Unconditional Income – right now!

Tommy Potter

It seems that democracy as it is today cannot last forever. Either there will be a qualitative leap or there will be disintegration and destruction. I believe that the first prerequisite for a renewed society must be direct democracy. The second requirement has to be unconditional income on which there are different concepts. Renewed society should - based on higher productivity in social work - lead to a significant increase in the National Prosperity Index.

There are different ideas about unconditional income. The most popular idea is the Unconditional Basic Income (UBI). According to Wikipedia:

Universal basic income (UBI), also called unconditional basic income, basic income, citizen's income, citizen's basic income, basic income guarantee, basic living stipend, guaranteed annual income, universal income security program or universal demo-grant, is a theoretical governmental public program for a periodic payment delivered to all citizens of a given population without a means test or work requirement. A basic income can be implemented nationally, regionally, or locally.

The basic income is mostly estimated as a payment of 800 to 1200 euros. No government in the world is ready to take responsibility for such high unconditional payments. The majority of voters are also not ready.

Citizen's Dividends

In that article I support the citizens' dividends as an alternative to UBI. Citizens should be entitled to receive dividends from the country's natural resources and manufacturing facilities. Natural resources should belong to all humanity, according to the Georgian principle. The country's production facilities were created by workers of several generations. Hence, it will be fair for the owners to split part of their profits into dividends for the citizens.

Unconditional Basic Income (UBI) or Citizen's Dividends?

Comparing these two concepts (UBI and Citizen's Dividends) I prefer the second concept - Citizens should receive their dividends.

The recipients of dividends are turned into politically active and financially savvy citizens, and the recipients of UBI are turned into dependents who do not care where the money comes from or who and how earned it.
The recipients of dividends are actually the middle class and the backbone of democracy, while the recipients of welfare or UBI can support any political rascal who makes great promises.
The recipient of the dividends is one of the owners of production facilities and natural resources and participates in the disposal of these resources. Almost nothing depends on BGE recipients.
The advantage of the idea of citizen dividends is that this idea can be implemented in any country, poor or rich. Dividends can be increased gradually. In the initial phase it would be possible to pay the minimum amount to support the technical and organizational part of the system. Then the payments can be increased gradually in order to maintain the stability of the economy and to adapt the tax and social legislation to new realities.
Why do we only strive for a basic income? Who determined the level of the basic income? Citizen's dividends can reach a level that is above the basic income! It is not a handout for the poor, but a mean of reducing social inequality to socially acceptable level. This is a fundamental difference between citizen dividends and other unconditional income ideas.

Citizen's Dividends Now (CDN)

Recommended "Citizen's Dividends Now" (CDN) is an alternative for unconditional basic income (UBI) that must be based on the following principles:

CDN can be paid for immediately. First payments can be small, for example 50 euros.
The aim is to gradually increase CDN payments.
CDN-pot needs to be emptied every month due to payments to citizens.
CDN payments are tax-free.
Payments should be increased gradually to see results and amend legislation.
Funding of the CDN-pot can be a combination of different methods of taxation, cash creation or even donations.
Legislation needs to be adjusted regularly to keep the economy stable and increase the flow of money into the CDN pot.
An increase in CDN payments leads to a reduction in social benefits. The changes may not reduce the amount of the lump-sum income - for all recipients of state benefits.
The gradual increase in CDN payments can be stopped or even turned back in the event of negative results.

The way to "Citizen's Dividends Now"

The introduction of citizen dividends requires fundamental changes in society that are hardly possible within the framework of traditional representative democracy. First, citizens need to come to power (in the form of direct e-democracy).

The proposed sequence of measures to implement the CDN:

The first step is to enact in the constitution the right of citizens to receive dividends from the country's natural resources and production facilities. The sum of dividends cannot be determined in advance.
Solve technical and organizational problems associated with the money transfer from the CDN cash pot to the citizens’ bank card.
Voters need to change the way new money is used. Newly created money must be transferred directly to the CDN-pot. Perhaps the amount of new money per person varies from 20 to 100 euros per month. At this stage (for example, 3 months), it is necessary to check out all technical solutions so that every citizen can really receive this money. It is also necessary to prepare legislation for the next stage.
The task of the next stage is to eliminate begging and the system of free food distribution (meal centers, soup kitchen, etc.). To achieve this, the amount of the CDN-payouts can de, for example, 250 euros per month. This will reduce the "caste division" of society, as former beggars and welfare recipients will become respected buyers, who are no strangers to saving. A market-based food distribution system is cheaper for the society than the existing "free of charge" one.
The purpose of the next step is to provide health insurance for all citizens, including the homeless. There are few such citizens, and the associated costs will be relatively low.
The increase in CDN payments to 600-800 euros will help eliminate homelessness. This can lead to changes in the rental housing market that may require legal adjustments.
The next big challenge is to abolish the “means testing”, so that people could get their CDN income without sanction, being controlled, or requiring submit an application. Layoffs in the bureaucratic apparatus will be required. But the saved administrative costs can significantly fill the CDN pot.
Deregulation of the labor market, the abolition of the minimum wage, the elimination of the "poverty trap", the ability for retirees to work without reducing their pensions - all of these changes will significantly raise social labor productivity. And with that, the CDN payments can raise above the base level.

The steps above illustrate the important idea that introduction of unconditional income cannot be an overnight act. The suggested steps can be supplemented or combined. This process can stumble at every step. But the common goal helps to take the next step forward.

The economic power of the people in the form of citizens' dividends and political power in the form of direct democracy are radically change the society.

Nobody would be hungry. The free distribution of food and clothing and the associated costs can be eliminated.
There will be no homeless people. Former homeless shelters can be rented out to the same people.
There will be no recipients of social benefits who avoid employment for fear to lose their welfare.
Pensioners who can and want to work will be busy.
Labor legislation can be minimized. It is currently overwhelmed by a lot of labor protection laws. As a result of simplification of labor legislation, we will get “pure” capitalism with minimal (or even no) government interference in labor relations.
The idea of introducing UBI into the capitalist economy almost entirely agrees with such incompatible ideas as neoliberalism and communism.
However, the presence of UBI eliminates the need for many laws that restrict employers' arbitrariness. But neoliberalism demands just that - the non-interference of the state into labor relations. But the abolition of wage slavery will not please the neoliberals.
On the other hand - in the presence of the UBI - the communist principle is actually implemented: “from each according to his ability, to each according to his needs”. But the communists will also remain dissatisfied, because this principle will work not in a socialist, but in a capitalist economy.

May be, that the modern economies of Western European countries are capable to provide citizens with dividends in the amount of 1,500 or 2,000 euros. However, an increase of more than € 1,000 requires a redistribution of the incomes of the rich and the super-rich and thus a reduction in social inequality. Most likely, this will be possible only in the community of democratic states with direct democracy.

Who will pay for it?

There are different ideas how to finance the unconditional income (CDN, UBI or something similar).

Negative income tax is redistribution of existing taxes
Financing with a large consumption tax that replaces all income-related taxes. This concept was further developed - according to the principles of Götz Werner - by the association "Generation Basic Income" from Austria.
Taxation of the rich faced major problems. Expecting a significant increase in tax revenue from the rich is unrealistic, as they easily evade taxes without even breaking the law. Most of these problems cannot be solved by a single country. International efforts are required to combat international crime and tax havens. The last G7 summit supported the introduction of an international minimum corporate tax rate of 15%. That can restrict tax wars and increase the cash flow to the CDN pot.
Environmental and natural resource taxes can also fill the CDN pot.
Donations. The introduction of unconditional income means the elimination of homelessness and begging. Saved donations can be add to the CDN pot (this is voluntary for church communities or other sponsors). This eliminates highly ineffective support systems for poor people, such as soup kitchens and charity stores.
Reducing the bureaucratic apparatus is an almost impossible task. As practice shows, the bureaucracy can only grow. However, removing the "neediness" control will free many social workers and job center staff. That can additionally fill the CDN pot.
Money creation. The amount of created money is determined by the central bank. Redirecting the flow of money to the citizens CDN pot could improve the performance of the economic, because consumers will support the real sector of the economy, and the speculative financial sector will be weakened.

Proposal that Giacomo Corneo presented in his paper "A state fund that finances a social dividend". The author suggests to receive dividends from stocks, placed abroad. I believe voters will not agree to fund the exploitation and human rights abuses. It is immoral to (jointly with the rich) exploit the people of poor countries and to finance the autocrats.

Why is there still no country with unconditional income?

For example, that could have been done by the US economy in the 1960s under the Nixon Plan. During this time, technical progress has significantly increased labor productivity. Is it possible that the modern economy of the industrialized countries cannot offer everyone a basic income? It seems that economics and advanced technology have long been able to provide a basic income for everyone, and it's not about economics, but politics.

The introduction of unconditional income leads to a radical redistribution of power. The power of capital and politicians decreases, while the power of the people increases. For example, it may turn out, that it is not the owner who chooses the employee, but vice versa. This situation scares many off. Politicians can find out, that voters are losing interest in "how the national cake is split" and become concerned about more important issues. Politicians are not ready for such a turn.

It turns out that the power and influence of a wealthy minority is sufficient to prevent any attempt to introduce a full-fledged UBI. In this sense, democracy can be considered fictitious in any country, even the most developed one.

For example, suppose the Italian government, as promised, introduces UBI in the country, increasing taxes on businesses and wealthy owners. Capital will immediately flow from the country in different directions, and factories and building sites will stop working. As a result, the entire population will be affected by that disaster.

These reasoning reveal an invisible wall that stop all unconditional income enthusiasts. To use Marxist terminology, we have a contradiction between the base and the superstructure. The base makes it possible to have UBI, but the superstructure does not.

Experiment or fight for Citizens' Dividends?

The reason why Citizen Dividends (or UBI) has not yet been implemented is because it goes against capital interests. And new experiments cannot change these interests. Authorities do not accept Unconditional Income regardless of experiment's results!

Therefore, I see additional experimentation as a distraction from real problems. It's the high time to stop experimenting with UBI in developed countries. It is better to use the available resources for education and propaganda and for organizing the citizens struggle for their rights.

Which country will be the first?

Unconditional income will be introduced in these countries, in which the population will actively fight for it.

Possible steps of introducing unconditional income are considered on the example of Germany. However, Switzerland is the number one candidate for unconditional income, since direct democracy already exists there.

And if the Communist Party of China guesses to introduce an unconditional income, it will further accelerate the Chinese economy by increasing domestic demand. If they dare this, it would be a moral (and then economic and military) defeat for liberal democracy.

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tomy_potter@protonmail.com