Category Archives: finance

Universal basic income (UBI)

Amazon has revealed its latest plan to automate American workers out of existence with its futuristic machine controlled grocery store.

According to a study by Ball State University’s Center for Business and Economic Research, the use of robots and other manufacturing efficiencies was responsible for 88% of the 7 million factory jobs lost in the United States since peak employment in 1979.

The Economic Security Project (ESP) – a coalition of over 100 technologists, investors, and activists – has announced that it is committing $10 million over the next two years to explore how a “universal basic income” (UBI) could ensure economic opportunities for all.

Elon Musk, the iconic Silicon Valley futurist, predicts “There is a pretty good chance we end up with a universal basic income or something like that, due to automation.”

With political uncertainty across the Western world highlighting rising levels of economic inequality, many others across the political spectrum are considering adopting UBI in the future, giving everyone a guaranteed minimum payment. In the 21st century to date there have been pilot projects in America, Canada, Namibia, Uganda, Kenya, Brazil, Holland, Finland, Italy and Scotland, described briefly in Wikipedia.

UBI – one of three main economic reforms?

James Robertson shared news (scroll down to 4.The Practical Reforms) of a meeting of the North American Basic Income Guarantee Congress at which there was co-operation between supporters of two of the three main reforms in total money system reform – land value taxation and basic income. Alanna Hartzok, General Secretary of the International Union for Land Value Taxation, expressed a hope for future meetings at which supporters of all three policy proposals could discuss the relationship between reform of the money supply, introduction of land value taxation and the replacement of welfare payments by a citizen’s income.

UBI – life enhancing?

Just as Green parties everywhere have said for many years, Elon Musk expects that UBI will enhance life with ‘ownwork’: “People will have time to do other things, more complex things, more interesting things and certainly have more leisure time.” Others, however, believe that without the need to pay for rent and basic necessities, people will not be motivated to work and will not make good use of their basic income and free time. Cynics will – and do – dismiss ‘the happiness agenda’ (Layard, Norberg-Hodge) and the recent Landmark study which found that most human misery in the Western world is due to failed relationships or ill-health rather than money problems and poverty.

If accompanied by a more comprehensive education?

The findings indicate the need for a broader education, giving some concept of good marital and parental relationships, an understanding of the country’s social and taxation systems and the development of expertise (until the Plain English Campaign succeeds) in interpreting official forms and negotiating online applications.

Increasing apprenticeships and retraining for those who become redundant is worthwhile but far more input is needed. The Sure Start focus involving parents and children from the earliest days was working very well until funding was cut by the coalition government in 2011, instead of building on its success.

Harrow mothers campaigning after 4 Sure Start centres had been given notice to quit

There are now 1,240 fewer designated Sure Start centres than when David Cameron took office – a fall of 34 % according to figures obtained by the Labour Party in a Freedom of Information request. The North East and London have seen the biggest fall in numbers, with over 40% of centres closing. The closure rate is increasing countrywide and councils have listed other centres which may well have to go this year.

Compensating for the cost of UBI

A total audit would balance the expense of an enhanced Sure Start programme and the cost of UBI over time, by quantifying:

  • reduced expenditure on the NHS and prison service due to the improvement in mental and physical health
  • and lower expenditure on policing and social services due to less stressful household and neighbourhoods, diminishing the intake of legal and illegal drugs and reducing crime.

So, in the foreseeable future, will 3D printers and robots take care of the necessities? And will basic income lead people to begin to improve relationships with each other and the rest of the natural world?

 

 

 

h

Not ‘commercially viable’? Fracking: environmentally, socially and financially a bad investment

The decision to sell its share in Third Energy, announced by Barclay’s chairman will be welcomed by many. Mainstream media, however, are failing to report this; five pages were searched and all witnessed to publicity coming only from campaigning groups – a snapshot of the first page may be seen below.

Third Energy, a Barclays subsidiary, which had a licence to frack just south of the North York Moors national park has “not become a profitable investment”. This is due to local opposition, which delays companies’ progress, according to Barclay’s chairman John McFarlane, speaking at the bank’s annual general meeting.

Barclays’ has now announced that it will sell its stake in fracking company Third Energy “in due course”.

Steve Mason of local campaign group Frack Free Ryedale said in a press release: “Clearly fracking is a bad investment environmentally, socially and financially. Where is the long term future of this industry? Why would you put money into an industry that is increasingly rejected by communities and could get banned at anytime?”

 

 

lll

Moving towards a new, balanced, green economy

Dr Christine Parkinson’s recently published book sets out the following series of measures which could move us towards a new, balanced, green economy:

  • introducing greater incentive schemes to encourage businesses to develop, use and market greener technologies and to penalise those who don’t. Examples of this could include: using and developing renewable forms of energy; phasing out motor vehicles which use petrol or diesel and introducing those that run on easily-accessible clean energy;
  • investing in research institutions which have the ability to develop innovative solutions to today’s climate-change problems;
  • introducing legislation to reduce the use of the motor car, such as restricting the number of cars owned by each household, unless they run on clean energy;
  • phasing out coal-fired power generation, ending fossil fuel subsidies;
  • introducing a carbon tax on those companies who continue to use fossil fuels;
  • rebalancing the economy, so that the rich are not rewarded for irresponsible behaviour that adds to the carbon load;
  • setting targets for meaningful reductions in carbon emissions by an early date, as suggested by Desmond Tutu in his petition (chapter 1) and ensuring that the calculations for this are correct;
  • phasing out nuclear power and nuclear weapons worldwide and re-channelling the money saved into the incentive-schemes and investments mentioned above;
  • proper funding of those institutions regulating the tax system, so that tax evasion and avoidance is properly penalised;
  • shifting the tax system to penalise those activities which need to be discouraged, such as greenhouse gas emissions and the accumulation of wealth;
  • banning certain household appliances and gadgets, which are not necessary and only add to the carbon load;
  • establishing a new institution, which will monitor the use of fossil fuels by companies and promote, and provide support for, the use of greener forms of energy;
  • encouraging less air travel, by raising awareness about the damage this is doing to the planet and encouraging airlines to invest instead in technologies that do not damage the planet;
  • working globally with other partners to reduce deforestation;
  • re-balancing international trading systems, so that goods and animals are not transported unnecessarily across continents and seas, adding to the carbon load;
  • encouraging countries worldwide to be self-sufficient in terms of goods and resources, so that goods are not imported which can be produced internally;
  • re-thinking and re-balancing entirely transnational trading systems;
  • working globally to find a better means of international co-operation in working jointly to reduce and reverse that damage that is currently being done to the planet;
  • encouraging partnerships between local government and local cooperatives and social enterprises;
  • encouraging the setting up of local groups (3G groups), where individuals can meet together to share what they are doing to reduce their carbon emissions and to encourage each other to keep going with it, even if the majority of others are still in denial (3G stands for three generations – the amount of time we have left).

She continues: “Some of the ideas above are already being worked on, and others are not about changing the economic system but about reducing carbon emissions, but I hope these are a starting point for others to add to, if we are really serious about taking meaningful anti-climate-change measures before it is too late”. 

* 

“Three generations Left” can be ordered direct from the publishers, using this link. Whilst much of the book is viewable on this website, she would prefer you to buy a copy as any profits from the sale of this book will be used to fund her son’s work amongst slum children in Uganda.  Last year was a difficult one for this project (Chrysalis Youth Empowerment Network), as due to the devaluation of the pound post-Brexit, monies sent from the UK to Uganda had lost a fifth of their value. Contact:  ChristineEP21@gmail.com.

 

 

 

 

Basic income

Readers who are unaware of the basic income concept can find an outline here.

As Ontario, Canada’s largest province, became the latest to announce a universal basic income three year trial (read on here), we read that a privately-funded, short-term pilot program is being run by this Silicon Valley accelerator, Y Combinator, in California.

The goal is to see how people react in the U.S., says Sam Altman, President, Y Combinator Group. The program gives “unconditional” payments to selected residents of Oakland. The administrators write, “we hope basic income promotes freedom, and we want to see how people experience that freedom.” If it is successful, the plan is to follow up the pilot with a larger, longer-term program”.

Altman says: “50 years from now, I think it will seem ridiculous that we used fear of not being able to eat as a way to motivate people.”

The Dutch universal basic income proposal is for UBI to replace other social security benefits. It would be paid for with revenue from a number of taxes, including a 30% tax on business profits, tax on air pollution, and a higher tax on “big fortunes,” according to Johan Luijendijk, co-founder of the Basisinkomen 2018 advocacy group, which argues that UBI would be affordable because it would replace other government support programmes.

Replacement or supplement?

Over the years in Britain the writer had always heard of UBI as a replacement proposal – but now she reads Professor Karl Widerquist, founder of Basic Income News, describing the Dutch proposal as unique.

The Basic Income European Network (BIEN) agreed at its general assembly in Seoul (in 2016) that universal basic income should not be a replacement of other social services or entitlements, but instead should work in combination with other services. Widerquist in an email with CNBC, is reported to have said universal basic income “is not ‘generally considered’ as a replacement for the rest of the social safety net. Some see it primarily as a replacement. Others see it as a supplement, filling in the cracks.”

The Swiss campaign for the basic income referendum

Earlier this year, a draft report, tabled by a Member of the European Parliament, Mady Delvaux-Stehres, warned that preparations must be made for what it describes as the “technological revolution” currently taking place, including provisions for the “possible effects on the labour market of robotics”. The report which urges member states to consider a general basic income in preparation for robots taking over people’s jobs passed by 17 votes to two.

Ms Delvaux-Stehres said: “We ask the commission to look at what kind of jobs — or more precisely what kind of tasks — will be taken over by robots. There needs to be a discussion about whether we need to change our social security systems. And even whether we have to think about universal revenue, because if there are so many unemployed people, we need nevertheless to insure that they can have a decent life”. 

However the recommendation to “seriously consider” basic income was rejected for inclusion in the final report, with 328 MEPs voting against the recommendation, 286 MEPs voting in favour, and eight abstaining from the vote.

A study by Oxford University’s Carl Frey and Michael Osborne estimates that 47% of U.S. jobs will potentially be replaced by robots and automated technology in the next 10 to 20 years. Those individuals working in transportation, logistics, office management and production are likely to be the first to lose their jobs to robots; according to the report universal basic income may be necessary.

 

 

 

Delhi’s Devinder Sharma calls for a GEP measurement to replace the current GDP yardstick

Edited extracts from the latest article in Ground Reality

Sensible voices, however few these may be, have now begun to be heard. The pressure to de-globalise is an outcome of the anger that built up slowly and steadily as inequalities worsen and the world goes deeper and deeper into an environmental crisis, fast heading towards a point of no-return.

iucn-header

The term ‘ecosystem’ was coined by Dr Roy Clapham, a botanist, in 1930. According to IUCN, the definition provided by Christopherson in 1997 is apt: “An ecosystem is a natural system consisting of all plants, animals and microorganisms (biotic factors) in an area functioning together with all the non-living (abiotic) factors of the environment.” The Convention on Biological Diversity (Earth Summit, Rio deJaneiro,1992) defines an ecosystem as: “A dynamic complex of plant, animal and microorganism communities and their non-living environment interacting as a functional unit.”

Unfortunately, Adam Smith did not measure the wealth generated by these ecosystems and the generation of economists who followed the principles of market economy also failed to look beyond what was prescribed in the textbooks. Many of the severe problems the world faces today — greenhouse gas emissions leading to climate change, the melting of ice caps and glaciers and the destruction of the environment (soil, water, oceans and air) — are due to economic thinking which created and thrust upon nations the GDP structure as a measure of wealth generated – based on a flawed assumption of what actually constitutes wealth. As Sharma has repeatedly said, if a tree is planted the GDP does not show it as growth, but if it is cut down the GDP grows.

But according to one study, the actual economic value of a fifty year old tree is as follows: 

  • Oxygen $ 7,700
  • Water recycling $ 10,000
  • Pollution control $ 17,700
  • Shelter for animals $ 8,300
  • Soil conservation $ 8,300

Yet if the tree is felled, the market price would be in the range of $ 1,100. See also the TOI report on Delhi Greens assessment.

Whether we like it or not, Sharma continues, neoliberal economics is bringing the world dangerously close to a tripping point.

A contract was signed in the early 1990s between the pharmaceutical giant Merck and a public-sector research institute in Costa Rica — InBio. Merck agreed to provide $1 million for two years to support ‘chemical prospecting’ which essentially means scouting the available biodiversity for commercial gain. It agreed to provide a 5% royalty arising from sales of any such products developed from samples of plants, animals and microorganism collected from with Costa Rica. Merck was then able to access huge resources for a meagre fee – 5% of the world’s biodiversity.

Biological resources have been conserved and protected by communities/tribes which have lived in these areas over the centuries

Mineral wealth exists in areas where abundant forests and tribes exist and communities living in hilly terrains and mountains have traditionally protected ecosystems. People living downstream in the river basins and plains have enjoyed the benefits of the untiring efforts of these custodians of immense biological wealth, who have been deprived of all the economic benefits – a one way transfer of wealth which has taken place over the centuries.

tribes-2-farms_and_forest_martali_village_eastern_india_2012

Ehrlich and Ehrlich (1981) coined the term ‘ecosystem services’ and the Millennium Ecosystem Assessment (MA, 2005) provided the first international effort to quantify ecosystem services, followed by ‘The Economics of Ecosystems and Biodiversity (TEEB), based at the United Nations Environment Programme (UNEP) which created an Ecosystem Service Value Database based on 1500 global peer reviewed publications.

The destruction caused by development is generally considered as inevitable, based on economics that does not make any attempt to integrate the real cost-benefit ratio. However, though a number of studies are currently underway in numerous institutes/universities, the discipline of ecosystem services has still to be recognised. Sharma believes that efforts to calculate the monetary value of ecosystem services will be increasingly valuable in development planning, because the value has hitherto been taken as nil or free of cost. He hopes that once economic values are established, planners will make decisions which will not be based solely on economic gain.

devinder-edited-utube-7Sharma (right) advocates the computation of a Gross Environment Product based on the valuation of ecosystem services, ensuring that ecosystems are no longer associated with poverty. This will require the discarding of the economic assumption that growth automatically trickles down. It doesn’t. The amount of real wealth nations has created should be indicated by the measure of sustainable growth achieved. Becoming carbon neutral is one such indicator.

Primarily with this underlying objective, the Chandigarh-based trust Dialogue Highway, in collaboration with the Department of Environment Studies, Panjab University, organised the 2nd International Dialogue on Himalayan Ecology (Jan 28-29, 2017) on the theme: “The Economics of Himalayan Ecosystems”. (The youtube link leads to the programme in detail, but only a few screen shots). Experts from across the country made presentations based on the outcome of research undertaken to ascribe economic values to the ecosystem services provided by the Himalayas.

Sharma is sure that this dialogue will go a long way towards mainstreaming the subject of ecosystem services in policy planning and intends to undertake a similar exercise for the Western Ghats in the months to come.

 

 

 

Government needs to formulate intelligent rules and incentives to generate productive work

In 1989, John Gapper visited a Unilever factory in Grimsby, once run by Birds Eye Wall’s, which had just won an award for industrial harmony. He records that the workers had agreed to job cuts and to work in teams, retraining and raising productivity in return for higher wages. But eventually, the ‘overriding focus on shareholder value’ forced a management decision to outsource. Unilever declared the factory too small and inefficient, closing it in 2005. Alongside the destruction of hope and employment, two years later the abandoned building itself caught fire.

grimsby-factory-fire

When capital was freed to move abroad, it became all powerful. It had been harder for companies to impose changes on their workforce when many were union members and moving production to other places was difficult. Once capital controls had been lifted in 1979, managers’ demands on workers with limited or obsolescent skills increased, using the threat of work moving to a greenfield site, or to the other side of the world.

Contrast with this situation with the stand taken by a smaller, still prospering business*:

kirsty-story

The Grimsby experience has been repeated in many places since 1989 with the loosening of barriers to trade and migration, and the unleashing of globalisation. People not educated at business schools or trained to run global supply chains had a tougher time, losing jobs and having benefits stripped. Their losses have made communities receptive to the gospel of economic restoration.

To generate and to keep productive work, investing capital more effectively for those in abandoned places, government needs to formulate intelligent rules and incentives.

The goal for companies to create decent jobs for local citizens – ‘a founding purpose of business’ (Gapper) – is only to require for all what many in London or New York already enjoy.

*http://www.birminghampost.co.uk/business/firm-quits-chamber-over-sending-3965485

 

 

 

Martin Dent launched the campaign to cancel Third World debt

Martin Dent was an academic and former colonial civil servant who launched a campaign to cancel Third World debt. Some of us met him in Birmingham when he spoke about the concept he was formulating and gave moral support. Recently we searched for news of him and found his obituary in the Telegraph:

martin dent 2

Martin Dent, who has died aged 88, was a former colonial civil servant and an eccentric academic who co-founded Jubilee 2000, the campaign for an amnesty on world debt; against all expectations it proved spectacularly successful, to the tune of tens of billions of dollars.

The genesis of Jubilee 2000 was in 1990 when Dent — then a politics lecturer at Keele University — drew up a petition calling for the one-off cancellation, by the end of the millennium, of the crippling debt owed by the world’s poorest countries. It was signed by a group of his students at Keele, and Dent said in 1998: “We wanted to find a way of forgiving the debts of others without saying it was OK for them to come back and ask for some more money next year. This is a one-off remission, not to be repeated, if at all, for a considerable period. Only in this way can we have a new beginning.”

The idea was slow to get off the ground. But in 1993 Dent joined forces with Bill Peters, a former High Commissioner in Malawi who had been quietly working on debt relief for the previous decade. Together they wrote to MPs, ambassadors, bishops and bankers to argue the justice of their cause.

Dent’s great-great-great grandfather was Thomas Fowell Buxton, who succeeded William Wilberforce in the task of mobilising public opinion against slavery and the slave trade in the early 19th century; and he liked to quote Buxton’s remark: “With ordinary talents and extraordinary perseverance, all things are attainable.”

Dent and Peters believed that the small group of anti-slavery campaigners had succeeded only through “a colossal mobilisation of opinion”, and set out to reproduce this achievement .

Helped by Peters’ contacts, they attracted heavyweight support: Archbishop Desmond Tutu of South Africa; the Archbishop of Canterbury; the then chairman of Lloyds Bank, Sir Jeremy Morse; and a number of showbusiness personalities, among them Anthony Hopkins, Steve Coogan, Peter Gabriel and Lenny Henry. They also won the backing of the then Prime Minister Tony Blair and a majority of British MPs. Eventually the G8 countries promised to act to the tune of some $100 billion.

By the turn of the century more than 20 million people from 155 countries had added their names to the Jubilee 2000 petition. Campaigners for Jubilee 2000 and other similar groups now estimate that since then $130 billion of debt has been irrevocably written off for 35 of the poorest, most heavily indebted, countries.

Dent was appointed OBE in 2000, and the next year he and Bill Peters shared the International Peace Award of the Gandhi Foundation.

The second son of a brewer, Martin Joseph Dent was born on July 11 1925 and grew up at Harlow in Essex. Educated at Eton, he found it difficult to organise his life according to the usual rules and norms, being constantly in trouble for arriving late at classes, losing books and having his clothing in various states of disarray. At the same time he was probably the only boy in the school who regularly read the Financial Times.

After serving in the Army at the end of the war he went up to Trinity College, Cambridge, where he read History and Economics. In 1952 he became an Administrative Officer with the Colonial Service in Northern Nigeria at Makurdi, the capital of Benue Province, where he endeared himself to the local population by learning their language and traditions.

In 1960 Dent single-handedly quelled a riot among the Tiv people. Donald Nichol, in his book Holiness, wrote about this incident, giving Dent the pseudonym of “Graham”: “A populous African tribe had broken into rioting and armed rebellion. To have quelled them by force would have required thousands of troops. Graham, however, simply went among them unarmed, unprotected, stumbling along with his spectacles slipping down his nose and with his bush shorts slipping over his knees. In village after village he addressed the people, charmed them and calmed them, until soon the rioting ceased.”

When some of the Nigerians who had helped him stop the riots were accused of being involved in starting them, Dent gave evidence on their behalf. His reward was to be dismissed, without a pension, for conduct that was “bad for the British Empire”. But the Tiv people never forgot him, and in 1994 bestowed on him the chieftainship title Asor-Tar-U-Tiv (“one who heals the land of Tiv”).

In later years Dent frequently revisited Nigeria, and other countries in central and southern Africa, maintaining close links with many African leaders, including General “Jack” Gowon, Nigeria’s Head of State from 1966 to 1975. He was thus well-versed in the difficulties created by the burden of debt in developing countries. When a relative left him a large legacy, he used it to set up a bursary fund for students in Malawi and added to it himself.

On leaving the Colonial Service, Dent did two years’ research at St Anthony’s College, Oxford, and in 1963 was appointed a lecturer in Politics at Keele University, where he remained until retiring in 1990. He was highly respected by his students, who were also fascinated by the disorder of his life: the interior of his car was once found to contain a stash of coins and notes and 93 biros, in addition to books, medicines and a compass which he used, he said, to work out whether he was travelling north or south on the motorway.

A modest man of deep Christian faith, Martin Dent was unmarried. But he had many friends. One lady was invited to dinner at what Dent described as an excellent restaurant. She dressed for the occasion, only to be told on arrival that the place had closed three months earlier. Fortunately, Dent said, there was a good fish and chip shop nearby, to which they happily adjourned.

Martin Dent, born July 11 1925, died May 2 2014

Jubilee 2000 has now become the Jubilee Debt Campaign.