Monday, January 16, 2017

Anytime Soon

In a post about something completely different, Freddie deBoer makes the following sobering observation about political discussion today:

None of this is about plausibility. It’s fine to debate outcomes you can’t achieve. There’s a debate that’s been raging in my weird little political circles about whether we should support a universal basic income or a job guarantee, and it has become nasty in some instances, with accusations of one side being useful idiots for libertarians, the other for corporatists. On first blanch, this is silly – we’re not going to get either of those things. Not anytime soon. But I still value the debate because we need to define our goals for the future, and whatever else is true, the people debating have clear differences in what they want to happen. That’s important.

As I said in my comment to his post, I’ve long tried to figure out how to respond to this (very sensible) point. But what do we really mean by "not anytime soon". The only way to implement a UBI, as far as I can tell, is to phase it in over at least two decades, while phasing out the corresponding means-tested welfare payments. "Not anytime soon" can mean we’re not going start moving in the right direction in the foreseeable future, or just that we won’t have it fully implemented within a generation. I'll easily grant the latter, but I think we can start the process very soon indeed.

I agree with deBoer that we should be discussing this now, but not just because we need to have articulate goals. We should be debating the goal in a way that amounts to debating how to implement it. Some people are against basic income, not because they oppose the end goal, but because they can’t see how to get there from here. They need to be shown a 20-year plan in which welfare payments are replaced gradually with a UBI (from $1000/year and increasing over a decade or to around $12000/year) that is taxed back from working people so they feel no difference in take-home pay. (And there would be no bottom line difference on the budget.) They would only feel a difference the day they lose their job and are now automatically insured. (That is, instead of having to apply for unemployment benefits, they would simply lose the wage component of their income, keeping the basic component.) That, roughly, is the plan that should be discussed.

Now, I also believe that we should talk about phasing out all taxes other than a land tax. And I think it would be great to run the two processes in parallel. Ideally, you'd have a twenty-year period with ordinary economic growth, increasing UBI, decreasing wages, decreasing income and sales taxes, and increasing taxes on land. Also, you'd want to replace the debt-based monetary system with one in which the money is created as purchasing power, i.e, the UBI + government spending. (The only check on inflation would be the land tax. Indeed, that would be the primary purpose of the land tax, which would ensure that money had "value", namely, as the only legal means landowners would have to cover their taxes. If you want to own land you'd have to satisfy demand in the population.)

But my tax proposal is only something that can plausibly be argued once the basic UBI implementation makes sense. Interestingly, in my mind at least, once someone has granted that the UBI can be implemented in something like the way I propose, the end of income taxes follows naturally.

2 comments:

randallwestgren.net said...

A Georgist! Thomas is a Georgist! Huzzahs!

During graduate school, I was forced to read Henry George by the light of whale oil lamps. My recollection is that Georgism is theoretically appealing, but there is no political system on Earth that wouldn't make a complete mess of introducing and managing it. Not even in Denmark...

Thomas said...

Thanks, Randy. I completely understand the sentiment. But...

What theory would you say our current political system isn't making a mess of managing in practice? This retort to your (let's call it) "realism" was especially trenchant in 2008, of course, but I think it still holds today. Even in Denmark.

I see the main problem as one of educating the political class. If we had all read Henry George in plain light of day, not by the light of whale lamps, i.e., if he were part of the canon of the political, economic, and social "sciences", then his theoretical appeal would perhaps inspire practical solutions. In my view, Georgism—along with C. H. Douglas's "social credit"—is actually the major policy implication of Austrian economics. Hayek supported basic income, at least in a passing remark, I'm told. Friedman was a Georgist.

Our current mess, I would say, is the natural consequence of trying to implement post-Marxist social science. In an important sense, all "social science", i.e., all attempts to understand social problems "scientifically", can be traced back to Marx. The great value of George/Douglas was to begin with an assumption of political sovereignty, not scientific ignorance. They approached politics from the point of view of the power we have, not the knowledge we lack.

It's great to have to you back, Randy! I'll be writing about intermittently.