Sunday, June 30, 2013

Basic Income

Nike is to tackle rising labour costs at its Asian factories by “engineering the labour out” of its shoe and clothing production as it seeks to defend its profits.

Don Blair, Nike’s chief financial officer, said its objective was to reduce the number of people making its products as he highlighted the impact of a sharp increase in wages in Indonesia.

Here’s another heart-warmer. Bank of America  has decided it’s been paying U.S. workers too much to review mortgage and other loan documents.  So it’s off shoring those jobs.  Now workers in India will be checking off on those appraisals, etc.  It should help the “struggling” conglomerate.
What strikes me about a dirty job isn’t that it needs doing – it’s that someone has to do it to get by. There’s no other choice for them. And it’s getting more difficult to find a job to make a living off. In the midst of a (still) growing economy, 2.1m Australians are unemployed or underemployed, Ford and SPC Ardmona (to name but a few corporates) are laying off thousands of jobs, Adecco chief Patrick De Maeseneire is calling for the abolition of the minimum wage, and in the tech community there’s a raging debate about when (not if) robots will replace most jobs we know of today. For labour market entrants facing an economy with 40% of us in insecure work, the choices (for those aside from a lucky few) are largely between waiting to be notified of shifts via text message, rolling short-term contracts in the public sector, or studying for years and years to end up in the same trap anyway. And that’s all before the economy really tanks.

This shouldn’t be our legacy. Australia is one of the richest countries in a world that has never been richer. Our GDP is on track to reach AUD$73,123.05 per capita this year. That we live with poverty, insecurity and economic anxiety is a matter of political choice, not necessity. We create enough value for everyone to have a basic living income. That’s why I’d like to propose every citizen, every permanent resident, receive a basic income of AUD$30,000 per year. No exceptions. No means testing. A universal minimum income.
Why Australians deserve a universal minimum income (The Guardian)
The new inequality we are seeing has little to do with how well educated you are. It’s hard to penetrate beyond the barrier on education alone. The new inequality is about capital owners and non-capital owners. And increasingly, it’s about technology capital owners. Those who own the robots and the tech are becoming the new landlord rentier types.

This, of course, fits our counterintuitive model of the world which looks at this crisis from the point of view of efficiency and abundance jeopardising the rate of profit. In that sense, we believe this crisis really started with the dotcom collapse.

It was disrupted capital from the old-economy world which drove the subprime fiascos, as it strove to secure itself to anything so that it could preserve its diminishing value.

This is because the dotcom era created something of a self-canabalising effect for most of the capital system. The more you invested in technology, the greater the efficiencies. The greater the efficiencies, the greater the abundance. The greater the abundance the more likely capital itself would be undermined, since you can’t put a price on air, or anything else which is abundant.

What’s happening now, arguably, is that the canabalising effect is being stalled by the monopolisation effect instead. The owners of the capital — which has the potential to create abundance — are protecting their rate of profit by stalling efficiency (a la patent trolling) and by means of the monopolisation effect.

This may not go on forever if the rise of technology jumps over into the Wiki open commons world, at which point it becomes accessible to everyone irrespective of the monopolies.
But for as long as the monopolies exist and gate-keep access to the higher living standards provided by their own technology, some sort of subsidising effect is needed from the government to stop people becoming totally disenfranchised from the system.

Undoubtedly, conservatives as Krugman notes will find this sort of thinking a bitter pill to swallow. But really, it’s better to think of it more as compensation for “not working” — since more work only accelerates the abundance problem, while leading us to another commodity and natural resource constraint — than redistribution of wealth per se.
Time to take basic income seriously? (FT Alphaville)


  1. It's a great idea that's probably not going to happen until we have universal world peace.

    A better suggestion: stop whining about the how evil the evil system is, and create your own system outside the system.

  2. So give up blogging in other words. I'm beginning to agree.

    1. I couldn't do that unless I got a bigger audience by doing so. I like the attention way too much.

      That written, keep up the good work. If you want to do something "useful," start boosting John Robb's signal. He has solutions to some of the problems.

  3. No, please don't give up. Your blog is the one I look forward to the most when I download my feeds! I really appreciate your commentary and syntheses of the various currents shaping our future.


Note: Only a member of this blog may post a comment.