Category Archives: political decision-making

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?

 

 

 

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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.

 

 

 

Mary Robinson’s call for citizens across the globe to trust their best instincts and work together for justice

Mary Robinson, a former president of Ireland, UN High Commissioner for Human Rights and a member of The Elders, writes:

mary-robinsonMillions across the world feel that the current globalised system is not working in their best interests. From unemployed former steel workers in the US rust belt, to the small island states in the South Pacific where livelihoods are threatened by climate change, people are angry that decisions taken by governments and in corporate boardrooms appear blithely indifferent to their daily struggles.

We know from history that crude populism offers no real solutions, creating only false hope and scapegoats. Yet it is also clear that there are many politicians who will cynically exploit genuine grievances for their own ends. All of this means that the new year is beginning with uncertainty and trepidation at every level of society.

Potentially seismic changes in political leadership in 2017, not only in the US but also across Europe, Iran, India and parts of Africa, could disrupt established institutions and multilateral processes.

At the same time, across the world we see rising levels of xenophobia and intolerance, a narrowing of political vision and a focus on parochial introspection. It feels as if a lid has been taken off a simmering pot of tensions and discontent. Views on race, gender and religion that only a few years ago were deemed unacceptable are now commonplace. Over the past year we have seen how public discourse can be tarnished by harsh and ugly rhetoric. This is most evident online, where women and minority groups are targets of cowardly abuse and intimidation.

Some politicians claim this is a populist revolt against global elites and that the whole system of international governance established since the end of the second world war, including the UN, needs to be comprehensively overhauled. I would argue that the values that form the foundation of the UN and the Universal Declaration of Human Rights are as relevant today as they were in the 1940s and that our challenge is to uphold them.

Politicians and business leaders must reassert our values of dignity for all At the same time, we need to make changes to the international governance system so that it is more resilient, robust, representative and equipped to adapt to new geopolitical realities and complex long-term challenges, including climate change, mass migration and growing inequality. If we are to have any hope of making constructive progress in 2017, and stopping this rising tide of anger turning into destructive nihilism, all responsible politicians, civil society and business leaders must stand firm and reassert our basic, common values of dignity for all. I am encouraged by the fact that there are many leaders, organisations and citizens who are still determined to act together to secure a sustainable future for our people and our planet.

I saw this for myself at the COP 22 climate negotiations that took place in November 2016 in Marrakesh. Leaders from countries at all levels of development — as well as business, cities, regions, civil society and indigenous communities — renewed their commitment to the goals set out in the Paris Agreement. The focus now is on implementation, so that any rise in global temperatures can be limited to 1.5C or below, an absolute prerequisite for climate justice.

Fortunately, leadership exists. In Marrakesh, I was very impressed by the Climate Vulnerable Forum: a group of 48 countries that are among the most vulnerable to the impacts of climate change, and most committed to leading a rapid transformation in their own countries to carbon-neutral, climate resilient economies. I was inspired by their call for “a new era of the pursuit of development, ending poverty, leaving no person behind and protecting the environment” and for an international co-operative system that is fully equipped to address climate change. This is precisely the right vision and attitude — and a powerful antidote to today’s pervasive gloom. Only by embracing such a holistic approach can we successfully implement not only the Paris Agreement but also the UN Sustainable Development Goals. Taken together — which is absolutely essential, because without action on climate change the rest of the UN’s 2030 Agenda for Sustainable Development will be unachievable — they have the potential to improve the lives of millions of people across the planet.

It must be a bottom-up approach, in which leaders and policymakers show humility and listen to the experiences and voices of people at the sharp end of climate change, poverty, violence and injustice. This is no time for naive optimism; the challenges ahead are stark and the voices of hostility are strident. But I remain inspired by the words of Nelson Mandela, who said in 2003 that: “Those who conduct themselves with morality, integrity and consistency need not fear the forces of inhumanity and cruelty.”

As a member of The Elders, the group of independent former leaders founded by Mr Mandela to work for peace and human rights, I will hold his words close in the coming year and hope they will continue to inspire citizens across the globe to trust their best instincts and work together for justice.

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.

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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.

 

 

 

New Economics question: is there a socially just, green, internationalist and small ‘c’ conservative form of protectionism?

trump-carrier

There was widespread media coverage of American president elect Donald Trump’s appearance at the Carrier furnace factory in Indianapolis, marking a deal to stop the company from moving hundreds of jobs to Mexico and threatening “consequences” for companies that relocate offshore. He also exerted pressure on Ford who backtracked on opening another small plant in Mexico.

Whilst understanding the welcome for more local jobs, Margaret – at a recent meeting of the West Midlands New Economics Group (WMNEG) – wondered if any deeper thinking would take place, “Or will Ford continue to make the ‘gas-guzzlers’ which are damaging the health of human beings and the planet?” Ann asked if there were different forms of protectionism and has decided to look further.

Colin Hines presents a detailed alternative – ‘progressive protectionism’ – which will be the focus of a future WMNEG meeting. As he wrote in the Guardian:

There is a left, green alternative that could effectively challenge the rise of the extreme right, while giving voters hope for a better future. In my new book ‘Progressive Protectionism: Taking Back Control’, I detail why progressives should endorse the controlling of borders to people, capital, goods and services, but not as occurred in the 1930s, when governments attempted to protect domestic jobs while still wanting to compete and export globally at the expense of others.

Progressive Protectionism, by contrast, aims to nurture and rebuild local economies in a way that permanently reduces the amount of international trade in goods, money and services and enables nation states to control the level of migration that their citizens desire . . . championing policies geared to achieving more job security, a decrease in inequality and protection of the environment worldwide.

corbyn-eu-socialist-leaders

Hines would urge Jeremy Corbyn to use his undoubted popularity with European socialist leaders, at next month’s London meeting of European socialist parties, to discuss how all EU member states can cooperate to reverse the present political, social and economic instability that haunts the whole continent.

He calls for a beneficial treaty replacing the outdated, discredited Treaty of Rome, which is increasing economic insecurity through austerity, relocation of businesses and the rapid migration of workers: “This should prioritise the protection and rebuilding of local economies and so provide a positive answer to voters’ concerns. To achieve this, a debate needs to be started about why Europe needs a progressive protectionism to replace the increasingly discredited Treaty of Rome with a Treaty of Home Europe-wide”. Cross-border issues such as responding to non-European migration, climate change, pollution, crime and military security would still of course require intra-European cooperation”.

He will be speaking on this theme at various events, including one meeting on 22nd April in Birmingham

 

Colin Hines is the convener of the Green New Deal group and for ten years, co-ordinator of Greenpeace International’s Economics Unit. His latest book, ‘Progressive Protectionism‘, was published in January 2017. It details why and how groups of regional nation states and their communities should join together to reintroduce border controls to protect and diversify their economies, provide a sense of security for their people and prevent further deterioration of the environment. He is also author of ‘Localization – A Global Manifesto‘. This may be bought in hard copy or read on computer/Kindle via the Amazon website. Those who avoid Amazon may like to read the assessment of corporate tax avoidance by lawyer Marc Wadsworth, here.

 

 

Theresa May, please note the shift in Sweden’s government focus on reducing carbon emissions

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Currently Sweden incinerates about 50% of its waste to make heat and energy – emitting carbon dioxide – some years even importing a large amount of trash from other countries. Its current government admits that this is not really recycling and that it takes less energy to actually recycle and reuse than it does to burn and manufacture a replacement from scratch.

We now read that Sweden’s ruling Social Democrat and Green party coalition is to submit proposals to parliament to slash the VAT rate on repairs to bicycles, clothes and shoes from 25% to 12%.

Take for example France, which, in 2015 passed a law outlawing planned obsolescence and requiring manufacturers to offer consumers free repairs or replacement parts on appliances up to two years after the date of purchase. Like the proposals in Sweden, the French law — Germany and Norway have similar laws on the books, as well — aims to curb the amount of waste entering landfills, keep money in the pockets of hand wringing-prone consumers and generate jobs in the appliance repair sector.

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MNN notes that the Swedish coalition will also submit a proposal that would allow people to claim back from income tax half of the labour cost on repairs to appliances such as fridges, ovens, dishwashers and washing machines.

The hope is that the tax break on appliances will spur the creation of a new home-repairs service industry, providing much-needed jobs for new immigrants who lack formal education.

Sweden has cut its annual emissions of carbon dioxide by 23% since 1990 and already generates more than half of its electricity from renewable sources. But emissions linked to consumption have continued to rise.

Per Bolund, Sweden’s minister for financial markets and consumer affairs and one of six Green party cabinet members says that the new policies tie in with international trends around reduced consumption and crafts, such as the “maker movement” and the sharing economy, both of which have strong followings in Sweden, “There is an increased knowledge that we need to make our things last longer in order to reduce materials’ consumption,” he said.

The proposals will be presented in parliament as part of the government’s budget proposals and, if voted through in December, will become law from 1 January 2017.

 

 

 

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