Tuesday, January 20, 2015

Guaranteed Income, or Something Else?

This and my next few posts are going to be somewhat news-houndy. I’m going to select a few ‘mainstream’ articles and highlight what I see as deficient in their reasoning. In a few weeks’ time, subsequent posts will lay out what I believe to be the best alternative to the current money system, an idea – Infomoney – that would require and encourage sufficiently deep change. Absent a sufficiently deep, broad and loving – not fearful – revolution, things will continue to slip away towards the abyss, no matter how well-meaning any particular proposal that only tweaks the status quo.

In a recent post, Yves Smith of Naked Capitalism analyses what she calls a past guaranteed income scheme that failed horribly: the Speenhamland System of the late 18th and early 19th centuries. I had not heard of the scheme, so was interested to read about it. The point of her article is to dissuade readers from supporting the guaranteed income idea, and promote her preferred alternative, a job guarantee programme. This post is my response to her analysis.
It is also intriguing that this historical precedent is likely to resemble a contemporary version of a basic income guarantee. Even though some readers call for a stipend to everyone, that simply is not going to happen, at least in terms of net results. It is massively inflationary, since most of it would fuel consumption.
This is a pragmatic argument, at least on the surface. All we can realistically expect, Yves Smith reasons, is some watered-down “version” of a guaranteed income, which is what Speenhamland was. In other words, not a guaranteed income worthy of the name, but a tweaked welfare scheme that favours existing power structures and vested interests. The powers that be are, after all, very powerful, and will only allow to come to fruition that which serves their interests. Therefore, a guaranteed income scheme worthy of the idea “simply is not going to happen”. Further, the more genuine the guaranteed income, the more it will fuel consumption and thus spur on environmental damage, and nobody wants that.

This is a fair argument if we don’t think outside the box and if we want to accept things are more-or-less fine as they are (as the elite would have us believe). But the faux pragmatism on display above sidesteps what I see as the whole raison d’être of a guaranteed income, which I expand on below. Basically, this opening gambit renders the rest of hercritique superfluous. By its logic, there can be no guaranteed income realistically speaking, so don’t want one. Why there can’t be is not addressed in any detail, so we have to take it on faith. My sense is that Yves Smith believes the money system can’t accommodate it. For example, “Taxes would therefore need to be increased to offset those [inflationary] effects.” The strong implication is that this “is not going to happen” either.

Indeed, taxes would have to be increased to ‘fund’ any basic income guarantee worth its salt, particularly if we don’t revolutionise other key institutions like the money system, Big Government, property law, education, agriculture, etc. Anything less will be an insufficiently deep revolution – if a revolution at all – and would fail to introduce and sustain steady-state economics, a vitally needed change if we are to end our systemic addiction to perpetual economic growth. Perpetual economic growth is in my opinion the most pragmatic consideration we face, far more so than (apparently) having to accept the money system as it currently stands. Such argumentation betrays real wishful thinking: the money system is the main driver of perpetual growth (more below), an impossibility on a finite planet.
The justices of Berkshire decided to offer income support to supplement wages, with the amount set in relation to the price of bread and the number of children in the household, so that the destitute would have a minimum income no matter what they earned.
Speenhamland was a means-tested supplement to wages and was about preventing outright destitution and starvation. It was not about freeing people to contribute to society from their passions, nor was it about dissolving class divisions based on money-wealth. The article is thus comparing apples and oranges while insisting a genuine guaranteed income ain’t gonna happen anyway. A guaranteed income would be guaranteed, or unconditional, and would enable all its recipients to refuse shitty jobs. Arguing that something Speenhamland-like is all we can expect is, in essence, a strawman argument. It is also defeatist in that it echoes elitist TINA reasoning, thus (unwittingly?) arguing for the very system Yves Smith purports to challenge at her blog. Indeed, the whiff of elitism is detectable throughout the article, e.g.:
People need a sense of purpose and social engagement. Employment provides that. [... snip …] Too many of the fantasies about a basic income guarantee seem to revolve around a tiny minority, like the individual who will write a great novel on his stipend. Let’s be real: the overwhelming majority of people who think they might like to write a book don’t have the self-discipline to do so in the absence of external pressure.
Note the judgmental language rooted in elitist ideas about value. Is the insufficient self-discipline alluded to a result of ‘human nature’ and thus insoluble? Are humans ‘lazy by nature’ after all? Yves Smith appears to be propagating an elitist point of view here, siding with Hobbes’ observation that nothing gets done unless the Iron Hand of Big Government or The State is there to threaten the masses to coordinated action. Implied in this argument too is that the only value (a vital word in all of this) in e.g. writing a novel lies in its greatness. Does this mean that we should prevent people from writing unless they produce a Great Work? And who judges greatness? Those academic experts who Know What They’re Talking About? This rhetoric applies to all forms of artistic expression of course. And what of more ‘lowly’ ambitions like learning languages, gardening, permaculture, musical instruments, dancing, etc.? Is all of that a waste of everybody’s time unless ‘greatness’ is produced, or widgets for sale? And are the current delusions of grandeur of a “tiny minority” really an argument against guaranteed income? Surely they are the result of a broadly defunct social system, the very system Naked Capitalism purports to challenge and expose.

Not only “employment” provides a sense of purpose (I’d say employment-as-job distracts from the deep and abiding absence of purpose most strive to ignore until retirement finally exposes it). Passionate interest provides a robust sense of purpose when it emerges from our inner being, and also gives rise to heartfelt social engagement as a calling. To get people in touch with their passions, their loves, to foster durable confidence in them and thus in their calling, we need a deep revolution in education, in city design, in distribution systems, in government, etc. Basically, any sufficiently radical change in one area requires correspondingly radical change everywhere else. Hence a guaranteed income scheme worthy of the idea can only work alongside other fundamental changes. Plopping a scheme of whatever shade onto society as it currently stands will not work, just as Speenhamland did not.

Yves Smith argues for a job guarantee. I’m wary of this idea because I’m wary of the centralised decision making it would require. Further, I could (disingenuously) argue that we tried a job guaranteed programme already. It was called state communism and didn’t work out. Modern proponents of a job guarantee argue that local government would decide what jobs are created based on local needs (a good thing), but where would their budget come from? I assume central government combined with local taxes (a bad thing), otherwise there’d be autonomous local money systems, something I don’t see proposed. If it’s the money system that is doing the ultimate affording, decision making about state-funded jobs will be centralised to a significant degree.

Also, absent other changes, a job guarantee would increase consumption and perpetuate economic growth, as Yves Smith argues of ‘guaranteed income’. In other words, whatever change we introduce, be it a new welfare system or a job guarantee programme or guaranteed income, unless we also end our addiction to perpetual growth we’ll just be rearranging deck chairs on the titanic. Indeed, we’ll probably accelerate towards the iceberg if all we do is give more people more spending power. As William Ophuls argues in Immoderate Greatness, “As a process, civilization resembles a long-running economic bubble. Civilizations convert found or conquered ecological wealth into economic wealth and population growth.” I fail to see how this core, destructive civilizational pattern can be ended unless the money system is revolutionized (alongside other changes). The best alternative I have seen is Franz Hörmann’s Infomoney, and I’ll be laying it out here at Econosophy in a few weeks’ time.

In conclusion, the arguments levelled by Naked Capitalism at guaranteed income (or some roughly similar scheme) can be levelled at all similar proposals. My point here is that there is no silver bullet. The deep driver of perpetual growth – the elephant in the room that Yves Smith, to give her her due, is prepared to address from time to time – is the underlying money system as the expression or sustainer of the state (civilization) project. If money continues to be created as interest-bearing debt that is extinguished from the economy upon repayment (debt-money must thus be continually issued to ensure a sufficient supply into the economy, exponentially more than was initially created to cover interest owed and prevent deflation); if, further, money and money equivalents are viewed at the cultural level as wealth and stores of value that earn interest (grow exponentially); if, in sum, being money-rich is better than being money-poor as a defining property of the system, then we have a system that cannot help but require perpetual economic growth if it is not to collapse. Changing this system fundamentally such that it no longer drives growth requires correspondingly fundamental changes to private property (which undergirds the money system in the form of collateral), to the state itself (which protects private property) and by extension to state institutions like education, law and the market (what is market without private property). Calling for such radical change is only unrealistic and thus pointless if infinite growth is possible on a finite planet.

A guaranteed income fits well into the radical changes I touch on above. It trusts people to make the best choices regarding how they, as individuals, keep society going (we need love-based not fear-based solutions, i.e. people are lazy and have to be controlled or everything will just rot). It would help demote money from its current too-lofty position as primary indicator of social rank, and help shift focus to actual accomplishments that would be valued in more nuanced and humane ways. As such, guaranteed income marries up well with the Demote money, promote wealth direction that, in my opinion, resource-based economics would be. Until we are able to establish cultural institutions, myths, and systems that have as their focus ecological and human health, we will likely allow ourselves to be guided by abstractions thereof, which historically have had to do with simplistic numerical measurements (e.g. GDP, price) of subjective but central concepts like value and wealth. These deep social concepts are pivotal issues in this broad debate, for we cannot be guided by mere numbers towards the richly nuanced and healthy relationships with Self and Other a humane and sustainable future surely requires.


Foppe said...

Hi Toby,

Wrt the above: Iagree, ofc, though I wonder how useful it is to turn the fear that Society Just Won't Keep Running Unless into a diagnosis/accusation of 'elitisim'. It's certainly sad that people cannot look beyond their fears (or at the very least express them), but it's not very surprising that this fear is rather widespread (I also encounter it in the dutch socialist party).

That aside, I wanted to point out something to you that I ran into a few months ago that I find very worthwhile, and that I'm trying to do more with in my own life. Are you familiar with non-violent communication, as developed by Marshall Rosenberg? If not (very), please consider finding the time to watch this, as it's indirectly extremely relevant to the question how to combat neoliberalism/the bureaucratization of the world: https://www.youtube.com/watch?v=Ql5hywRyqgo

Toby said...

Hi Foppe,

Thank you for your thoughtful comment. I tried to start the video (I have heard of Rosenberg's work) but YouTube did not want to cooperate. I'll try again when I'm back in Germany and my connection is more stable.

The fear that Society Just Won't Keep Running Unless is or is not rooted in elitism depending on what comes after the Unless part. I have thought about whether or not what I detect in the critiqued article is elitism or something else, and still believe it is elitism. ELitism is rooted in a few things, one of which is fear. Fear is not elitism of course, but can give rise to elitism (among many other things). And these are vry generic and sweeping statements, but I think fair enough in a very broad way.

Do I mean though that Yves Smith is fundamentally elitist? No, I do not. I don't know her at all, but very much doubt she is a dyed-in-the-wool, card-toting elitist. For eample, I have conservative, liberal, socialist, communist and anarchist impulses and beliefs, but call myself an anarchist. No doubt, because I am a product of the current milieu, there are whiffs of elitism in me too; how could there not be. In that I have gone out of my way to share/expose certain properties of my 'uglier' inner content and more controversial beliefs in recent weeks here, and in that I believe we ought all to be ruthlessly honest with ourselves and others (i.e. speak truth to power), then yes, I do think it's helpful to offer a diagnosis of a whiff of elitism if that is relevant and accurate. I see it's appearance in the article as pertinent in that it is representative of the "failure of imagination" David Graeber brought to our attention a couple of years ago in a Naked Capitalism article. We are at the cusp (or indeed in the middle) of a very profound breakdown of the current paradigm, the survival of which will take courage and ruthless honesty across the board, from top to bottom. In my humble opinion. ;-)

Debra said...

Toby, I do not follow your arguments, nor do I agree with them.
I think that you demonize what you call elitism.
I also think that you idolize what you call love, and that human beings have much more complex motivations than you seem to think.
We live in a world of.. caricature right now. It is extremely frustrating and sad for those of us who don't.. like caricatures...
A challenge for you : just exactly what face do you put on the elite(s) ? WHO exactly corresponds to this shadowy substantive ? It is not because we feel oppressed that we can necessarily locate a flesh and blood oppressor, unfortunately. That would be so convenient.
On hierarchy...
Imagine for one minute that a new cell destined to find its place in the liver suddenly... "decided" that that hierarchy was not good enough for it, and that it wanted to be a neuron ?
Imagine for one minute what YOU (or I...) would look like WITHOUT A HEAD ? (The French word for head once was "chef", as in "chief".)
By constantly going on about hierarchy, and griping about the shadowy elites, you are going against... your nature, my friend.
Maybe this sounds ridiculous to you, it probably does, but I happen to believe this right now...
Things would be easier if we did not have so many caricatural ideas about what is valued work, for example, and if more of us were willing to admit that it's not because your feet are at the bottom that they are inferior...
Why can we no longer THINK ?...

Toby said...

I don't put a face on the elites. I think elitism is an aspect of the state, gave rise to it. Elitism exists in all of us to varying degrees, as we are all part of a state. Hunter gatherers are not in state systems, and are thus not elitist (in a class-based way) in their social structures. Indeed, they are ruthless in making sure egalitarianism is upheld, tyrannical even. Does this mean I think egalitarianism is better than elitism? Not really. Just different, though with similarities. I'm not going to expand on that here.

Right now I think our relationship with elitism is undergoing change for many reasons. The dangers we face as a species arise from the fact that current elites (or vested interests, or powers that be) are so resistant to this change (and other problems built into the state cake) that they threaten human survival. It's really just resistance, and wholly understandable all things considered...

The body analogy is one I know well. The body is not elitist as you suggest, though of course there are hierarchies, but they shift. For example, right now I have a frozen shoulder, which means I can't use my left arm properly. As a consequence it takes up an enormous amount of my time and energy even though it's not my head, and its stiffness causes serious structural imbalance and thus other pains throughout my body. For lasting health, overall musculo-skeletal balance including an appropriate relationship with the environment and Other is required, as is constant adjustment to ever changing circumstances. Sometimes resistance and fear block needed adjustment and health gets worse to the point of breakdown or death. Addiction is one way this happens. It is happening to society generally speaking.

I do not idolise love. And I know full well how complex humans are. Frankly, I'm astonished you think me so simplistic after all this time.

Tao Jonesing said...


I'm not a fan of Yves Smith, but I think you are a little confused about what she said. The "stipend for everyone" concept described in the first excerpted quote is not the same as the Speenhamland System, which she goes on to describe accurately later in the post. (I happen to think she's wrong about a universal stipend being inflationary, though.)

As to her statement in the second excerpted quote "People need a sense of purpose and social engagement," I agree that it's an "elitist" statement that fails to recognize that before the enclosure of the commons, people did not need jobs to have a sense of purpose and social engagement. The purpose of enclosure, aka privatization, was to force people to choose between starvation and taking a job at wages they were not allowed to negotiate. While it is almost certainly true that most people today don't know what to do with their time unless they have a job, that's because they've been trained to believe that. There's no reason to believe they can't be retrained or learn a new way from scratch (the youngsters coming up).

Toby said...

Hi Tao,

No, no confusion at all. The stipend is what some readers want and something that will not happen in her view, something much closer to the guaranteed income idea than Speenhamland. Perhaps my post was confusing on that point, but I was not confused. Honestly.

As to the pre-job, pre-enclosure world being plenty full of purpose, I agree. And yes, youngsters raised in a different system would have no trouble with a guaranteed income world. But I believe that absent other profound changes, guaranteed income would be inflationary. No silver bullet and all that. That said, if society were to introduce a GI scheme worth its salt, most likely other changes would have happened leading to its full introduction. The idea is so radical it requires radical change to be desired across the culture and then accommodated/implemented.

Karl said...

Toby, its good to see you still engaged with these issues.

> In that I have gone out of my way to share/expose certain properties of my 'uglier' inner content and more controversial beliefs in recent weeks here

Are you referring to your feelings of self-loathing here? Any healthy mind is going to experience that occasionally. Elitism and constant fearfulness are results of an out-of-control ego. Thanks for writing and letting us know that you are a responsible "ego owner".

Debra writes:
> By constantly going on about hierarchy, and griping about the shadowy elites, you are going against... your nature, my friend.

I don't see anyone here talking about hidden manipulators. The self-serving behavior of people who take power is quite obvious to anyone who's paying attention. They are typically quite brazen about it.

Debra, your body analogy does not reflect the specifics of our insufficient political order. It is not radical to be working towards a more holistic social design. We are appropriate for our time and place.

Debra said...

I read your comments about elitism, and Tao's comments about sense of purpose, and the importance of jobs for money in our ideas about work.
Both of you seem to have the background assumption that we can "train" the upcoming generations to go beyond the necessity of this sense of purpose given by jobs.
This is where our roads part.
Because I think that this statement is basically a positivist one, and positivism is greatly responsible for where we are right now, and our difficulties. (See below)

Our ancestors did not rely... SOLELY on their status as paid workers for their sense of purpose because the life tissue of their existences consisted of so much more than work for money. Work itself was much more polysemic than it is right now, since we have... impoverished the meaning of the word.
There were many more exchanges that did not have to go through the money route.
And they felt much more connected to... the universe because they were flesh and blood actors in nature, who HAD TO rely on their senses, and their observations to scrimp by, in some circumstances (particularly in rural areas). Even poor, many of them, they had more power, and their world was richer, more varied than ours.
They were not living in isolated, artificial megapoles.
Really, you don't have to go all the way back to the hunter gatherers to see how much we have lost touch with our natural world.
My 76 year old French neighbor grew up dirt poor, (without money) and spent a lot of time scouting for food...
His grandchildren spend their time in front of their computer screens. That's how much we've increased our.. alienation in the space of two or three generations.
If I say that the idea of "training" future generations is positivist, it is because at this time, there is a... fundamentalist human belief that we are not in part determined by factors beyond our knowledge and control. Factors that we will remain ignorant of, inasmuch as we are still human creatures/animals, and not... God.

I still maintain that if you cut off your HEAD, nothing else can survive.
That's not elitist. Your head is... commander in chief, and for the commander in chief to command and GET THINGS DONE, he needs all his.. subordinates to do their WORK properly. The commander in chief DEPENDS ON his subordinates who depend on him. I see no reason to qualify this way of looking at the world as elitist.
Outside of this way of.. working, I fear that there is no salvation for us, Toby.
I see evidence of this in my.. job as a volunteer in a local library...
What did you think of the Lorenz quote, about our new... "modern" construction looking like cancer cells ?
That speaks to me. Greatly.
Perhaps I have ceased thinking these days, but when I see the word "universal", I WANT to jump up and run in the opposite direction... it takes all my self control to sit down, ponder, examine, and try to set out... in a different direction...

Toby said...

We agree that the importance of the head (or heart, or lungs, or legs, or fingers etc.) to the body is not elitist nor rooted in elitism in any way. It was you who suggested it was. Elitist would be unnecessary squandering of other of the body's systems to serve the head for fear-based or vanity-based reasons, where the head swells and swells cancerously because it can't see the harm it's doing. That cancerous process is closer to elitism, the patrician abhorrence of the great unwashed, dehumanisation of Other, self-agrandisation, etc. The brain as an organ is incapable of patrician horror of anything; the body cannot be elitist until it is sick with cancer, and even then that's just a rough metaphorical similarity.

I wouldn't characterise the head as commander in chief, more like one of the first among equals. I.e., the heart is also a brain scientists are now discovering, and the skin is part of the brain (what would the five senses be without skin and nerves). I could go one, but I think you understand. And anyway, as I've said before, I'm not against natural authority, I'm 'against' patrician, fear-based, institutionalised authority.

As for work, again, it now reads like we more or less agree. The thing is, we cannot stop change. We have computers, we are out of caves and other unbuilt shelters, we have abstract language, we have culture, we have modern technologies of every sort, etc. We cannot just switch all that off and return to something 'perfect'. The accumulated weight of change requires that we adjust or perish. That's a pragmatic, not idealistic, assertion. I suggest we do so in a love-based way.

One of the many, many things we once again need to adapt, is work for wage. One of the other things we need to adapt is our relationship with nature, or Other, and this change is needed to make other changes right, or healthy. Nature has become an Alien Other to us. One of the reasons I mention permaculture again and again is because I think it has a philosophy that is adapted to modern requirements: i.e. it proceeds from a partnership with nature, not a war against it. Permaculture requires far more work per calorie of food produced than modern agriculture, but is grounded in a far healthier relationship with the rest of nature, a love-based relationship I would argue. Here's an article that sums it up very well:


As for cancer, one of the books I read some years ago is "The Cancer Stage of Capitalism" by a Canadian philosopher called John McMurtry. He lays that metaphor out in painful detail. That book is one of the reasons I harp on about the impossibility of perpetual economic growth, which is cancerous by definition. Further, I would argue that cancer is a fear-based phenomenon and that dealing with all its manifestations (including perpetual growth and elitism) will require love-based solutions, and faith. Faith that is open to new learning, in contradistinction to belief, which is etymologically closed in that it stems from "lief", which means wish (to bewish). Wishful thinking is not going to help us adapt; we have to be courageously open, wake up and act. But act lovingly, honestly and openly, i.e. in a non-elitist way. That's a very tough path to walk.

Toby said...

Hi Karl, nice to see you again.

I kind of lost faith in blogging, coincidentally had a crisis that realigned how I relate to world, and found renewed faith in the blogging process. I'm flattered to see you appreciate my efforts.

Yes, I was referring to self-loathing, and I'd agree that it's healthy to face such feelings and process them, but I was also referring to other ideas and perspectives I've been sharing since November 2013, all of which together represent a 'new' foundation from which to return to this sort of material.

Toby said...

This article represents the beginning of what I mean:


“All these projects, it’s very important to me, are not just helping people who need it, but they represent almost the start of a new kind of society,” Katerini said. “They are run as direct democracies, with no hierarchy. They are about people taking responsibility for their lives, putting their skills to use, becoming productive again.”
[My emphasis.]

It's easier to escape involvement in a hierarchy, to hide away, to dehumanise others, to be isolated...

Debra said...

If cancer is a fear based phenomenon, I believe that the underlying fear is that of dying.
Every minute of our existence there are cells that sacrifice themselves, and choose ? death in the interest of the greater good of the body.
A cell that refuses to make this choice is a rebellious and egocentric cell.
There ARE egocentric cells.
But we are probably getting to that delicate point where the metaphor starts breaking down now...
You know that I don't believe in a materialistic vision of "reality"..
But we still have lots of points in common.
Ouff, as we say here...

Toby said...

Not sure about egocentric cells, not sure about cancer as rebellion in the sense of protest, but who knows. I think there's some benefit to seeing cancer as a communication from the body that health -- total health -- has been ignored for too long. And I would add (qualify fear of death with) fear of losing control. Perhaps they're the same thing, more or less.

Tao Jonesing said...


"Both of you seem to have the background assumption that we can 'train' the upcoming generations to go beyond the necessity of this sense of purpose given by jobs."

You are really good at finding ways to turn the plain meaning of simple language on its head. :-)

My point was that Yves statement assumes that the need to work is a fundamental aspect of human nature when we have plenty of evidence to the contrary. If a behavior is not instinctive, it is learned, and my rebuttal to Yves' position was that the behavior she argues is instinctive is, in fact, learned. That's all.

I'm describing, not prescribing.

Tao Jonesing said...


"That's not elitist. Your head is... commander in chief, and for the commander in chief to command and GET THINGS DONE, he needs all his.. subordinates to do their WORK properly. The commander in chief DEPENDS ON his subordinates who depend on him."

Your analogy fails because elitists see no connection between themselves and the masses they lord it over, i.e., an elitist fails to recognize that the poor are poor so he can be rich.

The elitist is a disembodied individualist head who gorges on the collectivist body with little or no recognition he is doing so. All he knows is he must maintain a status quo that maintains him, a status quo he considers "nature."