About the ideal organization of Society

You know your loony ideas may not be so loony after all when you see them echoed in the Great Newspaper of Our Times (the GNoOT, more commonly known as “The New York Times”). Trying to educate myself in the intellectual history of what I had settled on as the remedy for most of capitalism evils I found much of the work done by Bruce Bartlett in there: Rethinking the idea of a basic income for all, but only after seeing many of my concerns about the jobs that may never come back also confirmed in a more recent article: After jobs dry up

The points touched in both articles will sound familiar to any reader of this blog: the increase in automation within the manufacturing sector, and advances in transportation and IT are increasingly pointing towards an scenario where there may not be, after all, jobs for everybody (unless you accept as a definition of job doing something for someone that he himself does not want to do, but doesn’t require much skill or is especially satisfying, so he would only accept to pay a pittance for it… so in a sense there will always be jobs as shoe polisher, janitor, toilet scrubber, waiter and the like, as those are the only activities for which there is a truly free market –not requiring any qualification, so nobody can assert monopoly powers over them or somehow constrict the offer, in which given the demanded salary is low enough you can hope to always find “buyers” of labor power).

What is up to us as a society is to decide what we do with the likely increasing numbers of citizens (and non-citizens, a great worry of some of the writers in the topic which we will have to come back to) that have been made redundant and do not have neither the required skills nor the ability to acquire them that the tightening labor market still demands, and that can at most hope to join the labor force in the weakest position, to perform menial jobs with no stability, no social recognition and no prospect of advancement. It is not surprising that most find the idea utterly unappealing and are resorting to different sorts of escapism (from the harmless, like videogames, through the mildly self-destructive, like controlled substance abuse, to the full-blown psychopathic, like armed robbery or drug smuggling) with the subsequent loss of social capital and global impoverishment.

However, both Bartlett and Bennhold confuse things a little bit, as they point to Milton Friedman’s negative tax returns (NTR) as a precursor of the Universal Basic Income (UBI) I advocate, without realizing there is a huge difference:  the NTR substitutes for the rent the perceiver is not able to win for him/herself, whilst the UBI, as it name implies, is perceived by all the population (yup, even the millionaires receive that comparatively little stipend from the State, which of course does not even start to compensate the comparatively much bigger amount that then is taken from then in the form of taxes). Is that important or is it just hair splitting? As it happens, it is of enormous importance, as the main problem the opponents of a UBI see is its negative impact in the incentives to work, and that negative impact is a feature of NTR, but NOT of UBI: consider this, you are a single male with barely any education, so all you can expect from life is to earn the minimum to get by and put a roof over your head and some food on the table. You can work a shitty job for that OR you can just sit back and collect the checks the State send your way, as it is one or the other. The moment you start working the size of the check starts shrinking, so you have all the inconveniences of the job (from bearing a probably not too brilliant himself boss to the diminished time to enjoy your meager pay) without any of the advantages (the money you receive from it just compensates what you were receiving anyway). No shit Sherlock social researchers found it strongly disincentivized job seeking! But now think how it would work in the UBI scenario: you receive your money from the state no matter what. You start working in the lousy job, so whatever you get paid gets added to your previous income, so you are definitely better off. If you just can not stand your job, no biggie, you quit and revert to your previous income level; if you swallow hard and keep going, you get the continuous reward of staying in an upper income bracket (so in a sense this may still feed the “keeping up with the Joneses” mentality we identified as a key problematic feature of capitalism, which is not that good), and you can reevaluate as frequently as you want, as the moment the balance between what you get from that job and what you have to put in it gets too tilted towards the giving side and away from the taking you can safely go back to your home, knowing your subsistence (and your family’s, had you one) were guaranteed, without compromising your freedom on how to spend your resources.

Now that particular canard has been debunked (I strongly believe people would rather work in a society where a UBI has been instituted, although they would work more freely and less stressfully) I think it is time to articulate how the ideal society would look like, so we can then analyze how can we get from here and now (very imperfect social order) to there and then; in no particular order:

·         The ideal society has to guarantee each citizen the maximum freedom compatible with the freedoms of all the rest. A good starting point is the U.N. charter on human rights, which already contemplates the freedom of the press, religious practice, association (including family formation), political representation, movement and occupation

·         An acceptable mechanism (probably the only one) to coordinate and avoid conflict in the enjoyment of material goods is the existence of robust property rights (so private property and the possibility to freely alienate that property –which require a free market so every proprietor can determine if he wants to buy or sell with minimal intervention- is a necessary feature of the ideal society)

·         Note that the “freedom of the market” is subordinated to respect for basic individual freedoms. In order for that subordination to be achieved there is unavoidably a certain amount of regulation (to eliminate externalities –for example, I can not “freely” sell you electricity I produce as cheaply as possible if everybody else has to unwillingly pay the price of a polluted air or a degraded climate, and also to compensate for gross disparities of power or information) that needs to be defined and enforced, which in turn requires an institution capable of it (the legislative branch of the government, and the judiciary to oversee the police required for the enforcement)

·         Now, given the current level of technological advance and the admittance of markets, there are still going to be areas where a single-payer (or even single-provider) solution is going to produce overall better results (from the point of view of the whole society), namely: defense, policing, healthcare, basic education, research and development and basic infrastructures (hydraulic, transportation and communications). As resources have to be pooled (via taxes) to provide for those and allocation decisions to be taken, a third branch of government has to be added to propose a budget and oversee its use

·         I do not want to get too sidetracked by the discussion of how each branch of government should be appointed (popular vote or direct designation by a perpetual ruling elite) as the modern world gives us examples of both (the USA elects judges, but they do not seem to reach systematically better decisions than their European peers, which are designated and promoted in a non-democratic way; the West elects both the executive and legislative branches, whilst in China they are appointed within a ruling elite and for the past decades they seem to have been making better decisions on how to productively allocate the budget and set the right priorities for a sustained economic development). I personally tend to favor democratic election as a way to avoid corruption and the “bad emperor” problem identified by Fukuyama, but sometimes I confess I’m utterly dismayed by the abysmal choices collectives make…

·         Now, once we have property rights, maximum freedom, markets for the exchange of most goods and services, with a three branched government to police that market, maintain the monopoly of violence to ensure an ordered society and provide additional services that private initiative has historically shown to be no good at, ¿what do we have different from Today’s predominant order? Well, a tweak here and a tweak there, most of which are highly situation specific (for example, the USA would benefit from severe restrictions in monetary contributions to campaigns; Spain from a more independent judiciary; Greece from leaving the Euro…), but one of which is as universal as it sounds: the system would be more humane, more rewarding, more conductive to human flourishing, fairer and richer if we guarantee a basic income to every person, from the cradle to the grave, and then give them the freedom to add on top on that whatever their entrepreneurship, initiative, desire for further improvement and drive dictates.

So in the end there is not so much we have to accomplish to get “from the here and now to the there and then”, just push to get that UBI incorporated in some party’s platform in the West, and then have that party elected. It doesn’t matter that much if it is a left leaning party or a right leaning party (as both tend to, when in power, execute very similar policies in every other respect). I do believe the system would work better when it is spread to the whole world, under the auspices of a single governing body (like the current U.N. but without any member having veto power), but again that is not something I expect to see in my lifetime. To begin with, some countries are much closer (and have already the tax base in place) to such an arrangement, whilst others are light years away… so a more realistic scenario is to push for it in a country that has the ideological basis in place (Scandinavian Countries?) and hope that it sets a shining example (in terms of quality of life, happiness of its inhabitants and economic development) that attracts more and more countries to follow suit. I would expect the USofA to be between the latest to adopt such an egalitarian social arrangement for a number of reasons (their tax base, as we analyzed in this post: UBI cost in the USA, would need a more significant expansion, and their entrenched special interest, tinged with a racial component which is so far absent for most other mature democracies, are much more refractory to giving anything at all to “those people”, least of all what would enable them to lead meaningful lives without begging or risking prison).

Now there are two objections that have to be overcome, one mainly coming from the left and the other from the right. From the left I would expect to hear how this is not enough change, as it leaves the logic of the market almost intact, it leaves the power of big money and multinational corporations towering over an emasculated state with not enough resources to resist it, and this would continue fostering insane competition (between companies, but even more harmful between countries and between classes), ever more crazy business cycles, ever growing exploitation of workers and ever more despoliation of shrinking natural resources. From the right I would expect to hear (as we are already hearing) how it is just unaffordable (something I basically have already answered in this post: UBI cost in a European welfarist State), specially given the “phone call effect” that would attract countless (mostly poor) immigrants to whatever political entity that is so foolish as to establish such a luring scheme especially apt for freeloaders and every kind of parasite. The answer to those objections will be explored in further posts, suffice it to say now that none of them seems likely to carry much weight.