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As More Income Accrues to Wealth and More Wealth is Passed Between Generations Inequality grows and the Call for a Basic Income Increases.
Quick terms refresher – The emergence of the class structure:
- Plutocracy – billionaires – substantially all income derives from property
- Elite – multi-millionaires – earning most of their income from property
- Soleriat – Income from work, but many non-wage benefits (Pensions, vacations, healthcare). Some income also from property. Did very well through the pandemic.
- Proletariat – people who had stable unionized jobs – manufacturing and industrial jobs – in decline all around the world.
- Precariat – A feature of Rentier Capitalism.
- Habituated to unstable labor (not work).
- Have to do labor that is below their education.
- Losing the rights of citizenship.
- Underclass – destitute, homeless and living in the streets
The Gatsby Curve – A huge decline in Social Mobility.
There are stories every day of people becoming super wealthy overnight – joining the plutocracy. But, today (in the UK) most wealth is inherited.
Inherited wealth is a result of rentier capitalism. It is a function of family accumulation.
More and more of the income is going to wealth and more and more of the wealth is inherited wealth. This leads to a rigidity of the class structure and an increasing concentration at the top – precisely what we have.
Whenever Guy speaks in Silicon Valley or to the big financial companies, there are a few reflective people in the audience who will admit that they are winning too much. They know, somehow, that we need to share the wealth generation more broadly.
When bailouts go to the “too big to fail” corporations (to save the system), it widens inequality. The large corporation receives the largesse of the government so they don’t implode and cause greater damage, but the largesse ends up protecting the elite and the plutocracy from their deserved losses.
Meanwhile the living standards of the bottom half of the population are stagnant and average life expectancies in the richest countries in the world are declining.
What is True Wealth
The ancient greeks divided time into four types:
Labor – the time we spend earning money
Work – the time we spend working (for family, unpaid)
Recreation – the time we spend in leisure activities
Participation in the commons
More dollars or more things that dollars buy do not measure true wealth. True wealth is measured by how we spend our time. Do we have a balance between the work/labor aspects and the Recreation/participation aspects of our lives?
Pragmatically, it shouldn’t be “Universal.” It should be at the national level, but limited to citizens (or some level of citizenship) who live in country. It’s not that you don’t help migrants, but you help them in other ways.
It is an economic right that is unconditional based on any identification or status (other than citizenship and residency).
The idea is that you would gradually build up the level as your funding mechanism builds. The justification is ethical and philosophical. It is fundamentally about justice.
Our wealth has far more to do with the efforts and innovations of the many generations that have come before us than it has to do with anything we do ourselves. If we allow for (which we should) private wealth, we should also support a public dividend from that wealth. Notions of individualism and collectivism don’t have to be exclusive.
We know that insecurity leads to a reduction in IQ – the ability to make rational choices is diminished for the chronically insecure. It is unfair of us to expect sensible decisions from people who suffer constant insecurity. This is the justice in Basic Income.
Basic Income Pilots – around the globe.
Every pilot has shown a reduction in stress, mental illness, and physical illness. It has also shown improved schooling achievement for the young. It has also led to MORE work – not less. In the pilots we learn that productivity increases; work motivation increases; risk-taking increases – all the things that lead to a robust economy and increased economic activity are BETTER with a basic income.
Basic income strengthens social solidarity. It makes people more tolerant and more altruistic. It is all coming together – the evidence and the thinking – and we are on the cusp of seeing it happen.
The people opposed to Basic income are becoming fewer. There is the obvious far–right who are always opposed. And, surprisingly, trade-union leaders are also often opposed because they want people in jobs. But, it is unlikely that we will ever get back to wide-spread rising real wages.
Developed countries wages for the lowest 50% of the socio-economic spectrum will continue to be held down by global competition with emerging countries. If we want to improve the living standards for that 50%, we will HAVE TO have a new way to distribute our collective success. It seems that the developed country that does it first and broadest will have a long-term economic advantage.
The political resonance for Basic Income is improving and at the same time an uneducated, egotistical nastiness is growing.