A Basic income has been on the lips of a growing number of people. Switzerland recently held a referendum on it, an income of about 2500,- Euro per citizen. Some pundits (not real thinkers) like Guy Standing try to create a new class of people, the Precariat, just another name for ‘the poor’, trying to sell raising people out of poverty as somehow the effects of a basic income (duh).
There is nothing miraculous or innovative about the benificial effects of giving poor people some money
What is wrong with his ideas we explain below. Other ‘examples’ are the way Alaska pays its citizen an annual divident (because it sells its oil). Again nothing different from simple common economics. Also quite often people are shown talking about a basic income as a response to automation, focusing on job losses and the impossibility to find any work that generates income. Still most of these people miss the key ingredient that would make their argument solid as a rock, because : Yes, automation is making it impossible to earn a living for a growing number of people.
Wealth = Materials x Skills x Energy
The big mistake or ommision in these examples and debates is the focus on money and jobs. This focus leads to a lack of attention to the key incredient necessary to support a basic income. Most people don’t understand that if you say : “Money is not enough to support a basic income, in fact, if you need it you will surely fail” because to them money is something independent of everything else, a controlling currency that can be applied to problems like water quenches thirst.
Money is a means of exchange, so if you think it has value you have to specify what money represents to make that true
Money represents something. You may say it represents everything you can buy with it, but that hides the fact that to MAKE everything you can buy with money you need something more fundamental, which you have to be able to buy with the same money. That something is energy. To buy bread you need to buy the energy to bake it, plough the field, irrigate, mill, transport etc etc. Right now that energy is owned by oil/gas/coal or renewable enery companies first. They need money or they won’t deliver the energy. You need that to happen to have your basic income. Unless you find a solution to that need, you will see one of two things:
- You can’t get people to make the money available, the energy lobby doesn’t allow it, money given away will buy their stuff.
- You get a stipend, a bit of money accepted by the energy lobby. This money however does not create a sustainable basic income situation you envision (the Alaska situation).
- Even if the energy lobby is ok with it, banks don’t like the idea because it decreases the competitive atmosphere that drives companies into debt. They will lose customers as well as a way to scare workers into doing shit jobs.
The idea of the basic income can not work unless the resources needed to sustain the recipients of that basic income to come from the recipients. So we can create a basic income society that lasts forever with any group as long is this system does not depend on anything from outside the system. As long as we use fossil fuels or renewable sources that are not part of the system that condition can not be met.
You can’t build a basic income scheme if you are dependent on people outside it to support it
Doing an experiment where people recieve a bit of money without having to work for it without creating a closed system is simply subsidizing the manufacturers. It has been going on for decades in the form of easy jobs, economic booms like the dot.com and housing bubbles. The economy provides people with a basic income when it makes it easy to earn the money to sustain onesself. Now because fossil fuels are under growing pressure, these types of incomes are being cut and the fight is between those that think the ‘precariat/poor’ should die and those that want to find a solution.
A working Basic Income scheme
What basic income scheme would work? The answer lies in looking at the complete system, including all the inputs needed. The key to making it work lies in not depending on anyone for the basic necessity of energy. Energy combined with skilled labour (and automated systems) can use available resource, waste even and recycle it into whatever is needed. This is how farmers lived for millenia, with fixed recyclable biomass, solar energy (and occasionally wind), and locally manufactured technology.
We don’t claim we should go back to some primitive society, only that those societies where autonomous, people didn’t have to work all the time, there was always something to do for who wanted it, and there was plenty of food for everyone. Today we can do even better. The setup we can choose is the following:
- People wanting a basic income can pool their resources to unburden the food supply chain from all recurrent energy cost. Farmers can produce all the energy they need to work the farm themselves, make fertilizer themselves, repair their equipment themselves. This is the firs step. Using a new currency a basic income is distributed to those in the pool that allows them to get their daily food, essentially for free or in return for a bit of work. This is an example of an extraeconomic closed system, but it can be interwoven in normal society.
- The pool of basic income initiators will replace all energy needs in important parts of the economy with renewables in return for currency to buy the products created with the energy. Either the raw materials will become owned by the basic incomers or they will set up renewable based waste recycling plants to gather them where nobody wants to look. This is part of a strategy to reduce cost by applying renewables, and creating currency to allow those that reduced the costs to buy the now nearly free products.
- Basic incomers adjust their lifestyle to fostering a growing closed, mostly local system that provides them with what they need. They can use automation, technology and their own labour, but what they guarantee themselves is that they can stay alive and healthy.
There is even a perfect demographic to become basic incommers, and those are the pensioners and retired people of the world. If they invest their money into the renewable resouces to build local closed systems to sustain themselves, they will not only secure themselves against fossil fuel calamities but will also be the first generation to enjoy a truely sustainable lifestyle.
Money can facilitate trades that are not possible by barter, so introduction of a currency in itself can free up economic potential
The observation that poor people benefit from free money is nothing to be surprised about. What they mainly observe is that money can create economic liquidity, meaning it can allow equitable exchange of work over larger timespans. This is true even if the money doesn’t buy anything to begin with.
Wrongheaded VPRO documentary about Basic income
‘Duh’ talk : Money for poor people activates them
Basic income as a way to deal with outliers?
Karl Widerquist talking about basic income
More sources to be added soon.