s being set up for a trial run. In Australia, the idea of a UBI has been getting a bit more traction, despite a conservative government. A pilot scheme is also to be set up in the US on a small scale.
The Swiss idea was relatively modest: $2500 francs per month for everyone. It only got a 22% Yes vote.
The Scottish idea is to replace other forms of “welfare” (insulting expression) with the UBI. This is a somewhat more advanced approach, rationalizing the revenue outlay in to a much simpler form. That’s the key to success.
Arguments for a universal basic income
The current situation is spectacularly unimpressive on all levels. The welfare concept is now aging rapidly, and being replaced by a chronic demand for real basic needs for everyone. Future generations can look forward to stop/start employment, expensive housing, education and health. The old career paths have been blown away or obliterated by change.
Let’s get this straight:
There won’t be any sedate progression of life as it was in the past. Income is no longer a safe assumption for anyone. Everyone will have to create a life for themselves. Even the idea of “welfare” doesn’t begin to cover this quite unprecedented situation.
Population pressures, costs of qualifications and competition will further dissolve employment patterns. Everyone can look forward to periods of unemployment, perhaps long-term periods. What we’re seeing now is a bare glimpse of this future.
The basic practice of welfare systems is also a problem:
The various forms of welfare provided around the world are incredibly complex, particularly in Western countries. They’re shrines to a bureaucratic culture which causes nothing but misery and frustration. The usually extremely stingy payouts are generally well out of synch with real needs, too. The usual pattern is that welfare payments simply come and go, and the recipients simply pay bills with it, if they can.
The most common objections to welfare are based on pure ignorance:
1. Welfare wasn’t invented as a form of economic justice. It was invented to pump money in to the cash-starved American economy during the Depression as much as to relieve hardship.
2. Welfare money isn’t kept by recipients. It goes straight back out in to the local economy, buying goods, paying VATs and sales taxes, etc. Every consumer business on Earth receives some welfare money, in some form, directly or indirectly.
3. Welfare rules are more of a disincentive to work than anything else. In New York, someone figured out a few years ago that working a part time job would lose them their welfare, while they made less from the jobs.
4. Having large numbers of people unable to participate in the economy is not good for the economy. Quite the opposite; people would make a lot more money if those on welfare had any money.
Universal Basic Income and revenue
The welfare systems are also almost unbelievably costly to run. It’s one of the more obsolete forms of administration, still clunking along well past its expiry date. Typically, a welfare system is lumbered with more regulations than anything else. In a world where automatically doing everything is normal, these systems are inefficiency incarnate. There’s no way to justify these gigantic costs.
In revenue terms, almost anything would be better and far cheaper, than the current approach. The irony, however, is that most governments overlook practically everything in terms of managing welfare, particularly their own best revenue interests.
• Most welfare systems cost tens of billions. All that money can be saved immediately with the introduction of a UBI replacing those programs.
• UBI money will get plowed straight back in to the economy, generating revenue through indirect taxes, excise, etc. A lot of it will be in direct sales, too, a plus for employment.
• So revenue can be increased, money saved, and people may even be able to participate in the economy.
…Therefore, the old mindsets are against it. The convoluted arguments in my own country of Australia are a case in point. They’re trying to visualize a UBI which includes the many obsolete components of the existing system. They’re trying to add it on to taxable income and create yet another bureaucratic monolith of useless “activity”, an own goal by any standards.
You don’t need to tax UBIs. They’ll pay tax all along the line anyway. They’ll generate business, employment, economic growth or whatever other old buzzword you want to use to pin a medal on yourself for seeing the obvious.
Benefits of a UBI system
UBIs can do a lot more than simply make the wheels go around a bit better. They can also deliver:
• Realistic life choices most people don’t really have now, and definitely won’t have in a UBI-less future.
• Some level of actual economic capacity to improve oneself.
• Reinforcement for basics like power, phone, internet and other bills.
• Cash for health and pharmaceuticals.
• An end to poverty, humanity’s oldest and worst self-inflicted enemy.
• An end to the tyranny of the modern workplace, that DIY insane asylum which pays you far less than the stress is worth.
Consider also this:
a) You’re currently paying taxes for governments which do nothing but make life miserable and endlessly more expensive.
b) Most public services have been abolished or privatized at the public expense, and you rarely if ever see any actual direct benefit for your taxes.
c) Public money is diverted to endless lobbies, cronies and corporations; you should see definite value in your hand for your taxes.
In everyone’s interests the current system must go. Basic capitalism is based on prosperity of the whole, not the few. What’s now called capitalism is a perversion of its fundamental principles. It’s a game of Mousetrap, not modern commerce or economics, and it simply doesn’t work.
The only way to make the future work is to totally destroy this current system. It has to be destroyed to ensure it can never return in any form. A UBI can do that, virtually overnight.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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