More Basic Income
Two quick comments on the article in the March Socialist Standard.
1. New research on the Speenhamland system is now arguing that the common interpretations are not very accurate. It is not my field of research so I guide you here, but I think there are some papers on this at recent BI conferences.
2. The fact that conservatives fear that Basic Income gives too much power to workers (as they can opt out) and radicals argue that it undercuts workers shows that we cannot easily conclude what the micro effects will be.
BI was killed in USA in early 1970s because it gave blacks more independence, and that worried white southerners. The negative income tax experiments in USA originally seemed to show disincentives to work, but we know that the early results were distorted, and then it was shut down. I do not see how a BI necessarily affects profit rates, certainly not differential profit rates, except that it might change the composition of demand, which will certainly help some industries and hurt others. But I do not see how one can apply the simple Ricardo-Marx wage-profit trade-off model in a modern economy when income categories are not so clear cut. (Much of the income for the upper classes is labor income and not property income).
Good luck with your work.
C. Clark (by e-mail)
In response to Adam Buick’s article in the March Socialist Standard: I find his predictions unduly pessimistic.
He acknowledges that Basic Income would strengthen workers’ power in striking, but fails to acknowledge that while, yes, it would allow some wages to be pushed down, it would conversely result in others being pushed up.
Dangerous, unpleasant, or essentially antisocial or environmentally destructive occupations, which many workers are currently forced to accept, would need to offer higher rewards to keep their labour – or cease business, which for many such businesses, would be a good thing.
While he is correct that most governments are in practice in the pockets of big business, this is not entirely true of all. The post-WW2 Welfare State brought much improvement to workers’ conditions – and those of the unemployed; and attention to the source of the power of corporations and banks would give a future, enlightened government the power to work for the benefit of the environment and community – including the workers and unemployed.
The fundamental source of this power is the right ceded by government to the banks, to create our money supply, by making loans. This power should be ended, and instead government should create and spend into circulation all the money needed by society, and adjust its volume to meet needs without causing undue inflation or the destructive growth of debt which is now threatening the collapse of the whole system. This is something you should seriously look into.
Brian Leslie (by e-mail)
Reply: We should have guessed. There is some sort of link here between Basic Income and the currency crank ideas of Major Douglas and Social Credit. We haven’t got the space to go into this in detail here. Suffice it to say that banks do not have the power to create money by making loans. They can only lend out what has been deposited with them or what they themselves borrow. If this wasn’t the case why are they in trouble now? Why don’t they simply create more money by making more loans? Your plan to finance Basic Income by recourse to the printing press will shock many of its other advocates. In fact, we imagine them falling over themselves to repudiate it – Editors.
In the apology published at the bottom right hand side of Page 23 (April Socialist Standard), we are told that “The Politics Show” does not exist. Surely this is the show that was on for many years on BBC1 on Sundays at noon? Indeed it was the show that no-hopers Nick Clegg and Chris Huhne had their infamous bust-up on – if I’ve remembered that correctly
Dave Ainsworth (by email)
Reply: You’re right “The Politics show” did, and still does, exist. We were just trying to suggest that, as far as Andrew Neill was concerned, it probably didn’t.– Editors.