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Socratic Economics VII: Guaranteed Living Income

by Migeru Tue Jan 8th, 2008 at 01:38:01 PM EST

Every time I get a phone call from a telemarketer getting minimum wage for telling people like me that my number has been randomly selected to receive a brand new camera mobile phone, I cannot escape the conclusion that this person and I would both be better off if they were at home, on benefits.
There are so many people being paid crap to do unnecessary, even harmful, jobs that paying them crap to stay at home cannot possibly be worse. In fact, maybe they'll do something useful with their free time!
So, I propose

A guaranteed living income funded by taxing wealth.
Note that a "living" income doesn't have to be a "comfortable" income, just a "decent" income. It just has to be enough to cover the bare necessities of life: decent clothes, housing and food. For the definition of "decent", refer to the Scripture:
Adam Smith: The Wealth of Nations (Project Gutenberg)
By necessaries I understand, not only the commodities which are indispensibly necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably, though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty, which, it is presumed, nobody can well fall into without extreme bad conduct. Custom, in the same manner, has rendered leather shoes a necessary of life in England. The poorest creditable person, of either sex, would be ashamed to appear in public without them. In Scotland, custom has rendered them a necessary of life to the lowest order of men; but not to the same order of women, who may, without any discredit, walk about barefooted. In France, they are necessaries neither to men nor to women; the lowest rank of both sexes appearing there publicly, without any discredit, sometimes in wooden shoes, and sometimes barefooted. Under necessaries, therefore, I comprehend, not only those things which nature, but those things which the established rules of decency have rendered necessary to the lowest rank of people. All other things I call luxuries, without meaning, by this appellation, to throw the smallest degree of reproach upon the temperate use of them. Beer and ale, for example, in Great Britain, and wine, even in the wine countries, I call luxuries. A man of any rank may, without any reproach, abstain totally from tasting such liquors. Nature does not render them necessary for the support of life; and custom nowhere renders it indecent to live without them.
So, for definiteness, assume the guaranteed living income is set at the conventional relative poverty threshold of 60% of current median income.
What would be the consequences?


Poll
Do you believe in the Protestant work ethic?
. Yes, strongly 7%
. Yes, moderately 7%
. I am not sure 28%
. No, moderately 7%
. No, strongly 50%

Votes: 14
Results | Other Polls
Display:
This debate started life as a comment to Tory 'Workfare' Proposals by In Wales on January 8th, 2008.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Tue Jan 8th, 2008 at 01:44:21 PM EST
The first consequence would be higher taxes. From what level would you start taxing wealth? At what level would you tax the top?

Taxing wealth is more difficult than taxing income, because wealth is simply harder to measure (you need to inventorise material possessions as well as stock holdings, bank accounts...). This is how the wealthy manage to dodge a lot of taxes. The wealthy, being wealthy, have plenty of money to hire smart tax advisors.

Closing tax loopholes is a nice political rallying cry, but I suspect it's going to be very difficult in practice.

So, in econo-speak, you are going to have a relatively large inefficiency on this tax, and a relatively large overhead. You'd have to take that into account when setting the rate.

Then again, that means there's gainful employment for your telemarketer :-)

(wrt telemarketing, I'd say there are other fixes, like having the option to set your phone for no marketing calls)

by nanne (zwaerdenmaecker@gmail.com) on Tue Jan 8th, 2008 at 02:05:55 PM EST
I think that taxing wealth is less difficult than generally supposed.

ie Georgism which involves the taxing of Land Rental Values in particular, and potentially other privileges such as Intellectual Property and Limited Liability.

The Danes raised a large part of government revenues with this tax quite painlessly (for the great majority)until the current government put a cap on the tax and its benefits are slowly "withering on the vine".

Land is pretty easy to tax, because it doesn't go anywhere, and IMHO the principle that those who have exclusive rights of use of a "Commons" should compensate those they exclude is unassailable.

Henry George was once the second best known American, whose book "Progress and Poverty" sold by the million. He has been quietly airbrushed from History, and some say that the conflation by Economists of Land with Capital was entirely aimed at wiping out every vestige of Georgism.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Tue Jan 8th, 2008 at 05:55:51 PM EST
[ Parent ]
John Stuary Mill argued that taxing dwellings is the fairest tax because the value of one's home is a good measure of disposable income.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Tue Jan 8th, 2008 at 06:08:40 PM EST
[ Parent ]
You set incentives through any system of taxation. Granted, people don't only act on incentives. They have their big homes for status, too. Still, you are going to see some amount of shift of spending from the home to other things (say, cars, pieces of art) if you mainly tax homes.
by nanne (zwaerdenmaecker@gmail.com) on Tue Jan 8th, 2008 at 06:17:33 PM EST
[ Parent ]
Being Dutch, you know what happened when the Government decided to tax the size of the front of the houses.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Tue Jan 8th, 2008 at 06:19:11 PM EST
[ Parent ]
You overestimate my knowledge...

I do know that my parent's home has a large front façade and my mother once took the local tax man to the back to show that it wasn't really that big (the house was built in the early 20th century in what was then a village).

The case of New Orleans suggests that we got pretty cities...

by nanne (zwaerdenmaecker@gmail.com) on Tue Jan 8th, 2008 at 06:41:56 PM EST
[ Parent ]
I thought housefronts in Amsterdam were so narrow (but deep) because centuries ago there was a tax on the size of the front. Maybe that's an urban legend...

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Tue Jan 8th, 2008 at 06:51:51 PM EST
[ Parent ]
And there were taxes in Britain, France (impôt sur les portes et fenêtres), and Spain on doors and/or windows. They were thought to contribute to the spread of insalubrious dwellings, as the poor would limit the number of openings to pay less tax.

You're clearly a dangerous pinko commie pragmatist.
by Vagulus on Fri Jan 11th, 2008 at 10:18:15 PM EST
[ Parent ]
(The reasons of those taxes being privacy. It is a tax that can literally be computed by somebody walking along the street...)

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Sat Jan 12th, 2008 at 06:49:59 AM EST
[ Parent ]
The reason is transaction costs, not privacy. I have a hard time imagining that privacy was cared about all that much. Time spent on surveying, likelihood to get into a violent dispute or contract disease... more likely explanations.
by nanne (zwaerdenmaecker@gmail.com) on Sat Jan 12th, 2008 at 03:05:51 PM EST
[ Parent ]
Actually, at least in France, privacy was a strong reason. Getting out from under the all prying eyes of the Monarchic and Terror governments was a reason for the institution of that tax.

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Sat Jan 12th, 2008 at 04:58:40 PM EST
[ Parent ]
Ah, OK. I'm getting the historical period wrong. I could see something like that in the 19th century.
by nanne (zwaerdenmaecker@gmail.com) on Sun Jan 13th, 2008 at 08:04:33 AM EST
[ Parent ]
ChrisCook:
ie Georgism which involves the taxing of Land Rental Values in particular, and potentially other privileges such as Intellectual Property and Limited Liability.
All property is a privilege.
The laws of property have never yet conformed to the principles on which the justification of private property rests. They have made property of things which never ought to be property, and absolute property where only a qualified property ought to exist. — John Stuart Mill, Principles of Political Economy
And it has only gotten worse since he was writing.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Tue Jan 8th, 2008 at 06:14:10 PM EST
[ Parent ]
Indeed.

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Tue Jan 8th, 2008 at 06:30:06 PM EST
[ Parent ]
I ought to leave this until I have more time to comment but the first thought is really - how do you actually define what is necessary in each society for each individual to either have or have access to?

I remember seeing a programme that looked at some research into poverty and how people were living on benefits.  One mother thought it was more important to ensure that her son had a tv to watch, rather than certain other things because it would damage him socially if they did not have a tv.  I agree with that, when access to so many other things are cut off for children living in poverty, that a tv is important because it gives something in common with other children.  That doesn't equate to sitting a child in front of a tv all the time, but having access to social trends such as this programme or that is important for social development.

But would a policy maker think that a tv is a necessity or luxury?

A family member of mine is another example - on incapacity benefits but due to privatisation of social services care providers, her care costs went up something like 800%.  Whereas before recent shake ups, 75% of her income was taken into account for paying for care and bills etc, now 100% is. Food allowances are only for food, not for toiletries... So out of her benefits, her bills, care costs and food is paid, leaving almost nothing to 'live' on.  

Being housebound means that a decision has to be made around the cost of having a carer come in vs not having anybody to talk to all day long. When the care calls were first cut down, she very quickly became much more ill. Instead of a call in the morning and one in the evening, it became possibly one in the evening if affordable. Nothing to do, nothing to get up for. physical and mental well being then starts going further into decline.

These are the social costs of penny pinching. And the financial costs also.

Some 'luxuries' are actually necessities when they become something that keeps a person going, keeps them from declining further.

But it is so much more than purely a living income - it is whether services are joined up or not.  Do social services talk to mental health services?  Does the GP talk to social services? Or do people just keep being referred from one place to the next, with each place refusing to take any responsibility and obstructing provision of support?

When a trip to the hospital is too expensive, do you then not go? Get so ill that a few months later you go in by emergency ambulance?  What does that cost the NHS and the person involved?

Financial planning completely fails to look at social costs and long term consequences of different courses of action.  Fragmented services fail, privatised services fail.

How much should we give people to overcome all of these hurdles that public services put in their way?

by In Wales (inwales aaat eurotrib.com) on Tue Jan 8th, 2008 at 02:17:49 PM EST
Good comment. Reminds me why I favour free or very cheap public services over a guaranteed living income.

Of course you can pay for both, just need to raise taxes high enough.

Let's expand public transportation and make it cheaper, let's provide free daycare, free schooling, free university education (for the normal duration of studies), make healthcare affordable, focus on providing a better living environment so people can enjoy local amenities and socialise, and work on building a culture of sufficiency instead of the current ethic of maximising material wealth.

We won't have to talk about people needing to earn 60% of the median wage or any of that old rationalist social democratic stuff.

by nanne (zwaerdenmaecker@gmail.com) on Tue Jan 8th, 2008 at 02:44:43 PM EST
[ Parent ]
free or very cheap public services over a guaranteed living income

Assuming free or very cheap public services would include food, clothing, housing, toiletries and other amenities to those who needed them, as well as medical/dental services, etc.

In my comment to In Wales above, I mentioned my German friend's mother, a psychologist, who calculated that she would receive more income through unemployment benefits than through her social worker's salary.  In your scenario, I imagine my friend's mother would clearly prefer to continue working for her low salary, even if it amounted to less than the financial value of what she would receive through such free/cheap public services (which seems highly unlikely).  The reason being psychological:  Even if she were to get a small (relative to others') paycheck for a certain amount of money, it would still be more than the infinitesimal income (conceivably zero) she would get under your scenario.  Furthermore, if all those life necessities were made available by the state for free or extremely cheaply, she could consume those at little cost and use her small salary as "disposable" income.

Incidentally --

so people can enjoy local amenities and socialise

-- rather than, or in addition to, going to free/cheap state-provided stores, people could also go to state-serviced free/cheap canteens ("soup kitchens"), which would indeed seem to afford more chances for socialization than eating at home by yourself (if you happen to be single, as my friend's mother is, her children no longer living at home and no longer dependents).

If such a system were widespread enough, the stigma of consuming such state-provided life necessities conceivably could be significantly diluted enough so that people could use them with dignity, while at the same time maintaining economic incentives for those who want to work to earn extra disposable income.

Truth unfolds in time through a communal process.

by marco on Tue Jan 8th, 2008 at 06:56:31 PM EST
[ Parent ]
Eeehm... the guaranteed living income is an egalitarian measure -- everyone gets the same basic income. Free or very cheap public services also have an egalitarian effect.

I do like the idea of the state providing an open soup kitchen. But clothing, housing, toiletries, etc. I don't know. I'd prefer retaining welfare and various forms of assistance for these.

What your friend's mother brings up is a matter that can be solved by simple fine-tuning of benefits like financial assistance for the rent -- extending them to people with low incomes at a progressively decreasing rate.

Germany should have a minimum wage, at a level that allows people can earn a decent living wage. 8 Euros per hour would be a good place to start.

by nanne (zwaerdenmaecker@gmail.com) on Tue Jan 8th, 2008 at 07:46:01 PM EST
[ Parent ]
I do like the idea of the state providing an open soup kitchen. But clothing, housing, toiletries, etc. I don't know. I'd prefer retaining welfare and various forms of assistance for these.

I see. I thought you favored free or very cheap public services instead of the guaranteed living income, which I thought was meant to replace "welfare and various forms of assistance".

Truth unfolds in time through a communal process.

by marco on Tue Jan 8th, 2008 at 07:55:26 PM EST
[ Parent ]
The guaranteed living income is indeed meant to replace welfare and various forms of financial assistance. I prefer the existing order, but with better and cheaper public services, which will also cost some money.

Although some of the many forms of assistance that flank welfare can be replaced or reduced by having basically free public services (you don't need whatever programme for emergency care for the poor when you have universal healthcare).

by nanne (zwaerdenmaecker@gmail.com) on Tue Jan 8th, 2008 at 08:09:25 PM EST
[ Parent ]
I ought to leave this until I have more time to comment but the first thought is really - how do you actually define what is necessary in each society for each individual to either have or have access to?

Politics.
by Colman (colman at eurotrib.com) on Tue Jan 8th, 2008 at 05:32:20 PM EST
[ Parent ]
Your comment gave me a lot more understanding of the importance of social welfare programs.

On one point:

Being housebound means that a decision has to be made around the cost of having a carer come in...

The first time I read that too quickly as:

Being housebound means that a decision has to be made around the cost of having a career...

Sort of flipside to the thrust of your comment, but that immediately reminded me of a conversation I recently had with my German friend who said that her mother, who is a psychologist employed as a social worker, calculated that she would earn more income from unemployment benefits than she would from her current salary, and while apparently not serious about leaving her job, she does bring it up more and more frequently.

So, maybe I am seeing this too simplistically, but while social benefits for those unable to work or find work should be sufficient to guarantee healthy living, the minimum income from any job should be higher than what one would get from unemployment benefits.

And perhaps that is what is motivating those telemarketers: maybe they are making more from telemarketing than what they would get on unemployment benefits, even if such benefits would indeed quite sufficiently cover their living needs (material as well as psychological), as apparently they would in my friend's mother's case (her mother is single, although with no dependents anymore).

Truth unfolds in time through a communal process.

by marco on Tue Jan 8th, 2008 at 06:43:21 PM EST
[ Parent ]
bruno-ken:
So, maybe I am seeing this too simplistically, but while social benefits for those unable to work or find work should be sufficient to guarantee healthy living, the minimum income from any job should be higher than what one would get from unemployment benefits.
That's where a guaranteed income comes in. Any wage is over and above the guaranteed income.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Tue Jan 8th, 2008 at 06:48:59 PM EST
[ Parent ]
Whoa.  Then I didn't understand what "guaranteed income" meant: so everybody gets it, regardless of whether they work, eh?  (This makes the first half of my comment to nanne below pretty much superfluous, though I still like his idea.)

I just looked at the original thread from your comment, and it would be great if scoop allowed for mass copying/pasting of comments from one diary to another.

In particular, I think Helen's comment and comments around it are very important:

... I wasn't talking about the treadmill or other protestant ideas. There are numerous studies that suggest that joblessness itself can be bad for your self-esteem and can lead to depression and other mental illnesses.

Work allows you to focus outside yourself, especialy for those with little reason/incentive to leave the four walls of their residence.

It must be my Protestant father's influence, but I am prejudiced to the view that one should work in order to earn what one eats unless society has made it impossible to find such work, in which case it becomes society's responsibility to take care of you.  Even plants, after all, do work of a sort when they convert sunlight into glucose.

Having said that, maybe Buckminster Fuller had a point when he wrote,

History's political and economic power structures have always fearfully abhorred "idle people" as potential troublemakers. Yet nature never abhors seemingly idle trees, grass, snails, coral reefs, and clouds in the sky.

Critical Path

-- and maybe our economic system has the potential to become that productive and bountiful to pay us to stay at home:

We find all the no-life-support-wealth-producing people going to their 1980 jobs in their cars or buses, spending trillions of dollars' worth of petroleum daily** to get to their no-wealth-producing jobs. It doesn't take a computer to tell you that it will save both Universe and humanity trillions of dollars a day to pay them handsomely to stay at home.

One would hope the at-home-staying humans will start thinking - "What was it I was thinking about when they told me I had to 'earn my living' - doing what someone else had decided needed to be done? What do I see that needs to be done that nobody else is attending to? What do I need to learn to be effective in attending to it in a highly efficient and inoffensive-to-others manner?"

Critical Path

Maybe mass wisdom and creativity will spontaneously emerge out of "idleness", once prejudices against not working in a super-abundant society become outdated, who knows?

Truth unfolds in time through a communal process.

by marco on Tue Jan 8th, 2008 at 07:48:12 PM EST
[ Parent ]
There are numerous studies that suggest that joblessness itself can be bad for your self-esteem and can lead to depression and other mental illnesses.

We live in a society where the almost only recognised form of social interaction is the job - except for the hyperrich who apparently can idle away their lives without much troubles.

Being jobless means not having resources to do much outside the house, now that the public social place is commercialised and even privatised in the form of malls. Social engagement in the form of associations is being subsumed by private activities...

That's a problem with the building blocks of our society, not with being jobless.

As for the moral imperative of having to earn one's living - is it answered by telemarketing where there is no production to speak of ? What is the proportion of people living on marketing and advertising, how many salesmen whose job is to take their clients to strip clubs and to drink them into signing contracts are there ? Are those jobs socially and economically - in the meaning of producing and sharing resources - useful?

Does our world needs a hundred new car models each year - most of them strinkingly similar - and dozens of thousand of engineers toiling away to invent them ? There is a lot of useless work in our society.

When the 19th century idea of liberal democracy was conceived, with its emphasis on personal freedom, it implied its members would more or less be able to retire from society, thanks to their wealth ; less would mean the absence of freedom, like the Ancient Greek - who lived on the exploitation of their slaves - understood too. Thus the censitary voting that lasted quite longer than we'd like to remember. Guaranteed wage is about that freedom, but for everybody, not the happy few.

Technological advances have made that thinkable. There is already a huge proportion of people in our modern societies that have to live on 'social minimums' because they can't find jobs. The amount of wealth being paid to the wealthier part of society so that they accept to employ those jobless - and exploit their time - would be better spent given directly to the resourceless.

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Tue Jan 8th, 2008 at 10:29:46 PM EST
[ Parent ]
We live in a society where the almost only recognised form of social interaction is the job - except for the hyperrich who apparently can idle away their lives without much troubles.

Of course, idling away when you have sick amounts of money and idling away when you have no job and little money are two very different sorts of idling away.  The principal difference being, as you say,

Being jobless means not having resources to do much outside the house...

or even within the house.

now that the public social place is commercialised and even privatised in the form of malls. Social engagement in the form of associations is being subsumed by private activities...

But social engagement is not the only, or even primary, issue relevant to the depression and other mental illnesses that Helen mentions.  It is the psychological well-being that comes not from social engagement per se (I am sure that in places with high concentrations of unemployment there is still plenty of social engagement), but rather from the self-esteem (which Helen also mentions) that comes from working.

As for the moral imperative of having to earn one's living - is it answered by telemarketing where there is no production to speak of ? What is the proportion of people living on marketing and advertising, how many salesmen whose job is to take their clients to strip clubs and to drink them into signing contracts are there ? Are those jobs socially and economically - in the meaning of producing and sharing resources - useful?

What forms of sales do you think are socially and economically useful, if any?

Does our world needs a hundred new car models each year - most of them strinkingly similar - and dozens of thousand of engineers toiling away to invent them ?

I don't think so at all, but I don't feel so strongly about it I think producing hundreds of new models a year should be outlawed, or even disincented (at least, not specifically).  It is not clear to me that my own values and tastes, nor even the needs of society as a whole, should trump the personal decisions of those who decide to work in the car industry, whatever their motivations are.

There is a lot of useless work in our society.

Yes, there is.  But what is useless to you may not be useless to me, and vice-versa.  In some cases, certain categories of work may be agreed upon by enough people that society as a whole agrees to outlaw them, e.g. drug-dealing, gambling, prostitution, etc.  However, in the vast majority of cases, there is plenty of disagreement -- and that is a very good thing.  Because the guy who packs grocery bags for customers at the supermarket may seem to be doing a "useless" job to some, but to him, or to others, it may be very useful indeed.  Or even the elevator women in Japanese department stores whose sole job is to push buttons and hold the doors open for customers, announcing the names of floors and the items available on them.  Some may think this is a ridiculously useless job, but in Japan this job's "usefulness" does not only consist of its "utility", so to speak.  Or my sister's job: she is a chiropractor.  I used to think it was a useless job, because I did not believe chiropractic to be a valid medical treatment.  But after having seen her work, and seeing how her patients feel after being treated by her, and after letting her treat me myself, I have changed my mind about how "useless" chiropractic is.  (The job of the psychonanalyst: useless or not?)

I do like the idea of a guaranteed living income (though I have not yet given enough thought.)  However, I like it not because it will get rid of "useless" work, but because will ensure that every person has a basic plank of economic "capacities" or "freedom"(s), as you say, in society to build their life from.

Truth unfolds in time through a communal process.

by marco on Wed Jan 9th, 2008 at 05:11:01 AM EST
[ Parent ]
the self-esteem (which Helen also mentions) that comes from working.

Where does that self-esteem comes from, in the frequent case where the worker doesn't like his job, nor thinks there is much social utility in this ? It comes not only from the social interactions it provides (although that certainly helps), but also from the fact that it is a socially recognised form of social interaction, unlike, say, a band of youth drinking cheap beer on a public bench. When you're working, society tells you you are doing something worthwhile in various forms (no inquisitive dole worker, more money, and a general social feeling that earning one's life is a moral obligation). Self esteem comes from society, not from within the individual.

What forms of sales do you think are socially and economically useful, if any?

Pure sales - the merchantman that transports goods not included - is concerned about maintaining the competitive advantage of a company compared to its concurrence, without any technological or efficiency advantage. i.e. maintaining competitive status through the use and abuse of a pseudo-social interaction. It doesn't produce anything. That's my problem with it ; it is only greasing the wheels of capitalism, and is only meaningful in a free-market with assymetrical informations - I believe that such a system isn't necessary, at least in all fields of economic exchange.

It is not clear to me that my own values and tastes, nor even the needs of society as a whole, should trump the personal decisions of those who decide to work in the car industry, whatever their motivations are.

A major motivation is earning's one means of life. Would it be so easy to conceive hundreds of similar products if work wasn't an absolute social consideration ?

Because the guy who packs grocery bags for customers at the supermarket may seem to be doing a "useless" job to some, but to him, or to others, it may be very useful indeed.

Is it useful for the grocery packer because of the social interaction it provides, or because simply it provides money ? It is my understanding that such jobs as lift attendant are numerous in Japan because of a general understanding - in a society so technically advanced that such jobs could easily be automated - that providing such job is a social responsibility of employers, in order to maintain society thanks to full employment. If holding a job wasn't a social necessity - thanks to Guaranteed Income, and a society providing and recognising as valuable other means of social interaction - would such jobs exist ?

Our society claims that these jobs exist because someone finds them useful. But without the freedom of those workers to not do these jobs, is the free choice of said workers really taken into account ?

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Wed Jan 9th, 2008 at 07:59:34 AM EST
[ Parent ]
"Jobs" are so last century...

Networked self employment within partnership frameworks is the way we will go I think: 21st Century Guilds, maybe, with the role of the government/community being to "invest" by:

(a)guaranteeing/underwriting trade credit to start-ups; and

(b)taking quasi "Equity" in individuals' economic activity.

In the latter case I see the possibility of a government not "loaning" money to train/ further educate them but to invest it in a "Capital Partnership".

ie I don't have to repay the £100k it cost to qualify as a medic, but while I use this Capital I pay (say) 1% of my salary as a doctor to the government as "Capital Rental". A bit like a Redeemable Preference Share.

If I stay in public service, the Government maybe write it off over time: if I do overseas service they maybe write it off at an accelerated rate, and I pick up great experience as well.

Lots of policy options using partnership thinking....

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Wed Jan 9th, 2008 at 08:08:06 AM EST
[ Parent ]
What if not everyone wants to be a yuppie entrepreneur?
by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Jan 11th, 2008 at 09:54:00 PM EST
[ Parent ]
This isn't limited to "entrepreneurs".

Anyone in a "trade" or a "craft" (and here I include the Knowledge industries) can and should join a networked "quasi-Guild".

Sort of 21st century unions.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon Jan 14th, 2008 at 09:01:17 AM EST
[ Parent ]
bruno-ken:
Whoa.  Then I didn't understand what "guaranteed income" meant: so everybody gets it, regardless of whether they work, eh?  (This makes the first half of my comment to nanne below pretty much superfluous, though I still like his idea.)
If you set the guaranteed living income to 60% of the median income (including the GLI), it is easy to show that the GLI would have to be equal to 150% of the median wage (assuming people without any source of income, including unemployed, are included in the wage distribution with a wage of zero).

The calculation is this way: GLI = .6 (MW + GLI) <> .4 GLI = .6 MV <> GLI = 1.5 MW, and the median income would be 2.5 times the median wage.

So, if the median wage were €400, the GLI would be €600 and the median income €1000. But note that wages would not have to pay for the necessities of life, but they would only have to pay for the value-added.

We have met the enemy, and he is us — Pogo

by Migeru (migeru at eurotrib dot com) on Wed Jan 9th, 2008 at 06:03:12 AM EST
[ Parent ]
Another important consequence of a guaranteed income would be that it would make all the intrusions into the "poor man"'s living habits - food stamps rather than money, making sure the money is spent on this or that clothes, you have to constantly prove you are looking for a job - irrelevant : a guaranteed income has no conditions.

There mustn't be absolute optimisation of that income either : sure, you can live on pastas and a steak a week for quite some time. But the guaranteed income needs to be decent.

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Tue Jan 8th, 2008 at 10:06:08 PM EST
[ Parent ]
... to a guaranteed living income. That is, a person walks up to the JG office, and says, "I want to work three, four hour shifts a week", and the JG allocated them to a job and off they go.

The income guarantee is the social dividend for all the economic benefit provided by knowledge and social infrastructure that is in the public domain and used by people ... whether individually or with their activity organized by going concerns ... and the guarantee of the right to participate in the economy as a consumer, and the job guarantee is the guarantee of the right to participate in the economy as a producer.

And, yes, this is a thesis statement and not a detailed argument, but I'll try to slide it in under the heading of "comment".


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Jan 8th, 2008 at 04:56:12 PM EST
Consequences include higher bad inflation when people demand higher salaries to perform jobs. Anyone who does not understand the difference between this bad inflation and the tolerable one caused by interest hikes can talk with the Svante Öberg, deputy director of the Swedish Central bank.

Oh, and another consequence would be less frigthened people. Probably strenghtening democracy and so on.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Tue Jan 8th, 2008 at 05:31:12 PM EST
We can't have that, clearly.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Tue Jan 8th, 2008 at 05:33:22 PM EST
[ Parent ]
I cannot escape the conclusion that this person and I would both be better off if they were at home, on benefits.

Not if they are working from India!

In both of the blog entries you can easily understand that telemarketing is not exactly the most cherished job in the western world. However, for India it is a booming business and according to a report in TMC Net, "For many people in America and Britain, outsourcing to India is synonymous with telemarketing and call-centres that try their patience."
For thousands of young and educated IT workers in India, telemarketing is like a dream job as the salary is good compared to the Indian standard. Before they start their job, they receive training to speak with an American accent and often they change their real name and adopt a common American name. Because of the time difference between America and India, these workers often have to start their work after sunset and work until sunrise. It's a tough job but most of these workers are happy to get a monthly salary of $250 or a bit more. And since more and more people in USA like Panda are not interested to work in telemarketing, the industry is going to flourish even better and more quickly in India.

Telemarketing: India is shining but at the expense of What!



Truth unfolds in time through a communal process.
by marco on Tue Jan 8th, 2008 at 05:57:39 PM EST
bruno-ken:
It's a tough job but most of these workers are happy to get a monthly salary of $250 or a bit more. And since more and more people in USA like Panda are not interested to work in telemarketing, the industry is going to flourish even better and more quickly in India.

And the telemarketing jobs went to India

a) because people in the USA aren't interested in working in telemarketing
b) because the companies moved to where they could employ people for $250 a month.

Blaming the workers seems a bit of a stretch.

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Tue Jan 8th, 2008 at 06:03:45 PM EST
[ Parent ]
No, that is the problem. I get all these calls from call centres in Bangalore. The guys must have scripts that instruct them to pretend to have English names when a majority of Britons of South Asian descent have South Asian names, so it gives the game away, too.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Tue Jan 8th, 2008 at 06:06:42 PM EST
[ Parent ]
I'm not sure the Indian Raj blogger is speaking from personal experience. Maybe more from a telemarketer company owner point of view.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Tue Jan 8th, 2008 at 06:23:58 PM EST
[ Parent ]
Indeed, another perspective might be quite different:

Half a million people are employed in India's fast-growing call-centre industry, famous for maddening calls at dinner time in Australia.

For some of the workers, abuse and overnight working hours are contributing to stress, sleeping disorders, fatigue and migraines. A survey of Mumbai call centres found most call-centre workers suffer from burn-out stress syndrome. The abuse included racial taunts, the Global South Research Group survey found.

'Racial abuse by foreign customers is a job hazard that most employees have to deal with,' a report on the survey says. 'The US and Australia are the worst abusers,' said Vino Shetty, from his Young Professionals Collective office in Mumbai.

Indian Telemarketers having nervous breakdowns due to verbal abuse



Truth unfolds in time through a communal process.
by marco on Tue Jan 8th, 2008 at 07:00:31 PM EST
[ Parent ]
So, for definiteness, assume the guaranteed living income is set at the conventional relative poverty threshold of 60% of current median income.

I got curious as to how much this would cost in comparision with current expenses for welfare grants of various kinds. I base everything on Sweden. First note: the closer median wage is to mean wage, the costlier this will get. So in Sweden it will be more costly then in countries with more unequal income distribution. I use a standard all-else-equal assumption.

Searching for median wage was not easy. Googling gave me this document Löneskillnader mellan offentlig och privat sektor (pdf, swedish). Published in 2004. Graph on page 72 gives median wage at about 22 000 SEK/month. That gives GLI = 13 000 SEK/month.

Another quick search gives that the governmental budget (including most welfare programs such as unemployment benefits, pensions, sick benefits, grants for students and children and various programs)Statsbudgeten och de offentliga finanserna for 2004 was 748 000 millions SEK.

To give each of 9 million inhabitants 13 000 (not taxed) SEK/month would cost 9 millions * 12 * 13 000 = 1 404 000 millions SEK. That is, the national taxation would need to be doubled and all national services (universities for one) would have to be scrapped (or keep other and raise taxes even more).

(Please note that I am so far only counting the national government. Lots of taxation is local, and goes mostly to services, such as schools, daycare, healthcare, elderly care. The only major welfare program which is locally funded is the bloody-poor-but-do-not-qualify-for-other-program program: Socialbidraget, which is funded by local taxes. It was 8 700 millions in 2004.)

Now I will go backwards and check what GLI could be instituted today by scrapping all other welfare programs.

Somewhere along the way I have picked up as a rule of thumb that half the national governmental spending is various programs and the other half is services (this might be false, but hey this is a rough calculation). Assuming that rule is right, that gives the government spending 374 000 millions on various welfare programs in 2004. Throw in Socialbidraget and we have about 380 000 millions SEK. Divide by 9 millions we have 42 222 SEK/year. Divide by 12 and we have a GLI = 3 520 (not taxed) SEK/month or about 350 euros. Not much, hardly covers a low rent.

Now, the richer half of the population (earning more then 22 000 SEK/month) can easily be taxed as much as the GLI more as they (presumably) see very little of the current benefit programs. Say we do that, then we can double the GLI on the same budget. Now GLI is 7 000 (untaxed) SEK/month. That is about what a student on full scholarship and student loans get (but only for the months they study, summer in recension times can be hard, local government can be harsh with Socialbidraget). It is more then the lowest level in unemployment benefits (about 5 000 SEK after taxes) and more then Socialbidraget. It is about the same as the lowest pension level.

The effects here is taking from benefit holders who today gets a higher benefit, generally as they have had  a higher salary previously. Many benefit programs are based on your previous salary. Most clearly so pensions. The winners are those that today has low or no income and get low or no benefits. And most clearly families with children as the basic children benefit skyrockets from about 1000 SEK/month to 7000 SEK/month. (Children are inhabitants too, I figure.)

And the large bureacracies that serves the current mess of systems would loose. Lots of vested interests there. And people to liberate from thankless jobs.

It is late, I will sleep now. Make of this what you will. I just figured I would crunch the numbers and see what the result was.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Thu Jan 10th, 2008 at 08:17:46 PM EST
I realised after I had turned of the computer that I mistakenly mixed median wage and median income. Since the number I had was the median wage, it only takes into account those that has a wage. It also leaves out those that live on capitla income instead of wage (though, being few, they probably do not affect median much).

So the half of the population with the higher income is not those with a wage more then 22 000 SEK/month, it is more likely those that has wage. Since swedes live to about 80, and you work some 40 years, that is half of the life working.

I am also a bit unsure as to how much of pensions comes from the governmental coffers and how much that is deposited in various funds.

Hm, I will mull it over and try to figure out (or find) some approach.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Fri Jan 11th, 2008 at 07:57:29 AM EST
[ Parent ]
You could use labour market participation statistics. Those not in employment (inactive and unemployed) have a wage of zero and any income they receive is part of the "government programs" part of you analysis.

For the purposes of this analysis it would make more sense to calculate how much money it would cost to give everyone under poverty level up to the "60% of median income" level.

We have met the enemy, and he is us — Pogo

by Migeru (migeru at eurotrib dot com) on Fri Jan 11th, 2008 at 01:03:01 PM EST
[ Parent ]
Socratic answer - what are you trying to achieve by redistributing income in this way?

My suspicion is there may be complentary and alternative ways to achieve that result - but any solution is going to require social engineering on a huge scale.

Moving money from one place to another can help if there's a well-defined strategy. But it's not a strategy in itself.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Jan 11th, 2008 at 10:10:32 PM EST
What I am going to achieve is to eliminate the need for useless work. Apparently there aren't enough person-hours of meaningful work available for everyone to make a living: and I'm taking scrubbing toilets as more useful than making unsolicited phone calls. So, a large fraction of the population is going to be either unemployed or on benefits or in prison or in the military or doing useless jobs. Giving benefits only to those who can't or won't work is a disincentive to work, and carries a stigma. A guaranteed living income given to everyone 1) removes disincentives to work since wages are over and above the GLI; 2) removes the stigma in receiving income support.

As I have pointed out elsewhere, under this model wages would be smaller than they are now because they wouldn't have to cover the necessities of life, but only value-added. The total median income need not change appreciably.

We have met the enemy, and he is us — Pogo

by Migeru (migeru at eurotrib dot com) on Sat Jan 12th, 2008 at 06:23:05 AM EST
[ Parent ]
I still don't understand why you consider telemarketing as a prime example of a useless job, given that it is a growing market with pays ( at least here in Holland) significantly over minimum wage. So people are definitely willing to pay for it.

Sure, calling people who are not interested sucks for both sides, but apparently enough people do actually buy stuff from telemarketeers, or no one would pay them. So there is a way how telemarketeers are useful: apparently, there are people who only after being called by telephone realize they want something, and these transactions ( probably satisfying both buyer and seller) appear to be enough to pay for the marketeers.

Of course a lot of marketing effort creates 'artificial' demand for things one wouldn't miss without marketing. But it also has a genuine function in showing people real ways to improve their lives in ways they might not have known before. Even the most utilitarian analysis-driven capital goods producers (say, industrial electric generators) have marketing departments.

I would argue telemarketing ( and spam, for that matter) is relatively close to the productive side of marketing, compared to for example television ads or sports sponsoring that only aim to attach 'good feelings' to brand names. After all, telemarketing and spamming is so annoying and unattractive, you will only buy the products if you really realized you needed them.

I guess I just wrote a defense of telemarketing, spam and advertisement. Dear me.

by GreatZamfir on Sun Jan 13th, 2008 at 01:42:21 PM EST
[ Parent ]


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