Free cash from government!

With the news dominated this week by ongoing cash shortages, rising joblessness and the need to protect the benefit system against fraud, I'm wondering if the time has come for a Citizens' Income.

A what? The idea behind the Citizens' Income is to pay every citizen a small sum, just enough to cover basic needs. That would be payable to everybody - including children and pensioners, rich and poor, and so on.

This would remove at once the stigma of means testing for benefits, and the "benefits trap" that prevents people working while receiving government support - often leading them to work in black economies such as drug dealing.

With a Citizens' Income, people could also get a job if they liked - and most would, because the sums involved are small - but they could stay at home if they wished. (Another news story this week concerned single mothers being forced to take jobs, with predictably bad effects on the children.)

But is the Citizens' Income affordable? When I mentioned the idea a year ago to a billionaire I happened to be interviewing, he laughed out of hand and said it was completely unaffordable. But in a conversation with Britain's only living Nobel-winning economist I received a more measured response. Sir James Mirrlees didn't actually endorse the idea but acknowledged that the Citizens' Income was an idea that others were seriously considering.

Clive Lord, in his book A Citizens' Income, showed that in the UK an income of £320 a month (£420 for pensioners) would require a 7 per cent increase in income tax - but all taxpayers earning less than £30,000 a year would be better off. To anybody earning more, the idea may not seem enormously appealing - though that may change if they lose their jobs.

The Green Party has been calling for a Citizen's Income for some time. More importantly, the Citizen's Income was mentioned in passing in the Queen's Speech in 2006. Has the time come to introduce it?

PS. Sorry about the headline, which rather oversold the idea: as I've explained, the Citizens' Income would be paid for out of taxes. But would you have read this far if I'd called this post, "Time for a Citizens' Income"?

Comments

[Sabine K McNeill]

Free cash from government has been available for banks - in the name of UKFI (UK Financial Investments Litd). "There's always enough money for war, but never enough for health or the environment", as Labour MP Norman Smith remarked in 1944...

A Citizen's Income raises the 'zero line' for 'poverty', but doesn't prevent the gap widening between rich and poor, developed and developing...

And thus we took our petition "Stop the Cash Crumble to Equalize the Credit Crunch" to the Queen who passed it on to the Prime Minister who passed it to the Treasury...

More on http://tinyurl.com/666rwd

[Lyn Lovell]

Citizen's income would enable us to issue money according to population. World Citizen's Income would be an interesting move.

The reason we need more money all the time (commonly known as growth of the economy) is all to do with the issuance of money as interest-bearing debt. Where is this interest money to come from? You may pay your interest out of your wages but someone somewhere along the line has had to borrow the money to pay you the money you're paying your interest with. Think about it. It doesn't take long to exhaust any finite pool of money if you're paying out interest all the time. Money does not" create" money. Money is "created" out of thin air by someone tapping their fingers onto a computer keyboard. This money is not of course created, it's borrowed and some poor sod like you or me will end up paying the interest on it.

Every transaction we make is financed by interest-bearing debt. How many processes are involved in your TV or even your lunch? How many different layers of interest are we paying? Resources need to be dug up, transported, refined &/or reformulated, transported, stored, transported, wholesaled, transported, retailed and finally transported to your home or wherever. Every stage of this is financed by interest-bearing debt. The interest becomes part of the cost of production and is of course passed on to the consumer. So how much interest are we actually paying to the banks??

Where does all this interest go? Wars. Space travel. Gambling. Bribery - of nations not just individuals. Power trips. Exceedingly extravagant life-styles. Not much of it "trickles down". Did I not hear yesterday that the interest on the American National Debt would exceed their whole GNP within ten years? It is madness. Through interest and repossessions, all true wealth (land, property, businesses etc), together with all available leeway in the system, is eventually vacuumed up into the pockets of the financiers and their mates.

There is plenty of work to be done and plenty of people who want to do it. All we need is some non-bank vouchers (money) that we can buy our food with and we'd be away! Local government could function properly if it could issue local currency.

But nationally we need money to be issued by some public agency, not by private companies misleadingly called The Bank of England or The Federal Reserve, as if they were publicly owned. Why should our elected Government, such as it is, have to go to these private banks, owned by private shareholders all over the world, to BORROW money to build a hospital or pay the fire-fighters? Who elected the bankers?

Citizen's Income allows money to be fed in at the grass roots. Money could be created debt-free according to population and a living wage distributed to each person as Citizen's Income. Many administrative details need to be worked on and this is what the economists should be doing, not planning how to prop up the same stupid system that exploits both the Earth and her people.

Lyn

[Maria I]

CI would be necessary for children because children cost money - never mind Wiis and Playstations, they need to be fed, clothed and housed. If one is serious about replacing means-tested benefits by CI, an element of support for children is necessary, otherwise workless families without children would be OK, but workless families with children would starve. Which would wreck an otherwise excellent system.

[Molly]

It's great to see this discussion around the Citizens' Income. If politicians are really considering dropping money from helicopters, then please let's all lobby them to achieve greater equity (and save CO2 emissions) but setting up a Citizens' Income instead.

[Ian]

I suggest something a lot more radicle than this.

How about we do away with money all together.

It's obvious that tinkering with a fundementally flawed system is never going to work for the vast majority.

If you think about how many people would be freed up who now work for the money system, how we duplicate operations in industry and how the unemployed are simply without work as a result of this money system then you realise how much of our resources we're wasting because of it.

I've worked out that about 50% of workers would be freed up.

We have the infrastucture to feed, clothe house, educate and maintain 60million Brits and 50% of the workers are effectively a burden so why don't we simply do away with money and make everything free.

The motive for going to work to maintain the infrastructure?....everything is free if you do. But now we've released 50% of the workforce to do half of your hours so you now only have to work half the time and everything is free.

The only people that this wouldn't really benefit are the top 3% or the mega rich... The very people who are now running the show and pulling the woll over everyone elses eyes.

[Alex Sprunt]

R Buckminster Fuller (http://www.bfi.org) was nominated for a Nobel Peace prize in 1969 and awarded 40 honorary doctorates plus authored 20 books and received the Medal of Freedom from President Reagan in 1983, the year of his death.

He is reputedly one of the most important people of the 20th Century because he kept a precise record of many developments both economic and technological.

Two very important points that relate to CI are first, the context of our economic system today is still one of 'scarcity' or not enough to go around and that is blatantly false and has been proven to be false since 1971. There is an abundance of everything on planet earth to provide a billionaires lifestyle to every human on the planet.

Secondly, Buckminster Fuller proposed paying 2/3rds of the work force (who produce no real wealth) $1,000 a day to stay home. The added pollution, energy use etc they use not producing anything is enormous and once they are free they will find constructive tasks to complete.

You can read more at http://10billionbillionaires.org

[Sam Riches]

I think children should get the Citizen's Income. My son currently gets Educational Maintenance Allowance and it makes a real difference to our family income, but many of his peers in 6th form don't get it because the baseline level of family income is too high, even though the assessment for EMA doesn't take outgoings into account. We had to wait ages for his EMA to come through - many other students are still waiting - and a payment that was made to everyone would be much simpler to administer. Giving CI to all children (maybe at a lower rate for under 16s?) instead of Child Benefit would enable a straight substitution.
CI would also help people on incapacity benefit and similar benefits where they risk losing their income altogether if they take a new job which then doesn't work out for them. And it would make life easier for carers, and enable more people to get a better work-life balance. Bring it on!

[Paul Nollen]

It is important to know if the basic income is taxable income or not. If it is taxable, like the Alaska fund, (not on state level but federal), the citizen's income is a form of Negative income tax or NIT, but with a prebate instead of a rebate ( years after the low income occurred).

Paul

[Richard Lawson]

CI has a lot of advantages - simplicity of administration, removing the unemployment trap and feeding money into that level of the economy where it is most effective - at the periphery. However, there is a huge mountain of political resistance to climb, from the people who will complain that they are not going to give their hard-earned to surfers just so that they can enjoy themselves. This argument can be by-passed by enabling people on benefits to take their benefit into certain forms of work that are beneficial to society or environment.
This approach is explained here: http://www.greenhealth.org.uk/GreenWageSubsidy.htm

[Susan Murray]

Why give a Citizen's Income to children? because it would remove even more of the bureaucracy and complications in the tax and benefits system referred to by Karen. Clearly it would replace child benefit and would mean that individuals could be taxed on income earned above CI without needing to take into account their need to provide for dependents

[Karen]

I'm not sure why the income is necessary for children. Perhaps it should start at age 21 or 18 if in higher education? This might seem perverse but starting at 16 or 18 might discourage the young from seeking work but make further education seem more appealing. For those happy to scrape by it removes the bother of pretending to seek work. Actually a sensible idea. It could save millions on the admin related to benefit claims.