Over at Techdirt, Mike Masnick has been working on creating a forum for discussing what the future is going to look like by getting people to weigh in on what the future is going to look like. I've already contributed, extrapolating from current trends. I'm a bit pessimistic, basically seeing things getting worse before they get better due to the increase in right-wing-ery in our society. Political polarisation will only get worse unless we can break the stranglehold of the few incumbents who own the majority of our media outlets since they tend to drip-feed their ideology to their readers in order to normalise it. Given that situation and the fact that we need to come up with a workable plan for coping with mass poverty, I'm going to revisit some old arguments and try to come up with something meaningful to contribute to Mike's symposium with regard to poverty reduction schemes since it's one of the items on the agenda.
Poverty reduction schemes
There's a plethora of poverty reduction schemes around, some old, some newer, and some too radical to get off the ground. These have met with varying success rates according to implementation and uptake. I'm going to discuss the most popular ones.
Basic income
I've been bashing the idea of Universal Basic Income ever since I first began discussing it with its proponents because the mathematics don't add up. There's also the fact that these people can't agree on what it actually means — one-size-fits-all handouts to everyone regardless of economic status to supplant waged income or a supplement to earned income? If so, how much? And how would we pay for it? I've run up a calculator based on the flat tax idea. Try playing around with it. Basically, the lower the tax rate, the more people who gain. Raise it to the 50% mark and you see middle-income earners being hit harder to provide pocket money for the very rich. They'd be getting it too, in the name of fairness, remember. There's also the matter of the poor box being raided and people being thrown out of work to pay for this fiasco per my conversation with Mike about it in his article's comments. And this is all before we've even decided on how much people would receive. Let's face it, people, when the causes of poverty are structural, throwing money at it ain't gonna solve the problem, is it?
Middle-out
This is my preferred solution because I believe that working gives you dignity and purpose. I also believe that a robust welfare state helps ensure order in society. It works like this: a progressive tax rate and a living wage enable us to enjoy a decent standard of living in a consumer society. The taxes raised by taxing earned income then go on to pay for a welfare state that includes healthcare provision and a range of social services. The American city of Seattle, where Middle-Out ideas are being pioneered, is enjoying considerable success as a result of raising the minimum wage but it's struggling to improve the lot of low-income earners because it hasn't addressed the structural causes of poverty, namely housing costs and healthcare. We can see, then, that merely raising the minimum wage and expecting the market to provide is not the answer; we need to tackle the underlying issues, too.
Mincome
While I'm not a mad fan of basic income I'm much more open to the idea of an income top-up scheme that brings an individual's income up to a particular level as long as this doesn't take the place of housing or healthcare schemes. This is because I'm skeptical that a market-based solution is available for low-income people's health and housing. Therefore, any scheme I'd support must never be a one-size-fits-all plan in which a sum of money is bestowed upon the people, who are then told to live within their means and left to fend for themselves.
I believe it would be more cost-effective to create housing projects to introduce competition into the housing market and to provide free healthcare by expanding Medicare to all before introducing a mincome scheme so that people can afford to live on the money provided. Okay, but how would we pay for it? I'm thinking that due to the rapid expansion of micro-generation technology that community-based solar, wind, or mixed electricity generation plants, perhaps via roof panels, etc., would fund such a scheme.
Other potential community revenue streams should be explored but the idea is that the community generates its own income to the greatest extent possible using whatever resources it has, which is then used to fund income provision schemes for its residents. If everyone is, let's say, entitled to a top-up to £1,000 a month, anyone earning more than that would not be entitled to receive it. This would provide a bigger pool of money for people in need than if everyone received a fixed sum.
Bureaucracy and efficiency
The term "efficient bureaucracy" is not oxymoronic, it's just FUD designed to push people away from nuanced solutions that take people's needs into account.
I believe, based on personal experience, that efficient administration is best achieved by continually improving on information management and flow; making sure data is recorded properly, acted on where applicable, and made available to the people who need it as effectively as possible... If you manage information well and ensure that it cascades as appropriate, you'll find that your operation runs smoothly. - Information Management And Flow: Making Admin More Effective by Wendy Cockcroft on Linked In
Any scheme of any kind will require a certain degree of administration.
One of the main reasons it has proved impossible to automate my job is that the data is only as good as the person who enters it. ...If there’s a discrepancy I have to resolve it. I need a paper trail and reference numbers to get my job done.
Private enterprises rely on effective administration. When the records are not up to date, service provision — and the company’s reputation — suffers. - In Defence Of Bureaucracy, by Wendy Cockcroft on Medium
If you're going to sack the welfare program workers in order to run a tax-based scheme you're still going to need administrators who now have to work out who does or doesn't receive the money; is it going to citizens or legal residents as well? Remember, they're going from taking money off of people to giving it to them so they need to make sure the recipients are alive and in existence as well as being entitled to it. Births, deaths, and change of address, etc. all have to be taken into account. Fraud detection and prosecution will also have to be taken into account. None of the blue-skying UBI proponents has even bothered to answer that question and they're not going to: UBI is based on principles, not practicals. The only way you can accept it as a valid proposition is if you don't actually think about putting it into practice.
Which ideas will prevail?
Given that we live in a world where feelings trump facts I can see the idealists pushing their UBI idea till an economy-minded right-winger pulls the plug on it due to costs spiralling out of control. We would then end up with a modified version in which only a select group receive the money as a handout that doesn't really solve their main problem of having to rely on handouts to live as we're seeing in Portugal now.
Is there another way?
I believe that people need to be given some control over income generation, otherwise they'll be relying on other people for a living and that is not a good idea at all; anyone who can control the amount of money you receive can pull the plug on it at any time. For this reason a decentralised community-based income generation system with multiple income streams would be the way forward. There might not be enough jobs to go around but there is certainly plenty of money. We just need to get it flowing in our direction.
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