Immigration and Tolerance

“Change often measures our tolerance for folk different from ourselves. Can we accept their languages, their customs, their garments, and their foods into our own lives? If we can, then we form bonds, bonds that make wars less likely. If we cannot, if we believe that we must do things as we have always done them, then we must either fight to remain as we are, or die.”
-“That’s cheery.”
-“It’s true.”
― Robin Hobb, Golden Fool

This is a quote from a fiction book and yet so applicable to the events we are facing today as millions are being displaced, migrating to create a life in a foreign country with foreign customs, foreign languages and foreign views of the world.

Though, I don’t think ‘tolerance’ is the right word to use. See, tolerance is when you judge something as wrong or unacceptable but will not act upon it. Tolerance doesn’t involve openness, it doesn’t involve questioning your own views in light of someone else’s. Tolerance doesn’t allow for expansion from learning and sharing, it can only ever remain a tolerating of something that you’d rather wish wasn’t there.

Tolerance is more a suppression than anything else – it will culminate to a boiling point and, sometime somewhere, you’ll find a reason to take out your frustrations on those that are so different to you and you will justify it and say ‘I have been tolerant for a very long time, but enough is enough’ and you’ll try to either get rid of them or try to make them comply to YOUR way of living.

If tolerance is how we approach change, we are shooting ourselves in the foot.

So, I’d say – don’t be tolerant of people different to you – rather be open, approach them as one human being approaching another human being and allow yourself to see the world through their eyes.

Who knows, they might not be so different from you after all and, who knows, you might get to know a different side of yourself.

It's easy to stick to what you know and to think that 'your ways' are the standard for 'normality'. But we live in a world with different peoples, different histories, different views, different beliefs and different cultures. If all claim that their own lifestyle is the 'norm' - how will we see that the very fact that there are such great differences shows exactly that there is no such thing as 'the norm' or 'normality'. 

Within the principle of 'investigate all things and keep what is good' - imagine who we would be as humanity - how we would live - what we would create. It would be quite amazing because we'd have gotten to know those who are different from us and with each encounter an exchange would have taken place of that which each saw was good in the other that they had not yet considered or tried to do for themselves. Just for a moment... Imagine...

That potential exists for us - you could see it just now. We can create it, starting by changing our attitude in our own lives.

Change brings opportunity - let's not waste opportunity on tolerance.

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Corruption – Broken at the Core – Pt2

This post is a continuation to

Corruption - Broken at the Core

I ended off the previous post with:

“So if we want to understand how ‘those guys’ can be corrupt and how to change it – all we really need to do is ask ourselves: why am I corrupt? What makes me choose self-interest over what is best for everyone? What do you think? What do you see?”

You will probably be able to relate to a sort of ‘instinct’ within you to protect ‘me’ from ‘everyone else’. We tend to place our self-interest before the interest of all because we assume that another will take part of our share, will take what belongs to us or even chip away parts of us for their own purpose. If you have a look, that which stands at the center of this instinct is our relationship with giving and receiving. We don’t trust that we will receive what we need, so we won’t give to others what they need, rather hoard it all, because otherwise we may find ourselves lacking.

In a world where there is actually enough food for everyone, enough resources to support everyone – why does every single human being experience the threat of imminent lack, so much so that in almost every decision and action the principle of self-interest will override the principle of the common good? If there is enough for everyone, then why do we feel there isn’t or may not be somewhere in the near or distant future? Because our access to the resources that are here, is defined by the most godless (or shall I say ‘the most human’) of creations we have ever seen: an unfair money system. It doesn’t matter if there is enough if your access to it is not guaranteed.

The very foundation of our relationship with giving and receiving has been compromised through our acceptance of a system where money is not guaranteed and so access to what each one needs is not guaranteed. I mean – think about it: the very resources that each one needs to survive are not accessible to everyone. And this is something everyone grows up with – our very lives are dependent on whether there is money or not. Our very lives are dependent on whether we receive a big enough share of the resources. When we are never really certain that we will continue to receive our basic human necessities, is it surprising that self-preservation has become our primary drive? Not only when it comes to money and getting food on the table – but in every single aspect of our lives. Because EVERYTHING in life in some way involves the need to give and receive. When our relationship with those two words is tainted, twisted and compromised, we’re truly broken at our core – inhibited to live life to the fullest, unable to rise to our fullest potential as humanity.

The proposal of a Living Income Guaranteed is then about a lot more than simply making sure everyone has enough money. It’s about rehabilitating our understanding of what it means to give and receive, it’s about laying down the chains we have imposed on ourselves, that have driven us to a version of human life that is scarcely worth remembering. If ever the human race is erased and a new species comes to inhabit the Earth and finds records of human society – they would describe us as the most despicable race that has ever lived, not even able to share and live in peace with each other, let alone with the other beings that dwell on this planet – because that is the only legacy we have ever created and perpetuated. The Living Guaranteed Proposal is a second chance, a shot at redemption – we’ve only ever proven what it means to live in fear and self-interest. Why not prove what it means to live with care, compassion, consideration and respect for each other? It starts with a living income guaranteed.

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Solitary Confinement – The Horrors of our ‘Correctional’ System

Even though international governing bodies have condemned the use of solitary confinement since the 1990s, it is still a common practice in many prisons all over the United States. Currently, an estimated total of 80,000 to 100,000 men, women and children are isolated in closed cells for 22-24 hours a day – for periods stretching from days, weeks, months and even years.

Reasons to place a prisoner in solitary confinement are not restricted to serious violations – talking back to a guard or being caught with contraband are often reason enough to be ‘put into lockdown’ or ‘thrown in the shoe’. Did anyone say ‘Milgram’?

There is a reason international governing bodies condemn the practice: because it basically amounts to torture. The physical and psychological effects are horrifying. Mentally sane inmates often come out of solitary confinement with serious psychological disorders, violent behavior and suicidal tendencies. For those who were already suffering from mental illness, being confined to isolation only exacerbates their conditions.

Is this the purpose of our prison system? To break people, to strip them of their sanity or push them further into misery? Does that benefit the prisoners? Does it benefit society when a prisoner has served his sentence and has to re-enter society as a less functional being than he was before incarceration? No matter the crime they have committed – if we sanction the use of torture – are we not criminals all the same?

We make a big fuss over the CIA’s torturing practices, but don’t realize torture is happening on a daily basis to thousands of people in our so called ‘correctional facilities’ and ‘judicial system’.

The Living Income Guaranteed Proposal is based on the principle that all should be able to live a life of dignity. All… that includes prisoners. When we treat people like worthless pieces of s*** - what is going to happen? Is it going to heal them? Will they find peace? Will they repent for past transgressions? Or will it make them into that which we treat them as?

In other words – if we want to be able to continue calling prisons ‘correctional facilities’ – we better reinvent them and do an entire overhaul of the prison system. Archaic ideas of justice need to be thrown out the window and central should stand the fostering of understanding and the correction of harmful behaviors. If not – let’s be frank and call them ‘torture facilities’ – but how can we ever hope to live with any shred of dignity if we stand for that?

Join the discussion on Living Income Guaranteed – take the world in your hands and ask yourself: What needs to happen for all to live a life of dignity? What needs to change? Changing what is here starts with formulating solutions. Do you have any ideas? Let’s hear it!

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Tomorrowland – Would you get a Pin?

Just saw the Disney movie ‘Tomorrowland’. The following passage is quite interesting and worth looking at:

“Let’s imagine… if you’d glimpse the future, you are frightened by what you saw, what would you do with that information? You’d go to who? Politicians? Captains of industry? And how would you convince them? With data? With Facts? Good luck. The only facts they won’t challenge are the ones that keep the wheels greased and the dollars rolling in. But what if there was a way of skipping the middle man and putting the critical news directly into everyone’s head? The probability of wide-spread annihilation kept going up. The only way to stop it, was to show it. To scare people straight, because what reasonable human being wouldn’t be galvanized by the potential destruction of everything they’ve ever known or loved? To save civilization, I would show its collapse.

But how do you think this vision was received? How do you think people responded to the prospect of imminent doom? They gobbled it up like a chocolate éclair. They didn’t fear their demise, they repackaged it. It could be enjoyed as video-games as TV-shows, books, movies, the entire world whole-heartedly embraced the apocalypse and sprinted towards it with gleeful abandon.

Meanwhile, your Earth was crumbling all around you. You’ve got simultaneous epidemics of obesity and starvation – explain that one. Bees and butterflies start to disappear the glaciers melt, algae blooms all around you, the coalmine canaries are dropping dead and you won’t take the hint.

In every moment, there is the possibility of a better future, but you people won’t believe it. And because you won’t believe it, you won’t do what is necessary to make it a reality. So, you dwell on this so terrible future, you resign yourselves to it for one reason: Because that future doesn’t ask anything of you today.

So, yes, we saw the iceberg, we warned the Titanic, but you all just steered for it anyway, full steam ahead. Why? Because you want to sink. You gave up. And that’s not the monitor’s fault – that’s yours.”

It still puzzles me why the character speaking these words was portrayed as the villain – wasn’t he right on the money? Isn’t that exactly what is happening today? Some say the movie is about imagination, about feeding positive thoughts rather than negative thoughts – but it’s not really. The movie has one simple message: Are we giving up when seeing the world we’ve created with all its unintended ‘ooopsy’ consequences – or are we going to realize that if we want a different future, we have to actually create it. Positive thoughts or feelings won’t do. It is actions that are needed, our behavior that needs to change, our demands that need to change – from destruction to construction.

So ask yourself: what do I DO each day to create a different world?

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When Life No Longer Needs to be Paid For

At the moment life is not free – we have to pay for it. Buying groceries, paying rent or paying off the loan you needed to take out to buy your house, paying for medical support, paying for water and electricity – all of the life-supporting essentials cost money. So, in essence, you pay to continue living every day another day.

Now – what would happen when everyone received at least a Living Income – and if working – would receive at least double? Yes – you would still need to pay for everything to have your living essentials, but… the money to pay for it would be given to you, a security. It would practically mean that life is free – no longer a commodity to be paid for and even a luxury for some – life would be yours to live!

So – what would you do with your life? What would I do with my life?

The first thing that comes to mind is that anything I have to offer in terms of education – whether it is about personal empowerment or practical skills – I would put out there for free – for as many as possible to be able to benefit from it. At the moment – so many educators charge fees for their courses, for their knowledge and their know-how – which is of course how they make a living – but imagine now information and knowledge being able to spread so much easier to so many more – either because they can afford to share it for free or because the courses that are charged for can be paid for by so many more. Anyone with an interest, a goal they want to achieve would be able to do so with the help of the world’s knowledge at their disposal.

Would I work less? I don’t know, hey – perhaps a little, take more time for reading, gardening and dancing classes – but working from the perspective of creating something or contributing to something that helps others – that is very fulfilling for me. And even – let’s say I take out some time from work to just focus entirely on dancing – something I have very little time for at the moment – because I want to see to what extent I can develop my dancing. Well – I would do that, but then afterwards, I’d want to share it with others – so I’d become a dance teacher – not because I have to, but because it’s fulfilling to help others in getting better at what they love doing.

Oh – here’s one: I would feel a lot better about anyone providing a service – whether it’s a doctor, a lawyer or the tech support guy of my cellphone provider – because I know the only reason they’re doing it is because they want to. And when you do something because you want to, you’re going to do it well. That opens an interesting point, because it means the level of trust between people in society is going to increase - imagine feeling like you’re in good hands ALL THE TIME.

This may sound like the description of a utopian dream society – but is it really? Or is it only that we don’t realize to what extent our current economic structure affects our inner well-being, our physical health, our personal relationships and our daily interactions with others? In very low and depressed moments we may ask ourselves ‘what is the meaning of life?’ – I suggest we rather implement a Living Income Guaranteed and find out: What does it mean to live life?

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Parenting and a Living Income Guaranteed

How does the lack of parental economic support affect our societies? How would Parenting change in a society where our basic needs are guaranteed as a Human Right? What effects will securing the livelihood of mothers and fathers bring to our society at large? What needs to change in society and economics to make parenting a successful and satisfying part of our lives and those of our children?

Join us in our discussion with Equal Life Foundation’s very own Leila Zamora Moreno & Gian Robberts, sharing their perspectives and experiences thus far in relation to parenting and how we can change the ways it is lived to build a world that is best for all.
You are welcome to place comments and questions for Leila & Gian in the comment section of this video.

Hosted by: Marlen Vargas Del Razo

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Politics? Fun?? Have you Lost your Mind?!

One of the reasons it is so hard to push for substantial change is that – the way to do that is through politics – and trying to get people engaged and passionate about politics is not an easy feat. Just ask yourself – apart from the sentence I just wrote – when last did you hear the words ‘politics’ and ‘passionate’ in the same sentence together? It seems the two are each others' opposites. I imagine the following is actually how some people have defined politics in their minds’ dictionary:

“Politics: I don’t know exactly what it is, but it’s boring and I want nothing to do with it”

So – for those who ‘get’ that politics is probably quite important, but just can’t get themselves to read the newspapers for fear that you might die of boredom, I have good news. There is a show called ‘Last Week Tonight’ hosted by John Oliver, which may be just what you need. It’s a very funny show – sometimes bordering to, or just plainly grotesque, so breathe through those parts if it’s not your style. As with everything, you have to use your own common sense in relation to what is being presented. Yet, overall it’s really entertaining and while you’re being entertained, you’ll simultaneously be introduced to various different topics and problems on the world’s political agenda. You might actually learn more from watching this show than from reading the newspaper…

Seriously, watch it.



And if you have any suggestions for funny educational shows - share it with us in a comment!

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Voting Fun – What does it Feel Like to Have a Say?

One of the pillars within the Living Income Guaranteed proposal is the substantiating of Democracy through Direct Political Participation. Technology is available to hold regular votes that includes a large number of individuals. These votes can range from participatory budgeting where each citizen is asked to approve the yearly national budget, to making decisions on a daily basis on a local/municipality level.

Now – before such increased direct political participation is a reality – let’s do a little test to see what it feels like. So – here are some mock-questions where you’re asked to give your input. Imagine that this relates to your direct reality (eg. your town) – and your answer has a weight that influences the outcome of the decision. Of course, in reality – a lot more context would be given to each question – providing information about the different options, what benefits and costs are involved. Pretend that you are aware of all these factors and are answering after having weighed the options carefully. At the end of the poll you’ll be asked what it felt like to have a say, where you can share for instance that you felt uncomfortable in a way or actually felt empowered.

Let’s have some voting fun!

Here is the link: http://surveynuts.com/surveys/take?id=38568&c=357448241DFNH

It won't take you more than 5mins ;).

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Humanity Washed Ashore

“The full horror of the human tragedy unfolding on the shores of Europe was brought home on Wednesday as images of the lifeless body of a young boy – one of at least 12 Syrians who drowned attempting to reach the Greek island of Kos – encapsulated the extraordinary risks refugees are taking to reach the west.

The picture, taken on Wednesday morning, depicted the dark-haired toddler, wearing a bright-red T-shirt and shorts, washed up on a beach, lying face down in the surf not far from Turkey’s fashionable resort town of Bodrum.

A second image portrays a grim-faced policeman carrying the tiny body away. Within hours it had gone viral becoming the top trending picture on Twitter under the hashtag #KiyiyaVuranInsanlik (humanity washed ashore).”

http://www.theguardian.com/world/2015/sep/02/shocking-image-of-drowned-syrian-boy-shows-tragic-plight-of-refugees

This was an excerpt of just one of the stories about the boy. Over the last few days, dozens have been written and published on various major news sites. What is more striking than the content of the posts, is the comments that are left on these articles. What is humanity’s response to such images, to such news? If you have a moment, I would suggest to read through the comments. It ranges from expressing shock, to sending love and prayers, to abdicating responsibility, to assigning blame to the parents, countries, presidents, religions and then it just goes into back-and-forth bickering over ‘what kind of person you are’.

That just makes you wonder...

When I read/hear such events and news stories – what I see is that: we’re more and more coming to a point where we can no longer ignore the painful truth that what happens on this planet is a problem for everyone – they are no longer ‘far away’ – what we’re accepting and allowing, even just through our ignorance and complacency – is literally washing up our shores. Does it help, then, to assign blame? Does it help, then, to debate over the exact historical figure and events that led up to the problems we’re facing today?

We can no longer afford to think in terms of ‘us vs. them’ and ‘my country vs. your country’ or ‘my religion vs. your religion’ – because it’s simply not constructive. It’s a similar point with climate change – does it really matter who started it? Can we really afford to debate over who should take the first step?

When recently traveling to Belgium with my sister and her little boy, we spent a lot of time on playgrounds. It was fascinating to see so many families of different origins, with different cultures and speaking different languages all in the same place. Belgians were actually in the minority. But more interesting was to see the difference in how the parents interacted (or rather, didn’t) and how the children interacted with each other. The parents stayed away from each other, individually watching their children from the sidelines and stepping in when needed, kind of avoiding each other. The children, on the other hand – would all play harmoniously together on the playground. It didn’t seem to make a difference to them what the other child looked like, what they were wearing or even what language they spoke. They would actually adapt and use more body language to get a point across.

My point being… how the world exists today is one version of what can be – and is a result of our collective history. At the same time, there exists a potential for a different way of living together. If we wait, stand aside and refuse to look for solutions that will actually work for everyone – we know our children will end up doing the same – and that potential for a different world is lost.

We still have a ‘choice’ in how we address these global problems, or at least – it seems like we do – because we haven’t yet seen the worst of it. Despite problems escalating, there seems to still be a belief in many that ‘things will work themselves out’ – call it ‘Disney-brainwashing’. But if we’re going to find sustainable solutions, we better do it now – and we better include everyone in the benefits. If you follow the trends of the ‘state of the world’ – what we’re doing to the planet, what we’re doing to each other – it’s very likely our children will no longer have that choice, that chance to say: okay, let’s turn this ship around.

So, from one human being to another – we’re all here, all living and breathing – and all capable of working together if we choose to, all capable of focusing on formulating solutions that work for everyone, all capable of standing up and no longer assuming someone else will solve our problems for us.

So, I invite you to – if you have an idea, if you are part of the solution – SPEAK OUT - let’s hear about ideas and solutions, start constructive discussions, connect and support each other.

Here is the solution I stand for: A Living Income Guaranteed for All – read about it and share what you think. Then share what you stand for! The Living Income Guaranteed crew hosts weekly hangouts, a platform where ideas and solutions are discussed and promoted. So, if you want your idea and solution to get some extra attention, you can also contact livingincome@equallife.org and be welcomed on a live hangout!

Let’s start a new trend:

#IAmPartOfTheSolution

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And Then You Crash - Meconomics

This blogpost is a continuation to:
Reality in a Bubble – Meconomics
Inflating Reality Much? – Meconomics
Do You Know the Stakes of the Bets you Place? – Meconomics
Have you Ever been Swept Off your Feet?

In this little series, we’ve been investigating the phenomenon of inflation, how we in our daily lives participate in ‘inflating our reality’ and so, how we are on a personal level participating in the same principles/dynamics that we see playing out on a bigger scale when it comes to inflation, speculative bubbles and financial market crashes.

We saw that there is actually a set process involved that we can roughly break down into three stages:

1.    the start/onset,
2.    the process of inflation,
3.    the popping of the bubble.

We discussed stages 1 and 2 in the previous posts, so let’s look more closely at:

3. The Popping of the Bubble

The popping of the bubble is usually a singular moment that can be experienced as a ‘crash’ or an ‘explosion’ – though the consequences of the entire process (stages 1, 2 and 3) can linger and last for quite a while as the domino-blocks start falling.

The popping of the bubble is in essence the sudden release of all the energy that had been accumulating and growing in the process of inflation. Energy cannot ‘keep on accumulating forever’ – it has a breaking-point – and that is the point where the bubble pops and we experience some form of a crash, explosion or release.

Looking at the example of the couple fighting, where the on-set was one person forgetting to buy toothpaste, the popping of the bubble would be the moment where a snap decision is made at the culmination point within the fight of: ending the relationship. This is of course an extreme example, where we illustrated the process of inflation over a very short period of time, but actually, you would be surprised how often such decisions are made not because of practical common sense considerations, but because of an energy that had been growing and accumulating to the point where it seems like ‘the only choice’ to make in a moment.

We also saw in the previous post that inflation can occur both with negative and positive energy. Remember the example of the teenage girls ‘screeching’ in excitement? Well, I used to be one of those – and let me tell you – I would experience quite a ‘crash’ afterwards – not necessarily in terms of a ‘fight’ or a ‘break up’ type of experience, but I would get absolutely exhausted and experience huge headaches after a day out with my girlfriends. Another example would be when you fill your ‘inflation bubble’ with ‘high hopes and expectations’ – where you can easily crash into a sudden experience of total disappointment and despondence.

The moment the bubble is popped – the energy releases and all that we are left with is the physical reality. The abrupt transition from being emerged within energy where everything you see, think, feel and do is influenced by whatever energy you are experiencing, be it positive or negative – can create quite a ‘shock’ as you are suddenly faced with ‘what is left’ – which is your reality. That’s how we often have those moments of looking back at something we did or said and regret it or wonder why and how we could have done or said what we did/said in past moments. Because when looking back at the event without being emerged in the energy – you can see alternative courses of actions and behaviors.

So – with the example of the couple breaking up – you might have experienced similar moments where you are suddenly ‘snapped back’ to reality and all of a sudden everything has changed and you don’t even clearly see or understand how it could have ‘come to that’. This is the immediate experience after the popping of the bubble, but at the same time it is the on-set of a series of consequences. Because no matter how you wish you could ‘take things back’ – you can’t – it is done, things were said and done and there is no way to ignore the new reality that you suddenly created for yourself.

Understand then – that when you experience a ‘crash’ – it’s not something that ‘just happened’ or ‘happened to you’, you actually created it over a period of time through your own participation in reactions and mental energy. So, then you can have a look: where did I make an interpretation/react to something that was said/done or that happened in my physical reality? Where/when/how did I keep adding energy, inflating a bubble and removing myself more and more from physical reality? What kinds of energy did I fill this bubble with? Now that you have an overview of the process that ‘leads to’ such a crash, you can trace back your steps and learn from the past.

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Inflating Reality Much? - Meconomics

This post is a continuation to:

Reality in a Bubble – Meconomics

In my previous post we discussed speculative bubbles in the economy, where we saw how prices of assets increase through a process of speculation over and above the ‘real prices’ (which would reflect their actual value). We say the prices are ‘inflated’ (just like how you inflate a balloon or bubble) – and we looked at some of the major damage that those speculative bubbles can create, especially after they pop, where we looked at the example of the Greek economy.

How are Speculative Bubbles in the economy a reflection of bubbles we create in our personal lives?

Maybe let’s start with the following question: have you ever had an argument with a friend, family member or partner where the initial point of disagreement or the initial issue is blown entirely out of proportion? A conversation with your partner can start, for instance, with ‘did you remember to buy us toothpaste?’ and end up in a full-blown fight with shouting and tears. And then when you calm down, you realize you just broke up with your partner – you can’t remember how the fight started but suddenly your life looks very different. How does that happen? How do we do that?

We do it through a process of inflation – have a look, I twice used some form of the word ‘blowing’ in the above paragraph: blowing something out of proportion and full-blown fight – we blow bubbles and then they pop. Why is it inflation? Because there is no way someone is going to break up with their partner over forgetting to buy toothpaste – obviously something happened between the asking of that question and breaking up…

What we’re looking at is two ‘dimensions’ – you have the first dimension which is the ‘physical reality’, the actual events that take place or the reality we all have in common, and you have the ‘experiential reality’, which is how you interpret things that happen in your reality, how you become upset or sad over something, everything that you experience, that ‘takes place’ on an energetic level inside your own mind and body. I put the words ‘takes place’ in those little quotation marks, because the very nature of everything that happens in your ‘experiential reality’ is that it doesn’t really take up space – it’s not physical, you can’t touch it. We generate those experiences inside ourselves in moments, but they are not constant or stable.

When we start reacting inside ourselves (in the experiential reality/dimension) to what we hear/see in our physical reality, we change the way we perceive reality. If your partner forgot to buy toothpaste, then in physical reality, this means: your partner forgot to buy toothpaste. (Okay, that may sound silly, but it’s actually so silly that most of us don’t recognize how complicated we make our lives.) In your experiential reality, if your partner forgot to buy toothpaste, it can mean: “My partner doesn’t care about me”; “My partner is unreliable”; “I have to think of everything in this relationship”, “I do so much for him/her and he/she can’t even do this one little thing for me”.

So – we have this nasty habit of inflating something that happens in our physical reality through interpreting it and reacting to it in our experiential reality – making it seem bigger than it actually is. I’m sure you can relate to such moments, they occur so often that we have come to accept them as ‘normal’ – but let’s continue looking at them a bit further so we can really grasp and understand what it is we’re doing in such moments and how it creates a direct line of responsibility from ourselves to the phenomenon of speculative bubbles and the consequences they create in people’s lives.

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Meconomics: I Want my Needs and Need my Wants to be Satisfied

The economic problem – the corner stone of economic theory – is defined as the satisfaction of unlimited wants and needs in a world with finite/limited physical resources. This implies that not all wants and needs can be satisfied, so the questions economic models attempt to answer are: How is it decided which wants and needs will be satisfied? How is it decided whose wants and needs will be satisfied? In our world today – the answer is: “those who can pay for the satisfaction of their wants and needs will see them satisfied, those who can’t pay for it – well, sorry, we have to draw the line somewhere”.

As I was reading about the economic problem for the first time – I found it fascinating that they used the words ‘wants’ and ‘needs’ in the same way and treated them as one term – like this: ‘wants&needs’ – lol. The difference between wants and needs was briefly explained, but then both words were thrown under the ‘wants&needs’ banner – as though ‘needs’ carry the same characteristics as ‘wants’ and ‘wants’ carry the same characteristics as ‘needs’. When you approach the economic problem by reading the words ‘wants’ and ‘needs’ as ‘wants&needs’ - then the world as it is today might make sense to you – then the economic problem might actually be a justification for the desolation and lack in which millions live. Perhaps that is how economists want us to read the words, so that we won’t hold them accountable for not yet having come up with a better solution.

‘Wants’ and ‘needs’, however, are two very different things. ‘Needs’ are things you NEED – that you cannot go without or you will be physically and emotionally compromised. ‘Wants’ are things you WANT – they go beyond what you ‘need’ – you can go without, but you would like or prefer to experience them or have them in your life. It is true to say that if you tally up all the individual wants of all the people on the planet – you will end up with ‘unlimited wants’. The same is not true for needs, however – there are certain things no human being can go without – say food, water, shelter, social interaction, medical support – where this is the same for every single person by virtue of them being ‘a human’ – and where for some, dependent on personal situations and circumstances, the list is expanded to include a few other things as well.

Considering that needs are limited – we may actually be able to satisfy the needs of all the human beings on the planet – and it is known that we can. So – instead of trying to work with ‘wants&needs’ where the task seems impossible and full of ‘sorry’s, we have to draw the line somewhere’ – we could start with the part that IS possible – satisfying everyone’s needs – and only then design an additional system or model that draws lines for ‘wants’. Our current model is one where some are able to satisfy all their needs and most of their wants, while others are not supported in their basic needs – which, you have to admit, is quite an insane situation. Part of why this is allowed is due to… ‘wants&needs’.

Now – this blog is part of my ‘Meconomics’ series – so you can already guess where I am taking this discussion next… For this situation to be as it is – with so few raising their voice and spurring into action to change the status quo – I started wondering how the same point exists within ourselves. The same point, meaning: do we in fact have a clear understanding of the difference between ‘wants’ and ‘needs’ inside ourselves and do we approach ‘wants’ and ‘needs’ appropriately in our own personal lives?

True story: Earlier as I was writing this blog and came to the section of clarifying the words ‘wants’ and ‘needs’ – I first took the easy route of simply looking up the words in the dictionary and copy/pasting the definitions in my blog. But! I couldn’t use those definitions, because they would have perpetuated the confusion between the words rather than clarifying the difference between them. Have a look:

If the dictionary uses the word ‘want’ to clarify the word ‘need’ and uses the word ‘need’ to clarify the word ‘want’ – we can be sure we’re on to something. Does this mean that wants simply imply needs and that needs imply wants – because the dictionary says so? No. Remember, dictionaries will reflect our own language usage – so if the word ‘want’ has been used over time to indicate a ‘need’ – then it becomes an ‘accepted use of the word’ and is reflected in the dictionary as such. In the same way, the word ‘need’ has been used to describe ‘wants’ – and so it has become ‘normal’. What the dictionary then shows is how we have confused the meanings of the words ‘wants’ and ‘needs’ for ourselves and started using the terms as synonyms.

In my next blog I will continue exploring how the ‘merging’ of the words ‘wants’ and ‘needs’ as ‘wants&needs’ affects and influences us on a personal level so that we can get a better understanding of the world as it exists today within the principle 'as above, so below'.

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Meconomics: Fear of Missing Out and Opportunity Cost – Part 2

This blog-post is a continuation to:
"Meconomics": ME-Economics
Meconomics: Fear of Missing Out and Opportunity Cost


Read the above posts first for context.

In the previous post I had a look at the concept of opportunity cost and how we ‘make use’ of this concept in our language and daily living, or in other words – how the concept of opportunity cost is embedded in our psychological make-up and how it plays a role specifically when we make decisions. We saw that opportunity cost involves a dimension of a sense of ownership towards ‘the road not taken’ – where it then feels that we are ‘losing’ that option when we choose something else. We also looked at the role imagination plays within the creation of this sense of ownership.

So now, let’s have a look at an example of opportunity cost in economics and then take our understanding of the psychological origin of the concept – as how it exists within ourselves – to re-assess the ‘place’ of opportunity cost in economic situations.

Let’s take the example of interest:

“Interest is compensation to the lender, for a) risk of principal loss, called credit risk; and b) forgoing other investments that could have been made with the loaned asset. These forgone investments are known as the opportunity cost. Instead of the lender using the assets directly, they are advanced to the borrower. The borrower then enjoys the benefit of using the assets ahead of the effort required to pay for them, while the lender enjoys the benefit of the fee paid by the borrower for the privilege. In economics, interest is considered the price of credit.”

So, part of why you pay interest on a loan is to compensate the lender for the opportunity cost they incur by borrowing you the funds. The lender’s opportunity cost stems from the idea that he/she could have invested the funds and would have made a profit through investments. When reading this information for the first time it might intuitively sound like ‘it makes sense’ – because as we have seen in the previous post, we can all relate to the experience of opportunity cost. But does it really make sense?

When you’re struggling to decide which shoes to buy and end up choosing one pair over another and you experience a sense of ‘loss’ towards the pair you didn’t buy (your opportunity cost) – who compensates you in monetary terms for that opportunity cost? Do you ask the shopkeeper for a discount as compensation for your opportunity cost, because you could have bought the other pair? You don’t. And in this example we see that it clearly wouldn’t make sense to either.

We understand that when buying something and we have to decide between two options where only one can be taken – that making a decision involves letting go of the other one – it’s simply part of the nature of decision making. Even though we for a moment imagined owning both pairs, we do ‘come back to reality’ so to speak and see that we can only own one and that the other ones are not ours and stay at the shop.

So – why is it any different with lending money? A lender might imagine making a profitable investment on the one hand and lending the money on the other hand. But when it is time to decide – the road not taken is simply that: the road not taken. Once the lender decides to lend the money, it means he didn’t decide to make an investment and so that means he doesn’t get to make a profit either. That was the decision made and the lender could simply take responsibility for their decisions instead of ‘making a financial claim’ to the profits they could have made. Because remember – it’s not because the lender ‘could have made a profit by investing’ that the lender would have. What if, had the lender not borrowed the funds, he instead used the funds to make a really bad investment and lost all his money? That would be equally possible. Should a borrower then be paid a fee of gratitude because the loan potentially prevented the lender from losing his money through a bad investment? Lol – that somehow doesn’t happen.

So – we can ask ourselves why it is okay for a lender to make a ‘real claim’ (meaning: it is expressed in monetary terms, that means someone pays it, that means it has actual consequences on their purchasing power and living arrangements) on a cost that is based in imagination – but in other situations we can’t? Another way to place that question is: why do we allow it? Why have we never questioned it? Is it because we secretly WOULD LIKE TO be compensated for our imaginary losses? Because we secretly WOULD LIKE TO have it both ways without taking responsibility for our decisions?

It opens up even more questions as we look at: how could we do it differently? What other lending and borrowing models could we create? What would be their foundation? Or will we simply keep it as it is and allow such a significant point to be founded on a ‘glitch’ of our own logic?

This topic was also discussed in a Google Hangout – so for more information – check out:

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Meconomics: Fear of Missing Out and Opportunity Cost

When you study economics, you get introduced to a concept called ‘opportunity cost’. The definition of ‘opportunity cost’ is:

“The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.”

For instance: “The opportunity cost of going to college is the money you would have earned if you worked instead.”

So – say that if you are choosing between two pairs of shoes in a shop – the opportunity cost of buying the one pair is the other pair of shoes that you did not buy but could have bought instead. This concept comes up very often in economics, where it is said that opportunity cost is what sets accounting apart from economics – because in economics, the opportunity cost is included in the cost of, for instance, running a business or making an investment.

Now – I had never considered the concept of opportunity costs within daily decision making. It was only once I had become familiar with the concept in my economics studies that I noticed how we actually include opportunity cost within decision making in our every day lives. Let’s look at some examples, starting with going back to the shoes.

Say that there are two pairs of shoes that each look really appealing – where you actually don’t want to choose between the two and if you had the money – you’d buy them both – but you don’t have enough for both, you only have enough for one pair. So – you have to choose – because in the end you reckon it’s better to come out with one nice pair of shoes than with none at all. So, you make up your mind and buy one pair – and, you know, these shoes are comfortable and nice looking, so you’re quite satisfied with your purchase. BUT – in the back of your mind – there is that other pair of shoes – the ones you didn’t buy and there’s this sense of being unsettled, because – what if you didn’t buy the ‘right shoes’? What if you would have ended up being happier or more satisfied with the other pair – now you’ll never know. That experience of feeling unsettled or uncertain, like a bad taste that kind of spoils your satisfaction with the shoes you bought – that is the opportunity cost of buying the shoes you have.

And it’s interesting – because you went in with no new shoes – and you came out with a new pair of shoes – but somehow it feels like you also ‘lost something’ – as though you had to ‘give up’ the other pair of shoes, because they ‘could have potentially been yours’. What we don’t realize is that: they were never actually ours. Rationally speaking, we couldn’t have lost them, because we never owned them. So – where does that sense of loss come from?

If you slow yourself down when deciding to buy shoes – you’ll notice that something plays a significant role in that department and that is: Imagination. As you decide on which shoes to buy – you’re imagining wearing them/owning them. You imagine wearing them to specific events, you imagine what others will say about the shoes while wearing them, you imagine how they will fit with your clothes and outfits. So – within your imagination, you ‘act as though’ the shoes ARE YOURS ALREADY. Then, when you step out of your imagination and have to now, in physical reality, decide which shoes to buy, it feels like you have to ‘give up one pair’ – because even though it was only in your imagination that the shoes were yours, you created in those fleeting moments of imagination/projection an actual emotional relationship of ownership with both pairs of shoes.

Let’s look at another example:

Have you ever heard someone (or yourself) say the following in relation to a potential partner that they are hesitant to go into a relationship with/commit themselves to, because: “What if he/she is not ‘the one’?” And “What if, as I commit to this person, I miss out on meeting my perfect partner?” Without going into a discussion about whether ‘the one’ or ‘a perfect partner’ or ‘a soulmate’ exists – if you look at the logic that is used in these instances: it revolves around opportunity cost – the fear of ‘missing out’ on all the things you can’t do because you’re committing to one option. In looking at these statements – it’s interesting to see that there is again a component of imagination – because, you only concretely have one potential partner in front of you – one real live person – but in your imagination there exists so many other ‘potential options’ or ‘one specific other perfect person’ that you might not have met yet. And – instead of making a decision about the one real live person standing in front of us and deciding whether or not to be in a relationship with them or commit to them – we allow ‘imaginary people’ to enter into the equation. And many times a relationship opportunity is passed up on, because of that notion of ‘what if he/she is not the one’ or ‘what if a better opportunity comes along and I miss it?’

There are many more examples, here are some common phrases that refer to opportunity cost:

“You can’t have it both ways”
“I could have done something else with my time, you know”
“I invested so much effort in this project and for what?”

In having defined the concept of opportunity cost and had a look at how we use this concept in daily decision making, we will continue in the next blog by looking at the consequences of this logic in our economy.







Other blogs in this series:
"Meconomics": ME-Economics

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"Meconomics": ME-Economics

I’m sure everyone or most have heard of the words microeconomics and macroeconomics – where microeconomics looks at single factors/products/services and the effects of individual decisions (for instance what happens when I increase the price of the product I’m selling) and macroeconomics works with aggregates, looking at entire markets or the economy as a whole (what happens if the price of oil increases in the economy). However, in my economy studies I haven’t come across a single word that describes how we live economic decisions and apply ‘market logic’ in our personal lives – so here I am making one up: Meconomics, short for ‘ME-Economics’.

Sure – we can say ‘what you’re looking at is psychology – not economics!’ And yes – I am looking at psychology – but I’m looking at economics in the same extent as I am at psychology. Here is an example of how our Educational system enjoys fragmenting reality – breaking it up into bits and pieces so it can neatly fit in a particular box – and, apparently, what fits in the Psychology-box does not fit in the Economics-box. It’s mind-boggling to consider that economists may have never had any psychology course at all – that’s like a doctor not being trained as a nutritionist! (Oh wait, that’s the norm... case in point!)

If you take a moment to consider you’ll agree that psychology should be at the basis of our education – because everything we do, we do as a human being; How can we understand politics if we don’t understand human behavior? How can we understand economics if we don’t investigate our inner relationships with giving and receiving? How can we understand the function of the body if we don’t take account of the effect the mind has on it? How can we understand law if we don’t understand the law of our being? In other words: How can we understand the world if we don’t understand ourselves?

So – Meconomics will be a series of blogs investigating how we are maintaining the status quo of the economy on a micro and macro level through applying/living out the same logic, the same reasoning, the same models in every day life, whether it pertains to decision making, relationships, community living, self-image, socializing, parenting, siblings and so on and so forth.

If you have any ideas for topics to include in this series, feel free to leave a comment so I can dedicate a blog to it as part of the series. Let’s cover new ground, new ways of looking at economics, new ways of looking at ourselves – so we can become aware of how we are in fact, through the principle ‘as above, so below’ creating the rules of the game that determines human life on Earth in so many ways.

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Perspective on ‘A Basic Income for Everyone is Not Affordable’ – Part 3

This blog-post is a continuation to the posts
Top Economist says: "Universal Basic Income is Not Affordable"
Perspective on ‘A Basic Income for Everyone is Not Affordable’ – Part1
Perspective on ‘A Basic Income for Everyone is Not Affordable’ – Part 2

Read them first for context.

In my previous post I shared my concerns over utilizing income taxes to fund a universal basic income by looking at what social dynamics would be created as well as a possible punitive effective on unemployment.

In this post I’d like to look at particular taxes that have been suggested for funding a basic income.

When looking at ‘where to get large sums of money’ – we’ll almost instinctively turn our gaze towards the ‘rich’ in society. “They have lots of money and surely they don’t need it.” Herein I would refer to Hollande’s super tax in France – where the plan was to tax the rich at a 75% rate. Facing resistance and protest from the wealthy in society, the tax was quickly watered down until it quietly died altogether. Yes – in theory, the rich have money that could be allocated towards a basic income, but that doesn’t mean you’ll ‘get it’ – the money currently is not yours, it’s theirs, obtained according to current and past laws and agreements. Regardless of whether they are a minority among voters – their position in society enables them to impact the national economy and influence public opinion through other means. In other words, if they don’t agree with the tax policies, you are unlikely to get them passed. Whether that is a good or a bad thing is not under discussion – it’s what we have collectively created and it is not something we can simply sidestep or ignore when looking for practical ways to implement a basic income.

Another suggestion to create revenue from tax is to tax luxury products. Herein I consider the same point of what message it would send – is it ‘wrong’ to buy luxury products? Must there be an additional price paid for luxury products? I for one have no issue with luxury and I think most would enjoy to live a life that can afford luxury – I see it as worthwhile to make life more comfortable and enjoyable for everyone. The aspect that is concerning about luxury products at the moment is within conspicuous consumption, planned redundancy and planned obsolescence. These are issues that can be tackled otherwise, for instance by setting higher production standards and ensuring demand-based production.

Using pollution taxes to aid in funding a basic income is in my view not a solution. On the one hand, if the pollution tax is ineffective, loopholes will be found to avoid paying the tax as is happening today and pollution will not effectively be reduced. Then pollution taxes become a license to pollute and we are in fact requiring companies and individuals to be willing to pollute and ‘pay the license’ to assist in funding the basic income. On the other hand, if the pollution tax is effective in that it is an actual deterrent for pollution – then we would see a gradual decline in pollution and less and less tax revenue from pollution tax, so then it would not be a sustainable revenue stream.

All of the points I described in this and the previous two posts are reason to consider becoming more flexible about the universality principle within the basic income movement. I understand the experience of feeling like one is compromising in one’s ideals – I have been there. If you scan over the topics of this very blog, you will see that we started with investigating an Equal Money System, then stepped away from that idealism towards an Equal Money Capitalism system and then further ‘downgraded’ (if you want to see it that way) towards a Living Income Guaranteed solution. I indeed felt like I was compromising on ideals and was ‘downgrading’ my promotion of solutions – but what I didn’t consider was space-time practicality. It is easy to conceptualize a new world, a new system and we tend to forget that we have to work with what is here as what we have already created. So, I am willing to take our current reality into consideration and work with what is here, because it is pointless trying to force a solution that most resist at this stage. I have found it assisting to keep the goal in mind: which is to secure human rights and herein the freedom for individuals to start determining what kind of world they would like to live in, for themselves and for everyone else. So, I have let go of trying to force an ideal outcome on the world, considering that in that very act I would be stating that people don’t know what is good for them. I would rather work with what is here and see what adjustments can be made within the current framework that would remove the need for a survival-mode and instead open up the space for each one to ask themselves who they would like to be, what they would like to be a part of and what world they want to contribute in creating.

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Perspective on ‘A Basic Income for Everyone is Not Affordable’ – Part 2

This blog-post is a continuation to the posts


Top Economist says: “Universal Basic Income is Not Affordable”
Perspective on ‘A Basic Income for Everyone is Not Affordable’ – Part 1

Read them first for context.


In this blog I’d like to conduct the thought experiment of playing out the assumption that a basic income can be provided to everyone unconditionally – to then see what possible problems might occur and assess: if it is affordable – is it do-able?

First point to consider here is that to organize such a money stream – you’ll quite likely have to use income taxes as a source of funding. And that’s where I foresee possible problems. Income taxes today are a touchy subject, because everyone feels they have earned their income. If part of it is let go of and allocated towards ‘the common good’ – that’s cool, so long as people feel that it is justified. Considering the basic income as one of the expenses, where a person will now receive this income regardless of how much they work – you’ll most probably run into resistance and if it were to be established – resentment towards those who choose to simply live off a basic income. Sure – everyone will receive it, so even if one works and part of one’s salary goes towards funding a universal income, one will equally be paid out a basic income. For some that may mean receiving back more than what one paid in taxes. But for others, it will square out or they’ll still pay more taxes than the basic income amount. Inevitably this will lead to resentment, because we’ve for decades lived within the paradigm that money is something you should earn. So – for some to pay for others’ income entirely – no strings attached – may be easier in theory than in practice. So – yes, the numbers may work out, but that doesn’t mean you’ll receive the approval of the majority and get a green light to manifest a universal basic income system.

When it comes to income taxes and resentment, consider the current state of the welfare state – the complicated rules, the intricate web of conditions to qualify – the conditions set to ensure a person ‘deserves’ the support given. This complexity didn’t come falling out of the sky – it exists because people demanded it to be so. Although the ideas of unconditionally giving money to everyone and of giving up a part of one’s income to realize such a situation are noble ones – it’s worth asking the question if we as a society live up to that nobility. Herein a follow-up question could be: and if we do provide an unconditional basic income funded through income taxes – what is to say we will not end up right where we started, with ever increasing demands placed on those who do not ‘contribute’ to society in the conventional way of taking up employment and in one way or another being part of the national economy?

Apart from resentment, we have to also consider the dimension of what effect funding an unconditional universal basic income will have on employment. Herein I’m not referring to what effect it will have to create a support structure within which anyone will be guaranteed an income regardless of work efforts and whether that will induce people to simply stop working. Rather – I’m looking at the ‘message’ that is sent out by taxing the incomes of those who work, from the perspective of it being interpreted or having the same effect as punitive measures. For instance, in basic income experiments, the effect on unemployment was negligible or only significant in relation to certain individuals, such as youngsters, students and mothers – where it can be argued that this is not such a bad thing – they will be able to focus on other activities, such as educating themselves or raising their children, which will have long term benefits for society and the economy as a whole. But within those experiments, only the ‘receiving’ aspect of a basic income was tested – the ‘giving’ aspect of a basic income was not. Within the experiments, money was made available by governments or organizations and the effects of receiving the income were observed. What didn’t happen, was taking a small village or town that was approximately representative of the national population and taxing incomes in that village in such a way as to generate enough funds to redistribute it equally among everyone, where the amount given to each one is sufficient to live off of. In that scenario, one might have observed a greater shift from employment to unemployment, simply to be on the side of those that ‘benefit’ rather than those who work and pay for others to benefit.  It is this effect on unemployment that Paul De Grauwe was referring to in his article.

I’ll continue in my next post.

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Perspective on ‘A Basic Income for Everyone is Not Affordable’ – Part 1

In my previous post I shared an article by Belgian economist Paul De Grauwe who came to the conclusion that a basic income would only work if it were limited by giving it to those who need it, rather than providing it to everyone unconditionally.

The article raised some eyebrows, but more importantly, generated cool discussion. The universal basic income concept is only one of the many basic income ideas that are suggested, discussed and promoted around the world. Ideas and concepts differ in name, in scope, in amount, in funding method, etc. – but all have the same goal in sight: to eradicate poverty, to stimulate economic growth and to secure human rights.

The Living Income Guaranteed proposal is one of these particular concepts or ideas. One of the points that sets it apart from other proposals is that it doesn’t suggest to provide a basic/living income to everyone unconditionally. Herein, I’d like to place the article by Paul De Grauwe into more perspective – or rather, the publishing of the article – I will not presume to speak in his name.

But firstly, keep in mind that the Living Income Guaranteed Proposal is not ‘against’ providing everyone with a basic income.  The consideration here is the affordability within doing so – and where affordability is theoretically possible, is it also practically feasible? The basis for the argument of universality is often found within the idea that everyone has a basic right to life, therefore everyone should receive enough money to live off. Sure, sounds good, but then we also have to consider that within the current economic model, many are able to satisfy this right for themselves adequately without the need for a supplementary income. Two other, perhaps more significant arguments, play a role within advocating unconditionality. The first consideration being the reduction of the labor force and the strengthening of the unemployment trap. If one receives a basic/living income without having to lift a finger – what is then the motivation to invest in education, develop skills and take up employment? The effects of providing a basic/living income to only those who need it then takes on an unintended punitive dimension to those who do work. Unfortunately – we have defined ‘receiving something’ as a ‘reward’ and ‘not receiving something when another does’ as a ‘punishment’. Providing a basic/living income to everyone is one way to prevent these adverse effects. The second consideration is the cost of administration. With everyone receiving a living/basic income – a check is written out to every adult citizen in the country, and that’s that – there is no bureaucratic lump-slump that is cost and time inefficient.

The Living Income Guaranteed proposal has a different suggestion to mitigate the adverse effects on employment. Rather than providing everyone with a living/basic income, the suggestions is to set the minimum wage at double the living income. Setting these conditions within the labor market makes employment attractive, because even in the lowest-paying job, one will be far better off than when living on a basic/living income.
Administration would still be simplistic as the proposal suggests, especially at on-set, to stick to providing a living income to those who are unemployed or retired. In other words – those who would usually receive ‘unemployment benefits’ or ‘pensions’ would instead receive a living income. Herein there are no strings attached from the perspective that there is no expectation that a living income recipient should find employment soon. Working/not working becomes a personal choice, but a choice that entails the consideration that when one is not economically productive, it is reflected in one’s income.

So – before looking at the affordability of a universal basic income, it is worthwhile to remember that: even if it is not affordable (in practical terms), that’s okay too – the same goals can be achieved in different ways.

In my next post I’ll lay out some concerns in relation to funding a universal basic income through tax revenue.

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Top Economist says: “Universal Basic Income is Not Affordable”

This is an article by Paul De Grauwe translated from Dutch.

You can find the original article here: http://www.demorgen.be/opinie/een-universeel-basisinkomen-kan-nooit-van-de-grond-komen-a2166604/25mXp2/

A Universal Basic Income Will Never Happen

Top economist Paul De Grauwe, professor at the London School of Economics, writes weekly about people, the world, the economy.
30 December 2014

The idea to provide everyone with a basic income exerts a strong intellectual appeal towards both the left and right side of the political spectrum. The appeal for left is that a universal basic income that is sufficiently high can ban poverty. For the right, a universal basic income is popular because it will remove the unemployment trap. In the current system of unemployment benefits, the unemployed lose their benefits upon finding a job. That discourages the search for a job. This shortcoming disappears with a universal basic income. Because in that system, the unemployed retain their basic income after finding a job.

Affordability

With such broad support you would expect that the universal basic income is already a reality. But that is obviously not the case. And that has everything to do with its affordability. Due to the fact that in such a system everyone, both rich and poor, working and non-working, receive the same basic income, the government requires to organize a massive money stream.

A numerical example: Suppose that the universal basic income is 1000 EUR per month (which is not that much if it is intended to ban poverty entirely) and that the basic income is given to all adult Belgians. This would mean that government expenses would increase by 100 billion, or 25 percent of GDP.

The universal basic income of course makes it possible to save on large portions of social security. Unemployment benefits and benefits for illness can be scratched; we could also save on pensions. But an important part of social security is not dropped. For instance, health care, child support and the portion of pensions above 1000 EUR remain.

Andreas Tirez from the think-tank Liberales has done an interesting exercise on the subject. He came to the conclusion that after deducing the savings on social security that would become possible through the basic income, there is still a shortage of about 35 billion EUR. That is about 9% of GDP.

It then also means that, after the introduction of the basic income, tax revenue would have to increase by 35 billion. The total tax burden that now represents about 51% of GDP, will need to increase to 60% of GDP.

Weakening work incentives

One can argue over these numbers. Do they overestimate or underestimate the costs of a universal basic income? The reality will not be far off in my opinion.

A universal basic income that has the ambition to ban poverty from the world, is then immensely expensive. That doesn’t need to surprise you. To give the poor (a minority in society) a basic income, you have to also provide a basic income to the large majority that doesn’t need it. This leads to new problems. The working majority receives a basic income that stands loose from labor efforts, but will have to pay extra taxes (and not a small amount) on their labor incomes. And that is the best way to weaken work incentives.

Conclusion: The only realistic system is one where the basic income is limited to those who need it. A universal basic income will never happen.

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Ending the Vicious Cycle of Economic Inequality with Living Income Guaranteed

“Rising economic inequality was a major driver of the financial crisis. With the OECD recently debunking ‘trickle-down’ economics, our new report sets out the links between inequality, the growth in scale and influence of the financial sector, and the dangers for financial stability.”

“Privatisation and the doctrine of maximising value for shareholders have increased the amount of economic activity focused on extracting the largest possible short-term profit. These trends are referred to collectively as ‘financialisation’.”

“This diagram lays out the seven indicators of economic instability, each fuelled by rising inequality and increasing financial sector activity:



Our report describes how these indicators laid the path for the 2008 crash, and threaten to do the same again:

1. Increasing inequality depresses demand since consumption levels depend more on the wages of those at the lower end of the income scale, than the profits of the wealthy
2. In the face of stagnating wages, households rely increasingly on debt to maintain their lifestyles with rising asset prices, especially in residential housing, worsening this.
3. Financial liberalisation allows money to flood into countries with trade deficits, such as the USA and the UK, providing the funds for debt-led consumption.
4. Snowballing wealth at the top increases risky financial speculation.

Inequality doesn’t bring growth, it brings economic instability

In recent years there has been a marked slowing of growth across the world’s wealthiest economies, with none returning to the growth trends experienced before the crisis. Many have begun to speculate that this stagnation could, in fact, be a permanent development – meaning that wealthy economies are fundamentally unable to create enough demand to keep growing.
The mainstream political consensus has for decades now suggested that inequality is a price worth paying for economic growth. But new research from the Organisation for Economic Co-operation and Development (OECD) shows definitively that this inequality/growth trade-off is false – adding to a growing body of research showing that inequality actually prevents economies from growing. This points to a fundamental structural flaw in the economy: if the proceeds of growth are not shared, the pie stops growing.

The pursuit of higher returns for the already wealthy within this dwindling pie cannot persist forever. With wealth refusing year on year to trickle down, debt has been used to plug the wage-consumption gap for the rest. The signals are showing quite plainly that this pursuit of growth, via inequality, is ineffective and unsustainable.”

The New Economic Foundation suggests both reversing the trend of liberalizing the financial market and at the same time implementing efforts to reduce inequality. The implementation of the Living Income Guaranteed proposal will see poverty eradicated  and ensure a limit to inequality where, at the very least, everyone will have an income sufficient to lead a dignified life – herein effectively stopping the currently allowed trend of unrestrained inequality where the wealth of a small elite is paid for by the lives of many. Concurrently, financial markets will be restrained by limiting the need for excessive debt and the move towards citizen shareholding of human rights and basic resource companies – where those profits are utilized for the funding of a Living Income Guaranteed – flowing back into the goods and service market – and no longer the currency in a financial monopoly game. Unfettered inequality and an unrestricted financial market are unsustainable – the solution is here – please read and share the Living Income Guaranteed Proposal to redefine our economy and manifest the values and ideals of humanity, dignity and justice – in fact.




About the New Economic Foundation:

NEF is the UK's leading think tank promoting social, economic and environmental justice. Our purpose is to bring about a Great Transition – to transform the economy so that it works for people and the planet.

The UK and most of the world's economies are increasingly unsustainable, unfair and unstable. It is not even making us any happier – many of the richest countries in the world do not have the highest wellbeing.
http://www.neweconomics.org

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