Day 241: Will Inflation be a Problem with Providing a Living Income Guaranteed?

‘Inflation’ is one of those big posh words that people like to use when they want to show off that they’re “in the know” of economics and money mechanics. You hear it on the news, tv, the internet and when you listen to other people talk about it, it never really becomes clear ‘what it is’ or ‘why it is so important’.

Day 240: A Bank for the People

We have an interesting point being taught in economy books - which is that an increase in investment spending has an expansionary effect on the economy - because money is invested in certain products and therefore, people are being paid or jobs being created, which means an increase in income...

Day 239: Sustainable Pricing with Basic Income Guaranteed

When we have a look at how prices have been determined throughout history, we can see that that for most throughout time (up to until the last 50-100 years), prices were set in the interest of the owner of the product / service, whereby those who labored on the products were given miniscule wages...

Day 238: Advertisement vs Rational Informed Decision-Making

One of the premises of the argument for Capitalism as the most Effective means of distributing goods and resources is that consumers make rational and informed decisions...

Day 237: Planned Obsolescence becomes Obsolete with Basic Income Guaranteed

During the war as countries no longer had access to their usual trading routes through obstruction like blockades and disrupted commercial agreements, industries had to start making the same things with inferior materials...

15 September 2014

Day 264: Living Income Guaranteed and Taxation - From Redistribution to Contribution



‘The re-set’ is a UK-based movement consisting of several proposals to effect ‘a constitutional re-set to re-store fair principles, accountability, community led governance and ethics. Ensuring peoplecare, earthcare and fairshare for the benefit of all’. You can  check out their website here: www.thereset.org. An overview of the proposals is presented here: http://www.thereset.org/proposals.php.

In this blog the focus is the Proposal on the abolition of Taxes. The re-set proposes to abolish the current tax system and replace it with ‘TEAL’ – Total Economic Activity Levy:

TEAL is very much a ‘pay as you go’ tax. Every time money is withdrawn or paid into a bank account, a tiny percentage of money from each transaction will speedily find its way into the treasury. Even people without bank accounts will contribute, because whenever a pack of cigarettes or a loaf of bread is purchased, the seller (say a shop) will be paid, and when the shop pays into his bank TEAL will be collected, and if you sell your labour (i.e. you have a job) TEAL will be paid by your employer and collected by your bank.”

This principle is the same one we propose under the Living Income Guaranteed proposal. Within such a system, the focus changes from ‘redistribution’ to plain ‘contribution’.  It’s not about trying to equalize incomes and moving it from the rich to the poor – but a matter of: if you make more use of the economic system, you proportionally contribute more to sustain it. One likes to believe that one’s wealth is derived from merit alone – but it simply isn’t. There is an entire economic system in place that enables a successful person to be successful. There are those who have gone before you, who have shared their know-how with you, there are those who have an income to buy your goods or services, an income they earned through participation in the economic system, there is physical infrastructure like roads and railway systems that enable all economic activity. If the economic system was self-sustaining and never required any financial input in order to maintain it or correct its inherent weaknesses, then we could say the economic system is a free one. Obviously, that is not the case. The ‘pay as you go’ tax is therefore a reasonable method of collecting the funds to be re-invested within the economic system that each one depends on.

If a basic income or living income is provided through non-tax funding – then the ‘pay as you go’ tax or ‘TEAL’ should be sufficient to mobilize the funds needed for other government expenditures, which we suggest would be quite limited if the economy in itself is largely corrected and empowered through the integration of the Living Income or Basic Income – then other taxes can indeed be abolished.

31 August 2014

Day 263: Campus Education vs. E-learning - My Verdict

With a rising amount of online tertiary courses being developed and made available, a debate has started about whether online education can guarantee the same quality tertiary education that a student would receive when attending a campus college. (See: http://www.pbs.org/newshour/bb/can-online-courses-replace-campus-education/)

Anant Agarwal - the CEO of edX, a joint partnership between MIT and Harvard University that offers free online learning - sees the benefits of recording lectures and then making them available to a large amount of students. He says: "Of 155,000 students that took the course, about 5 percent passed the course and earned a certificate. So that was about 7,200. That is a big number. If I were to teach on campus twice a year, both in the spring and fall semesters, I would have to teach for about 40 years before I could teach 7,200 students."

On the other side of the table,  you have arguments such as the one formulated by Shyam Sharma from Stony Brook University: "In our discipline, the objective of students learning is not to basically learn the content of the discipline, but instead to use the content as a context to engage in intellectual discussions, to develop their positions, intellectual positions, to debate and argue and develop critical thinking skills. And that oftentimes requires the expertise and guidance and mentoring and close connection, one-on-one support to the students."

Having had the 'pleasure' of receiving tertiary education in a classroom on a campus as well as through online courses, with some subjects being the same, let me share my perspective.

Comparing the content-material of the subjects I took both at the campus college and through the online course - I can say it was largely the same. So, from that perspective, the 'quality' of the online course was no different than that of the campus college. Differences were mainly due to the fact that I attended the campus college in Europe and the online education in Africa, so case-studies and examples were local and therefore quite different. Considering that the core content was the same, which did I prefer? If I have to choose between sitting in a classroom with hundreds of other students where the professor is standing at the bottom with a microphone, or comfortably sitting at home and going through the material at my own pace, I have to say the latter is my preference. Video lectures can be paused and re-winded so a student can make sure he/she hears all the information. This luxury doesn't exist in a classroom, where one can get distracted by other students, or simply miss information as one is splitting one's concentration between hearing what the professor is sharing and writing it down simultaneously.

To attend classes I had to either travel from my home town to the campus each day, spending time and money to be able to sit in the class room, where most of the time I had to hear the professor repeat what was already explained in the textbooks - or I needed to rent a room on campus/close to the campus to not waste the time traveling between home and campus - but this obviously came at the extra cost of paying rent. It was the fact that 'the professor might share information that is not already covered in my books' that required me to attend, in order to make sure I had all the material necessary to prepare myself for assignments and exams. I didn't find that for the subjects that I took in both scenarios - which were largely theoretical - that I gained anything from sitting in the class room - the amount of students that attended the course were plentiful, not really allowing for any one-on-one support in any case. For some subjects I was sitting in a room with a thousand other students. Rather then, make one lecture that can be used by many universities - and professors can add their own insights, examples, exercises and notes to provide their personal touch. This was exactly the format that was used in my online education.

Now, there were subjects I attended on the campus college that were very different in nature from the ones I attended online, where the focus of the subjects was to develop practical skills such as working in teams, making presentations, going out in the field, interviewing people, etc. For such subjects where you require to produce and present a project through team-work, there are benefits to physically sitting in the same room and having a personal relationship with your co-students. It is in these instances that I would say it is worthwhile having an actual campus with professors assisting students to develop these skills.

When it comes to 'developing critical thinking skills' as an argument for class-attendance - I have to disagree. Critical thinking should be a focus in primary and secondary education. If a person is supported from an early age to develop a clear vocabulary and to develop common sense, then whether one is at home going through material or sitting in a class room - one can view the material in a critical manner either way. Online platforms such as forums can be utilized for students to exchange views on subject material as well. I personally engaged critically with all the material I was presented with throughout my online education, of which the Economist's Journey to Life blog is a clear testimony.

So, I believe that campus college education has been romanticized and been given more credit than it actually deserves. A large part of college and university courses can be provided online. This would reduce the cost of the education and make it accessible to a larger audience. Why have professors - experts in a certain field - spend their time every year giving the same lectures over and over again - when they could record it once and then make it available to students to watch at home? Surely, humanity would benefit if professors were able to dedicate a larger portion of their time on research and developing solutions to current problems? Reducing the cost of tertiary education, more students could afford it and avoid the trap of student loan debts. Some degrees can then be followed online entirely, whereas for others a mix would be optimal, to have some subjects/courses online and have classes in education centers/on campuses for practical skill development.

08 July 2014

Day 262: Democratization - Put your Money where your Mouth is with LIG - Pt3

This blog-post is a continuation of the blogs

Day 260: Democratization - Put your Money where your Mouth is with LIG - Pt1
Day 261: Democratization - Put your Money where your Mouth is with LIG - Pt2

where we've been investigating what exactly stands in our way from living the principle of Democracy in its true form - with government of the people, by the people and for the people. Herein we identified two crucial factors that require to be addressed in order to bridge the gap between the people and government, being:

1. Education
2. Ownership of Economic Influence

The point of Education was discussed in the previous blog, where it became clear that for individuals to develop political capital in order to become effective participants in direct democratic decision making, we require to invest in the people through a Living Income Guaranteed.

Within this blog we look at the second problem:

Ownership of Economic Influence

In the first part of this blog-series we stated that:

"Instead of politics being a one-party system - in the sense that only one party is involved: the people - we are working with a three-party system - there is the people, there is the elected government officials and there is those with the financial means that participate in rent-seeking to influence policy to their own advantage, regardless of public opinion."

Most are aware of the role of lobbyists in politics - but here some points of clarification:

"A lobbyist is an activist who seeks to persuade members of the government (like members of Congress) to enact legislation that would benefit their group."

"The highest paid lobbyists know that they can charge top dollar for their services because they can offer their clients access and influence at the highest levels of government. Not surprisingly, these firms' client lists are a "Who's Who" of the corporate scene; hiring these firms is simply beyond the reach of most organizations and special interests."

Those who can afford to hire the best lobbyists are able to affect change at the highest levels of government. This shows a simple equation: more economic power equals more political power. One can ask if lobbying shouldn't be made illegal - it definitely sounds fishy - but it is justified under the principle that anyone can make the government aware of their interests and ask to consider them in policy making. Some people are obviously better at this than others - and as with anything in a capitalist society - if there is a demand for services of a particular skill, the private sector will start to supply it according to the rules of the private sector. So - it seems that we will just have to compromise on the original principle - which is not meant to discriminate against who is able to/can afford to lobby the government - if we at the same time wish to retain a capitalistic free market system.

However, the Living Income Guaranteed proposal implicitly formulates a solution to this conundrum. The proposal suggests that every citizen of a country become shareholder of human rights companies (such as water provision, electricity, telecommunications, media) and natural resource companies (eg. mining companies) in their country, under the principle that such points should never be owned by  private persons as they should operate in the benefit of the whole of society. Such an adjustment would change the economic landscape from a political perspective quite drastically - whereas previously all huge corporations that can affect change through lobbying at the highest levels were owned by the elite in society - many big corporations would now be owned by the people and would become a source of effective economic influence and a vehicle for political participation on a level that simply did not exist before.

For a political dispensation to become democratically correct - we require to not only level the political but also the economic playing field because policy is determined as much by government as by the economic elite. So for those who have given up on democracy in the true meaning of the word: a Living Income Guaranteed would put an end to the compromised political systems of representation we have today.

There is one more objection to direct democracy that is still being raised - though in today's world it is so laughable I almost forgot to mention it. But here it is anyways: 'Direct democracy is not possible because it would just be too expensive and too difficult to get all the citizens in one place to rule the country.' In a world with the technology we have today - it is silly to still think of 'coming together' as a physical event. Facebook proves that it is possible to daily vote on issues - we're already doing it by the simple click of the mouse: 'Like'. So all that requires to be done is use the technology that has been developed and create online platforms for political participation.

So - there we have it: Education, Ownership of Economic Influence and Technology - all three points no longer an obstacle with the implementation of a Living Income Guaranteed. Will we come up with more excuses - or will we realize that for the first time in the history of man we have the privilege of living in the day and age that the means and ability for implementing and practicing real democracy are available? Since everyone seems to agree that democracy is the best form of government, we at the Equal Life Foundation say: Put your money where your mouth is! It is not enough to call oneself a democrat or to support democracy 'in principle' - it requires investment in the people and an adjustment in ownership of economic influence - it requires us to ACT. Money makes the world go 'round and politics is herein no exception.

25 June 2014

Day 261: Democratization - Put your Money where your Mouth is with LIG - Pt2

I ended off the previous blog with the following:

"Within allowing such a representative system of politics, we have created a 'gap' between demos and kratia - between the people and the government - where we can in fact no longer say that it is the people who are ruling, as it is the elected government officials in the executive and legislative branches of government that are ruling - and this excludes most citizens. This gap has allowed for secrecy and rent-seeking. Instead of politics being a one-party system - in the sense that only one party is involved: the people - we are working with a three-party system - there is the people, there is the elected government officials and there is those with the financial means that participate in rent-seeking to influence policy to their own advantage, regardless of public opinion.

In order to bridge the gap between the people and the government, two specific problems require to be addressed:

1. Education
2. Ownership of economic influence
"

Let's start with discussing the first problem.

Education

In principle, everyone seems to agree that the people should rule together - there is an undeniable sense of moral rightness within this - society should together lay down the laws by which it will organize itself and together give direction to their shared environment through public policy - simply because - we are all, individually yet together, a part of a certain society and there is no acceptable justification to exclude any free citizen from this process. In practice, however, Plato's argument still holds strong. "The people are too easily swayed by emotion"; "the people cannot see the bigger picture"; "the people don't have sufficient knowledge and understanding of politics, economics, ecology, law, you name it". There is of course truth in this argument - however, it is not one that cannot be overcome.

Plato lived in the 4th and 5th century BC - so that's about 25 centuries ago - and still, we have not seriously attempted to overcome this problem in order to uplift our political system to the principle it morally requires to ascribe to. What have we been doing for these 25 centuries? Is it so hard to find a way to empower individuals so that they may be capable of critical thinking that in the last 25 centuries we didn't manage to come up with one? Or is it just that we haven't actually tried and rather gave up before having started because it is more convenient that way, at least for those individuals that currently do have the capacity of influencing decision making.

So - let's create a profile of the 'type' of citizen that would have the intellectual capacity of participating in political life.

We can imagine such a person:
- Having a rich vocabulary that enables him/her to participate in discussions in the political arena; big and difficult words are not seen as big and difficult for this person, they are words with a meaning
- Being relatively emotionally stable in that emotions/feelings do not play a decisive role in this person's decision making process
- Being interested in and informed in terms of current affairs

The points listed above refer to a person having political capital. So - what makes one person have political capital and another person not? How can such capital be developed and how can we facilitate the development of political capital within individuals in order to eradicate the education-problem standing in the way of manifesting a real democracy?

Which is one of the main variables that determines the richness of one's vocabulary?

SES.

'SES' is something you'll often see in sociological and psychological scientific research, because it determines almost Everything about a person's development, and place in society. 'SES' stands for socioeconomic status and formally refers to the income, job and education level of the parents. "Fifty years of research has revealed the sad truth that the children of lower-income, less-educated parents typically enter school with poorer language skills than their more privileged counterparts. By some measures, 5-year-old children of lower socioeconomic status score more than two years behind on standardized language development tests by the time they enter school."

Now - which is one of the main variables that determines emotional intelligence?

SES!

According to research: "High socioeconomic [students] are found to be more responsible, better able to make intelligent decisions using a healthy balance of emotions and reason, better able to focus on task at hand and pay attention. They have more control over their feelings as compared to low socioeconomic status students."

Starting to see a pattern here...

What makes a person interested in current affairs in such a way that they actually read the news and keep abreast of developments in the region/nation/world?

That question refers back to the first point of vocabulary; one of the main reason why people don't watch the news is because they don't understand the vocabulary involved, which brings us back to SES.
Secondly - many individuals do not understand the importance of watching the news in terms of how it affects them or do not see how them being informed about problems would increase the likelihood for the problem to be solved. This is a cultural point that is largely created through the very representative system of democracy we have today - where individual citizens simply do not see how their voice, how their views would make any difference. It is someone else's responsibility to come up with a solution, so why even bother getting informed? So - this particular problem that is preventing the development of political capital is the very political system in place today and can thus not be seen as a reason or argument for not changing it.

Political capital, like any form of capital, requires investment to grow and develop. Seeing that socioeconomic status is one of the main determining factors of the development of such political capital within individuals - and seeing that this political capital is a necessity to enable people to rule their country in terms of the principle of democracy we all seem to agree is best for everyone - it becomes clear that the 'problem' of education is not insurmountable - it only requires us to do a simple thing: Invest in the people!





And this is exactly what an implementation of a Living Income Guaranteed would do: ensure that each one has a dignified income, in other words - ensuring there are no more individuals with 'low' socioeconomic status in society. In seeing to what extent one's socioeconomic status affects one's abilities, one's opportunities, one's power to affect change, why would we allow anyone to have a 'low' socioeconomic status? We surely wouldn't wish it on ourselves or our own children - instead, we (would) want to give them the best possible nurturing grounds - and so - this courtesy, we should extend to all in society.

Anyone who calls themselves a Democrat but allows a representative system of democracy is a hypocrite, if they do not at the same time support a proposal such as the Living Income Guaranteed that would solve the conundrum of allowing the people to rule directly when currently individuals may not have sufficient political capital to do so. It is not acceptable to make such an assertion and then leave it at that - compromising for centuries on a principle that can be lived for real through a simple correction in how we value Life and substantiate it through real action.

To be continued.



Sources:
http://news.stanford.edu/news/2013/september/toddler-language-gap-091213.html
http://www.sciencepub.net/nature/ns1103/017_16199ns1103_114_119.pdf

24 June 2014

Day 260: Democratization - Put your Money where your Mouth is with LIG - Pt1

Democracy - derived from the Greek words 'demos' (the people) and 'kratia' (power, rule) - refers in its most basic sense to 'rule by the people'. Currently the term holds a very positive connotation - it has been generally agreed upon in the Western/developed world that democracy is the only legitimate form of government.

There have been great efforts made by the West, through the IMF and the World Bank to 'encourage' other nations to adopt democratic practices. This was easy for especially the developing nations that called on the IMF and World Bank for financial support. All these institutions needed to do was: making 'democratization' a condition for the provision of financial support - and *woops* - we suddenly speak of 'waves of democratization' as though everyone has 'seen the light'.

Anyhow - most people will agree that democracy is the most legitimate way of ruling, because it allows for the highest degree of freedom for the individual.

In Ancient Greece it was a contested issue. The renowned philosopher, Plato, was against democracy and advocated rule by the wisest among society, the philosopher-kings (how convenient of you, Plato). He argued that most people have no business being part of the political process, because they don't have the required knowledge, insight or understanding for it.

Although not explicitly, we have been aligning to Plato's philosophy by no longer allowing each and every citizen to vote on legislation and executive bills in their own right, but instead working with a system of representative democracy, where we elect individuals that are seemingly more equipped to make such decisions on our behalf.

Within allowing such a representative system of politics, we have created a 'gap' between demos and kratia - between the people and the government - where we can in fact no longer say that it is the people who are ruling, as it is the elected government officials in the executive and legislative branches of government that are ruling - and this excludes most citizens. This gap has allowed for secrecy and rent-seeking. Instead of politics being a one-party system - in the sense that only one party is involved: the people - we are working with a three-party system - there is the people, there is the elected government officials and there is those with the financial means that participate in rent-seeking to influence policy to their own advantage, regardless of public opinion.

In order to bridge the gap between the people and the government, two specific problems require to be addressed:

1. Education
2. Ownership of economic influence

We'll continue this discussion in the next blog.



28 January 2014

Day 259: Living Income Guaranteed and Raising Children

Q: "I have two children - One child is now 24 and the other is 6. When I was raising my 24-year old, I worked all of time and because of this I had to leave that child in the care of others until they were old enough to stay home by themselves. I don't mind working - I actually like it very much. I just feel like I missed out on so much of my child's life and that I wasn't there for them as much as I could have been because I was physically exhausted, distracted with work issues, and other life things. When my 24-year old was in their last year of high school, I became pregnant after years of believing that it wouldn't be possible for my husband and myself to have more children. Again, for financial reasons, I had to cut breast-feeding short, go back to work, and hand my child over to the care of others. Unfortunately, this child did not do as well as my first with others taking care of them and was having physical and behavioral issues come up from me not being home with them. So my question is: Does what you propose with living income guaranteed address this problem? Will parents, like myself, be able to stay home if we want to? And if we DO decide to stay home, will it be seen as though we're 'living off of the state' or collecting unemployment benefits where we will be pressured to get back out into the workforce as soon as possible? Is there a cap of how long we can stay at home with the children?"

A:

So my question is: Does what you propose with living income guaranteed address this problem? Will parents, like myself, be able to stay home if we want to?
Yes, definitely. Anyone in a caretaker position will be able to stay at home and focus on such responsibilities, while receiving a Livinng Income Guaranteed that is sufficient, where one won't require to sacrifice time spent with one's family for the purpose of generating an additional income source. The Living Income Guaranteed movement recognizes the fact that parents are not able to spend sufficient time with their children and how this is having a detrimental effect on society, as it influences the development and education of new generations and how they are able to participate in and contribute to society as a whole. Forcing parents to take up employment and placing their children in the care of others is a disservice to the parents, the children and society as whole - thus, with LIG, parents are no longer punished for having a child, but unconditionally supported.

And if we DO decide to stay home, will it be seen as though we're 'living off of the state' or collecting unemployment benefits where we will be pressured to get back out into the workforce as soon as possible? Is there a cap of how long we can stay at home with the children?
No - one would not be living off the state, since LIG is not financed through state-owned funds, but by the profits generated from a country's heritage. No one will thus be paying for someone else's LIG, removing the resentment that currently exists within taxpayers towards welfare programs that are funded through income taxes. There are also no caps for how long one can receive a Living Income Guaranteed - it is unconditionally provided; when to take up employment is therefor a decision for each to make in consideration of one's responsibilities.

26 January 2014

Day 258: Will Implementation of LIG put more Stress on the Ecosystem by Creating more Consumers?



Q: "When LIG is implemented and people, who were mostly outcasts, become able to fully participate in the system we can probably expect a huge increase in consumption putting more stress on the already suffering ecosystem of the planet. How can we deal with this effectively"




A: "This is why other structural changes form part of the LIG proposal.

1. That before a product is produced, market research must be done that establishes a genuine demand for such a product as the mentality is followed that when a product is produced, we can create the demand for it through advertising.

2. Advertisement should stand in relation to informing potential consumers about what the product is, how long it will last, what the materials used are, how the price is determined - appealing to a person's rational choice making capabilities, without using manipulation and persuasion tactics that appeal and attempt to influence a person's emotional state of mind.

3. Durable products (eg: something that you use several times, like a vacuum cleaner or a bed, a car, etc) require to be approved by the bureau of standards where they have to be able to show that they have made the product to last for as long as reasonably possible.


The purpose of all these measures is to counter the trend of living beyond our means - where we have been depleting the Earth's resources faster than we can replenish it through producing and selling goods that no one truly needs or wants, but are sold through manipulative means of convincing the consumer that they DO want and need this good, and through producing inferior goods that were made to break. So, LIG intends to align our ECOnomic system to our ECOlogical reality - which is an absolute must if we intend our children to inherit an Earth that is not damaged beyond repair. We are the custodians of Earth - whether this position is rightful or unrightfully claimed is beyond our time - we have placed ourselves as humanity in the position where we are the only ones who can make a change to the health of the planet we inhabit - and thus we have a responsibility to do so."

For more perspective, visit www.livingincome.me !