Popular Front of Judea
28th October 2013, 01:40
It's always amusing -- and sad -- to see new arrivals here parrot the austerity gospel here. "OMG budget deficits. Looming hyperinflation!" Of course it is that "printing money" that has kept outright collapse -- with all that entails -- at bay.
Capitalists have a dilemma. The very measures that can keep capitalism a going concern are the same ones that erode its ideological underpinnings. I am all for erosion. How about you?
Today, Basic Income, the proposal that the government provide each and every citizen an income sufficient to meet his or her minimal needs, sounds utopian, maybe even ridiculous. Soon it will merely seem impractical and a little later, it will be recognised as obvious, inevitable and necessary, not because it will provide a safety net for our poorest citizens or even reduce inequality, worthy as those goals are, but rather because it creates demand, the only thing our economy currently lacks. Basic income may well prove to be the best tool to preserve our capitalist system.
These days capitalism and technology have made us so efficient that creating goods and services requires ever less labour. A dozen workers can make steel it used to take hundreds to produce. Three men and a tractor can pick as much cotton as 1000 sharecroppers. White-collar workers are not immune to productivity gains. The personal computer is doing to office workers what the internal combustion engine did to the horse 100 years ago, making them obsolete. On the micro level, of course, this is wonderful. Productivity increases mean you can make more stuff with fewer inputs. If I need fewer workers, I can keep more profit.
On a macro level, however, it is problematical. Since my workers are your customers, if I hire fewer workers (or am able to pay them less) they spend less in your shop, which means you buy less inventory and fire some of your workers and this demand deficit ripples through the economy, creating a gap between potential and actual output. A guaranteed basic income, giving citizens money they will spend straight away creates demand and ultimately stimulates the animal spirits of the private sector.
If you think about it a bit, it is a no brainer.
But the functioning and advantages of basic income is not the point of this essay. I want to look instead at why it still seems utopian and ridiculous. Lets think about George Osborne and his economically illiterate advocacy of austerity. Even the IMF tells us British GDP has suffered because of this misguided policy. Why then, does the Chancellor continue to claim that reducing government spending is vital to economic recovery?
Basic Income And The Atavistic Appeal Of Austerity | Pieria (http://www.pieria.co.uk/articles/basic_income_and_the_atavistic_appeal_of_austerity )
Capitalists have a dilemma. The very measures that can keep capitalism a going concern are the same ones that erode its ideological underpinnings. I am all for erosion. How about you?
Today, Basic Income, the proposal that the government provide each and every citizen an income sufficient to meet his or her minimal needs, sounds utopian, maybe even ridiculous. Soon it will merely seem impractical and a little later, it will be recognised as obvious, inevitable and necessary, not because it will provide a safety net for our poorest citizens or even reduce inequality, worthy as those goals are, but rather because it creates demand, the only thing our economy currently lacks. Basic income may well prove to be the best tool to preserve our capitalist system.
These days capitalism and technology have made us so efficient that creating goods and services requires ever less labour. A dozen workers can make steel it used to take hundreds to produce. Three men and a tractor can pick as much cotton as 1000 sharecroppers. White-collar workers are not immune to productivity gains. The personal computer is doing to office workers what the internal combustion engine did to the horse 100 years ago, making them obsolete. On the micro level, of course, this is wonderful. Productivity increases mean you can make more stuff with fewer inputs. If I need fewer workers, I can keep more profit.
On a macro level, however, it is problematical. Since my workers are your customers, if I hire fewer workers (or am able to pay them less) they spend less in your shop, which means you buy less inventory and fire some of your workers and this demand deficit ripples through the economy, creating a gap between potential and actual output. A guaranteed basic income, giving citizens money they will spend straight away creates demand and ultimately stimulates the animal spirits of the private sector.
If you think about it a bit, it is a no brainer.
But the functioning and advantages of basic income is not the point of this essay. I want to look instead at why it still seems utopian and ridiculous. Lets think about George Osborne and his economically illiterate advocacy of austerity. Even the IMF tells us British GDP has suffered because of this misguided policy. Why then, does the Chancellor continue to claim that reducing government spending is vital to economic recovery?
Basic Income And The Atavistic Appeal Of Austerity | Pieria (http://www.pieria.co.uk/articles/basic_income_and_the_atavistic_appeal_of_austerity )