Tag: universal services

Discover LIFE

In the never ending quest to make the principles and ideas behind LIFE accessible to a wider audience we have produced an new iBook called “Discover LIFE”.

Understanding who we are requires that we can reach beyond our personal perception of the world to see ourselves as a species.

Who are humans?

How did we get here?

What makes us tick?

These are the important questions we must be able to answer first, before we can embark on our journey to find out what works for us.

With sound and compassionate understanding of our inherited natures, we will be on the road to developing effective new models around which the peoples of the world can organise themselves.

The book is available in the animated iBook format for Apple devices and computers here. Most graphics are clickable for more detail – it’s fun, try it out. Open in iBooks when prompted.

And a PDF Hi-Res version (30Mb) is here and a Low-Res (7Mb) version is here.

Please post your comments and suggestions below, or email them to info@uklife.org, that would be greatly appreciated

Many thanks!

Enthralled to Finance

We don’t have to be captive to the financial institutions, but we will continue to be so long as we try and use money as a substitute for security.

This requires attention: the reason we are controlled by “finance” is because we have given our lives to finance, meaning we have tried to use money as a store of life. We try to save up enough money to be safe in our old age (pensions), we send people money to keep them safe when the industrial economy has no job for them (benefits), and we invest the money we have to make more money (funds) so we can afford to live far enough away from people who don’t have money to feel safe.

We will not escape the grip of bankers until WE let go of abusing money as a store of security. We are creating our own unhappiness.

Read this interview with an aging German banker, who says banks act “… on behalf of pension funds, very large hedge and sovereign funds and wealthy investors. Never in the history of mankind has there been so much money in circulation, and never before was it possible to trade with it so quickly. And never before has this money used the entire planet as a playing field, as is the case today in the era of globalization. That’s the way it is and the way it will remain. There can be no turning back the clock. How shortsighted people must be when they hold bankers responsible for this development!”

He is wrong about it staying this way – read www.standardsoflife.org/sustainable_economics to see how to change this, how to create our own happiness.

 

The Path to a Future: Flat Sharing

For my entire working life the conventional wisdom seems to have been that only a mug would pay their full share of taxes, and that it was every citizen’s duty to reduce their responsibilities in this area to a minimum. Those who succeeded in paying the least amount of taxes have generally been lauded as heroes.

Continue reading “The Path to a Future: Flat Sharing”

The Path to a Future: The Mind of Production

To support super-democracy, super-security and build a thriving super-economy we to need to make substantial investments in our societies. To make those changes to our infrastructure we will have to leverage the strengths of private enterprise to help us reach our public policy objectives.

We struggle with the interface between public initiatives and private enterprise, and the debate tends to be rather crudely proposed as pitting right intention against effective action, as if they were incompatible. In fact they are mutually complimentary, and both absolutely necessary if we are to reach our goals.

Continue reading “The Path to a Future: The Mind of Production”

The Path to A Future: Economics 001

The economy, and implicitly the development of wealth, is a core issue that too often suffocates the debate about our options for change. Many of us come to the table with assumptions about the relationship between wealth and prosperity. We need to reevaluate these assumptions if we are to develop solutions to our problems. In this section we will revisit the basic constructs of economics and wealth creation, to make sure we are operating from a realistic and accurate foundation when we formulate the framework for our economies.

The typical policy debate today is about the balance between the social ills of the free market, and economic ills of a state-controlled economy. This suggests a built-in assumption that we must compromise our social security to let markets be free.

Why is that true? Why is it that market freedom is a function of social insecurity? What is it about economic theory that stipulates a need for the population to be prepared to pay a piece of their personal freedom, in order to get to a piece of the market freedom pie? The conventional answer to this is that the labor force needs an incentive to work, and that sometimes the appropriate incentive is survival. Apparently, without the threat of destitution, people will not take the jobs on offer in a free market!

Which leads to the next question: why would a free market create work that only those threatened with starvation would want to perform?

Oh I see, a free market doesn’t necessarily create undesirable jobs, it’s just that the free market rewards low cost, and low cost means work and reward conditions that only the potentially destitute would agree to work in.

Right?

This cyclical assumption that low cost requires undesirable work, which demands an insecure workforce, is fairly deeply embedded in our current cultural psychology, especially in the West. In fact it isn’t really challenged, because it is so widely held and so subtly integrated.

As I will show, the opposite is actually true. Secure populations, working voluntarily in jobs of their choosing, is the most productive economic model available. The “market” is not a policy model, it’s only a mechanism; it is no more an economic, or political, model than the explosion in a cylinder is a car.

Our desired outcome is prosperity. That is the destination everyone understands we are aiming for; everything else is just a means of achieving prosperity. The free market is not the destination, any more than collective bargaining is. So the first link to unhinge in our minds is that the “free market” is what we need. Keep your eyes on the prize: prosperity.

The “market” is a set of mechanisms that naturally directs resources to meet needs. While its principles are simple, in operation it accommodates a bewildering array of inputs, influences and outcomes. It’s like our brains: we know the principles on which they work, but that doesn’t mean we know how to work them.

Cost is a significant input to market mechanisms. When all else is equal, cost drives decisions to the most efficient outcome; that is the raison d’être of the market. But we should note that, almost always, cost is the last criteria in the decision tree; the item has to be fit for purpose first, and affordable second.

What about trade? Within a given market, does the locality need to be the lowest cost producer of the good or service? If trade is possible the answer is no, because if equal and lower cost items are available through trade, then trade will fill the need. Unless… unless the item is so vital to the survival of the population or the basic functioning of the society, that a breakdown of trade, for any reason, would be a strategic threat to everyone. There are certain items that are so strategically important that higher cost is not a barrier to local production, and the market must necessarily be modified in order to accommodate the higher priced, locally secured items.

This leads us to an important place on our journey and we would do well to stop and clearly annunciate our conclusions:

  • The market is a great system for almost everything.
  • The market is not an appropriate mechanism for the most important things.

Whoa! How did we get here? I’m a freemarket capitalist and I’ve been around for a while so I know a thing or two about the world I live in, and this doesn’t sound right at all! I’m going to have to go back and read those last few pages again. You’ve used some crazy commie logic to trap me into believing that the free market won’t solve these problems. Wait here while I reread.
…
Okay, back again. Well, um, I can’t see where I could disagree. It’s not like it’s complicated, right? There’s just some stuff in the world that’s too important to outsource. I can see that.

Thanks.

Now the other news: if there is no strategic imperative, there’s no reason to interfere in markets. This is where some get caught up in a different false linkage: they think that we can intervene in markets to make them produce social welfare and justice. In fact, the basic social welfare of our societies is not an output of markets. Markets do not have “well-being” as an output in any of their functional logic. Markets efficiently direct resources to fill the needs of consumers, that is all they do. The welfare of society and our quality of life have to be outputs of human endeavor, they are a function of choice. We do not have to choose the common good or a high quality of life, and we certainly won’t get either if we wait for markets to deliver them.

Let’s be fair to markets while we’re here: they don’t know how to benefit society, and it’s extremely unfair to ask them to do so. Markets, especially those catalyzed by modern banking systems, are good at creating wealth; but wealth is not the same as prosperity. Prosperity is a mixture of wealth, peace and freedom that delivers a high standard of life. So if we want prosperity, we have to mix the output of markets, with the output of our choices to promote peace and freedom.

When we can clearly see these distinctions, and the properly differentiated roles for economics and politics, we can formulate more coherent policies that are more likely to deliver our intended outcomes.

Economic policy should concern itself with:

  • the maintenance of markets
  • the management of the monetary system
  • the administration of strategic resources

Political and social policy should focus on:

  • the cessation of hostilities
  • the protection of liberty
  • the general welfare of society

Let’s look at each of these policy areas in turn, so that we may more clearly demarcate their boundaries. Once we have separated them in our minds, we will be better able to act in the right places to produce our desired results.

Economic Policy

The maintenance of markets involves trying to ensure that they function as freely as possible by correcting naturally occurring defects as much as is possible. The two most common defects in market function are the imperfect distribution of information and the exclusion of external costs.

  • Making as much information as possible available to consumers, with the lowest barriers to acquisition, is the best we can hope for; you can take a consumer to information, but you can’t make them know.
  • External costs, “externalities” in official parlance, are those costs that can be directly attributed to the lifecycle of a product or service, but for which there is no one to demand payment during that lifecycle. Nature is a good example of a non-payment-demanding party to many transactions. When these externalities are recognized, the proper maintenance of market function requires that these costs are imposed on behalf of the non-paymentdemanders, usually in the form of some kind of tax, duty or other loading of the item’s cost profile.

The management of the monetary system is primarily about preserving the value of the currency. Given that there is no real basis of tangible value in a modern currency unit, it is important that the quantity of money in circulation be managed in line with the output of the economy. Furthermore it is essential that the banking system charged with the care of private deposits, debts and equity be regulated for stability. Modern economies based on monetary systems require a trusted banking function in order to operate, and so the maintenance of that system’s stability is paramount. (Banking is entirely different than investment management, which is not really a banking function at all, and should be kept separate from banking. In fact, the term ‘investment bank’ should be abolished.)

The third leg of economic policy is the administration of strategic resources. As discussed earlier, there are resources that are so important to the sustenance of a society that trade cannot be relied on for their procurement and distribution. These resources must be identified and their supply purposefully managed, such that their availability is as guaranteed as it is possible to achieve. Chief amongst these resources are shelter, food, healthcare, education, transport, energy, information and the legal infrastructure of democracy (the same services that form super-security). In most situations only a subset of the total market for each of these resources is strategic, and only that subset need be the subject of public policy. For example, the availability of clean drinking water is a matter for public policy but this does not need to extend to the bottled water market. Similarly the provisioning of primary health care as a public service, does not preclude the availability of specialized procedures in the private market.

Those are the elements of economic policy and maybe you’ve noticed certain absences that you might normally expect to be part of contemporary policy portfolios. Before going further, let’s do a quick review of the complementary political policies that accompany our economic policies, to shed some light on those absences.

Political Policy

We have said already that political policy should concern itself with the establishment of peace, the protection of freedom and the provision of welfare. As regards the economy, the establishment of peace and the rule of law are precursors to enterprise and trade. The freedom of the people is necessary for proper market function, the development of business and the fostering of innovation. Indeed, the freedom to choose and the freedom to fail are essential to the fluidity and effectiveness of market mechanisms.

The provision of public welfare is commonly understood to be the primary function of government, but the policy framework to deliver effective results has eluded most, if not all, to date. Public welfare policy has been colored by our history and has yet to free itself from the shackles of our legacy perspective. During the last century or so we have developed levels of efficiency and productivity that have created the capacity to provide universal welfare. The capability of the population to sustain itself, without reliance on the grandesse of a ruling elite or the magnanimity of magnates, means that we can truly deliver the bare necessities of life to all, at a reasonable cost to all.

The cost of universal shelter, sustenance, healthcare, education, transport, information and democratic freedom is about one third of the total output of modern economies. That’s right, for about 30 cents on the dollar we can afford basic housing, a healthy diet, primary health care, reasonable education, local public transport and universal digital information access for everyone. Not everyone is going to want or need every service, but if they did, we can afford to provide them today; with the same tax rates we are already paying.

So why aren’t we doing it? The primary reason goes back to the starting premise of this section: the idea that the provision of such welfare would fatally undermine the economy, the very system that produces the wealth that makes it all possible. And we’re back to the same logic we questioned at the start. Do we believe that the motivation to work, to innovate and to be more productive will disappear if we aren’t afraid of starving to death in the gutter? This is not reality. It misunderstands human nature, and the meaning of “welfare”.

Human nature is full of aspiration; that is what has driven our development over time. Once we have filled our bellies we desire taste; once we have rested we desire comfort; once we have seen color we desire lights and once we are satisfied we wish to contribute. The religions of the world are the ultimate examples of our capacity for aspiration, far beyond the mundane practicalities of life. Providing a roof, a bed and a bowl of soup does not satisfy the aspirations of anyone. Would it satisfy you? Wouldn’t you still want to see a movie, eat some chocolate or wear different clothes? Perhaps you’d rather own a mountain bike, become a photographer or grow some vegetables? To believe that providing the bare necessities of life to someone will blunt their motivation and dull their aspirations, is to negate what you know about yourself. It’s simply not a reality, not of anyone, anywhere.

So what should public “welfare” policy actually provide? The policy should aim to satisfy a basic, mutual social contract between neighbors: that no matter what fortune befalls you, you will have the bare necessities of life, and as much opportunity to make the most of your life as can be afforded. Viewed in this light, welfare policy is not a benefit that anyone is entitled to, it is a service delivered to the best of their neighbor’s ability.

Public welfare policy is really about delivering personal security and opportunity. As such it does not involve the transfer of payments, instead it delivers services that fulfill the social contract. Housing is made available to provide secure shelter, food sufficient to maintain health and medical services as can be afforded for all. Think of them as services, not dependent on the largess of some individual or group, but provided universally, as a birth right of citizenship. No cash, no luxuries and only what can be universally afforded from a reasonable tax.

Now start to imagine the impact of such a public welfare system on the economic system. No need for a minimum wage. Everyone has their basic sustenance taken care of, so they are free to provide or pay for labor at whatever rate they choose. On almost every level required for a flourishing market economy the situation is improved: workforce mobility, propensity for risk, innovation capacity, skills development, productivity, confidence and satisfaction. The implementation of universal personal security will have a dramatically beneficial impact on economic output, at the same time that it enables “low cost” production.

Because delivering universal services frees labor to be priced according to its marginal value added, the “cost” of labor throughout the economy is significantly reduced, especially at the lower skill levels. This in turn, has the knock on effect of reducing the nominal cost of delivering the universal services themselves, because a high proportion of the cost of delivering those services is labor related. In effect, providing universal services reduces the cost of delivering those same services.

A fundamental and progressive effect of universal personal security will be the stimulation and expansion of micro-enterprise. Freed from the pursuit of mere survival, the population will be able to use their more unique skills and interests to create micro-services and products that meet the needs of very small markets. This micro-economy has the ability to boost general satisfaction by allowing specific needs to be met more directly, at the same time that it further enhances the economy by dramatically increasing transaction volumes and efficiency. Child care that allows bicycle repair, that saves resources, that are diverted to power buses, that get people to work faster, that allows more family time. The feedback loops that reinforce the productivity, efficiency and diversity of the economy are endless. Additionally, as more needs are satisfied more directly by micro-suppliers, the dependence on mass production and long-distance transport is lessened, the resilience of local economies is strengthened and production becomes more environmentally sustainable.

Conclusion

When we can separate and distinguish between economic and political policy, we can make effective choices that will lead to the prosperity we desire. We don’t need an economic policy that creates jobs, we need a political policy that allows jobs to be created. We don’t need economic policies that encumber businesses with social responsibility; we need political policies that deliver real social security.

For our economy we need economic policies, and for our welfare we need political policies; each, unto their own. Far from economic growth resulting in social ills, or social growth resulting in economic ills; economic and social growth are mutually enhancing. Delivering universal social security will not erode productivity, it will enhance it. Unfettered markets will not drive social well-being into the ground, they will lift it up.

If we can just uncouple our unfounded assumptions about the relationship between enterprise and welfare for long enough to see again with clear eyes, based on what we know about ourselves, we can pave a Path to prosperity for all.

Part 17 in the serialization of the The Path to A Future.
A new section will be posted every 2 weeks during 2011. Enjoy!
To get a free PDF of the book go to www.standardsoflife.org/thepathtoafuture.

Sustainable Economics paper published!

We have just completed our paper showing a practical path to reaching a sustainable state. This paper brings together various aspects of the Standards of LIFE to focus specifically on why and how universal services are the key to saving our environment. This is an important document – please read it.

Armed with the knowledge in this paper you will be able to explain to others how we can get to a steady state economy and why it will be fantastic once we get there. Truly the next stage in the development of empathic civilization, there’s on need to return to the “dark ages” to save ourselves.

You can read the paper at http://www.standardsoflife.org/Sustainable_Economics as well as download both an ePub version for iPad/iBook/kindle and a PDF version.

The wiki pages are open for adding comments and you can always give feedback via our Facebook page and email to feedback@standardsoflife.org.

Enjoy and educate!

Social Security is Serious Stuff

If you think that social security is the generous expression of care for others in a civilized society, think again.

This may come as a surprise to many Americans, even a few Europeans: a functional social security system is a vital underpinning for a capitalist economy. Without functioning social security, there is insufficient society to support a vibrant economy; social security systems actually catalyze economic activity, and the prosperity it generates.

There are other vital reasons for maintaining a functioning social security system (a basic social “safety net”): maintaining social peace, elevating confidence, satisfying our natural empathy and improving sustainability. But even without those reasons, our economy simply cannot prosper without social security. It’s serious business – social security is really important. It isn’t a policy “option”, social security is the imperative at the root of all the things we cherish about our peaceful and prosperous life.

In the face of massive debts and monetary instability, our “Total Economic Awareness” (TEA) delusion jumps up and we make the kind of mistake that everyone makes in a panic: we grasp for simplistic, obvious solutions. No money left: OK, stop spending it. That’s the kind of reaction you get to apologize for later, in your personal life (so long as you didn’t destroy something or do something unforgivable) but when you’re a sophisticated, modern society, that kind of reaction just won’t do. We didn’t come this far, or get to this point, without a lot of careful attention and wisdom gained from many experiences – we need to remember that, and cultivate the poise that allows us to make sensible decisions about serious matters at important moments.

The current fashion for degrading the social security of our societies, as a means of supporting huge debt burdens, is extremely dangerous and very short sighted. And this is happening just as we enter the times when climate instability is likely to test us all.

The reasons why social security is an absolutely essential foundation of our society include:

  1. Our social cohesion is fundamentally dependent on the maintenance of basic life services for everyone
  2. The health of our economy is dependent on broad economic participation, both as producers and as consumers
  3. Innovation requires risk taking, and social security encourages risk taking
  4. Situations and circumstances change: our societies and their economies need to transition as smoothly and quickly as possible
  5. The rule of law and the control of crime are dependent on broad participation by all
  6. The quality of our democracy is dependent on an educated, informed and involved citizenry
  7. Our ability to withstand shocks and natural disasters is heavily dependent on our social cohesion

Social security is not an optional, luxury expression of generosity, that we can afford to do away with when money is short. Social security provision is an absolutely essential, basic building block of a peaceful, prosperous and sustainable society – without it, peace, prosperity and our survival are all endangered.

How do we square that essential nature of social security, with the budget dilemmas and economic weakness of these times? To resolve this conundrum we must revisit what it is that makes up the essential nature of “social security”: it is the provision of personal security from the elements, hunger, sickness and depravation to each and every member of our society. This is not a monetary transaction, it is a social intention. We will not make our way out of this until we fully grasp the proper nature of social security.

In the Standards of LIFE we have modeled the impact of delivering social security as a set of universal services, and found that this not only fulfills the essential nature of social security, but has positive knock-on effects across the economy and budgetary process that address the concerns of fiscal responsibility and fosters sustainable prosperity.  We must solve our budget problems, resolve the monetary dilemma and build sustainable societies, all at the same time – and the only way to do that is with the parallel adoption of universal services and micro-economics.

Read more and find out how to fix our problems without breaking our societies at www.standardsoflife.org.

New Economics

Along with the newly emerging democracies of the world, a new economics is desperately needed. The current economic model is at the end of its road and that is readily apparent to many savvy observers.

There are two factors driving the need for a new economic model:

  1. The desperate need for social and physical infrastructure investment
  2. The crisis of monetary management

We can see a new economic model by reconnecting with the truth of our existence: individual humans, born in relationship and seeking purpose – in that order. Understanding that sequence and priority, we can place our economy in its appropriate context: our economy is a client of our society. In so doing we can shed the delusion of “total economic valuation” (in which everything has a price tag), and clearly see that there is much activity that is not, and cannot be, valued in monetary terms.

In the new economics, social value is not accounted for with money. Demonetizing social value immediately transforms our economics; it makes investments affordable, protects the value of money and creates sustainable social structures.

Investments

We need to make some massive investments. The demographics of the developed world demands social infrastructure to manage the changing ratios of contributors and dependents. The demographics of the developing world requires economic infrastructure to support the burgeoning youth population. And the demographics of the entire world requires physical infrastructure for transitioning to a sustainable energy supply.

Among the recognized investments that we all need to make are:

  • education – life long, civic and skills
  • energy – replacing stored & extracted with renewable & sustainable
  • transport – leveraging the new energy infrastructure
  • water, food and health
  • shelter and sanitation
  • information, democratic accountability and transparency
  • investment in research, innovation and development

These investments are not only large, they are essential! We have to find a way to make these investments, and no one in the current economic modus has got a clue, let alone a practical path to their accomplishment. The most significant reason why none of the current practitioners has advanced any concrete ideas is because they are mired in the current morass that is modern monetary policy.

Monetary Mess

The worldwide crises in monetary management of fiat currencies has exposed the fundamental flaw of attempting to visualize all human activity as economic activity: the debt burden is unreasonable and unsustainable. This is resulting in the need to bankrupt national societies just to try and maintain a delusion of currency rectitude.

The economists and economic policy makers of today are stuck between what seem to them to be unreconcilable problems:

  • massive public debt
  • unbalanced budgets
  • unaffordable social security systems
  • currency credibility issues
  • inflationary pressures
  • massive investment deficits

Central bankers across the world, in the vacuum created by political inaction, are trying to balance the credibility of their currencies and budgets with massive debts and the need for growth and investment. In a world where prosperity is seen as a gift to the people from the bounty of commercial enterprise, these problems cannot be resolved. But they can, if we just pause for a moment and observe the reality.

New Economics is the only option

Into this world of monetary and investment crises arrive the newly emerging democracies of North Africa and the Middle East. The need to replace decrepit, crony economies with sustainable economies is a parallel requirement of the arrival of freedom and dignity. The demands of the protests are overtly political, but they are subliminally economic as well. What do they see when they look around the existing economies for inspiration for their new world?

None of today’s dominant economic models are providing a sustainable path to a future for their current adherents, nor would they for any new arrivals. Read this collection of essays from some of the preeminent economic experts of the day, and you will see that no one has a solution to the debt v. investment conundrum we are facing. The Western capitalist models cannot balance their books without forever pushing their debts out to the next generation. The Eastern capitalist models are mired in inefficiencies, corruption and environmental degredation that do not deliver sustainability, while also being dependent on the suppression of freedom and dignity.  Neither of these offers a model worthy of adoption.

The new, sustainable economics seats the economy firmly within the context of society and generates growth out of untapped micro-economic capacity. The new economics provides the wellfair necessary to support aging populations, enables affordable infrastructure to create a new energy platform and delivers vibrant growth for coming generations.

New Economics is the result of a three step process that yields sustainable prosperity, affordable investment and sound monetary management:

  1. Understand the economy as a client of human society
  2. Take responsibility for society by delivering social value through Universal Services instead of welfare
  3. Unleash the total potential for growth using modern communications to enable micro-enterprise

To preserve the peace we have, and move forward to sustainable prosperity, we all have to take the first step. Ask yourself: “Am I a human being, or an economic asset, first and foremost?”. I think you will agree that you are a human first; and so it follows that your economic value and activity is a subset of your humanity. That too is the valid order and construction for human society. The economy is a subset of our humanity and it is an illogical and impossible task to try and value all human activity in monetary terms. When we assimilate this understanding and stop trying to “pay” for our social needs, we can liberate our economy to fill its natural role in the firmament of human existence.

The structure of New Economics is laid out at www.standardsoflife.org in full. The principles that reconcile the seemingly intractable problems of today’s economic systems are also discussed extensively in this blog – select the Economics category to see a full list of articles.

Infrastructure has never been commercial

Great civilizations require great infrastructure, and great infrastructure has never been a commercial endeavour. It’s time to face reality and get on with the job.

The great societies, those that have spawned the great advances in learning and development, have been built on great infrastructures. Those infrastructures have never been built by commercial enterprises operating in competitive markets. Great infrastructures (like the Egyptian, Chinese, Roman, Indian, Euro-colonial and American) have been built with public funds subsidized by socialized labour.

The greater Los Angeles area has over 20 million people, with less than 20 days’ food supply – if it were not for the roads and other infrastructure, built with public funds and socialized labour during the Great Depression of the 1930s, the entire LA basin could not survive for long: no food, no water, no power. There would be nowhere in the world to land a jumbo jet, if it were not for publicly funded infrastructure.

Now the world needs to move to a new energy infrastructure that complies with our planet’s laws of thermo-dynamics. This infrastructure, where it does get built in time, will get built by the societies that leverage public funds and socialized labour.

What is “socialized labour”? Socialized labour is labour that is provided at below market rates of monetary compensation, and it is available in three varieties:

  • forced – involuntary labour coerced by violence and manipulation, such as slavery and prison labour
  • reluctant – marginally motivated by meagre rewards and the threat of ostrification
  • cooperative – willing labour provided as part of a mutually recognized common purpose from which all will benefit

Which one of those models for socialized labour is likely to yield the effort required to build our new infrastructure?

Some version of forced labour was the choice of ancient civilizations, and some version of reluctant labour is the option provided by today’s social and economic structures. What we will need is a cooperative effort, and that will require social and economic structures akin to those proposed in the Standards of LIFE.

Our current preference for giving public money to commercial organizations, that operate using market-priced labour, will NOT deliver the infrastructure we need at a price we can afford. There isn’t enough money in the world to pay for the infrastructure we need – this is a fact that would be much more obvious to those of us sitting on infrastructure built by our forebears, if we weren’t. Think about it: we’re broke and we haven’t even invested in maintaining the infrastructure we inherited. This is serious and immediate, we must act now.

Option 0: do nothing

Option 1: fantasize about a different future

Option 2: implement Universal Services and start building our 21st C infrastructure

Open letter to the Basic Income community

Dear Citizen

The purpose of this open letter is to invite you to consider whether the goals of Basic Income can be attained more effectively and more sustainably through the provision of Universal Services.

First, let us say that we heartily agree with the basic objective of moving forward to the next evolution of social organization, and that we find the historical precedents that you cite in support for Basic Income are indeed the very same that support Universal Services. There is not the width of a hair between our visions of a peaceful society, in which each individual can fulfill their potential and use their unique skills and abilities to contribute to the whole in a way that honors their freedom. We both recognize that the empowerment of the individual is the basic fabric of our common society, and that it provides the foundation on which to rebuild a new economy.

Furthermore, the distinctions between our mechanisms for achieving the same goals can be seen as quite subtle, even muted. The basic mechanism of providing a structure within which each and every citizen is guaranteed the bare necessities to sustain life is common to both of our approaches, and it is this commonality that drives us to believe that we are sufficiently of one mind as to be able to bridge our differences and join forces in the pursuit of our common goals. Our differences do not separate our intentions, our commonalities define our opportunity to work together.

The primary difference between Basic Income (BI) and Universal Services (US) is whether or not money is provided to citizens. This is not a difference in intention or objective, it is a distinction in the mechanism used to reach the same goals, based on the same principles. We have studied the fundamental economics of modern, monetary systems and concluded that the most important rebalancing that must occur is to return to the social sphere those costs that are social, and that this is necessary to develop a sustainable economy. If we do not socialize our social costs we cannot make the books balance and we cannot preserve the value of currency.

We recognize that the development of our societies and commerce over the last centuries has left us with an unconscious assumption that monetary instruments are the appropriate, and often only, way to measure and account for value. It is a natural extension of this assumption that we think of welfare and opportunity in terms of monetary values. However when we use money to pay for what is actually a social cost we are both devaluing the currency and creating unsustainable accounting, because we cannot monetize the social benefits that would be necessary to balance the books.

In the US model the same objectives of BI are achieved: every citizen is availed of the basic necessities to sustain life, and the opportunity to develop their contributions to themselves and their society. No one is obliged to “work” to receive the services, and they can use the services as they need them. The level of universal services provided is dependent on what that society can afford, in the same way that the size of the BI grant varies based on the wealth of the society. Many of the enhancements to the functioning of the labor market as well as the environmental benefits are the same with both US and BI. However there are important differences in both the practicality and the impact of US versus BI.

The biggest advantage of US over BI is that it is affordable (and therefore more practical) because it “pays” for the “cost” of the services by socializing the labor portion of the cost of delivering the same services. BI does not change the fundamental accounting practices at the base of the modern capitalist system, which are crumbling under our feet as we speak. US removes the subsistence portion of labor costs from the monetary transactions in the economy, and in so doing balances the economic accounting by constraining the use of money to value only economic assets. The impact of BI is the reverse, it encourages the fallacy that monetary accounting can balance the world, that social good can be paid for and that social costs need to be measured in currency.

The second most important reason why US is preferable to BI is that it enables the development and growth of a microeconomy that can supplant capitalist enterprise as the primary economic fabric of our societies, and this is a fundamentally more sustainable foundation for our society. By removing cash payments from the social support system US effectively enables the provision of micro services rendered for micro payments. When citizens seek to supplement their US in order to afford “luxury” items that are not included in the US they can meet those needs by providing services, products or labor according to their skills and abilities at prices that are effectively the marginal value added. This creates a rich ecosystem of micro transactions that creates a micro economy that meets needs more directly and accurately at lower cost and with less waste. With BI the transactional value of any service, product or labor is increased to a level that is defined by the value of the BI grant more than the value added by the service, product or labor.

Admittedly BI is presented as a supplement to social security, not a replacement, but it is inevitably perceived as an alternative and in practice it would be almost impossible to separate the two. This problems leads to many of the structural issues that BI has difficulty addressing, such as:

  • the incentive gap
  • abuse
  • effectiveness (size of BI grant)
  • appropriateness (differentiated needs)
  • and finally the most significant: we still need a social safety net.

The BI community has been extremely inventive and diligent in working to overcome these objections and problems by developing mechanisms that seek to redress these issues through different implementation processes, however this has led to overly complex constructs that further detract from the practicality of BI.

We are fundamentally of one mind regarding the necessity of moving forward to a better socio-economic model that incorporates the unassailable truths of freedom and individuality, and we share the same heritage and the same goals. We hope to unite with such a caring and thoughtful community as you have built around BI, and we would hope that this letter can serve as an introduction to the possibility of uniting forces around a cohesive vision for our common futures that will bring your and our communities together to fight for a better future.

Please consider this an open invitation for engagement and discourse that will yield a common platform incorporating the best of both of our approaches. Check out the framework described in a fair degree of detail at www.standardsoflife.org and let’s get moving forward together.

Yours faithfully,

The Standards of LIFE Community