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.

---

*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.

 

Reconciling Heathrow’s Third Runway with UK Climate Commitments

BBC News reports the British cabinet has just approved the extremely controversial third runway at London’s Heathrow airport. It will allegedly bring billions of dollars of economic benefit to Britain’s economy and create tens of thousands of new jobs.

Oh really? Big business is always promising pie in the sky economic benefits and job creation for big infrastructure projects that seriously disadvantage the rest of us by evicting us from our homes and otherwise destroying our quality of life. Experience teaches these economic projections aren’t worth the paper they’re written on. Thanks to the growing complexity of the global economy, economists can predict what the economy will do next month – much less 20 years from now.

The inimitable George Monbiot says it all in an October 18 opinion piece in the Guardian: “In a world seeking to prevent climate breakdown, there is no remaining scope for extending infrastructure that depends on fossil fuels.”

As Monbiot rightly points out, there’s no way Prime Minister Theresa May can allow Heathrow to build a third runway and simultaneously uphold the Paris climate change agreement Britain signed last year.

Subsidizing Air Travel for the Rich

He cites last year’s Airports Commission report, which offers two possible strategies for ensuring the new runway (and extra flights) won’t conflict with the climate pledges Britain made in Paris. The first is for the rest of the economy to make extra cuts in greenhouse gases to accommodate aviation. Already the Climate Change Act imposes a legal target of 80% reductions by 2050. But if flights are to keep growing as the commission expects, those cuts would have to rise to 85%. This is fundamentally unjust. The large majority (75%) of Heathrow’s international passengers are holiday travelers. As they also have a mean income of £57,000, this option makes everyone else pay for the holidays taken by the well off.

The second option they offer is a carbon tax on aviation. An analysis by the Campaign for Better Transport suggests that the tax required to reconcile a new runway with Britain’s carbon commitments is somewhere between £270 and £850 for a return flight for a family of four to New York.

IMF Calls for Carbon Tax on Aviation

The International Monetary Fund is also calling for a carbon tax on aviation and shipping to help the industrialized world meet the carbon reduction goals it agreed to in Paris. Emissions from planes and ships, presently accounting for 4% of global emissions, are steadily increasing. Unlike other forms of transportation, it’s impossible to replace jet fuel with more carbon neutral energy sources such as electrification.

As Monbiot points out in his article, it makes absolutely no sense to spend billions of dollars on this infrastructure boondoggle and then price people out of the air travel market with a carbon tax. For this simple reason, he predicts the third runway won’t happen. The current timeline proposed by the Department of Transport is so long and convoluted, construction on a third runway couldn’t start before 2020. I suspect Monbiot is right – that it won’t happen at all.

photo credit: Liberal Democrats Brian Paddick with London Borough leaders campaigning against Heathrow expansion via photopin (license)