The Case for Universal Income

The Cost of Living: Do We Need a Basic Income

Directed by Shayne Blackwell and Wayne Welsh

Film Review

This documentary examines various argument, pro and con, for a Universal (Unconditional) Basic Income.

Britain’s highest profile UBI advocates are journalist George Monbiot and the late anthropologist David Graeber. The main arguments they (and others) offer are

• Britain’s extremely high levels of extreme poverty and destitution, despite being the fifth richest country in the world.
• The systematic dismantling of Britain’s welfare system (over the last four decades).
• Growing food poverty levels among Britain’s working poor.
• An aggressive speculative property market,* a major driver of inequality.
• The need to free up working class Brits to perform work not considered “employment” (child and elder care, higher education, and voluntary work).
• The protection a UBI provides against exploitative treatment by employers (employers are forced to provide better working conditions when employees have the freedom to say no.
• Ongoing loss of jobs do to automation and offshoring and relocation of manufacturers overs.

Although the documentary was released prior to the 2020 COVID crisis, the economic crisis triggered by global lockdowns has only accentuated the dismal working conditions of the world’s working poor.

The main arguments used against UBI are that that it’s “too expensive” (meaning it would lead to higher taxes and/or debt); that would encourage laziness by removing the incentive to work); and that it would cause inflation.

David Graeber (author of the History of Debt) points out that that the “too expensive” argument stems from a misunderstanding of where money comes from in modern society. At present, in most countries other than China, governments allow private banks to issue 98% of the money in circulation as loans. This includes loans to government to cover budget deficits.

Graeber stresses that allowing banks to create and control our money supply is a political choice. There is nothing to stop government from issuing their own funds to cover their deficits (as both Lincoln and Roosevelt did).

Ironically (as becomes clear in the film), people who endorse the “laziness” argument assure us they would continue working despite receiving a UBI – it’s just other people who would quit working.

Prior experiments with UBI in Indian and African communities produced decreased a decrease, rather than increase, in inflation. The additional community income caused an increase in goods and services in the economy. This, in turn, tended to drive prices down.

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*A Universal (Unconditional) Basic Income is a system under which government provides regular, permanent cash payments to each citizen, regardless of their income or work status.

**In the UK, as in the US and New Zealand, the primary cause of housing inflation is a monetary system that allow banks to focus most of their money creation in the housing market (rather than the productive economy) without any effort to regulate the amount created.

Public library members can view the film free at Kanopy. Type Kanopy and the name of your library into your search engine.

 

The Hidden History of Money, Debt and Organized Religion

Debt the First 5,000 Years

David Graeber (2012)

In this presentation, anthropologist David Graeber talks about his 2012 book Debt: The First 5,000 Years

For me, the most interesting part of the talk is his discussion of the historical link between debt and the rise of the world’s major religions (Hinduism, Christianity, Confucianism, Islam, Buddhism, Judaism) between 500 BC and 600 AD.

As Graeber describes it, all commerce was based on credit prior to the development of coinage around 500 BC. In all societies, coinage arose in conjunction with the onset of empire building – traveling armies had to be paid in hard currency rather than credit. The result, according to Graeber, was the simultaneous rise of military/coinage/slavery* empires in Greece, China and India.

According to Graeber, all the major religions arose around the same time – as a “peace movement” opposing militarism, materialism and slavery.

Around 400 AD, when the Roman and other empires collapsed, coinage vanished, along with the standing armies that necessitated its creation. During the Middle Ages, nearly all financial transactions were based on credit. Until 1493, when the “discovery” of the New World initiated a new cycle of empire building, accompanied by militarism, coinage and slavery.

I was also intrigued to learn that Adam Smith stole most of his thinking about free markets from medieval Islamic philosophers. The Islamic ban on usury enabled the Muslim world to operate pure free markets that were totally outside of government influence or control. Trying to operate an economy without such a ban (or a system of debt forgiveness like the Biblical practice of Jubilee) leads to inevitable economic chaos and ultimately collapse, even with government intervention.

People who like this talk will also really like a series Graeber recently produced for BBC4 radio entitled Promises, Promises: The History of Debt.  In it, Graeber explores  the link between Native American genocide and the harsh debt obligations imposed on the Conquistadors.  He also discusses the formation of the Bank of England in 1694, the role of paper money as circulating government debt and the insanity of striving for government surpluses.

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* In ancient times, the primary mechanism by which people became enslaved was non-payment of debt.