Day 256: Will LIG result in a Centrally Planned Economy with a Coercive Government?

This blog-post is a response to a Facebook Comment made in relation to the Living Income Proposal.

"Government is still government. Centrally coerced power nonetheless."

I suggest reading the blog ‘How Companies will be Nationalized and What does it Mean? LIG’ for more clarity on how we suggest nationalization is to occur – where it is NOT the government that would centrally own/control the resources ‘on behalf of the people’ – it would be the every citizen directly being a shareholder of the nationalized companies. This means that the companies will not be used in favor of the government – but in benefit of the population as a whole. Herein, no changes really have to occur in how the companies are operated today, the only difference is where the profit goes and who takes part in shareholder meetings. 

" "If we define competition as the ability achieve the best living condition in a society " has absolutely NOTHING to do with competition within a free market sense. Such fundamental misrepresentations / rebranding of words is disservice."

Competition for the sake of competing/winning is a disservice to society as a whole. This is what the ‘invisible hand’ doctrine is all about – that self-interested competitive behavior yields result that are favorable to others in society, which was not intended. However, currently this competition has, let’s say, ‘evolved’ to the point where the ‘losers’ in the competition literally lose everything – including those things that are supposed to be guaranteed human rights. This is where LIG intends to make a difference. Competition is useful from the perspective that it creates an environment where participants strive to create the best product and the best service – which in turn enhances the quality of life of the members of society (which is what is referred to in the quote you mentioned) but it shouldn't do so at the expense of an individual’s ability to provide themselves with living necessities.

"None of these terms mean anything. "Activation of the economy"?"

Simply referring to increasing economic activity, employment and productivity.

Who knows what standards they employ for not interfering with the "nationalization of natural resources". How do you qualify "interfere with public services"? Who the hell even determines what is objectively the "highest quality"? This is complete monopoly of resources, enstated through force / coercion / compulsion, with extremely ill-defined definitions of language. This is one step away from having a dictator.

You’re using quite a slippery-slope type of argumentation here – it would be a good example of ‘how not to do it’ in critical reasoning courses. Anyhow – monopoly of resources: no – it would be quite the opposite – resources would be owned by every citizen of a country and would no longer be able to be controlled by a few. Remember – it is not government that owns the resources, it is the citizens directly. Also – it’s not that we are suggesting to have only one company provide for instance electricity and that this company should be nationalized and that this company will now receive funds from the government that other companies don't - No – we encourage healthy competition between firms supplying the same/similar services – whether these are ‘nationalized’ firms (in the sense that is discussed in the Living Income Proposal) or whether they remain in private hands.

 A HUGE issue with this program, besides the mind-blowing idiocy in their understanding of basic economic concepts, is the perversion of price. I guarantee you if you linked a good description on how they intend to replace the price mechanism I'll blow it away in a second. Not even Zeitgeisters' resource-based economy can figure this out.

 You know how monopolies are kept in check in a FREE MARKET? Companies A, B, C, D. A uses profits / loans to buy companies B. Company C raises the price of his business since he knows that company A is trying to corner the market. If Company A tries to buy D he either already used so much of his $$$ or took on so much debt than company D can simply hold on and corner the market himself.

 Self-interest and FREE markets naturally limit these things. It is self-regulating.

How about collusion? A, B, C, and D form a union and agree to raise prices across the board. Guess what? The first company who defects from the pact and drops his prices gets the WHOLE market share. In return the other 3 companies HAVE to lower their prices as well.

Probably have never heard that in your entire life.

Please – I suggest you get your head out of your economy-books and rather do some real-life investigation. How can Nestle, for instance, have 12% of the WOLRD market if the free market is so self-regulating? Theory and practice are not the same thing. The free market is inherently not designed to take into account, for instance, living conditions – as you probably know – equilibrium wages have nothing to do with living wages – yet, how can we allow companies to set prices that adhere to market-principles, when it means they cannot pay their employees a proper wage? With LIG we suggest to make minor adjustments so that at the very least, everyone’s human rights are guaranteed and so that any worker is actually recognized as someone who participates in providing their labor for the benefit of society through producing goods and services, through a wage double the living income.

You require to consider that ‘pure’ free market principles are nothing more than a nicely formulated set of justifications the elite uses to continue abuse in the market. So, I suggest supplementing your studies with independent research, so that you can come to grips with what is really happening and how it doesn't match the economic theories. 

It's a big ol lie that the government "protects" you from monopolies and collusion. They kill the competition and FORM the monopolies. Governments take out the risk of monopoly by taking AWAY the risk. Ever hear of bank bailouts? Privitized profits and socialized losses? They only got that big anyways because of the government. The problem isn't banking. It's the coercive nature of government which traps people (under the point of a gun) to this fraud.

Again – we propose a very limited role for government with Living Income Guaranteed and suggest that as much as possible is done automatically to minimize the possibility of fraud and inefficiency.

Bureau of Standards? I mean the hell, it is not economically efficient of ideal to produce everything to the "highest-standard" possible. Should a lead pencil be made from Brazillian hardwood? Would wooden pallets for shipping all be required to be made from hardwood to withstand maximum weight load? Would we even have the existence of goods such as particle board / press wood / mulch (after all ALL of these were reinventions of waste products which had no productive use before...... but according to this theory we should have not have even cut the lumber before we planned what to do with the chips). You put this policy in place 100's of years ago and we'd have no such thing as cheese or whey protein because damn........ once you make the cheese we'd have to employ 100 researchers to find out what to do with the whey! Guess no cheese until we figure out the "perfect plan" eh?

Here you’ve taken words out of context. With the Bureau of Standards the intention is to go back to good-quality products. Of course, there is no purpose for a pencil to be made from Brazilian hardwood. But there is a purpose for a microwave to last for 50 years instead of 5. So – we’re here looking specifically at equipment/tools that are not actually consumer-goods in the sense of, for instance, food that is consumed – where you buy it, you consume it, now it’s gone and you have to buy more. Equipments/tools were originally designed/meant to last a long time, but as it was realized that if you make something to break – people have to come buy a new one – inferior materials started being used and tools/equipment started becoming consumer products in that you use it only x times/ for an x amount of time and now it’s broke and you have to buy a new one. Such behavior creates consequences not only for the current but for future generations as well, as it perpetuates a wasting of resources. So, the Bureau of Standards is a suggestion to ensure we do not waste resources on inferior products. This is something the free market does not regulate, because it is an external cost. Yet, it is absolutely important that we start pacing our rate of production to the physical if we want to keep living on this planet. It is not, however, a means for central planning. In the same way we have regulations for safe food-production – there should be a Bureau of Standards for quality tools/equipment because it is in everyone’s best interest.

The understanding of the fundamentals are completely whack. Even if you cut past this hogwash it ultimately is just coercive force / violence by the state put into extreme, pretty much Soviet Russia or Communist China. Centrally-planned, coerced ideals through "objective calculations" that seem good on paper but starve millions due to misallocation of resources.

Not really worth any more of my time. All of the 10+ pages from this program have been utterly shameful. If it wasn't for the fact that stupid people can "democratically" vote and enslave the rest of us under this type of tyranny I wouldn't even bother.

I suggest taking a breath – letting go of your fears, and with the perspectives given in this blog – read the proposal again – so that you may see it for what it is, rather than filter it through your mind – as you’re currently making associations and interpretations that are in no way part of the LIG proposal.

For context and more information:

Living Income Guaranteed - the Proposal: http://livingincomeguaranteed.wordpress.com/the-proposal/

Living Income Guaranteed YouTube Channel - watch the hangouts: https://www.youtube.com/user/BIGuaranteed?feature=watch 

Living Income Guaranteed Website: http://livingincome.me

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Day 255: How will Companies be Nationalized and What does it Mean? LIG

How will companies be nationalized and do you foresee any resistance?

Within LIG, nationalized companies would not be owned by the government – they would be owned by each person of the population directly. One of the great down-sides of nationalizing companies as how it has been done in the past, is that the government owns the companies, and thus – the companies are managed in a way to benefit the government, often creating inefficiencies due to corruption and fraud. With LIG – the government would be the vehicle to transfer the company from the private to the public sector – but the company would not be owned by the government, where the government then supposedly runs the companies ‘on behalf of’ and ‘in the interest of’ the people. No – each citizen would become a shareholder of the company and have the ability to perform their shareholder duties. The Liquid Democracy platform would herein be beneficial to allow such large numbers of people to participate in events such as annual shareholder meetings.

In terms of the process of nationalization – herein the laws of a specific country must be consulted. In countries where nationalization occurs through providing compensation to the current business-owners, we suggest this would be the last investment for which personal income taxes would be required. The government would then purchase the companies on behalf of the people, however still with taxpayers’ money – which implies the company belongs directly to the people.


What does it mean in effect that a person owns an equal share in a country's national companies?

We suggest that every citizen becomes shareholder of those companies that are nationalized as part of a nation’s national heritage. In being a shareholder, each citizen owns an equal part of the company and hence:
-    Each citizen has an equal vote in important decisions, such as nominating directors.
-     Management and daily operations are likely to remain as they are.
-    The companies and their management are directly accountable to every citizen.
-    Citizens can submit shareholder resolutions.
-    The companies serve the interest of the shareholders, which means: they serve the population as a whole.
-    Government officials play no privileged role in the management of the nationalized companies – they are citizens and thus their role equals that of every other citizen.

In terms of receiving dividends, every citizen has a right to receive a Living Income Guaranteed, funded by the profits of the nationalized companies, when they have no other means of supporting themselves (as determined by the particular means-test of the country).

So the share-income from National companies does not work as stock dividends do in today's world, if those who have sufficient means to support themselves have their Shares but don't get LIG?

Correct.

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Day 248: Q&A on Living Income Guaranteed

Here follow questions and perspectives about the Living Income Guaranteed proposal - from the Discussion Forum at livingincome.me.

It would be very helpful if all the essential information on your LIG proposal were to be found in one place, preferably a single page or two, instead of being scattered all over numerous blogs and vlogs. What I mean by essential information is how exactly it is to be financed, who are entitled to it and on what conditions.

I am aware that your proposal differs from the one laid out by the Basic Income Earth Network (BIEN), but what I would like to know is to what extent LIG comply with the four criteria that are adhered to by most proponents of BIEN. Those criteria are that the Basic Income should be: universal, individual, unconditional and high enough for a decent standard of living.

What I have understood so far is that the LIG is means-tested, in other words conditioned on not having wealth or savings or a paid job for that matter, but not conditioned on the willingness to take a job (I only know the latter through correspondence, but have found no references). What this seems to imply is that if you are willing to live with few belongings no one can force you to work. This would make the proposal as a whole partly conditioned.

But what happens if you are not working full-time? Will you be entitled to a Living Income supplement? And if so, how would it be calculated considering the minimum wage is twice the amount of the LIG? Is the minimum wage the same for a part-time job for instance?

As I understand the proposal, it is to be financed solely from sales tax or value added tax, the idea being that the value of labor is directly reflected in the prices of goods and services. But does this mean that income tax is completely abolished? And have you ever considered a negative income tax system which is a model often used in financing a Basic Income?

From what I can see, LIG is to be paid individually and not to households or families, so that settles, I guess, the question of individuality, but how about universality? It is not entirely clear to me whether every individual, including children, will receive it, and, if so, the full amount. Also, if children are included, will their LIG be dependent on what means the parents have, savings, job or otherwise?

It is stated in several places that LIG is to be high enough to secure a decent standard of living, so that would seem to satisfy the last criteria.

I would prefer having all replies here or with links to texts, not videos. Thanks.

“It would be very helpful if all the essential information on your LIG proposal were to be found in one place, preferably a single page or two, instead of being scattered all over numerous blogs and vlogs. What I mean by essential information is how exactly it is to be financed, who are entitled to it and on what conditions.”

Yes, we’re working on exactly that. The information will soon be found on a page on this website.
“I am aware that your proposal differs from the one laid out by the Basic Income Earth Network (BIEN), but what I would like to know is to what extent LIG comply with the four criteria that are adhered to by most proponents of BIEN. Those criteria are that the Basic Income should be: universal, individual, unconditional and high enough for a decent standard of living.”

The principle of universality in terms of ‘anyone gets a living income regardless of whether one is employed or not’: No – Living Income Guaranteed does not adhere to this principle. It is about making sure that everyone has a Guaranteed Living Income – meaning, an income that secures a dignified life. We suggest the minimum wage to be double a Living Income so that if one is employed – one can afford not only a dignified lifestyle, but one with ‘perks’. In general terms, then, LIG is for those who are unemployed.

In terms of your question on working part-time – labor will be equated at an hourly rate, where the particular rate will also be determined according to one’s skill/educational level. One may thus be able to be employed part-time without requiring a Living Income Guaranteed as one is self-sufficient due to the particular rate one receives as determined by one’s skill / level of education. For those working part time on a minimum wage would mean they would receive the same amount of income as they would being unemployed and receiving LIG. Herein – one can look at setting an absolute minimum of part-time wage at 3/2 of the Living Income Guaranteed in order to create incentive for part-time workers. Alternatively, one can simply accept that those who are currently working part-time to make ends meet, will instead stop working, receive a LIG and from there perhaps have more time to perform the tasks that makes it impossible for them to work full-time in the first place, which are often tasks such as caretaking or studying. Those part-time workers who like to work to keep themselves busy or because they would like to contribute but have no financial reason to do so – can still do this and receive a part-time minimum wage, or can volunteer and receive LIG.

Children – Ideally, yes, children should receive a LIG, which would be available to the parents up until a specified age, after which, the parents are locked out and the LIG is solely accessible by the child. A child’s LIG is not dependent on the parents’ income. However – one would require investigating the financial capabilities of a particular economy at the implementation stage. It is possible that one would require to continue with a basic child grant system until the economy expands sufficiently to allow for a LIG for every child.

Individual – yes – Living Income Guaranteed is not given to families but to individuals.

Unconditional – yes, but only insofar as discussed above. Meaning – anyone receiving a minimum wage is excluded from LIG. However, there are no other specified conditions such as having to actively search for a job.

High enough for a decent standard of living – yes.

“As I understand the proposal, it is to be financed solely from sales tax or value added tax, the idea being that the value of labor is directly reflected in the prices of goods and services. But does this mean that income tax is completely abolished? And have you ever considered a negative income tax system which is a model often used in financing a Basic Income?”

The primary way of financing LIG would be through the nationalization of resources:

Nationalization of Resources and Social Dividends
One of the ways to fund a Living Income Guaranteed is through the Nationalization of Resources within a particular country. Within this, relevant resources are appropriated towards the public good, where those companies dealing with the production and manufacturing process of these resources will be nationalized. The citizenry would then effectively become shareholders of these companies. Economic profits or surplus value generated by publicly owned companies would partially (or wholly if possible) finance the Living Income Guaranteed.
Aside from the obvious funding function of such a step, the nationalization of resources and connected enterprises also provides an opportunity for the management of the country’s resources by the people of that country, and is thus in fact an extension of direct democracy.

On Taxation:

Taxation
Within the Living Income Guaranteed, Direct or Personal Tax methods will be discontinued. Only Indirect Tax methods will be facilitated in the form of inter alia Value Added Tax (VAT), Sales Tax and Import Duties. When a society and system is in place which effectively tends to all points of requirement within a country, one does not require an extensive government structure to tend to those points which the private sphere has not yet covered. As such, there is no longer a need for excessive taxation, as the role and functions the government will be required to execute and fund, will be minimal.
The amount of tax an individual takes on, will then be directly related to one’s activity and participation within a particular system or section of society (eg. Toll roads / Road pricing).

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Day 243: Living Income Guaranteed and Communism

Whenever a new way of organizing society and our economic system opens up, one of the comments that comes to the surface is :"But isn't that communism?"

Now, communism in itself as a word has become a word of Terror. It is used specifically to instigate fear reactions within people, where you do not want to be linked or involved in anything that may be deemed 'communistic'. But what is communism really? Nobody knows anymore. It's one of those terms -- just like the Inflation concept -- that has taken on a life of its own. In the case of communism, it's become a boogieman story. I mean, when people talk about communism and 'fighting communism' it is done from an assumption that communism is 'one clearly defined thing' and ‘it’s clearly evil’. Truth is, there were many various different concepts that developed that could be deemed 'communistic'. It's the same with Religion, you can talk about for instance 'Christianity' but then within that you have various variations and adaptations of Christianity. Forms of communism were adopted in Spain in the 1930s which were highly effective, yet you don’t hear about it anywhere.

So when you talk to people and ask why they are against anything that could closely be related to communism, they go "oh but just look at Russia, and all those people that died it was a total failure, it’s never going to work". What is not being done is putting communism that took place in Russia (or what actually would be more correct is to say 'the communism that DIDN'T take place in Russia) into context.

What must be understood is that Communism as an idea and Communism as ‘what happened in Russia’ are two different things. You see, people were angry, people then had an idea and then they went into a Revolution to try and implement that idea. The thing is that once they were in power – they had no practical plan or way of implementing their idea in a way that would actually work. They had no knowledge of things like politics and economics and were completely inadequate and incompetent to actually run a country. So, they tried things out, it failed, they went into fear and established a form of authoritarianism and all in all the story did not have a happy ending.

To go back to the Christianity example – the way Communism is treated is the same way the Jesus message and Christianity is being treated today. We have what Jesus said, being one thing – as principles of ‘Love thy neighbour’ and ‘Give as you would like to receive’, which is very much a principle of Equality and Harmonious Living. And then you have Christianity in all its various ways as what is ‘supposedly the Jesus message’ – but when you look at what is actually being lived out, is a message of fear, hate and inequality. So just like ‘what Jesus said’ and what ‘Christianity does’ are two completely different things – you can’t say that ‘Communism as an idea’ and ‘How communism took place’ are the exact same thing.

If you look at what happened in Russia, this is exactly one of the reasons why we never promoted any type of ‘Revolution’ to bring about change within any of our proposals, because they are impulsive and short-sighted. So yes, communism in Russia failed because there was no practical common sense reasoning or research that had gone into what they were doing. And because they failed big time, communism now has forevermore been branded by the mark of the Devil, and we should fight it in any way we can.

So now, each time something comes up that even in the slightest way could disturb the way things currently are and can in the slightest way be interpreted as ‘communistic': fear rises and it gets boxed away. All communism has been reduced to in this day and age is a form of fear induced superstition to keep people from actually thinking for themselves, kind of the same way Parents will tell their children that the boogieman’s gonna come for them if they don’t eat their veggies. Come up with any idea that will bring about a change in the way the current system works and people will come at you with the big C-Word to scare you into shutting up and conforming.

It’s come to a point that anything that doesn’t fit and support the status quo is labelled ‘communism’ and ‘socialism’ and anything that does support the current system is called ‘democratic’ and ‘free’. It’s just a word used as one pleases – if you don’t like it, call it communistic – if you do like something, call it ‘democratic and free’. I mean, you can have two countries who both to some extent operate within a form of Nationalization – but depending on how much they threaten the status quo the one will be called Communistic and the other one won’t. It’s just a word of convenience. Take Chile for instance whose economy is based on the nationalization of copper, copper being one of their main exports. They nationalized it and they did it effectively – and yet Chile is not deemed communistic. In fact, the World Bank will tell you that they are very proud of Chile and that Chile is an example for other South American countries in terms of adopting the Free Market System. But if you’re a different country and you nationalize say your oil and you adopt policies that are unfavorable to the United States = now you’re communistic = You are evil, your president is the Devil, you must be stopped.

It should actually become a rule that you can’t use the word ‘Communism’ in any form of argument or way to make a point, because the word has gotten abused so much that it’s just a joke. If you can’t make a point without resorting to terms like Communism as a form of Propaganda to terrorize people, then you just shouldn’t bother.

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Day 137: Greece: The Birth and Death of Democracy

Today I watched an interesting documentary, called ‘Catastroika’ [see bottom for embedded video].

It was made in response to the financial crisis which has been taking place in Greece, and investigates the effects of Privatization.

It walks you through several countries, starting with Russia after the collapse of the Soviets – which had been used as a ‘neo-liberal laboratory’, where liberalists wanted to test mass privatization. It takes a look at France, where in Paris where big companies (along with EU authorities) wanted to privatize the water – were successful in this until the new mayorship took it back. During the time that the water was privatized, the quality of service went down while the consumers experienced massive price increases (260%) – without any form of justification (economic or technological), it was just a price rise thus, in the name of profit.

When the total privatization in Paris failed, the big guys turned their focus to Italy.

Here, again, the point of privatization was pushed. A referendum was held (a referendum is a vote by the public where they indicate their stance towards a particular policy issue – everyone has to vote and the results are binding, this is the best method currently to find out what public opinion is on a particular point) – and it turned out that 97% of the people, were against privatisation of the water.

When it was inquired whether the water was going to be privatised, the government said it couldn’t – as per the referendum.

So you’d think “Game Over” right? Nope – they simply put people in place like some executive guy or ex-banker (can’t remember the specifics, you’ll just have to watch the documentary lol), who then completes the point, against popular vote.

Where does this leave democracy? I mean, that was like a completely unconstitutional move.

Another example that is walked through, was the privatization of the Railways in England, and yes you can guess it: catastrophic. And even though the past, as the UKs history with the privatization with the Railways was disastrous, the point was still pushed within Greece.

This time, instead of putting people in place to just ‘make it happen’ – another approach was taken: media manipulation. Within the media, the public railway system was severely slandered and degraded, over and over – so that the public would agree, that maybe privatization could be an answer.

This documentary is very interesting to watch. Often, when there is talk about ‘virtual democracies’ – where ‘everything on the outside looks like it’s democratic’ but on the inside the very opposite happens – everyone’s attention goes to Third World countries elsewhere, like Africa – “out there” and criticise the people’s conduct their for their failure of democratic consolidation.

In the meanwhile, corruption and anti-democratic actions are taken the whole time, in the West, in Europe, in Greece: the very cradle of democracy.

It definitely proves one point: democracy is dead.

Private interests as the big multinational companies have taken precedence of what the majority of the people want – and it’s happening everywhere, all the time. (Little in between rant: It's funny because, in economics, the point of 'the private must be protected from the public' is emphasised ALL THE TIME, where if you allow the public to take over, they will infringe on YOUR freedoms, and you will not be able to 'realise yourself' and 'pursue your own personal good as you see fit'. I mean, that's just so much BULLSHIT -- and just plain propaganda to justify where the corporate world can take over and make insane profits at the expense of the majority, in the name of "Freedom" and "Self-Realization" -- because somehow, if that gets taken away it also imposes SERIOUS problems on your own personal freedom -- I mean, Really???)

Several economists were interviewed (some professors at universities such as London), and states that private enterprises do not necessarily do better than public ones – and that they can perform at the same level. Liberal economics would NOT agree with this, so it’s cool that this is coming to the fore.

Just in Greece with the financial crisis going on now for 2 years, the suicide rate has gone up by 20%.
The situation we’re in, worldwide – is seriously fucked up.

Though, it is not too late. The documentary also points out, that most of these problems are Political in nature, and that thus through participating within Politics, we can reverse this type of destructive policies which serve no-one but the few at the top of the private companies.

This is a crucial point, because the whole thing of ‘Let’s revolt’ and ‘Let’s demonstrate’ like the Occupy movement, are really pointless. You have to change the system, from the inside out, through popular support – not by attacking it.

Investigate Equal Money – we can change this.

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