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...

17 November 2014

Transcending False Dilemmas with Living Income Guaranteed – Part 5 - Kill or Be Killed

This post is a continuation to the blog-posts:

Transcending False Dilemmas with Living Income Guaranteed – Part 1
Transcending False Dilemmas with Living Income Guaranteed – Part 2 – Sustainability vs Full Employment
Transcending False Dilemmas with Living Income Guaranteed – Part 3 – Tools of Intervention
Transcending False Dilemmas with Living Income Guaranteed – Part 4 – Abundance of choice vs Sustainability

Please read them first for context.
Example 3

‘If we don’t maintain our military forces and curtail individual freedoms, terrorists will have free reign and come to destroy our beloved country.’

Here we’re looking at the false dilemma presented to justify military forces to remain active, for funds to be invested in them, by feeding the fear of terrorism and war visiting upon us.

It would seem to me, that so long as there are guns, so long as machines of warfare are produced and placed in the hands of some or other military force – that then, we can expect these arms to be utilized at some point in time. Even if they are said to only be meant for ‘peace operations’ – to go to some other country and break up quarrels there – you’re trying to fight fire with fire. So-called legitimate armies only perpetuate the production of arms – which can really end up anywhere. What use do we have in the 21st century to shoot people with bullets? Why have we not yet stopped global weapon production? If Human Rights are at all regarded as important – and if you value your own life – you have reason to do so – then isn’t the production of deadly weapons the first gross violation of these rights? Really – if we were actually interested in peace operations – we wouldn’t shoot bullets –but we’d use tranquilizer guns. When people revert to violence to solve a conflict, obviously, they’ve been unable to communicate and direct their problems effectively. Is it really going to solve ANYTHING to go kill them? Is it really those individuals that are the problem that they must be taken out, done away with – or are they just so tired of a particular problem that they see no other way than to take out their rage through aggression on others? Are we solving anything by taking out the individuals without addressing the real issue? If you must bring guns – then at least just use tranquilizer guns – it will stop the fighting all the same – people can’t kill when they’re sleeping.

Anyhow – we’re not going to create peace on Earth if we’re going to continue producing the means with which to wage war. We suggest within the Living Income Guaranteed proposal that all countries dismantle their weapon-production industries and declare an overall ban on weapons. We should be ashamed of ourselves that we haven’t done so already – it’s the minimum requirement for peace AND the first step in honoring the right to life. Military spending could then be re-allocated towards funding a Living Income Guaranteed, or taxes could simply reduced.

Rather than meddling in foreign affairs under the banner of ‘promoting peace and democracy elsewhere’ – would it not be more productive to stand as an example within one’s own country first – to create a political and economic model that is sustainable and honors the rights of each citizen – and show other countries how they can achieve the same?

One can point at the waves of democratization, but they were never genuine – western countries going to undemocratic regimes and forcing them to ‘democratize’ or else they won’t receive any more funding – and what’s more – “please arrange your economy so that it will better suit our needs”.

In the meantime, which of the countries maintaining armies for so-called peace operations and which of the countries ‘helping other countries become democratic’ has in fact eradicated poverty at home? None.

One cannot claim the right to instruct others when one hasn’t absolutely proven to stand as an example of peace, support and care oneself. Allowing poverty and destitution within one’s own country deprives one of this right.

05 November 2014

Transcending False Dilemmas with Living Income Guaranteed – Part 4 – Abundance of choice vs Sustainability

This post is a continuation to the blog-posts:

Transcending False Dilemmas with Living Income Guaranteed – Part 1
Transcending False Dilemmas with Living Income Guaranteed – Part 2 – Sustainability vs Full Employment
Transcending False Dilemmas with Living Income Guaranteed – Part 3 – Tools of Intervention

Please read them first for context.

Example 4

‘We’ve created a society with an abundance of choices and so freedom to choose. Producing so many varieties of the same product places pressure on the environment, but reducing it would mean to give up the freedom we’ve gained.’

We all like to have options and choices – being able to ‘choose for ourselves’ which product we buy – the one that suits our needs just a little better, the one that has the specific features we are looking for. When we are not satisfied with a particular service, we like knowing that there are alternative providers of the same service and that we are not stuck with the only service provider.

Choices and options give u a sense of freedom, a sense of self-determination. So, it would seem that the more options we have available to choose from, the more freedom we have, the happier we are. And so, it would also seem that with the amount of choices we enjoy in our western consumerist lifestyle, we must have reached a state of absolute freedom. But have we?

Barry Schwartz did an excellent TED Talk presentation about this very topic and I will quote some of the key points he brought up as a quick summary – for the full presentation, click here.

“The official dogma runs like this: if we are interested in maximizing the welfare of our citizens, the way to do that is to maximize individual freedom. The reason for this is both that freedom is in and of itself good, valuable, worthwhile, essential to being human. And because if people have freedom, then each of us can act on our own to do the things that will maximize our welfare, and no one has to decide on our behalf. The way to maximize freedom is to maximize choice. The more choice people have, the more freedom they have, and the more freedom they have, the more welfare they have. This, I think, is so deeply embedded in the water supply that it wouldn't occur to anyone to question it.”

“We all know what's good about it, so I'm going to talk about what's bad about it. All of this choice has two effects, two negative effects on people.”

“One effect, paradoxically, is that it produces paralysis, rather than liberation. With so many options to choose from, people find it very difficult to choose at all.”

“The second effect is that even if we manage to overcome the paralysis and make a choice, we end up less satisfied with the result of the choice than we would be if we had fewer options to choose from. And there are several reasons for this. One of them is that with a lot of different salad dressings to choose from, if you buy one, and it's not perfect […] it's easy to imagine that you could have made a different choice that would have been better. And what happens is this imagined alternative induces you to regret the decision you made, and this regret subtracts from the satisfaction you get out of the decision you made, even if it was a good decision. The more options there are, the easier it is to regret anything at all that is disappointing about the option that you chose.

Second, what economists call "opportunity costs." Dan Gilbert made a big point this morning of talking about how much the way in which we value things depends on what we compare them to. Well, when there are lots of alternatives to consider, it is easy to imagine the attractive features of alternatives that you reject, that make you less satisfied with the alternative that you've chosen.”

“Opportunity costs subtract from the satisfaction we get out of what we choose, even when what we choose is terrific. And the more options there are to consider, the more attractive features of these options are going to be reflected by us as opportunity costs.”

“Third: escalation of expectations. This hit me when I went to replace my jeans. I wear jeans almost all the time. And there was a time when jeans came in one flavor, and you bought them, and they fit like crap, and they were incredibly uncomfortable, and if you wore them long enough and washed them enough times, they started to feel OK. So I went to replace my jeans after years and years of wearing these old ones, and I said, you know, "I want a pair of jeans. Here's my size." And the shopkeeper said, "Do you want slim fit, easy fit, relaxed fit? You want button fly or zipper fly? You want stonewashed or acid-washed? Do you want them distressed? You want boot cut, you want tapered, blah blah blah ..." On and on he went. My jaw dropped, and after I recovered, I said, "I want the kind that used to be the only kind.
He had no idea what that was, so I spent an hour trying on all these damn jeans, and I walked out of the store -- truth! -- with the best-fitting jeans I had ever had. I did better. All this choice made it possible for me to do better. But I felt worse. Why? I wrote a whole book to try to explain this to myself.  The reason I felt worse is that, with all of these options available, my expectations about how good a pair of jeans should be went up. I had very low -- I had no particular expectations when they only came in one flavor. When they came in 100 flavors, damn it, one of them should've been perfect. And what I got was good, but it wasn't perfect. And so I compared what I got to what I expected, and what I got was disappointing in comparison to what I expected. Adding options to people's lives can't help but increase the expectations people have about how good those options will be. And what that's going to produce is less satisfaction with results, even when they're good results.”

“Finally, one consequence of buying a bad-fitting pair of jeans when there is only one kind to buy is that when you are dissatisfied, and you ask why, who's responsible, the answer is clear: the world is responsible. What could you do? When there are hundreds of different styles of jeans available, and you buy one that is disappointing, and you ask why, who's responsible? It is equally clear that the answer to the question is you. You could have done better. With a hundred different kinds of jeans on display, there is no excuse for failure. And so when people make decisions, and even though the results of the decisions are good, they feel disappointed about them; they blame themselves.
Clinical depression has exploded in the industrial world in the last generation. I believe a significant -- not the only, but a significant -- contributor to this explosion of depression, and also suicide, is that people have experiences that are disappointing because their standards are so high, and then when they have to explain these experiences to themselves, they think they're at fault.”

As with so many things in life, when we see something as beneficial, we have the tendency of overdoing it and pulling it to the extreme only to realize how that creates other adverse effects and we have to reign ourselves in a again. Sleep is good – it is a vital part of life and required for the body to rejuvenate – but sleep too much and you’re just wasting time. Chocolate is good, it is one of those substances that can give great pleasure – but eat too much of it and your face will be plagued with zits. With all such things – the key is to add the magic words ‘in moderation’: Sleep is good… in moderation. Chocolate is good… in moderation. Having choices is good… in moderation.

So, looking again at the original statement that we have to choose between either freedom through an abundance of choices – and sustainability in refraining from utilizing resources that no one actually needs – we can now clearly see that this is a very ‘black and white’ representation of the story, leaving out important considerations. In understanding that yes, some choice is better than no choice, but too much choice is worse than some choice – we are able to pursue both freedom and sustainability –they are not mutually exclusive.

To this end, we suggest in the Living Income Proposal that before new products and services are produced and made available on the market, it must first be proven that there exists an actual genuine demand for it: that it is something people are asking for – and not merely the same product or service of which there already exists a multitude of options to choose from, only to then create the demand through marketing and advertisement.

01 November 2014

Transcending False Dilemmas with Living Income Guaranteed – Part 3 – Tools of Intervention

This post is a continuation to the blog-posts:

Transcending False Dilemmas with Living Income Guaranteed – Part 1
Transcending False Dilemmas with Living Income Guaranteed – Part 2 – Sustainability vs Full Employment

Please read them first for context.

Example 2

‘The government has two kinds of policy at its disposal to correct market failures: fiscal policy and monetary policy – not using these policies means letting the free market dictate economic conditions.’

Most economists have come to accept that the free market is the ideal way of conducting economic activity – let market forces dictate prices and output and don’t try to control these forces, because they eventually create the best outcome for everyone. Most economists, however, have also come to accept that there are certain situations in which intervention is called for – to correct market failures and inefficiencies. Looking at only the national economy – the ways in which intervention happens, apart from declaring laws that set standards, minimum or maximum requirements, quotas, etc. – fall under the categories of either fiscal policy or monetary policy.

Fiscal policy refers to those policies that have to do with tax collection and government spending. In overly simplistic terms: if the government sees it is needed to increase output and income/employment – it can implement expansionary fiscal policy through reducing taxation and/or increasing government spending.

Monetary policy refers to those policies that have to do with the rate at which money is released into the economy. Here the government has no authority, it is the central bank in each country that influence interest rates to either contract or expand the economy.

Both kinds of policies, when used to achieve a certain goal, always have certain drawbacks in other areas. In other words, the usefulness of their application is always limited by the nature of the free market principles – where their use becomes a careful balancing of adjustments here and there to ‘kind of’ have ‘some’ movement in a certain desirable direction.

Problems such as poverty, deprivation, insufficient incomes and job insecurity, to name but a few, cannot be tackled directly from within this economic paradigm – to do so with the use of fiscal and monetary policies would in most countries require substantial interventions – and create substantial drawbacks, crippling the economy in other areas, and over time, undoing its own efforts. So – what can we do? This is just how it is, right? This is just the nature of economics, right? ‘Sorry for those fellas struggling to survive, but there’s really not that much we can do for you. Sure, in theory you have certain basic human rights, but looks like it’s just not gonna happen.’ In brutal terms, that is the attitude that has been adopted when it comes to our economies and the intertwined question of human rights.

At the Equal Life Foundation, we take the guaranteeing of human rights very seriously – in our view, they are not optional and they should not be seen as variables that are dependent on the grace of market forces that may or may not grant these rights at some points in time. Seeing that the conventional paradigm and available policies lack the capacity to ensure these rights, it became clear that it was necessary to step outside of this paradigm and dare to look for alternative measures that CAN guarantee human rights, yet won’t result in the crippling and destabilizing of the whole of the economy.

Providing a Living Income to those who are unemployed or retired through the profits of companies that are considered human rights companies and national resources companies is exactly such a measure. It’s not a fiscal policy, because it is not funded through taxation and it’s not a monetary policy, because it is not funded through printing more money. Fascinatingly – if a measure is none of those two – and it’s not purely free market… ‘well… well… then… it has to be communistic!’ Lol. Yet, it’s not communistic, because the economy will still operate according to free market principles, there will be no centralization of ownership – there will be decentralization – and the role for government would become smaller than it is now.

For more information about Living Income Guaranteed,
Read our Proposal
Watch our Hangouts
Read our Blogs

25 October 2014

Transcending False Dilemmas with Living Income Guaranteed – Part 2 - Sustainability vs Full employment

In my previous blog, I discussed what false dilemmas are, how they are used in our everyday life, how easily we get swayed by false dilemmas and what the consequences are of their use. I also discussed how one is able to broaden one’s view of a situation, taking a step back so one has a more accurate view of the whole picture when faced with false dilemmas.  I gave 4 examples of false dilemmas dominating discussions on very real problems that require direction and solutions. Within this blog I’ll take each example and show how the Living Income proposal steps outside of these false dilemmas and offers real win-win solutions.

Example 1

‘If we want to reduce the use of fossil fuels for a better environment, we will lose thousands of jobs in the energy-sector. So – which do we choose: preventing unemployment or fighting climate change?’

At Naomi Klein’s launch for her new book ‘This changes everything’, Naomi presented the same dilemma to Estela Vasquez, Executive VP at SEIU (United Healthcare Workers East), asking her to comment on the tension that has been existing between climate change and labor union activists – her reply was as follows: “We actually can fight for good jobs, for jobs that deal with the question of having clean energy, renewable energy, to have transportation that is accessible to all, (…) jobs can be created in retro-feeding buildings, in creating new forms of energy, in creating transportation that is clean, in creating a new society, where the determining factor is not profit, but the determining factor is the well-being of every living thing on Earth, not just human beings.”

She further mentioned that the interests at stake with climate change and pollution are heartfelt by the same people whose jobs may be insecure – what does it matter, for instance, if one secures a good job with good working conditions, if one’s child develops asthma from playing in the garden, breathing compromised air? There shouldn’t be a choice between one or the other – because both factors are, in different ways, affecting individuals’ well-being.

With a Living Income Guaranteed in place, one will always have a security net available when it comes to job losses or threat of losing one’s job – where it can be recognized that loss of employment is not an infringement on basic human rights, because one’s rights are fundamentally guaranteed through the receiving of a Living Income. When fear of unemployment is removed – flexibility is created in making a transition towards creating different jobs, jobs that are more beneficial to the community at large. The most common excuse from corporations that have not been mitigating the social costs they have helped to create, has been that: ‘we provide employment, and if you don’t want us here, we will find cheaper employment elsewhere’. Such threats become void when jobs no longer stand equal to lifelines. Such threats have created a burden on society at large in having to compromise the future for the present – but now we are walking into that compromised future. When we are faced with points such as climate change – creativity and innovation play a key-role – it is a time that calls for human potential to freely move – a potential that remains shackled as long as human rights are linked to jobs, where eventually the employer and the availability of alternative employment, determine what one can and cannot do in life, what forms of society we can and cannot aspire to, what solutions we can or a cannot bring into manifestation. A Living Income Guaranteed allows us to stop the cycles of the past and allows us to, instead, start addressing the problems we’ve created as well as ensuring that we do not make the same mistakes again.

Of course, it’s not sufficient for human creativity and inspiration to move freely – ideas must be able to become a reality and businesses concerned with sustainable and renewable energy sources, for instance, must be given a chance to establish themselves in the market. Here we’re looking at economic power-plays where companies engaged with power-production from fossil fuels have established themselves as pillars within an economy around which everything else turns. Having considerable economic influence, the practice of compromising the opportunity for firms based on renewable energy to establish themselves in that same market is common practice. Within the Living Income Guaranteed proposal, we suggest that the citizens of a country become the owners of companies within that country that produce power – hence – allowing the activities of these companies to be directly accountable to every citizen – and as such – having to keep all citizens’ interests at heart. This changes the economic dynamic in such a way that the entire power producing industry and the role established companies play within it – can be considered within the context of what would be best for all the citizens involved.

17 October 2014

Transcending False Dilemmas with Living Income Guaranteed – Part 1

One of the ways in which we limit our ability to address problems and steer ourselves towards solutions without entering into an endless debate, is through our acceptance of false dilemmas at face value.

What is a false dilemma?
"A false dilemma arises when we allow ourselves to be convinced that we have to choose between two and only two mutually exclusive options, when that is untrue. Generally, when this rhetorical strategy is used, one of the options is unacceptable and repulsive, while the other is the one the manipulator wants us to choose. Whoever succumbs to this trap has thus made a choice that is forced, and as such, of little value. . . . Here are a few examples of common false dilemmas:

•    Either medicine can explain how Ms. X was cured, or it is a miracle. Medicine can't explain how she was cured. Therefore it is a miracle.
•    If we don't reduce public spending, our economy will collapse.
•    America: Love it or leave it.
•    The universe could not have been created from nothing, so it must have been created by an intelligent life force.”
(Normand Baillargeon, A Short Course in Intellectual Self-Defense. Seven Stories Press, 2008)

It seems easy enough to spot false dilemmas and yet, they seem to dominate the discussions about some of the most important issues we require solutions for. Have a look:

Example 1

‘If we want to reduce the use of fossil fuels for a better environment, we will lose thousands of jobs in the energy-sector. So – which do we choose: preventing unemployment or fighting climate change?’

Example 2

‘The government has two kinds of policy at its disposal to correct market failures: fiscal policy and monetary policy – not using these policies means letting the free market dictate economic conditions.’

Example 3

‘If we don’t maintain our military forces and curtail individual freedoms, terrorists will have free reign and come to destroy our beloved country.’

Example 4

‘We’ve created a society with an abundance of choices and so freedom to choose. Producing so many varieties of the same product places pressure on the environment, but reducing it would mean to give up the freedom we’ve gained.’

Do you start seeing to what extent false dilemma’s – the ‘either/or’ presentation of options – is thoroughly ingrained in media, in politics, in every day life discussions?

On the one hand false dilemmas are used to manipulate those presented with the false dilemma to choose the option that the presenter of the dilemma wishes – but on the other hand – it also encourages stagnation and paralysis. Because what happens, is: you have groups who have an interest within the one option, or who support the one option – and you have groups who have an interest within the second option, or who support the second option. And now there is a back-and-forth quibbling, to put it plainly, about which option to choose, about which group ‘loses’ and which group ‘wins’. Of course, no one wants to lose, or be the one to sacrifice their interests for the other group’s or the other goal – so everyone is fighting, but in the meantime, you maintain the status quo, because there is no movement, there is no common solution – there is just a debate, a discussion, an argument, when what is really needed is direction and action.

We tend to so blindly accept information the way it is presented to us – without critically thinking for ourselves and seeing if there are no alternatives. No, instead we immediately position ourselves on one or the other side of the dilemma and feel good about ourselves for ‘taking in a position’. But what does it matter to take in a position, if that position is not going to lead to a solution, but simply perpetuates a back-and-forth dynamic that can only lead to losing? Either ‘our group’ wins over the other, then the others lose out, or the other group wins and then ‘our group’ loses out – or no solution is reached and everyone keeps quibbling, then everyone loses out, because nothing gets directed – or both groups go into a ‘compromise’ and don’t really take on either issue, but just do ‘ a little bit’ on both fronts to please everyone – which seems like a ‘win-win’ solution – but it actually isn’t – because everyone is compromising.

The first thing to do is to take a step back and allow yourself to see the bigger picture. Because – what is presented with a false dilemma? You’re presented with a zoomed-in picture that shows two doors, two options. Now, instead of trying to break your brains over figuring out which of the doors represents the lesser of two evils – take a step back – zoom out the picture and suddenly more becomes visible within the frame – there might be a third door that had not been mentioned or there might be a pathway going around the wall that the doors are in, making every door entirely irrelevant.

In my next post, I’ll go over each of the examples and show how the Living Income proposal steps outside these false dilemmas and offers real win-win solutions.

12 October 2014

Common Concerns about the Implementation of a Living Income Guaranteed

The following is a Q&A discussion from the Living Income Guaranteed Facebook page.

Do we have equal education, ambition, and iq? should the cashier and server make the same as the entrepreneur with more risk and skin in the game? If you want more pay, find a profession in high demand. Also, if positioning the government to raise minimum wage rates only creates a market distortion inducing hyperinflation, increasing the rate of automated points of sales, job elimination, and pricing some smaller companies completely out of markets. i find it hard to believe that the people on this page can't see through a socialist ideology for the disaster that it is.

Hi - it's not within the Living Income Guaranteed proposal to give each one equal wages, regardless of skill, profession or education. However, it is within the Human Rights Declaration to provide each one with certain rights - which requires a minimum living income. Wouldn't you say it is hypocritical to promise or guarantee these rights and then refrain from providing the means through which these rights find their expression - which in our world, is money? In terms of the inflation argument - please check out the hangout we did on that topic:

A living income is not a right. It's a right to persue, it. How can someone be provided something equal, or to a hyper -standard of their personal production? If a living is "guaranteed ", what is the motivation of the indevidual to continue to be a productive member of society? Where is this guarantee coming from, if the incentive to work is gone? Will farmers farm if they are guaranteed a living even if they dount? Will truckers get up at 3am and drive? Will doctors continue to practice?
The truth is, this utopian, society you are promoting sounds like roses and rainbows but the facts are, you are pushing the same socialist ideology that has been failing for hundreds of years.
I hope you never see the day your agenda is a reality. I hope you never have to explain why you have to stand in line for the only meal of the day. I think you should be studying the reasons for the collapse of the Soviet Union, or for that matter, Rome. Noone can guarantee you a living, it's a fact. The people who say they they can, are only going to make those promises until they realize, that giving you that guarantee, means taking from someone else who WORKS for it. It's called slavery. What some see as greed and unfair, I call success.
Asking your government to guarantee your living, is in turn relinquishing your liberty to them. If you want to know your rights, read the constitution. There are no guarantees in life. If you want freedom and peace, and your rights? You have to work and fight for them. And that means taking personal responsibility for your actions and wellbeeing. If you want someone to guarantee you the the things that sustain your life and you are over the age of 18, you are completely delusional.

Hi - I hear your concerns regarding the Living Income Guaranteed proposal as they have been brought up before. If we lived in a world where jobs and opportunities for success were readily available to all - then, yes, we can suppose that it is ever person's choice to live in poverty and there might be reason to leave someone to their own vices. However, that is not the world we live in today. Not everyone grows up in the same environment that supports them with the skills to enter the job-market. Not everyone has access to decent education and even with having a degree and the will to work, youth unemployment is a growing phenomenon, because there are no jobs available. For a different perspective, I suggest you read the blog 'Redemption and the Right to a Living Income' as it is directly pertinent to the point you raised here. Placing that absolute 'rule' or 'principle' that only those who can make a decent living within the economic system rightly deserve it is problematic when you consider the world we live in, because it can not simply be argued that those in poverty choose to be there and/or that they are unwilling to change their living conditions.

In terms of work incentives, we looked at this point as well. If staying at home still provides you with your basic living necessities, would there be a reason to work? One point here I would like to bring up is that pilot projects for a basic income have all shown that work efforts are not reduced when a basic income is provided. So, there is reason to believe that our fears are just that - fears. But do we want to take that risk? We'd rather not. Therefore, within the Living Income Guaranteed proposal, we suggest that the minimum wage be double the Living Income. That means that those with a job can definitely afford more luxurious lifestyles than those living with just the basic requirements - which therefore provides an incentive to take up employment.

In terms of your argument of taking from someone else who worked for their income to provide another with a living income, I suggest you read the Living Income Proposal itself again as we suggest a way of financing the Living Income Guaranteed that does not require means such as income tax which ensures that no one pays for anyone else's Living Income.

That guaranteeing a Living Income stands equal to, or is a slippery slope towards communism is quite a leap. Consider that communism was characterized by central planning and the centralization of ownership of resources. We propose instead that capitalism remains the way in which economic activities are conducted and we support the decentralization of power with minimal government - less government in fact than a welfare state implies. Herein, we agree with Libertarians such as Matt Zwolinski who recently wrote an informative and insightful article titled 'The Pragmatic Libertarian Case for a Basic Income Guarantee'.

The constitutions and the values and principles that we've been upholding are products of the past - where once upon a time, they were considered useful and an improvement over what was here before. However, if you look at the abuse that has been allowed in the name of these values and principles, it becomes clear that we have to formulate new principles for our global society to live by. We simply cannot continue as we are. If not for those in need - then out of self-interest - because in the battle where each person is fighting for their rights - we are disregarding the planet we live on and some day, we will all have to pay the price - unless we change what we're doing. That doesn't mean we have to implement a utopian society of equality - but would it be so outrageous if each person was given the bare necessities to survive?

08 October 2014

Pollution Inequality and Living Income Guaranteed

One of the reasons pollution has been able to become such a huge problem is that those creating the pollution are usually not the ones suffering its consequences. Let’s take the classical fictional example of a paper factory using a nearby river in which to dump its waste-material. The river-current drags these materials away from the paper factory and to a nearby town that uses the river water for drinking purposes. The paper factory might use the same river for drinking water for its employees or production processes, but it will use the water a bit higher up the river, at a point where the water is still clean. So – even though the factory is producing the waste material, dumping it in the river and so contaminating the quality of the water – it is not the factory itself/those working at the factory who feel and experience the consequences of polluting the river to get rid of its waste. Since the factory doesn’t feel the harm in what it’s doing, it won’t change what it’s doing, unless there are complaints from the villagers who DO experience the consequences of the river pollution and take action so that solutions can be implemented.

Now – a study was done by James K. Boyce, professor of economics at the University of Massachusetts, where he investigated the ‘distribution’ of air pollution. Most people have heard about distribution of income and wealth and how unequal it is. But what about air pollution – is everyone suffering to the same extent or are certain groups/categories of people more exposed – and why?

In an interview with the professor the following was discussed:

LP: Do patterns of inequality differ across the country? How can a person of color or a poor person avoid air pollution?

JKB: Avoiding industrial air pollution is difficult, particularly if you're poor or a member of a racial or ethnic minority. That’s partly because of housing prices. It’s partly because of discrimination in housing and mortgage markets — the phenomenon of red-lining. And it’s also partly because of the tendency for firms to site polluting facilities in relatively low-income and relatively high-minority communities because they expect less political pushback.

Hmmm, that last statement is quite interesting, isn’t it? In the example of our paper factory we were giving the factory ‘the benefit of the doubt’ in saying that – they probably didn’t realize what they were doing within polluting the water of the river, because they weren’t experiencing the consequences of the polluted water. But this statement clearly shows that – polluting firms are not only aware that they are polluting, they are aware that it has negative consequences for others – and yet, so long as they think they can ‘get away with it’, they’ll still do it. And when can they get away with it? When those experiencing the negative outflows are unlikely to speak up or take action to hold the firm accountable.

Or maybe it doesn’t mean that at all. Perhaps – let us entertain this notion for a moment – perhaps people of color or poor people are less likely to initiate political push back because they just don’t mind the air pollution. Maybe they are the enlightened ones who realize that air pollution is really not a big deal and therefore simply don’t want to make a fuss when it isn’t necessary.

But then you get to the following part of the interview:

LP: What are some of the most concerning economic effects of industrial air pollution on communities?

JKB: Air pollution has adverse effects on people’s health, and that means that they have to spend more on healthcare and they miss more days of work, either because they themselves are too ill to go to work or because their kids are sick and they have to stay home and take care of them. It also has adverse effects on property values, which vary with the levels of air pollution in the community.
On top of those outcome effects, it also impacts equality of opportunity, particularly for children. Because communities that are heavily burdened with air pollution tend to have higher incidence and greater severity of childhood asthma, the kids miss more days of school, and partly because they’re missing school and perhaps partly because of the neurological impacts of air pollution on their young and developing cognitive function, there is an adverse effect on school performance.

If you believe, as I think most Americans believe, that every kid deserves an equal chance, that equality of opportunity for children is dear to our society for reasons of both equity and efficiency, then the impacts of disproportionate pollution burdens on the children in some communities – the fact that the playing field is tilted against them through no fault of their own – is a troubling feature of our environmental landscape.

That settles it then – air pollution is definitely a problem that impacts the lives of those who are most exposed to it in a harmful way. So, it’s highly unlikely that they don’t mind – it must be that there is a problem in their ability to voice themselves and push for solutions that would improve their standard of living. And that makes total sense. As we have argued before – political participation is currently a luxury that can only be afforded by those who have the money and the time to firstly educate themselves on what procedures are available to them to organize themselves, formulate complaints and propose solutions – and secondly, walk these procedures and taking action.

With the implementation of a Living Income Guaranteed, companies would no longer have the ability to get away with excessive air pollution in low-income or minority community areas. No matter how much one currently struggles to get by income-wise and no matter if one belongs to a ‘minority community’ – each one’s economic situation would be secured and therefore, each one’s political influence is guaranteed as well. Herein, we could make an end to the cycle of impairing opportunities of those who already have a harder time to make the best of the opportunities they do have. Because once one is caught up in the struggle to survive, one has no bargaining power – one becomes the equivalent of a ‘slave’ within a system where one’s long term benefits are sacrificed for the short term goals of having enough money to put food on the table and pay the bills. And this is known by the bullies of the world who will ensure that the consequences they create are carried mostly by those who don’t have the luxury to put a stop to it.

So, is a Living Income Guaranteed ‘bad news’ for firms? No – not at all. The philosophy of the free market is based on the premise that off-setting individual interests can create the best outcome for everyone. Of course, interests that are not voiced have no power to off-set anything at all – which is precisely what we’re witnessing in the world today. A Living Income Guaranteed would ensure that all interests are considered and play a role within the creation of an optimal outcome. Air pollution is a great example herein, because what is air pollution – it is a way in which the natural equilibrium is disturbed, which, as we are all too aware of, is having consequences on the larger natural systems that the air forms a part of. In essence, it is a form of poisoning the planet, the planet we all share. We can try for a while to keep the effects of pollution isolated so that most, or at least the more affluent, in society don’t have to worry about it. But the planet is an interconnected system and eventually – as we’re noticing with global warming – the effects will reach everyone. So – implementing a Living Income Guaranteed is not only a matter of empowering those without means or voice to make a decent living for themselves in this world – it is a vital step to ensure that we create optimal outcomes for everyone, that cannot be achieved if not everyone is part of the discussion.