Who is more Fiscally Responsible – Citizens or Elected Politicians?

In the blog-series ‘Democratization – Put your Money where your Mouth is with LIG’ I briefly discussed an argument against direct democracy (placing authority directly in the hands of citizens rather than elected politicians) that dates from the time of Plato – the argument being that citizens would make ‘bad decisions’ and don’t possess the necessary intelligence, knowledge and skills required in political decision-making.

I came across the following information when browsing through the comments on a blog regarding the implementation of a Basic Income in Switzerland:

"Switzerland is an interesting laboratory for direct democracy.

I dimly recall a very interesting study by (I believe) University of Zurich (maybe 20 years old).

They analyzed for each of the 26 Swiss cantons (=states): (1) influence of direct democracy on canton politics (which varies by canton. Some cantons don’t have all that much direct democracy. Others such as Appenzell-Innerrhoden don’t even have a parliament because EVERY single law is passed directly by the people). (2) fiscal situation of the state.

The highly fascinating result was this:

the stronger the people can directly influence public spending and taxes, the healthier the canton’s budgets (!!). The people tended NOT to spend more than they had. Rather, the professional politicians (or the canton’s that gave elected officials greater power) tended to be more fiscally irresponsible."

Naturally, my interest was peaked and I went to search for studies about this topic. And, yes, you guessed it – I found the material supporting these claims. I think we can all agree that when states spend beyond their means – we have a case of bad political decision-making. According to the logic of the argument that it would be dangerous to have citizens directly participate in politics, we would expect citizens’ involvement within budgeting decisions to exacerbate fiscal irresponsibility. And yet – here we have an example that not only shows that citizens wouldn’t make matters worse – but that citizens would do better than elected politicians when it comes to balancing the budget.

If at any point it is relevant to ask the citizens for their direct input on a particular topic to increase democratic practices, it would be: how should we spend public funds? Voting a person into office is one thing – but it is the budget that really determines political policy for the coming year. Mandatory budget referendums should be a minimum requirement for any regime to qualify as a democracy, really. When the extent of your political participation is to vote someone into office – then all you have is ‘hope’ that the people in power will use public funds responsibly and for the purposes that you expect them to. Mandatory budget referendums would create a point of direct accountability towards the citizenry that once politicians are in power, they are indeed acting out their mandate on behalf of the people. It would immediately reduce corruption and prevent budgetary deficiencies down the line, where one is suddenly told that the retirement age has to increase and austerity measures are being implemented because there are insufficient public funds and one only then starts wondering ‘well, where did all the money go?’. 

The fiscal problems most countries are experiencing today could have been prevented. It is now a time of walking through consequence that has already been created and yes, it is worthwhile looking for solutions to address current problems head-on – but it is most important to prevent the same scenario from taking place again. In Dutch there is a saying ‘a donkey doesn’t bump his head on the same rock twice’ – seems like humanity can learn a thing or two from donkeys since we have this tendency of not even looking at what it is we bumped our heads on and why – but simply try to put some ice on the wound. However much we may be upset with governments and politicians – we are the ones who gave them the power to do what they did. The consequence that is here is as much ours as theirs – and rightfully so. If anything – let us at least learn from our mistakes – otherwise all the troubles we’re going through will really be for naught. Let us at least enshrine solutions within the constitution and develop new political practices that we can pass on to the next generations, because surely, part of the consequence we are experiencing is due to continuing traditions from previous generations, but that doesn't prevent us from rising to the occasion and creating new traditions to shape a better future.

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

This post is a continuation to the blog-posts:

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

Please read them first for context.




Example 2

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

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

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

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

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

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

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

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

For more information about Living Income Guaranteed,
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Transcending False Dilemmas with Living Income Guaranteed – Part 2 - Sustainability vs Full employment

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

Example 1

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

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

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

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

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





http://livingincome.me/ 

http://livingincomeguaranteed.wordpress.com/the-proposal/

Transcending False Dilemmas with Living Income Guaranteed – Part 1

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

What is a false dilemma?

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

•    Either medicine can explain how Ms. X was cured, or it is a miracle. Medicine can't explain how she was cured. Therefore it is a miracle.
•    If we don't reduce public spending, our economy will collapse.
•    America: Love it or leave it.
•    The universe could not have been created from nothing, so it must have been created by an intelligent life force.”

(Normand Baillargeon, A Short Course in Intellectual Self-Defense. Seven Stories Press, 2008)

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

Example 1

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

Example 2

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

Example 3

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

Example 4

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

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

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

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

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

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

Common Concerns about the Implementation of a Living Income Guaranteed

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

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

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

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

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

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

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

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

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

Pollution Inequality and Living Income Guaranteed

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

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

In an interview with the professor the following was discussed:

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

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

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

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

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

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

JKB: Air pollution has adverse effects on people’s health, and that means that they have to spend more on healthcare and they miss more days of work, either because they themselves are too ill to go to work or because their kids are sick and they have to stay home and take care of them. It also has adverse effects on property values, which vary with the levels of air pollution in the community.

On top of those outcome effects, it also impacts equality of opportunity, particularly for children. Because communities that are heavily burdened with air pollution tend to have higher incidence and greater severity of childhood asthma, the kids miss more days of school, and partly because they’re missing school and perhaps partly because of the neurological impacts of air pollution on their young and developing cognitive function, there is an adverse effect on school performance.

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

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

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

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




http://livingincome.me
http://livingincomeguaranteed.wordpress.com/the-proposal/
https://www.youtube.com/user/LivingIncome
https://plus.google.com/u/0/communities/117690749220880074672
http://www.twitter.com/LivingIncome

Day 259: Living Income Guaranteed and Raising Children

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

A:

So my question is: Does what you propose with living income guaranteed address this problem? Will parents, like myself, be able to stay home if we want to?

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

And if we DO decide to stay home, will it be seen as though we're 'living off of the state' or collecting unemployment benefits where we will be pressured to get back out into the workforce as soon as possible? Is there a cap of how long we can stay at home with the children?

No - one would not be living off the state, since LIG is not financed through state-owned funds, but by the profits generated from a country's heritage. No one will thus be paying for someone else's LIG, removing the resentment that currently exists within taxpayers towards welfare programs that are funded through income taxes. There are also no caps for how long one can receive a Living Income Guaranteed - it is unconditionally provided; when to take up employment is therefor a decision for each to make in consideration of one's responsibilities.

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

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




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

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

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

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


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

For more perspective, visit www.livingincome.me !

Day 257: Living Income Practicality

Q: Will LIG result in the replacement of jobs by machines?

A: The foundation of LIG is to provide the necessary access to the living necessities as a human right, therefore if jobs are replaced by machines as an on-going trend, people will receive the LIG as a means to have their living needs covered. Therefore we don't directly endorse the idea of replacing human labor with machines as that is at this stage decided by each corporation's capacity to implement it in their business. However, also to consider that with LIG, due to financial security, many will feel more confident to start new business ventures, which will again create more jobs.


Q: How do we prevent those receiving LIG from being exploited by greed? For instance: Everyone working is receiving at least double the Living Income. What is to stop the price of goods from moving up so that it's not feasible for people on LIG to afford goods?

A: There will still be short-term fluctuations in the prices of various goods. However, when the prices of the commodities that represent living necessities follow an upward trend to such an extent the Living Income becomes inadequate – the Living Income amount will be increased. If the Living Income goes up, it means the minimum wage – which is defined as double the Living Income – will proportionally increase as well – thus increasing costs for firms. In the long-run it is therefore in firms’ best interest to expand operations in order to meet the increased demand rather than increasing prices. The period where inflation due to an increase in demand is most likely to occur is after the implementation of LIG. It is key, therefore, to ensure that the implementation is done in a transparent way, so that any increase in demand is not unexpected, but firms are prepared for the change and have defined strategies to expand their output.


Q: How will people be motivated to work and perform well under LIG?

A: The classical notion that money is what motivates people to perform well – where the more one earns, the better one performs, has been disproven – for perspective, watch: http://www.youtube.com/watch?v=u6XAPnuFjJc.
By setting the minimum wage at double the Living Income, every worker is recognized as a vital part of the company, which creates loyalty and a commitment to the goals of the company. It has been shown that when employees receive more than a subsistence income, a firm incurs less turnover costs as well as less costs relating to monitoring the employees. That being said, the relationship between employer and employee is likely to change as LIG increases the bargaining power of employees significantly; no-one will ‘need’ to work anymore. Currently – the threat to lose one’s job is often enough to compromise oneself within one’s job by accepting inferior labor conditions – because one knows that there are always others who will do any job just in order to survive – and thus one is replaceable. With LIG – working is no longer a matter of survival and employers will require to put in the effort to make jobs attractive by creating optimal labor conditions and treating every employee as an individual and not merely as a cog in a machine. The above-referenced video includes several examples of how appealing to employees’ sense of purpose creates far more effective motivation than the threat to lose one’s job.


Q: One point that came up for me is that with the Erasmus program in Europe many students travel to other countries for one year. The student is integrated into the local university system and learns about the culture and the language. In general students' mobility is highly supported by the EU. If there is a country that offers LIG at lower age than most other countries, then that country might see an influx of immigrating youth - would this play a role?

A: Being a student in a country doesn’t make one a citizen, and so, one is not entitled to a Living Income. Countries can specify whether permanent residents would receive LIG, as well as citizens – this could also go in stages, where initially only citizens can claim a Living Income and later, as more countries implement LIG, permanent and perhaps even temporary residents can receive LIG as the inflow of immigrants will not be as intense at that stage.




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

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