In the recent UBI study undertaken in Germany, most participants continued to work:
"One of the key findings of the three-year experiment is that people who received the basic income kept working an average of 40 hours a week, dispelling the myth that basic income would make people lazy.
However, a significantly higher percentage of the participants in the basic income group changed jobs compared to the control group. Knowing they had a financial backup plan presumably helped them make the move.
It was also found that more people in the basic income group started studying, sometimes on top of their job."
My concern would be...who owns the government that's issuing the UBI? The potential to twist UBI- to replace its universality with conditionalities, e.g. enhancements for remaining childless so as to reduce the stock of 'unnecessary' population, ultimately leaving just the owners of capital, their robot-servants, and perhaps a few tribes of 'wild humans' as an anthropological curiosity.
Ann, thanks for sight of the article very interesting. A couple of thoughts.
Guy Standing has been a passionate and articulate supporter of UBI across the globe not just for first world economies. He preferred UBI to a Job Guarantee (the latter more loved by US economists eg S Kelton) because of the freedom it gave people. I can't speak for Guy but I'm sure he reasoned that most people would still need to work and not pursue leisure solely as the monetary amount of income could not fully replace a standard wage.
On the credit/investment income cycle I see the power of this argument but arguably much of our so called investment isn't productive, doesn't improve main street productivity, wages, public services, etc and arguably fuels speculative investing/rentier class activities. So much of the cycle you refer to is actually leaking money or returns that are not economically or socially useful/ productive.
This made me think the cycle might behave more like a whirlpool instead!
Why do we forget the barbaric attacks russia has been undertaking against Ukraine's diverse society since 2014? Every day, including today, russian army kills Ukrainians. Also, russia's so-called "president" well qualifies as one of "old, white and embittered capitalists" if the vast inequality of russia's society and its paranoid militarism are taken into account.
We do not forget the barbaric attacks Russia has undertaken against Ukraine; just as we do not forget the genocide of the Palestinian people. But whereas Russia was penalised, Israel’s sovereign assets are protected.
We also do not forget that the United States is guilty of violating international sovereign immunity rights and confiscating financial assets deposited in good faith in U.S., UK, and EU central banks. Whereas Afghanistan’s $7 billion in reserves frozen in American institutions caused concern, the immobilizing of Russia’s $300 billion in reserves “represented a whole new category of economic combat,” as investigative journalist Stephanie Baker explained....2 For more, read this article...: https://carnegieendowment.org/research/2024/12/the-case-for-an-african-payments-union-lessons-from-the-european-experience?lang=en
As you point out, trust is a significant element to the functioning of a healthy economy and together with the acknowledgement of the need for economic systems to meet the needs of all citizens and that economics is anyway a social construct it seems a little like looking through the telescope from the wrong end to construct an economic theory from a purely economic pov.
An economy that truly works (as much as any economy would!) surely has to start with people. How do we provide for everyone if we rightly revile the dog-eat-dog paradigm that currently prevails? The answer is, of course, that it is not an economic but a human problem. An economic model should be no more than an assistive tool designed to facilitate our desire to thrive whereas we currently have a system that raises money to a status above that of humans and gives it an embodiment beyond its incorporeal limits. We were lost as soon as it became a thing, a commodity in itself instead of a symbol of something more important - that trust you mentioned.
UBI and UBS are not opposing ideas. The world is messy and there is always the tendency to tie things down that should be more fluid. These are tools that can be configured in multiple ways and in combination with each other and a host of other tools from the economic, social and political lockers.
I don't think it is possible to design a new system and substitute it for what we have but the starting point for something different should be at the village level where everyone knows everyone else and can see and feel the consequences of the tools they use.
energy currency, everything else is prone to the machinations of greed of the advantaged, be it labor or extraction, the thermodynamic principles can not be challenged.
a currency that is only minted when energy is produced, verification via requiring 1% systems support cost paid in a small protons of the produced energy.
Money supply tied directly to sustainable production, as cheap energy is a universal subsidy.
Theory being we redirect greed for "growth" at keeping costs low for all, considering food is an energy as well. If we really try to think of the dynamics of a currency tied directly to energy production we have to first consider the opportunity costs of the current system as ann has well documented.
With an energy currency subsiding the cost of living then a ubi is looking a lot cheaper.
long term stabilization project for energy costs instead of bond market, imagine if every time some bad eco went down we doped a few 100bil on sustainable energy production.
realistically not many countrys could pull something like this off
I've read the article and the comments, and as usual, the most important word is not mentioned at all: land. We keep talking about "employing" people like they are slaves, and they are, because we've removed any option for them to choose their own life, living by their own wits. That might sound a bit Jurassic, but it's a fundamental principle that's critical if we're really serious about economic justice. With our currently enclosed system, any UBI would be quickly soaked up by the rent-seekers, through prices, rents and so on. It's a hopelessly flawed idea, as silly as putting an athlete in chains and then offering him crutches to help get around.
The economy has two basic inputs: atoms (materials, widgets, etc) and time (of workers). The latter is fundamental to the social construct we call money because money is ultimately a claim on the time of other people. The value of the claims money makes on atoms is tendentially driven down by "productivity increases" leaving to time aspect ever more predominant. If AI and robots meant that there was little need for workers to spend time working, then money, as a system of regulating how people spend their time, would lose meaning. However this would conflict with the fact that money is also a symbol of status and power. You can only be rich by having things (yachts, servants) that other lack. As long as we think there will be competition for status, then we should expect something like money to exist. This is why UBI can't work in a capitalist economy, though one could imagine a more feudal style economy, or perhaps one line in ancient rome where the rich paid people to riot for them to undercut their rivals.
Good comment! I would suggest to add to 1) atoms and 2) time, 3) energy. Money is a claim on people’s time but also on the availability of an energy surplus. For the individual, if all of their time is devoted to collecting energy (calories) to stay alive, then the resulting lack of an energy surplus creates in a lack of time available for discretionary purposes. By feeding machines (which are atoms assembled in sophisticated ways, although not as sophisticated as living organisms) with energy, we discovered a way to break free from the constraints of our (and our animals’) metabolism, which has the effect of seemingly accelerating time (or rather: we have the ability to accomplish many more things in the same time). Hence the phrase “money is power” is literally true as well as figuratively true - power is the capacity to deliver energy flows. Interest is a claim on future energy surplus. And in the future, energy surplus is likely to decline due to the inevitable and necessary downslope of fossil fuel production.
This article demonstrates both a fundamental misunderstanding of money and disregards all evidence so far on UBI.
It's the exact opposite to what is suggested here. UBI frees up jobs for people who want those jobs and allows others to get on an do the things they want to do in life.
That could starting a business, it could be dedicating oneself to reading books to the elderly. Without it wage slavery is the only option. UBI drives competition for workers (something capitalists hate of course but is actually good for them). To drive innovation we actually *want* rising wages and competition for labor. We wouldn't have automation and machinery and robots if were it not for that competition.
On the tired old trope of "printing money". Governments spend all currency into existence in the first place. Banks do not create net new money with loans as its equity neutral (loan is an asset and a liability). Only public spending does not create a liability for anybody.
As entry level jobs dwindle away we will have no alternative to a Job Guarantee or a UBI.
Is one way to frame this discussion is that in contrast to gold, money is not a thing. Money is a relative value and measure of things. Additional, money only has value if you can exchange it things. So in the suggested UBI world, ownership of the means of production of things will be concentrated and people receiving UBI only have a promise. That creates a very unstable political system.
Landing a man on the moon was archived by a whole economy via he allocation of everyone's work. Since then a bigger economy and more money hasn't meant more landings. Because a whole economy hasn't had the same focus. Political control via a monetary system is a way to allocate this focus.
Maybe we ask the money system to do too many qualitatively different things and it needs redesigning. UBI, as considered here, is essentially a system of ration points. Gold and it's dubious surrogates are essentially ways of holding wealth outside of the money system, but in a liquid form. Reserve currencies facilitate transactions between countries. Credit money enables the benefit of future returns to be invested in the present. It also values the future, relative to the present. Government spending enables future tax revenues to be invested in social, environmental and economic goods. Money in circulation facilitates the myriad day to day transactions. The supply and distribution of money in circulation, in association with the availability of credit contributes to describing market values. Taxation is variously a means to reduce money in circulation, a means of regulation and a source of funds to repay government debt. Expecting a single system, operating as a complex interconnected web, to meet all these functions, everywhere, with efficiency, justice and intelligence is a big ask, especially when a further function of money is to enable corruption of every aspect of the system. Like other aspects of culture, the money system is based on what has been before. This system evolved to extract wealth from the people and the planet. Perhaps unsurprisingly it is not well suited to meeting human needs within planetary limits.
Your analysis is wonderful as far as it goes Ann. Where it falters is in failing to recognize the present monetary applied concept which is Debt ONLY. The word ONLY designates it as a MONOPOLY paradigm not unlike the last monopoly paradigm we dealt with which was Salvation Via Roman Catholic Sacraments...ONLY.
Conceptual monopolies are the bane of human history, and a conceptual analysis of the history of paradigm changes reveals that the answer to monopoly is not advocation of opposites but THE INTEGRATION OF OPPOSITES TO THE POINT OF THIRDNESS GREATER ONENESS which is the classic signature and intellectual process of WISDOM. Furthermore, an analysis of historical paradigm changes reveals that their beneficial effects have always been an aspect or aspects of the natural philosophical concept of grace as in a UNITARY/THIRDNESS GREATER ONENESS OF A PROBLEMATIC DUALITY (like debt and monetary gifting) and again results in a new mental and temporal universe reality whose aspects are one or more of the voluminous other aspects of grace. We need a new monetary paradigm that ushers in a Wisdomics-Gracenomics.
By the way I very much like your idea of social basics. What we need is an integration of work ethic and other positive human purposes to the point of thirdness greater oneness of those two human virtue creating activities.
One aside here. I'm not necessarily suggesting any particular religiosity here by invoking the word grace. You'll pardon the expression: God save us from the gross moralists and the religious obsessives. I am suggesting we stop mistaking the map of religious orthodoxy for the topography of the self actualization of the values and experiences espoused in those orthodoxies.
Ahem…have just had a little edit of some repetitive content..Sincere apologies readers...
UBI militates against the government's desire to provision itself.
In the recent UBI study undertaken in Germany, most participants continued to work:
"One of the key findings of the three-year experiment is that people who received the basic income kept working an average of 40 hours a week, dispelling the myth that basic income would make people lazy.
However, a significantly higher percentage of the participants in the basic income group changed jobs compared to the control group. Knowing they had a financial backup plan presumably helped them make the move.
It was also found that more people in the basic income group started studying, sometimes on top of their job."
(From this article: https://www.dw.com/en/free-money-germany-basic-income-experiment/a-72223009 )
My concern would be...who owns the government that's issuing the UBI? The potential to twist UBI- to replace its universality with conditionalities, e.g. enhancements for remaining childless so as to reduce the stock of 'unnecessary' population, ultimately leaving just the owners of capital, their robot-servants, and perhaps a few tribes of 'wild humans' as an anthropological curiosity.
Yeah, giving the power over systems like that to the current lot is concerning
Ann, thanks for sight of the article very interesting. A couple of thoughts.
Guy Standing has been a passionate and articulate supporter of UBI across the globe not just for first world economies. He preferred UBI to a Job Guarantee (the latter more loved by US economists eg S Kelton) because of the freedom it gave people. I can't speak for Guy but I'm sure he reasoned that most people would still need to work and not pursue leisure solely as the monetary amount of income could not fully replace a standard wage.
On the credit/investment income cycle I see the power of this argument but arguably much of our so called investment isn't productive, doesn't improve main street productivity, wages, public services, etc and arguably fuels speculative investing/rentier class activities. So much of the cycle you refer to is actually leaking money or returns that are not economically or socially useful/ productive.
This made me think the cycle might behave more like a whirlpool instead!
Great article got me thinking.
Thank you.
Why do we forget the barbaric attacks russia has been undertaking against Ukraine's diverse society since 2014? Every day, including today, russian army kills Ukrainians. Also, russia's so-called "president" well qualifies as one of "old, white and embittered capitalists" if the vast inequality of russia's society and its paranoid militarism are taken into account.
We do not forget the barbaric attacks Russia has undertaken against Ukraine; just as we do not forget the genocide of the Palestinian people. But whereas Russia was penalised, Israel’s sovereign assets are protected.
We also do not forget that the United States is guilty of violating international sovereign immunity rights and confiscating financial assets deposited in good faith in U.S., UK, and EU central banks. Whereas Afghanistan’s $7 billion in reserves frozen in American institutions caused concern, the immobilizing of Russia’s $300 billion in reserves “represented a whole new category of economic combat,” as investigative journalist Stephanie Baker explained....2 For more, read this article...: https://carnegieendowment.org/research/2024/12/the-case-for-an-african-payments-union-lessons-from-the-european-experience?lang=en
I appreciate very much your remarks on not forgetting the barbaric attacks against Ukrainians!
While the nominal size of the immobilized FX reserves of russia seems unprecedented, in early 1940s the US acted similarly against the nazi Germany's invasions of Europe when about $7.4bn of FX reserves was "occupied." Here is an article about this move: https://www.foreignaffairs.com/articles/united-states/1941-10-01/freezing-dollars-against-axis
Hence, I tend to disagree with Baker's claim that modern-day russia's case is "a whole new category." For me, russia's is similar to nazi's.
As you point out, trust is a significant element to the functioning of a healthy economy and together with the acknowledgement of the need for economic systems to meet the needs of all citizens and that economics is anyway a social construct it seems a little like looking through the telescope from the wrong end to construct an economic theory from a purely economic pov.
An economy that truly works (as much as any economy would!) surely has to start with people. How do we provide for everyone if we rightly revile the dog-eat-dog paradigm that currently prevails? The answer is, of course, that it is not an economic but a human problem. An economic model should be no more than an assistive tool designed to facilitate our desire to thrive whereas we currently have a system that raises money to a status above that of humans and gives it an embodiment beyond its incorporeal limits. We were lost as soon as it became a thing, a commodity in itself instead of a symbol of something more important - that trust you mentioned.
UBI and UBS are not opposing ideas. The world is messy and there is always the tendency to tie things down that should be more fluid. These are tools that can be configured in multiple ways and in combination with each other and a host of other tools from the economic, social and political lockers.
I don't think it is possible to design a new system and substitute it for what we have but the starting point for something different should be at the village level where everyone knows everyone else and can see and feel the consequences of the tools they use.
energy currency, everything else is prone to the machinations of greed of the advantaged, be it labor or extraction, the thermodynamic principles can not be challenged.
a currency that is only minted when energy is produced, verification via requiring 1% systems support cost paid in a small protons of the produced energy.
Money supply tied directly to sustainable production, as cheap energy is a universal subsidy.
Theory being we redirect greed for "growth" at keeping costs low for all, considering food is an energy as well. If we really try to think of the dynamics of a currency tied directly to energy production we have to first consider the opportunity costs of the current system as ann has well documented.
With an energy currency subsiding the cost of living then a ubi is looking a lot cheaper.
long term stabilization project for energy costs instead of bond market, imagine if every time some bad eco went down we doped a few 100bil on sustainable energy production.
realistically not many countrys could pull something like this off
I've read the article and the comments, and as usual, the most important word is not mentioned at all: land. We keep talking about "employing" people like they are slaves, and they are, because we've removed any option for them to choose their own life, living by their own wits. That might sound a bit Jurassic, but it's a fundamental principle that's critical if we're really serious about economic justice. With our currently enclosed system, any UBI would be quickly soaked up by the rent-seekers, through prices, rents and so on. It's a hopelessly flawed idea, as silly as putting an athlete in chains and then offering him crutches to help get around.
The economy has two basic inputs: atoms (materials, widgets, etc) and time (of workers). The latter is fundamental to the social construct we call money because money is ultimately a claim on the time of other people. The value of the claims money makes on atoms is tendentially driven down by "productivity increases" leaving to time aspect ever more predominant. If AI and robots meant that there was little need for workers to spend time working, then money, as a system of regulating how people spend their time, would lose meaning. However this would conflict with the fact that money is also a symbol of status and power. You can only be rich by having things (yachts, servants) that other lack. As long as we think there will be competition for status, then we should expect something like money to exist. This is why UBI can't work in a capitalist economy, though one could imagine a more feudal style economy, or perhaps one line in ancient rome where the rich paid people to riot for them to undercut their rivals.
Good comment! I would suggest to add to 1) atoms and 2) time, 3) energy. Money is a claim on people’s time but also on the availability of an energy surplus. For the individual, if all of their time is devoted to collecting energy (calories) to stay alive, then the resulting lack of an energy surplus creates in a lack of time available for discretionary purposes. By feeding machines (which are atoms assembled in sophisticated ways, although not as sophisticated as living organisms) with energy, we discovered a way to break free from the constraints of our (and our animals’) metabolism, which has the effect of seemingly accelerating time (or rather: we have the ability to accomplish many more things in the same time). Hence the phrase “money is power” is literally true as well as figuratively true - power is the capacity to deliver energy flows. Interest is a claim on future energy surplus. And in the future, energy surplus is likely to decline due to the inevitable and necessary downslope of fossil fuel production.
This article demonstrates both a fundamental misunderstanding of money and disregards all evidence so far on UBI.
It's the exact opposite to what is suggested here. UBI frees up jobs for people who want those jobs and allows others to get on an do the things they want to do in life.
That could starting a business, it could be dedicating oneself to reading books to the elderly. Without it wage slavery is the only option. UBI drives competition for workers (something capitalists hate of course but is actually good for them). To drive innovation we actually *want* rising wages and competition for labor. We wouldn't have automation and machinery and robots if were it not for that competition.
On the tired old trope of "printing money". Governments spend all currency into existence in the first place. Banks do not create net new money with loans as its equity neutral (loan is an asset and a liability). Only public spending does not create a liability for anybody.
As entry level jobs dwindle away we will have no alternative to a Job Guarantee or a UBI.
Thank you, as always, for a reasoned and very readable update on stuff I mostly ignore (find boring etc)
Is one way to frame this discussion is that in contrast to gold, money is not a thing. Money is a relative value and measure of things. Additional, money only has value if you can exchange it things. So in the suggested UBI world, ownership of the means of production of things will be concentrated and people receiving UBI only have a promise. That creates a very unstable political system.
Landing a man on the moon was archived by a whole economy via he allocation of everyone's work. Since then a bigger economy and more money hasn't meant more landings. Because a whole economy hasn't had the same focus. Political control via a monetary system is a way to allocate this focus.
Do we really want to concentrate this further?
Maybe we ask the money system to do too many qualitatively different things and it needs redesigning. UBI, as considered here, is essentially a system of ration points. Gold and it's dubious surrogates are essentially ways of holding wealth outside of the money system, but in a liquid form. Reserve currencies facilitate transactions between countries. Credit money enables the benefit of future returns to be invested in the present. It also values the future, relative to the present. Government spending enables future tax revenues to be invested in social, environmental and economic goods. Money in circulation facilitates the myriad day to day transactions. The supply and distribution of money in circulation, in association with the availability of credit contributes to describing market values. Taxation is variously a means to reduce money in circulation, a means of regulation and a source of funds to repay government debt. Expecting a single system, operating as a complex interconnected web, to meet all these functions, everywhere, with efficiency, justice and intelligence is a big ask, especially when a further function of money is to enable corruption of every aspect of the system. Like other aspects of culture, the money system is based on what has been before. This system evolved to extract wealth from the people and the planet. Perhaps unsurprisingly it is not well suited to meeting human needs within planetary limits.
Your analysis is wonderful as far as it goes Ann. Where it falters is in failing to recognize the present monetary applied concept which is Debt ONLY. The word ONLY designates it as a MONOPOLY paradigm not unlike the last monopoly paradigm we dealt with which was Salvation Via Roman Catholic Sacraments...ONLY.
Conceptual monopolies are the bane of human history, and a conceptual analysis of the history of paradigm changes reveals that the answer to monopoly is not advocation of opposites but THE INTEGRATION OF OPPOSITES TO THE POINT OF THIRDNESS GREATER ONENESS which is the classic signature and intellectual process of WISDOM. Furthermore, an analysis of historical paradigm changes reveals that their beneficial effects have always been an aspect or aspects of the natural philosophical concept of grace as in a UNITARY/THIRDNESS GREATER ONENESS OF A PROBLEMATIC DUALITY (like debt and monetary gifting) and again results in a new mental and temporal universe reality whose aspects are one or more of the voluminous other aspects of grace. We need a new monetary paradigm that ushers in a Wisdomics-Gracenomics.
By the way I very much like your idea of social basics. What we need is an integration of work ethic and other positive human purposes to the point of thirdness greater oneness of those two human virtue creating activities.
One aside here. I'm not necessarily suggesting any particular religiosity here by invoking the word grace. You'll pardon the expression: God save us from the gross moralists and the religious obsessives. I am suggesting we stop mistaking the map of religious orthodoxy for the topography of the self actualization of the values and experiences espoused in those orthodoxies.
If the unemployed receive UBI they will spend it on goods and services produced by employed people in a virtuous circle, no? What did I miss?