LESLEY Riddoch’s piece on Universal Basic Income (UBI) was gratefully received, and speaks to the failures of the modern UK state machinery to muster the political will to energise the lives of its citizens for the betterment of all (How to solve Scotland’s challenges of the future? Ignore scaremongers and take a bold leap with basic income, August 30).
However, UBI will not operate in a vacuum, but as part of a system that is today broken beyond repair even by so radical a proposal as UBI. In her piece Lesley describes only part of the change that is needed.
In a functional capitalist system, where capital drives the economy, UBI would be a fine solution to the potential unequal distribution of wealth. You would set the rate of UBI as some proportion of the wealth of the nation and (with one or two caveats) market forces would take care of the rest.
But in the current post-capitalist world, where because of next-to-zero interest rates people of modest income are not incentivised to save, and because of the inherent fragility of the broken economy the rich are not incentivised to invest, UBI risks becoming a huge additional millstone, which rather than balance the scales of wealth does the very opposite.
Until the crash of 2008 capital was literally the currency that drove all our endeavours, like electricity in a circuit – flowing from location to location and used to achieve progress and growth. That is no longer the case. Money is now accumulated in repositories which act like batteries created by greed.
READ MORE: Scotland should ignore scaremongers and be basic income pioneers
In a semi-closed system (such as the economy of an independent Scotland), over timescales of five to ten years, given that nothing else was to change, the money that was distributed via UBI would simply be accumulated in those greed-batteries, leading to the rich getting richer and the poor ending up back where they were to begin with. Inflation would be a constant determining factor.
But all of this is not to say UBI could not become part of a revitalised economy based on traditional capitalism. If interest rates could be raised to track the UBI rate, then the incentive to save would return. Taxation would have to become very much more effective, largely by taxing outcomes (ie wealth and profit) rather than incomes.
The rich would still have to be allowed to be rich, but effective taxation would allow UBI to serve the mechanism where balance would be achieved, so that the unsustainable inequality we now suffer could be better managed for the good of everyone.
So, UBI would need to be part of a re-organised economy with fair and effective taxation, an ethical banking system, and a regulated financial services system. It would also be essential for local authorities to have powers to top up UBI, which in turn would require a re-organised system of local government based on geographical and demographic practicalities.
Money is a consensual construct, designed to serve us all as the lubricant to trade, exchange and commerce. In the modern era it has been appropriated by greed, often in the service of the industry of war, as a self-fulfilling end in itself, rather than the means whereby we progress to a better world.
UBI can be part of a huge change for the better, but only a part.
Stewart Robinson
Musselburgh
UBI is likely to be significant in many ways. Every pound paid in UBI will benefit more than just the person it’s paid to; every pound will most likely be put straight into the local economy. UBI should mean it really is universal, so children should also have a UBI.
I agree with Lesley. It’s time to be bold.
Jim O’Rourke
via thenational.scot
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