Monday, 25 August 2014

An Open Letter To The Pirate Party

Dear friends,

I've seen Andrew Norton's post in the Mailing List Archives and I must say I agree with him. I want to see the Pirate Party succeed but wishful thinking alone won't make it happen. We've got to put the work in. Nobody will vote for a party whose policies aren't rooted in common sense except perhaps as a protest. With this in mind I'd like to talk about the possibility of moving away from trendy lefty liberal socialist policies which don't work in practice towards sensible middle-ground policies that do.

I'm basically a moderate conservative who sees the need for a well-funded welfare state governed by and for the people via a decentralised, distributed democratic process. My motto is,

"The individual must be free to act and the will of the people must be respected."

If this principle is not at the core of every policy those policies will fail. The needs and desires of BOTH the many and the one must be kept in balance, with neither gaining the advantage over the other if we want a fairer world.

Where basic income fails

This is where the policies of the major parties fail; stuck in the rut of their failed ideologies they double down on them because they can't or won't consider any other way of doing things. The result is increasing desperation to "prove" their ideologies right, the result of which is authoritarianism. Thus we have the drive to "redistribute" wealth, to impose penalties for long working hours, or to force creative works into the commons with little or no thought paid to how to compensate artists or programmers except via a flat benefits scheme commonly referred to as Basic Income, which, in trials in the UK as "Universal Credit" has flopped because it doesn't meet peoples' needs.

Individuals' lives are more complex than a flat rate of income could provide for. E.g. I'm married with no kids and no car on an income of £17.5k PA. My husband is temping and it's a bit quiet at this time of year. In September it should pick up again, increasing our income. We've got more than enough to live on. Now if we had two or three kids and a car we would no doubt be regular visitors at the local food bank because my salary wouldn't be enough to cover all our expenses. A flat rate benefit of even £1k a month would be far less than I'm earning now and would make things even worse. Added to my monthly wage and Richard's temping income, it'd help but it'd be taken right back as my taxes would have to rise to pay for everyone else to receive that benefit as well. That's because the tax threshhold would have to fall to bring in enough revenues to pay for this, and remember, everyone would be getting it regardless of need. It'd redistribute wealth, all right: upwards. The very rich are adept at avoiding tax, remember. They only get taxed on their income, not what they've already got.

The biggest failure in the basic income plan is that it's predicated on supply-side economics as it's understood on the left/liberal side of the political spectrum because it posits that "the market" will self-correct, lowering prices for food, shelter, and other essentials to accommodate lower incomes. It also assumes that people will choose to work to increase their income. The truth is that many people here in the UK choose not to work because the jobs available don't cover all their expenses while the state (at least for the moment) does. If the welfare state was abolished tomorrow people would be forced to take whatever jobs they could find but their incomes wouldn't cover their expenses and the result would be mass evictions and intolerable levels of poverty. If basic income (or Universal Credit) was introduced countrywide tomorrow, eliminating all other benefits, we'd have the same problem as the actual incomes would be about the same for the poor. Those in the middle would see their incomes drop to pay for this debacle and the very rich would receive £1k a month courtesy of the overburdened taxpayer. Result: massive social unrest.

Supporters never look at what happens when such schemes are actually implemented except to paint it in glowing terms that point out the reduction in workplace accidents and the improvement of quality of work/life balance for those who end up working part time. When "Mincome" was trialed in Canada the people running the program massively underestimated how much it would cost. The program was quietly abandoned but when it is discussed, the cost of running it are rarely mentioned. Had it been self-sustaining, would it not have continued?

The Middle-Out solution

At the moment we've got two competing ideologies; free-market supply-side trickle-down economics on the right and tax-and-spend on the left. The liberals tend to try to bridge the gap between the two but end up serving up either Fascism Lite or Socialism Lite depending on their leanings. Middle-out is a departure from both and would create a more inclusive society by providing incentives for production, rewarding labour, and funding a robust welfare state. Let's take a closer look at it.

According to billionaire Nick Hanauer, jobs are created to meet consumer demand; workers are hired to make goods and provide services to paying customers. No customers, no jobs.

“If a worker earns $7.25 an hour, which is now the national minimum wage, what proportion of that person’s income do you think ends up in the cash registers of local small businesses? Hardly any. That person is paying rent, ideally going out to get subsistence groceries at Safeway, and, if really lucky, has a bus pass. But she’s not going out to eat at restaurants. Not browsing for new clothes. Not buying flowers on Mother’s Day.”

One of the reasons our welfare state is failing at the moment is that there's not enough revenue coming in from lower wages and there's not enough tax being levied on the wealthy to patch it up. At a time when the working poor require supplementary benefits to make ends meet, this is unsustainable in the long run. This is not to say that small businesses are the only employers but even the biggest companies require customers and even the government requires revenues. Since the tax take has been reduced by the Government in the hope that taxes from workers via jobs created via tax cuts for the rich would make up the shortfall (it didn't), the Government has taken to selling our data to marketing companies and cutting services in an effort to balance the books. So what can we do?

  • Raise taxes on those earning over £500k PA to £65%
  • Cap CEO/Senior officer pay at x15 times that of the lowest-paid member of staff. When they get a pay rise, so do the staff
  • Encourage the proliferation of profit-sharing schemes to give employees more of a stake in the company
  • Increase the minimum wage to £7.50 PH
  • Cap prescription charges at £10 for multiple items
  • Subsidize public transport for those earning less than £14k PA as part of a co-payment scheme with employers 
  • Create a co-payment scheme for childcare where the Government pays for half and the employer pays the rest
  • Build more social housing
  • Tax second homes and empty properties at an incremental rate to force them onto the market
  • Invest in education, healthcare, and infrastructure to support workers and encourage people into work
  • Get rid of mass surveillance. Targeted surveillance is more effective for catching criminals
  • Use OS
  • Eliminate waste
  • Reform IPR, reduce copyright terms to 10-15 years, and promote alternative business models for artists, inventors and creators
  • Break up the big corporations using anti-trust laws to encourage competition and free up the market
  • End the war on drugs and treat them as a health issue

Remember, if people earn more, they'll spend more. Those companies that don't find themselves suddenly more prosperous have a demand-side problem; not enough customers. If they address that they'll be back in profit. These proposals address the truth that market forces are at work and we need to work with them, not against them. Sixteen simple steps would take us to a better tomorrow where peoples' needs would be met, the individual would be free to act and the will of the people would be respected. Best of all, it actually works in practice. So why aren't we doing it now?


Wendy Cockcroft

No comments:

Post a Comment