It’s time to broaden the debate on how to fund a universal basic income by including options for sharing resource rents, which is a model that can be applied internationally to reform unjust economic systems, reduce extreme poverty and protect the global commons.Some interesting points but bogs down over affordability. Doesn't get that the issue is distribution of real resources and that affordability is not the issue.
Counterpunch
From Basic Income to Social Dividends
Rajesh Makwana
Affordability is a legitimate issue with regards to inflation and labor market distortions. And UBI proponents have a bad habit of proposing new regressive taxes, this article being no exception.
ReplyDeleteRather than implementing new basic income schemes, the aim should perhaps be to scale up social protection along the lines of a proposal by Barbara Bergmann, who recommends that a universal basic income is only considered after a well-funded ‘Swedish-style’ welfare state has first been established. This would include, for example, far more generous allowances for children, pensioners, the unemployed, and those with a disability, or even more generous work leave policies and free university education.
Can't argue with that. Ties in with FDR's proposed 2nd Bill of Rights (which was copied from Huey Long's 'Share Our Wealth').
Another way to enhance personal freedom would be to shorten the work week and/or lower the retirement age.
Since it is unlikely that wages would increase proportionately as we work less, an additional form of income could be necessary in order to prevent millions more people falling below the poverty line.
Problem is that a UBI would act like a defacto wage subsidy and could actually drive down wages, rather than supplementing wages as intended.
Employers would have little obligation to pay a living wage if governments are already supplementing incomes. .... A basic income could therefore become a subsidy to employers who would no longer feel obliged to pay decent wages or provide adequate benefits to their employees.
Right. There may be ways around that -- i.e. a minimum wage for each occupational category. Or a shorter work week could help create a tighter labor market which should improve labor's share of GDP.
But nonetheless it is a potential issue for a UBI that has to be reckoned with.
Distributing income from user fees appeals to both liberals and conservatives.
BARF! Neoliberals love user fees because they are a regressive tax.
Sharing the value of co-owned resources is not just a theoretical premise; the practice has long existed in Alaska where 25 percent of all mineral lease rentals, royalties, bonuses and other payments received by the state are placed into a permanent fund
So all we have to do is strike oil and have a very small population, like Alaska ?
Seriously, most public resources are administered at a loss, effectively subsidizing wealthy users like Cliven Bundy. The idea that we could fund a UBI from Cliven Bundy's grazing fees is delusional (tho Huey Long did fund a lot of his Louisiana social programs by taxing oil companies).
In summary, this UBI subject has been beaten to death. What's new in this article is the proposal to fund a UBI from fees/taxes on public resources, like oil and minerals and timber. IMHO this makes sense if the resources are being exported because then the costs will be passed on to consumers in some other jurisdiction. If the resources are consumed locally then the cost will be passed on to local consumers and it's effectively a regressive tax.
A drawback of linking a basic income or social dividend to tax revenue/fees on natural resource exploitation is that it creates incentives such that recipients will be less likely to oppose ecologically destructive economic activities in view of the higher basic income or social dividend payment they will stand to receive.
ReplyDeleteI'm all for taxing natural resource exploitation, but it ideally should be clear that this is about a more rational approach to natural resource use and clawing back economic rents.
I can see that it might be an effective strategy politically for advocates of basic income or a social dividend to draw this connection between a resource tax and govt program but would prefer a strategy that didn't encourage a potentially damaging mindset to develop in relation to the environment.
We need to get away from the erroneous assumption that the Market god solves all problems.
ReplyDeleteMarkets are one way to allocate resources reasonably efficiently. However, equating efficiency with effectiveness is boneheaded.
As keep coming back to the central point of Peter F. Drucker's The Effective Executive (not "the efficient executive"): Efficiency is doing things right and effectiveness is doing the right things.
Markets are about efficiency and not about effectiveness. That's where governance (management) and policy (prioritization) come in. Firms are highly structured around setting and achieving objectives. They are command systems for a reason.
Managers that overemphasize ruthless competition within the firms to increase efficiency generally underperform managers that manage (ruthlessly) by objectives.