The fiscal accounts of most nations seem to be out of whack. Universal Basic Income would help regain much order

Sir, I refer to Lawrence Summers’ “Trump’s misguided tax reform plans” December 5.

It reads quite, or even very correct, but as so many other recent writings by economists, it does not stimulate taking a strong position in favor or against, that because it is getting harder and harder to distinguish real economic prognosis from fake politically framed one.

Everywhere we look we get the feeling we have lost control over the fiscal accounts and government activities in general… no matter who is in charge. Since it is we citizens who at the end of the day are going to pay for whatever happens, it behooves us to urgently put some order to our government’s affairs. 

The most expeditious way for that could be to use a Universal Basic Income scheme to separate, as much as possible, redistribution, from the rest of government activities.

Doing so, by means of an all citizen to all citizens affair, we would be better able to understand what is going on, and presumably governments would thereafter be more elected on the basis of who offers the best in what should be a governments primary responsibilities to all, and not based on who offers the most to some.

Of course, to diminish the redistribution role of governments will be no easy affair. That is not only because redistribution profiteers will naturally fight back; but also because after so many years of being brought up on the need to cry for a larger share of the redistribution pot, voters have become more genetically disposed to be beggars of favors.

That said, if a UBI is used, we must make sure that it is funded with real money… no funny money, no debt.

It could be funded with savings in current redistribution costs, carbon taxes, payroll taxes on robots, driverless cars and similar human employment substitutes, or by special taxes on income and wealth.

That would provide stimulus for the economy, while at the same time allow all who want jobs to easier reach up to the growing gig economy.

PS. In resource rich countries, like Venezuela and Nigeria, it SHOULD primarily be funded by like the net oil revenues.

@PerKurowski

If Uber drivers are considered workers, are not driverless cars, or robots, workers too, to be taxed accordingly?

Sir, Sarah O’Connor, Jane Croft and Madhumita Murgia report on how “Uber drivers in the UK have won a crucial legal battle with a tribunal ruling they are “workers” entitled to the minimum wage and holiday pay.” “British court rules Uber drivers are ‘workers’ in setback for ‘gig economy’” October 29.

Yes, but if so, why are not those driverless cars that are expected to soon be supplanting all drivers not considered workers too?

Sir, as I have written to you before, if we do not tax what will represent lost work opportunities for humans, something’s going to have to give.

I have nothing against artificial intelligence or robots replacing human workers. That’s great, that will leave us humans much more time to enjoy life. But our non-human replacement workers need to be taxed too; and all those tax revenues re-distributed to all of us humans, by means of Universal Basic Income. That so that we humans will be able to afford enjoying all our additional spare time.

And it is all a case of simple justice. If a company does not employ me because of the payroll taxes I generate for him, should not my robotic substitute be charged with those same taxes?

And a Universal Basic Income would make it so much easier for all us humans to adapt to the gig-economy… we would not have to work 16 hours a day to make a living, perhaps 4 hors would do.

PS. I pray for my grandchildren not having to live surrounded by dumb artificial intelligence and lousy 2nd class robots  

@PerKurowski ©

Millions of small loans not given to “risky” SMEs, only because of bank regulations, endangers our social stability

Sir, Mohamed El-Erian writes: “for things to continue as they are, you need to be confident that the economic, financial, political and social tensions spawned by low growth will not become the defining drivers of the economy. And that is increasingly unlikely in light of what is transpiring on the ground every day… If the political response continues to disappoint, low growth will give way to a recession while artificial stability in the financial system is replaced by disorder.” “Yet more low but stable global growth is unsustainable” September 30.

Absolutely! As I have been arguing in more than two thousand letters to FT over the years, we have been doomed to dangerous doom and gloom by bank regulators, as they have impeded the economy to breath that risk-taking oxygen that allows it to move forward, so as not to stall and fall.

Just think about the millions of small credits to “risky” SMEs and entrepreneurs around the world, that have not been awarded the last decade only because of Basel Committee’s stupid, dumb, senseless, useless, risk weighted capital requirements for banks.

To bridge that cliff of joblessness and hardships that it has and will have caused, I can’t think of anything else than a Universal Basic Income, a Citizen's Dividend, or whatever you want to call it. Of course that has to be duly funded, in much by reducing the margins of the redistribution profiteers, no funny money will do.

@PerKurowski ©

A Universal Basic Income, a Societal Dividend, needs always to be slightly small, so as never risk being too large.

Sir Ralph Atkins and Gemma Tetlow report that “Swiss vote against basic income provision” “Welfare systems” June 6.

I support Universal Basic Income, for me it is a Societal Dividend, but I would have voted NO in the referendum. 2.500 Swiss Francs, about US$3.500 monthly, about 50 percent of the Swiss GDP per capita is way too large for a “Basic”. In Switzerland, something like $1.000, perhaps expressed as a percentage of GDP or of average or median salaries, would be a much more reasonable level at which to start this social experiment.

And of course the idea of those working not getting the UBI plays directly into the hands of those arguing that UBI could cause people to work less.

So what is a Societal Dividend or a Citizen's Dividend of that kind proposed by Thomas Paine? Here is my personal take on it.

It is a basic amount transferred to anyone independent of having been able to capitalize on society’s strengths and accumulated assets, like having been able to get a good job.

It could be seen as an effort to grease the real economy by combating the natural concentrations of wealth.

It could be seen as a substitute for many those redistribution efforts that because of their complexity, is bound to attract the profiteers.

It is a well-funded transfer, no funny money, from citizens to citizens, or from natural resources inherited by an Act of God, but not depending on government favors. It could therefore be seen as an effort by citizens to become more independent of that populism and demagoguery that often lies behind all societal redistribution.

Also the way it is funded, can help to align the incentives for other societal causes, for instance if with carbon taxes, with the efforts for a better environment.

But a Societal Dividend should never ever be so large so as to risk de-capitalizing the Society or induce generalized lazyness.

@PerKurowski ©

PS. In other words the Swiss UBI referendum was set up to fail... probably by some anxious redistribution profiteers L

Universal Basic Income is a Societal Dividend, paid mostly by reducing the margins of the redistribution profiteers

Sir, John Thornhill and Ralph Atkins discuss the Universal Basic Income proposals flying around. “Money for nothing”, May 27

If anyone should stand up for ideas like the Universal Basic Income, that would be the poor of Venezuela. Out of an incredible oil boom, the 21st Century Socialism gave them less than 15 percent of what should have been their fair equal per capita share of those revenues. The rest was mostly swindled away by redistribution profiteers, wasted away by incapable government besserwissers or captured by “better-positioned” citizens.

For a Venezuelan to read about “Labor leaders… wary of introducing UBI, fearing it might only be used by rightwing politicians to shred the existing welfare state. By setting the rate too low and withdrawing other welfare benefits, it could end up hurting the very people it was designed to help most”, is sadly laughable.

And “the superficially preposterous idea of handing out an unconditional basic income of a year to every citizen, regardless of work, wealth or their social contribution”, a participation in the society, is not much more preposterous than a citizen inheriting some shares of a corporation that gives him the right to a dividend.

Also if we could only separate the redistribution from other government activities it would be so much easier to know what is happening, and therefore be better able to resist the calls of populist demagogues.

But the Universal Basic Income, to really fulfill its purpose needs to be the result of a citizens-to-citizens societal agreement, a Societal Dividend, or a Citizen's Dividend of that sort proposed by Thomas Paine; and not just a handout by governments and politicians that citizens need to be grateful for. On the contrary one of its major benefits it that it reduces the forced citizen submissiveness to those who dole out "the favors". Again, just look at the Venezuelans, suffering all type of humiliations, even being taunted and insulted, and not much happens.

And Universal Basic Income plans, if funded by carbon and petrol taxes would help to align the incentives for the fight against climate change with that of the fight against inequality.

And Universal Basic Income could be the first step in order to create decent and worthy conditions for that structural unemployment that seems to be growing. 

And let us be frank, if the Universal Basic Income is not offered voluntarily, and inequality grows, there will be many less voluntary and much harder options flying around for redistribution.

Universal Basic Income, is not “Money for nothing”, it might very well be money for better chances of the societal peace, which is required to achieve more and better development.

Universal Basic Income is not about assigning governments more power. On the contrary it is about wrestling redistribution powers from their hands.

@PerKurowski ©