Crisis Needs a Citizens’ Income

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The first in a series of articles highlighting some of GWLAD’s main policies for the upcoming Senedd Election. We kick off with our Citizen’s Income Policy.

WITH Wales reeling from the social and economic effects of lockdowns, Gwlad’s flagship policy of a Citizen’s Income could hardly have emerged at a more auspicious time.

The ground-breaking Citizens Income policy, or UBI (for ‘Universal Basic Income’) is one of the party’s founding principles, which will provide the people of Wales with the safety and security needed to achieve their individual aspirations.

In this article, I will explain what a Citizens Income is (UBI for short) and why I feel it is the most urgent policy of our time.

I recently discussed UBI on the Rich Politics show and I wish to thank Richard for the invitation.

A UBI is a regular, equal and non-returnable cash benefit which is received individually by all citizens, regardless of their material and occupational situation.

I see it as an investment policy which values and dignifies human life in a world which has increasingly sought to commodify and allow exchange value to triumph over experiential value to an alarming degree.

The UBI has a long history going back to the 1940s where a ‘social dividend’ was proposed in the UK. Similarly, the esteemed economist Milton Friedman supported a ‘negative income tax’ which would be very similar to UBI in practical terms.

Unfortunately, austerity-driven macro economic thinking has slowed down the progress of UBI in recent decades, despite it having the potential for cross-spectrum support.

An existential tragedy in Wales is the increasing number of people living in poverty, both ‘in work’ and ‘out of work’. Among the obvious reasons for this is the self-defeating nature of our tax and benefits system. The ‘in work’ people have to endure an inflexible and bureaucratic public sector or a rapacious corporate sector to make ends meet.

Those who claim welfare payments whilst also working must be careful to ensure they do not increase their salaried hours, if only by a tiny amount, as they would risk some of their welfare payments, including tax credits.

The UBI policy provides the optimal antidote as it tackles both issues simultaneously. It gives the ‘in work’ people greater bargaining power in the labour market, while the ‘out of work’ population can seek apprenticeships, training and upskilling opportunities, without the fear of losing welfare payments.

Critics of UBI commonly cite it as fiscally irresponsible and unproven policy. For context, furlough has cost £46 billion from March to December 2020, and the DWP’s annual budget is £200 billion. A UK wide UBI of £500 a month per person would cost £143 billion annually.

Extrapolation of furlough cost to an annual figure, combined with savings achieved across various government departments, e.g. social care, show we are not far off the figure needed to achieve mathematical equivalence with a workable UBI.

Gwlad also want to introduce a flat income tax at the same time to ensure that a UBI would be fiscally neutral in Wales. This would protect against inflationary pressures as well as maximising the tax intake as per the Laffer curve.

UBI has been fully implemented in the state of Alaska for many years by now, and has more recently been trialled in Canada and Finland, leading to positive outcomes in various social measures, e.g. education, mental health and employment.

The urgency of a UBI cannot be over-stated right now because of the accelerated loss of jobs to automation and global outsourcing of work. We can see the inroads made by automation all around us-driverless cars, smartphones, video conferencing, robotics, 3D printers etc.

All are technologies which have and will replace most jobs once legislation is passed and the retail price of these technologies drop.

Secondly, laissez-faire economic models have fuelled the global flow of capital to find the highest rates of return. Quite simply, employers have been heavily incentivised to relocate and outsource work to cheaper international locations, thus in effect erasing even more jobs in Wales than through technological change.

A UBI can address this problem directly by guaranteeing people a basic subsistence, regardless of the long term effects of automation and globalisation.

We also need to think of UBI as a good investment which will increase economic activity and thus increase the tax collected by a Welsh treasury. Greater economic activity could also help revive our dilapidated high streets and give small businesses a greater chance of success.

In addition, those who work would have more flexibility to take part in community activities, volunteering and training as they would be able to negotiate better working conditions.

Finally, a UBI would allow the free market to develop a post-Covid economy in an equitable and sustainable way without the malignant heavy-handed mess of state intervention.

As a party, Gwlad believes in a small-business driven economy which gives all stakeholders an equal opportunity within a free market.

By moving this UBI policy forward in a period where Covid 19 has created so much economic uncertainty for everyone, we hope to create a Wales which has a stronger and more independent economy.

7 thoughts on “Crisis Needs a Citizens’ Income

  1. I like it, in fact I love it, as an idea. A thriving market economy in which nobody is left behind. Veritably Utopian! How though, is it squared with the inherently venal, tribal, lazy and grasping nature of humanity at its base and primordial level (not said as any kind of damnation; we are a product of competition and survival of the fittest)? And before you damn me as some kind of mindless philosopher, you may do well to ask why so many billions are spent worldwide on nukes that could be otherwise invested in schools, hospitals, etc.

  2. Whilst a UBI would be very welcome in context, the argument regarding automation is a little hyperbolic. At present, most automation needs either a supervisory meatbag or a brigade of cat herders (programmers, technicians, engineers) to make it even approach a break-even point. Let us take just one facet of this lustrous excrement, driverless cars.

    Driverless cars, i.e. those you can turn loose on occupied roads with zero supervision, do not exist. Tesla’s “Autopilot” is laughably the closest we (humanity) have come to automating this task. It comes with warnings about the necessity of supervision, force sensors in the steering wheel to make sure there are hands on it and a disavowing of any result of negligence on the part of the human operating it. Yet that isn’t why driverless cars won’t work. It’s more fundamental than that.

    The real reason driverless cars won’t work is humans. Just indulge me for a second and think about your car. Specifically, think about a situation where you’re out and develop a headache. Not a problem, there’s a strip of paracetamol in the glove box (which never holds gloves).

    Now, let’s take driverless on its logical progression, which is removing private transport ownership and having a universal fleet of robo-Ubers. You’ve removed the “personal” in personal transport, you have none of the usual little stashes of paracetamol, sunglasses, spare specs, bits of paper, pens, music, seat settings, heater preferences… You may as well just take the sodding train which, I suspect, is the motivation in the first place. That and bleeding us all drier than we already are as it’s a safe bet none of this will be even close to parity with running a 15 year old, perfectly serviceable 1.4 Euro5 diesel at 119g/km CO2.

    It won’t be quite as engaging, either. “Let’s just pop out for a drive and stop wherever we like.” Not on JohnnyCab’s time, sunshine. Not good for mental health as the continuing lockdown has shown time and again.

    Speaking of COVID, just how much worse would this be if we had a fleet of robotic rent-a-sheds that we all share? Yes, you could conceivably install high intensity UVB/C sanitising lighting which activates after the trip for a set time but, again, if someone gets “if ((occupied == false) && (journey_complete == true)) {” wrong, misplaces a semicolon or attracts the attention of a script-kiddie, the crispy critter therein is not going to be happy.

    You’ll note I haven’t even mentioned peak/off peak pricing, Big Tech monitoring your every journey and zero privacy. One word: Minefield. The very first thing every despot attacks is personal mobility.

    I sincerely hope I’m wrong.

    1. Advantages the train would have are a table to do some work, the ability to do so without bobbing about due to the unevenness of the road, and having a toilet handy for when you need to go. The gap the robo car could effectively plug is the ‘end to end’ bits of the journey, to and from the origin and destination railway stations.

      I believe the biggest blocker to adoption of automated cars is the legal minefield, as in “Who’s to blame for an accident?”. Is it you, the other guy in his automated car, one of the manufacturers, the lead developer of the AI? A cop out option would be to place liability on the driver as is the case now, necessitating him to be on the ball, ready to take control if things look to be going awry. This of course negates the whole ‘driverless’ bit.

      As you allude to, they will never replace actual driving in the hearts and minds of those who enjoy the act (incidentally I find it very much a means to an end so I have a bias here!). Also, they do nothing to solve the climate problem like proper investment in mass transit would.

      1. I have to say, as a libertarian, that I find the idea of limiting one’s transport options to “the train and robo cars” highly distasteful. Many may choose that route, indeed they must be free to do so. Nobody should be *forced* out of their cars by ulterior motives and cynical, wasteful tech that is only seen as ecological because the pollution is invisible to the end user and the vast majority of these battery EVs haven’t reached the point where the cells need replacing, which is a filthy job both in terms of manufacturing the new cells and getting rid of/recycling the old ones.

        Not that it matters that much in the grand scheme of things as transport, which includes the holy gospel of mass transport taking you from nowhere near your house to nowhere near your destination, accounts for around 40% of greenhouse emissions, being very generous with that figure. It’s even worse when you look at NOx emissions; buses fare particularly poorly against this metric, especially when you make the y axis g/100kg cargo for actual usage statistics (to make it fair to the lorries).

        As for automation, when we have machines that aren’t full of bugs, vulnerabilities and hardware holes (speculative execution, anyone?) then I’ll be happy to trust someone else’s life to them. Until then, software should stay where it can do little harm such as Alexa speakers and Ring doorbells. Personally, I’ve seen far too much “under the hood” to ever trust it, so I’m a lost cause. Even open source isn’t much help as no one person can really audit the massive complexity of some of these systems. Every release is a leap of faith.

        Actually, there’s another element I find highly worrying about this headlong rush to automate everything: How far must we go until we cannot survive without it? We’re already three meals away from anarchy as it is. When I was sailing, we already had moving map GPS and other tech gizmos but we still learnt and practiced dead reckoning, tidal charts and sightings religiously. It’s the very same principle of automation being fine as long as you can fall back on the MkI Homo Sapiens in a crisis *and* that ability is tested regularly.

        Offshore hydrogen electrolysis and human driven FCEVs are, IMHO, the correct (as the tech currently stands) option. Flow cells may alter that if a true membraneless quick electrolyte swap technology can be developed as that is far less volatile and much easier to store than H2 but that tech is far from mature.

        1. I’d say, speaking in terms of personal liberty, the freedom to breathe air that is as clean as we can make it, and to not live in a planet battered by ecological disasters trumps any affort arsehole Clarksonite petrolheads might feel if interventions are taken to ‘steer’ us towards public transport. By which I don’t mean punitive duties, congestion charges and the like, but proper, attractive public transport infrastructure, that is competitive with car-running costs, end-to-end integrated, and so will draw people out of their cars as much as is feasible and realistic. Buses, and the patchwork railway network that means a double whammy of faff and prohibitive expense for those who aren’t commuters to the City, ain’t that. Buses should only ever be regarded as a supplement where the population density and/or geography precludes trams, trains, metroes and the like. That was the great folly of the Good Doctor’s hatchet job in the 60s. “Bustitution” – what a load of bollocks. Of course there will always be those who ‘love’ driving and will never give up what amount to fetishised tools, but that’s their choice.

          Your reference to pollution by toxic metals and other elements used in the construction of batteries and other components in electric vehicles is misguided as mitigating these damages is a vanishingly infrequent occurrence (as you say yourself, we haven’t had to do it yet), dealing with far more easily contained by-products compared to the burning of fossil fuels for each journey using a combustion engine.

          You contradict your own libertarian stance in bemoaning the rise of automation and all the problems and risks it brings. These technologies are after all, only in existence or development to cater to commercial demand, or improve efficiency of manufacturing processes and supply chains to get an edge over the competition in the marketplace. The points you raise about its pervasiveness and your cautionary stance concerning where it all might end up however, are on the money.

  3. “By which I don’t mean punitive duties, congestion charges and the like, but proper, attractive public transport infrastructure, that is competitive with car-running costs, end-to-end integrated, and so will draw people out of their cars as much as is feasible and realistic. Buses, and the patchwork railway network that means a double whammy of faff and prohibitive expense for those who aren’t commuters to the City, ain’t that.”

    And that, David, is right on the money too. If we can go forward on that basis, you may just see me take the new, improved, doesn’t-cost-the-same-as-a-7-night-all-inclusive-for-a-family-of-43 (with apologies to Rhod Gilbert) train for certain journeys after all.

    I can also see your point about “fetishised tools.” For some, it’s less about the tool than having the latest accessory – and being seen to have it. Clarkson himself once quipped that a true sports car was for doing a 2:15 around Silverstone but a Lamborghini is for doing Knightsbridge at 2:15AM.

    Fair point on the double standard. I’ll have to watch that. Excellent discussion, David. Thank you.

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