You do realize Rhode Island is a social democracy, right?


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socialist-internationalPerhaps God, in a clever bid to tell me He exists despite my secularism, deemed in his Almighty wisdom to hit me with a cruel double-whammy this past weekend by putting a NCAA tournament downtown, making thousands say in unison how much they love Providence, while in the midst of a presidential primary that suddenly has New Deal Liberals saying they are Socialists.

The lines of Jonathan Edwards, the ghastly Puritan preacher who scared the bejesus out of a generation with his 1741 Sinners in the Hands of an Angry God, seem like they were written just for me! There is no want of power in God to cast wicked men into hell at any moment. Men’s hands cannot be strong when God rises up. The strongest have no power to resist him, nor can any deliver out of his hands.-He is not only able to cast wicked men into hell, but he can most easily do it. 

Oh the joys of being young and in La Prov!

Harrington
Harrington

Let’s just start with a basic fact, just what exactly is the Democratic Socialists of America?

As I have written elsewhere, the DSA was created in 1982 from the remains of several defunct socialist parties, including the one of Eugene V. Debs and Norman Thomas. But when Michael Harrington and Irving Howe got to it, they tried a new approach, instead of running candidates they decided they would use an Old Left tactic of entryism, suggesting that the surviving Old and New Lefties from the previous five decades enroll en masse in the Democratic Party and push it Leftwards in the face of the neoliberal behemoth called Reaganism.

This strategy was a total failure for two reasons. First, Harrington and Howe had no grasp of neoliberalism as a bipartisan project and how the Democrats were selling their longtime union worker base out in the name of Wall Street donors, with Harrington being so naive he once said that the Democratic Party was the labor party the Left had been looking for all along. Yeah, okay, whatever, just like the Dunkin’ Donuts Center is the punk rock spot par excellence we have been looking for since Fort Thunder closed.

Howe.
Howe.

Second, and more importantly, they were a little full of themselves as typical members of the trendy Manhattan cocktail party class of intellectuals who were not in the tradition of Debs as much as the British Fabian Society, the proto-think tank made up of bourgeois intellectuals who used the Labour Party as a release valve for populist angst by creating a set of policies and positions that gave the working class a steady diet of welfare state protections in exchange for the rejection of revolutionary politics that would give a feast by nationalizing the means of production.

Another issue was their longtime anti-Communism, Howe was a former Trotskyite turned Labor Zionist while Harrington had infamously blown his chances of creating a political party to coincide with the social protests of the 1960’s by showing up at the drafting of the Port Huron Statement, the manifesto of the radical Students for a Democratic Society, so to hector and lecture the anti-war movement about a totalitarian Stalinist boogeyman they would be giving comfort to by standing in solidarity with the Soviet-aligned North Vietnamese. Harrington was such a square it took him until well into the 1970’s to come out against the war, something that takes real talent when you consider Noam Chomsky, Howard Zinn, and Walter Cronkite, all non-Communists, were anti-war before he was. What has passed for a Democratic Socialist party in this country for over three decades is a pale farce of what Debs was about and is essentially a Left-sounding caucus of the Democrats, not unlike the Progressive Democrats, and really should be called Democratic socialists of America, with a heavy emphasis on that D and a small letter s.

Now that we understand the reality of that mirage, consider the nature of the social contract that came into existence at the end of World War II.

Historians are now putting forward a new way of talking about the war that is extremely useful for these purposes. What happened was not a four year conflagration as much as a Second Thirty Years War, a European Civil War that began in 1917 with the Bolshevik revolution and ended in 1948 with the consolidation Eastern Bloc. On one side you had the Communists trying to initiate a worldwide revolution and on the other you had Fascism, the most vocal and militaristic form of reaction to what Gramsci called the revolution against capital. At first this anti-Communist effort was a series of isolated battles on various fronts. But when the stock market crashed and what was called “liberal” or alternatively “bourgeois” democracy stopped working effectively as a system to take care of its people, the entire world began to look for answers in the extreme Left of Communism or the extreme Right of Fascism. What followed over the next nineteen years was open combat between these two sides. And when the Nazis opened fronts in the East and West, the underground partisan resistance movement, led by Communists, fought back in a popular front with socialists and liberals.

But after the war, the Allied powers decided to turn their backs on Stalin and the country that had the most military and civilian losses of anyone. Part of this in Western Europe included the embrace of the Labour and Socialist Parties in the West by the ruling class while throwing the Communist partisans under the bus, who created a welfare state to stave off open class warfare, and part of it included the beginning of a Cold War.

America is a fascinating example of how this should have worked. At the time, the Communist Party was led by Earl Browder, who urged his membership to stay true to the no-strike clause during wartime and vote for FDR. With the end of the war, anticipating a peaceful co-existence with the Soviet Union that would have the two superpowers cooperating in a worldwide peace under the auspices of the United Nations, he dissolved the Party and created the Communist Political Association from the infrastructure, hoping to serve as a Left pressure group within the two party system. Part of the reason this happened was because he had no idea Franklin Roosevelt was about to drop dead and be replaced with the anti-Communist Harry Truman and part of it was because he was egotistical enough to think he actually was able to make an impact on social policy and governance.

However, this episode does serve as an insight. The American social contract was supposed to be based within the two party system and the CIO unions, organized by Communists, were meant to serve as the arbiters of the social safety net. There never was, under this vision, any place for a third party, particularly a Social Democratic one, instead the unions were meant to play that role. One can see another marker of this by looking at Dwight Eisenhower’s rebuke of the anti-labor elements of the GOP, exemplified by Joseph McCarthy, Barry Goldwater, and Robert A. Taft.

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And in that sense, one should see Rhode Island as the perfect example of this. Is it corrupt? Yes. Is it prone to ethnic and sexual chauvinism? Yes. Are its unions that political punching bag politicians use and abuse except for when it serves their own ends? Yes. Is the ruling party that has been in majority for decades a mess? You bet.

But so is the social democratic system in Europe, especially Scandinavia!

Take a look at the writings of Stieg Larsson, creator of The Girl With the Dragon Tattoo. His vision is the reality that Bernie Sanders idealizes, a land of blatant misogyny and covert neo-Nazism that is falling apart. Or just look at Tony Blair, who turned the Labour Party into a corporate boot-licker after they had ousted the militant Trots from the party in the previous few decades. Or check out the amazing film CONCERNING VIOLENCE, now available on Netflix, which shows some of our blessed Scandinavians busting a labor union in a Liberian mine and kicking the organizers out of their company-owned homes, literally leaving them in the dark on the side of the road. Neoliberalism has turned the social democratic project into a shambling mess. In response, Europe is in the grip of a genuine Fascist renaissance that makes Trump look moderate.

Now consider the idea of a basic income. Daniel Zamora, author of a recent critique of Michel Foucault’s embrace of neoliberalism, has this to say in an interview with Jacobin:

[M]y research on this issue led me to think about how over the past forty years we’ve gone from a politics aimed at combatting inequality, grounded in social security, to a politics aiming to combat poverty, increasingly organized around specific budget allocations and targeted populations.
But going from one objective to the other completely transforms the conception of social justice. Combatting inequalities (and seeking to reduce absolute disparities) is very different from combating poverty (and seeking to offer a minimum to the most disadvantaged). Carrying out this little revolution required years of work delegitimizing social security and the institutions of the working class

[H]e not only challenged social security, he was also seduced by the alternative of the negative income tax proposed by Milton Friedman in that period. To his mind, the mechanisms of social assistance and social insurance, which he put on the same plane as the prison, the barracks, or the school, were indispensable institutions “for the exercise of power in modern societies.”…

Given the many defects of the classical social security system, Foucault was interested in replacing it with a negative income tax. The idea is relatively simple: the state pays a benefit to anyone who finds themselves below a certain level of income. The goal is to arrange things so that without needing much administration, no one will find themselves below the minimum level… An important argument runs through his work and directly attracted Foucault’s attention: in the spirit of Friedman, it draws a distinction between a policy that seeks equality (socialism) and a policy that simply aims to eliminate poverty without challenging disparities (liberalism).

For Stoléru, I’m quoting, “doctrines. . . can lead us either to a policy aiming to eliminate poverty, or to a policy seeking to limit the gap between rich and poor.” That’s what he calls “the frontier between absolute poverty and relative poverty.” The first refers simply to an arbitrarily determined level (which the negative income tax addresses) and the other to overall disparities between individuals (which social security and the welfare state address).

In Stoléru’s eyes, “the market economy is capable of assimilating actions to combat absolute poverty” but “it is incapable of digesting overly strong remedies against relative poverty.” That’s why, he argues, “I believe the distinction between absolute poverty and relative poverty is in fact the distinction between capitalism and socialism.” So, what’s at stake in moving from one to the other is a political issue: acceptance of capitalism as the dominant economic form, or not.

From that point of view, Foucault’s barely masked enthusiasm for Stoléru’s proposal was part of a larger movement that went along with the decline of the egalitarian philosophy of social security in favor of a very free-market-oriented fight against “poverty.” In other words, and as surprising as it may seem, the fight against poverty, far from limiting the effects of neoliberal policies, has in reality militated for its political hegemony.

So it’s not surprising to see the world’s largest fortunes, like those of Bill Gates or George Soros, engaging in this fight against poverty even while supporting, without any apparent contradiction, the liberalization of public services, the destruction of all these mechanisms of wealth redistribution, and the “virtues” of neoliberalism.

Combatting poverty thus permits the inclusion of social questions on the political agenda without having to fight against inequality and the structural mechanisms that produce it. So this evolution has been part and parcel of neoliberalism. [Emphasis added]

Zamora elaborates in another interview:

First, it is impossible to create a generous version of universal basic income without cutting social spending. For example, consider a simple mathematical formulation for a basic income scheme: only 1,000 dollars for Americans 18 years old and above. Obviously, you can’t choose “not to work” with only 1,000 dollars per month if you want a decent life for you and your family. So this would essentially becomes a government subsidy for low-wage industries. The reality is that a version of UBI in which you could choose not to work couldn’t ever happen under capitalism, it would be too expensive.

Look, this basic scheme of 1,000 dollars would cost more than 2.7 trillion dollars a year. The total federal budget for social security, Medicaid, Medicare and all the means-tested programs is about 2.3 trillion dollars. So if you supply a universal basic income by replacing all those programs, you get a massive privatization of the public good. All the money that was hitherto socialized to give social rights will be therefore privatized.

We give people money rather than rights because, of course, as Milton Friedman would say, ‘they know how to use their money better than the state.’ This demise of the idea of public good itself or of socialized wealth for the common good cannot, in my view, ever lead to social progress. Obviously we could say that we should finance UBI by new, very high taxes on income, so we could have both social security and basic income. But the amount of income tax increase needed to finance this scheme would be very high. So why not use that money for free health care, free education, and public housing instead? Rather than expanding the market – rather than giving more people the “chance” to participate in it with basic income – let’s instead get some of the most important things in our lives out of the market.

Second, as Seth Ackerman has pointed out, UBI does not address the problem of the unequal distribution of work. Indeed, unemployment or “Mcjobs” are not randomly assigned but are distributed in a very unequal way. For argument’s sake, let’s say that we did have a UBI that could enable you to choose not to work and still have a decent quality of life at the same time (which is very unlikely). This could be a game-changer but it still assumes that those who are unemployed actually don’t want to work or would be happy not to work. And what if they do want to work? Why would it be fair that some won’t be able to work and others will? The idea that we should address the question of unemployment by reducing the demand for work rather than working for full employment doesn’t offer a solution to why people want to work. It presupposes that the despair the unemployed feel is just false consciousness that we could mitigate by promoting non-work. But I think it’s a weak explanation of what is at stake with the question of work. As Seth Ackerman argues, “so long as social reproduction requires alienated work, there will always be this social demand for the equal liability of all to work, and an uneasy consciousness of it among those who could work but who, for whatever reason, don’t.”

That is why I think full employment and reducing work-time are still, in my view, the most important objectives for any left politics. Collectively reducing work time is both politically and socially more preferable than creating a segment of citizens who are out of work with heavy consequences for the workers. You can immediately see how this idea would foster divisions within the working class (and how it has already done this over the last thirty years). [Emphasis added]

The question then becomes simple, why has this happened? The answer is simpler, because Social Democracy is not Communism. In the name of a bourgeois notion of electoral democracy, capital is allowed to ransack the society and bankers are able to get away with a good deal. Whatever the flaws of Communism, and there are many, it is an effort that criminalizes this behavior and places genuine emphasis on the well being of the people. If Lloyd Blankfein of Goldman Sachs were in a Communist country and committed the crimes he did to cause the 2008 crash, I am not saying he would have been shot for that (although he would have been), I am saying he would have never dared even thinking of that heist because of the likelihood of the death penalty he would face. When you read in the newspapers about a Chinese citizen being shot, if you look behind the headlines you understand the New York Times does not care about “human rights abuses”, they care about the financial firms that advertise with them! As Chris Hedges pointed about his former employer several years ago, the burden of guilt for the 2008 crash should be placed at the feet of the Times, they could have easily gone to the Bronx, Brooklyn, and Harlem to find black and brown people who were being targeted by predatory lenders that were gaming the system and causing the housing bubble. But that would have been quite inconvenient for their precious advertisers.

As a corollary of this thought experiment, let’s really interrogate the whole idea of how awesome the Scandinavians are about banking. This talking point is based around the fact that Iceland prosecuted their bankers for the 2008 crash and we should too.

In theory, that is a statement that is common sense. But the converse of this talking point, why did they need to do so in the first place, suggests a pretty dire diagnosis of their Social Democratic party. Now it is true that in 2000, when the financial sector in Iceland was deregulated, the country was under the leadership of Davíð Oddsson, a Prime Minister from the neoliberal Independence Party that was in charge from 1991 to 2004 and who later went on to chair the board of governors at the Central Bank of Iceland from 2005-2009, two positions that tilled the soil for the seeds of the crash. And from late 2004 until February 2009, just after the crash, the successive Prime Ministers, Halldór Ásgrímsson and Geir Haarde, were neoliberals. But the fact that Iceland’s political system was able to allow such a blatant and lunatic set of political positions is the problem that has always existed in Social Democratic societies, there is always wiggle room for this kind of greed. The only reason Iceland prosecuted their bankers was because of massive protests in the streets from the people calling for blood. These protests led to the election of Prime Minister Jóhanna Sigurðardóttir, who only came to power because of an alliance with feminist and communist groups called Social Democratic Alliance. And even then, after four years, the neoliberal Progressive Party returned to power under Sigmundur Davíð Gunnlaugsson. The Progressive Party in turn is part of a neoliberal international grouping, the Liberal International, whose membership includes the Colombian Social Party of National Unity, currently in leadership, which is being cited for US-backed human rights abuses that are causing conditions akin to a civil war. That Scandinavians would find any kind of unity with such agents of imperialism and racism is the ultimate and damning failure of their hallowed state system.

The recent financial pitfalls of Rhode Island, particularly the pension heist operated by Gina Raimondo and the Democrats, are shot-for-shot equivalents to the Social Democratic counterparts in Europe. Meanwhile, the socialist revolution everyone should be hot and bothered over is going on in the Global South. Venezuela, Cuba, Iran, Bolivia, Brazil, and South Africa, aligned with that boogeyman Vladimir Putin in Russia, are trying to build a real alternative to capitalism, a genuine social democracy that is able to stand up to imperialism. China is asserting itself while rebuilding its political culture around Marxism Leninism and sending funding to these countries. And what does Bernie the Great Helmsman say? Remember when he called Chavez a dictator and voted for sanctions on Cuba?

What Bernie Sanders does is not revolutionary, it is reactionary. Like Jesse Jackson, Dennis Kucinich, or Howard Dean, he gets the people who participate in direct action politics, protesters and rabble-rousers, to get hyped up behind a great-sounding candidate who the banking class would never allow near the levers of power. Then, after a year of the masses getting hyped up over the candidate, the convention comes and they gracefully endorse the real contender. Meanwhile, the ACTUAL socialist party in this country, the Green Party, has barely made the news cycle. When you understand that the banks rule the country no matter what, the different faces in the White House become meaningless. Bruce Dixon of Black Agenda Radio calls this the “sheep dog” candidacy because Sanders has diverted attention and corralled the rabble.

Want further proof? Jill Stein recently has been telling the press that her campaign has tried to build a coalition with Sanders to no avail. Meanwhile, Trump, who we know had an all-important telephone call with Bill Clinton prior to announcing his candidacy wherein Bubba told him that the Donald might have a genuine shot, is so awful he makes Hillary Clinton seem like the candidate we must now vote for to stave off the apocalypse.

The irony, of course, is that the Clintons are soaked in gallons of blood caused by racist incitement in the Global South. The idea that she is somehow “better” than Trump for any minority population is vomitous and laughable at the same time. Her actions as Secretary of State alone would have resulted in her being hung at the Nuremburg war crimes trials and have the entire Democratic Party, including Langevin, Cicilline, Whitehouse, and especially Reed, spending the rest of their lives in a prison cell they instead would prefer to put Edward Snowden into. When Bill Clinton was in office, she was a major collaborator with a series of war crimes so outrageous that Hitler would beg for moderation. Just read Diana Johnstone’s Queen of Chaos for more details.

I honestly do not have much hope for this “movement” after the Berning down of this candidacy. The logic of Marxism that informs both Social Democrats and Communists is one which sees capitalism as a series of deepening contradictions that leads to eventual collapse. This new President Clinton could very well get us into a war with Iran or even, after all these decades, Russia. The events in Ukraine and Syria are an augury of a wider conflict. Wars happen when the capitalist system needs a recovery and so it gets a boost from the weapons sector. Just look at World War II and Vietnam, both of them were able to save the American economy from decline. America needs a big old-fashioned war to pull us out of this mess.

At this point, the only hope I see for Sanders is to become Jill Stein’s Vice President. The current media narrative is one showing he will have a new burst of energy in these coming primaries, but this arc is an old and tired one that follows the sheep dog arc precisely. He will continue to lose the important black vote in the south, the most Left constituency of the wider party, and labor will endorse Clinton because Sanders failed to build a constituency in these key demographics prior to announcing his candidacy, which is pretty awful for someone who calls himself a socialist. If he fails to build a united front from below with the Greens, which I anticipate he will, then it is all over.

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The flaw(s) in opposition to a basic income


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https://www.youtube.com/watch?v=BY1OKSObkH0

Our friends at Ocean State Current-Anchor recently published a piece against the concept of a guaranteed minimum or guaranteed basic income. Justin Katz argues that a GMI would interfere with price discovery, which is an important mechanism in free markets. He is wrong.

Whoo hoo!

Okay, first, let’s celebrate. The fact that Katz is addressing this is a sign that substantial success has been made in promoting the concept of a guaranteed minimum income among liberals and conservatives. He even acknowledges that ‘[e]ven on the political right, some folks are willing to entertain the idea as a reimagining of the welfare state. . .”.

First they ignore us, then they laugh at us, then they fight us. . . We’re somewhere around step 2 1/2, because we’re not getting laughed at, but the argument being made against us is not emanating from an immediate bill to make this happen.

The Right and the Basic Income

Who does Katz mean when he says that some on the right are willing to entertain a guaranteed minimum income?

He might be referring back to a recent (fairly epic) conversation I had with Ken Block, Katz, C. Andrew Morse, and several other people about RI H7515. I won’t rehearse the ins and outs of that, but the gestalt of it was me pointing out that many land use, tax, and transportation disincentives to business are more significant than the labor movement in chasing away small business in Rhode Island.

C. Andrew Morse, though in concert with the others (and against me) on just about everything else, did say that he thought it was plausible to imagine a future where benefits like SNAP or Section 8 could be swapped out for a general income to all people in the country.

On a grander level, though, the right has always been the biggest proponent of a guaranteed minimum income (with substantial left support). The kingpin of economic conservatism, Milton Friedman, was a huge supporter:

Don’t worry. Though Friedman is not usually the sort of person many of us would claim common ground with, guaranteed minimum income programs are an important part of most social democracies, and even (in a weaker form) exists in the U.S. through the Earned Income Tax Credit (EITC). In fact, the GMI is arguably more important than the minimum wage in creating lowered inequality in a market economy, because in places like Denmark it allows what’s called “labor flexibility” while also providing an effective bargaining shove in the favor of working class organizing.

Building from Lincoln Logs

The argument that Katz is making about price discovery is not false. Katz says:

What ought to happen [in economic hardship] is that prices adjust to reflect the new economic reality. If your entire industry is displaced, many people won’t be able to afford the latest gadgets, so the industry that makes those gadgets will have to find a way to lower their prices.  Every industry will have to lower its prices to reflect the reduction in demand at current prices.  That sounds terrifying, but remember that the premise is that technology is displacing people and making everything less expensive to produce.

This is true.

To take an example: in the housing crisis, it was bad for a person who owned a house for their housing price to dip, and a lot of effort has been made to re-inflate the housing bubble so that prices would return to an upward trend. But obviously having housing prices dip would be good for someone who might want to buy a house but previously couldn’t. It’s more complex than that, of course, but mainly that’s because we have a string of regulatory and tax externalities that get in the way of very poor people taking advantage of that price change. For instance, we zone away affordable housing types, we make it illegal for certain people or certain numbers of people to share housing, we have a tax system that rewards interest payments that primarily are accessed through loans by wealthy people, and so on. But the point, overall, is still true. If you live in Providence as a poor person you are much more likely to be able to find affordable housing than if you live in a housing market like San Francisco where the prices have gone sky-high.

Where Katz goes wrong is in building an economy out of Lincoln Logs. He imagines a very small scale village, perhaps, where giving the village’s poor is a huge input into the economy, and has an outsized effect on prices. It’s true that poor people getting a basic income will have a slight stabilizing effect on prices, but the effect on the poor people’s poverty is going to be a lot bigger to them than to the community. It’s like rolling a bowling ball down a ramp and having it bounce off a super-ball. The laws of physics say that each is affected equally in opposite directions, but the mass and elasticity of the super-ball mean that it is the actor that is affected most dramatically.

The problem here is that Katz ignores orders of magnitude. We have a huge economy, and currently in that economy the top 0.1% of the U.S. owns more than the bottom 150 million people the bottom 90% (287 million= 318.9 million x 0.9, see reference from Politifact). Making sure that an even smaller slice of that 150 million 287 million has a basic amount of money to not go homeless or hungry is insignificant compared to the size of the economy.

Other Flaws– Forgetting Costs

This’ll be a basic rehearsal for many people on the left, but the right should remember that just removing one cost does not always mean solving a problem. In fact, this shouldn’t be a controversial thing to impress upon a conservative who is thoughtful, because conservatives are the group that most seeks the concept of a business-like “cost-benefit analysis”. A liberal might be inclined to say that certain things just are good no matter what, but conservatives are supposed to be the people who say, “Wait, what are the other factors?”

Here are some other factors I can think of:

Violence: When people are in absolute desperation, they are more likely to turn to violence. We can assume that we’re going to take a tough stance on these folks, but that means building prisons and paying for more police. Since we already have the largest prison population in the world– bigger than China’s, both per capita, and absolutely– we’re not really in a place to dillydally on this issue. Welfare reform sucked for lots of reasons, but the oddest one of all was perhaps that it ultimately has cost us more money than welfare did to get rid of welfare and put people in prisons.

Educational gaps: In the long-run, the market corrects many things, but as Keynes said, “In the long run we’re all dead.” If a child has a short-term shortage of nutrition, even if a very effective private charity eventually fixes that problem, the gap in the meantime is likely to cause longterm harm to their educational achievement.

Health: Whether we have a fully private health system, or a fully public one, or a weird mishmash of public and private like what we have here in the U.S., the costs to mental and physical health are great when people are in tough times.

Bureaucracy: As Friedman points out, we’re not starting from scratch. We have numerous bureaucracies that handle many overlapping and competing forms of aid. Martin Luther King made a similar point, if from a very different perspective, during his Poor People’s Economic Human Rights Campaign. The biggest single advantage of the guaranteed minimum income over other programs is that it deals with aid more efficiently. Conservatives should stop acting as though some magical world without aid of any kind is going to come about, and instead start thinking of how existing aid programs can be made to benefit the most people for the least amount of money.

Markets are Good, Extremes are Bad

The Schumpeterian “creative destruction” of the market which is part of the very laissez faire Austrian school of economics says that bad things happening in an economy can produce great progress in the long run. While we’re not terribly open to this idea on the left, we should be. For one, it’s merely a reflection of the Marxist belief in the same thing, and was in fact developed in response to the idea of Marxism.

More to the point, creative destruction is all around us. When a business fails, someone is able to buy up the resources from that business at pennies on the dollar and repurpose them. It’s like the succession of a forest: a fire happens, thousands of trees are lost, but the conditions that allow small plants to grow up and mature are created, and soon a new forest is born. But this metaphor fails when it’s taken to the micro-level. We don’t think of people as like trees. We think of people as people. We value them (because, after all, we’re biased) as individuals. In the long run, the creative destruction happens. The welfare system exists to make sure the change happens without harming individual people.

A guaranteed minimum income is a good way to balance the forces of creative destruction without sacrificing what’s most important to us: people. Conservatives should adjust to that.

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Update: Justin Katz wrote a response to mine this morning, drawing heavily on the physics metaphor. I think he still misses the point, and in some ways he digs himself into a less reasonable position than he initially took.

Elasticity

Much of his post really draws on the elasticity aspect of the physics metaphor. Quoting from the most recent piece:

First, though, I’ll point out a technicality.  My post was explicitly not about using a UBI as a welfare mechanism for a small population of very poor people, but rather about using it as a way to reconfigure our economy when technology makes large numbers of human jobs superfluous.  In that case, Kennedy’s argument about size and elasticity does not apply.

Well, yes, Katz’s article was about how the GMI could be used to protect the Big Other of the tech industry, but that is exactly the reason the elasticity argument does apply. Let’s review what Katz said in his first piece:

As David Rotman writes in the MIT Technology Review, some folks are seeing a UBI as a way to address the social change when technology ensures that fewer and fewer people actually have to do anything resembling work:

[Quote block within Katz’s piece] “… among many tech elites and their boosters, the idea of a basic income seems to have morphed from an antipoverty strategy into a radical new way of seeing work and leisure. In this view, the economy is becoming increasingly dominated by machines and software. That leaves many without jobs and, notably, society with no need for their labor. So why not simply pay these people for sitting around? Somehow, in the thinking of many in Silicon Valley, this has become a good thing.”

It’s not surprising that tech oligarchs and other comfortable groups of people would favor the idea, because the healthier, more-natural economic path forward would put some risk on them, rather than just on the poor folks losing their jobs.  If you’re out of work and the government gives you money (from somewhere), then you can go on buying devices and software, keeping Silicon Valley humming. (My emphasis)

Whatever Rothman or Katz might say, my point is the GMI has never been offered as a way to prop up specific industries. Its biggest advantage is the fact that it gives tremendous choice to individuals who use it, not that it acts as some kind of constraint on choice through corporate welfare or state-owned-industries. The disappearance of particular jobs due to industrial change may in fact be the reason a given population has no work, or has lousy work, at any given time, but the mechanism of addressing that problem– giving them money– does not in any way protect an industry. Recipients can “go on buying devices” but they can also buy other things if they wish. There’s no implicit guarantee for the industries.

So Katz says elasticity is good.

But Katz moves the goal posts from the beginning of his rebuttal to the end, because he states that:

Right now, we’ve got a pretty stiff approach to welfare, delivered mainly in specific products and services, and it’s processed through a slow bureaucracy.  In addition to the simple wastefulness of doing anything through government, this creates complications and has an effect on the economy (decreasing the incentive to work, for example), but we have to consider pluses and minuses in our specific context.  Cash, on the other hand, is a very elastic medium, and using it for welfare would rocket the economic and individual problems much higher.

Money is fungible, of course, so if we all pay for somebody’s food, that person can spend his or her other money on things of which we do not approve, but at least he or she gets the food.  If we simply hand out cash, then the person can skip the food and go right to paying for… say… hard drugs.  Being compassionate, what does our society do then?  Finally cut the people off, and declare their destitution beyond our responsibility? (My emphasis)

So Katz says elasticity is bad.

Today,  Katz’s blog trumpets a vote to make using SNAP benefits for drugs or gambling illegal. So while Katz’s reply to me does acknowledge an outside chance of fraudulent SNAP use (“Of course, giving people things they don’t want above other things, but that have value, we probably increase the tendency toward fraud (to convert the food into cash”), he argues that the benefit of the SNAP program is that it mostly guards against that result (“If we fund just food, the person still has to come up with money for things he or she wants.  That could mean incentive to work.”). Yet if SNAP’s advantage is that it prevents the elastic use of its benefits for things like drugs, why does Katz’s blog highlight an effort to make that use illegal at the state level? It is already illegal to use SNAP for this purpose at the federal level. The answer is that the 66-1 vote to make welfare fraud doubly illegal is more about casting doubt on the morality of poor people than about addressing a real problem.

So Katz may be a hobgoblin, but consistency is not part of his mind.

Nonetheless, drug abuse is a real thing, and it is not at all hard to imagine that some people do manage to use their food stamps for purposes other than food. Milton Friedman had answers to the idea of drug use directly. He felt that government did its best work in providing basic and mostly undifferentiated services to the general public, while very complex social issues were best handled at the ground level by private individuals. I think this is a solution that is commensurate with social democratic thought, but at its very roots it is a conservative idea. So in Friedman’s world, all people would have some basic money to do with what they might, and private charities could educate them to the risks of drug use, provide needle exchanges to prevent disease amongst those who still choose drug use, and provide varied approaches to treatment for those getting out of drug abuse. The housing needs of individuals suffering from this problem would be privately met– untrammeled by exclusionary zoning. This is a vision where the vast majority of the complex work of fixing a complex issue is done by the private sector. This is the vision offered by the left. The right, on the other hand, has worked to make basic benefits hard to get, but has also tied the hands of private individuals who might want to help with drug abuse. Needle-exchanges, drug decriminalization, and other programs that might let the private sector shine have generally been anathema to the right (I couldn’t find anything immediately demonstrable of this on Katz’s blog, and it’s not fair to paint all conservative thought with one brush, but to illustrate my point, here’s an example from Kentucky. Some Republicans in New Hampshire had a better approach this year, though their party was split).

Mass

I feel the Earth move under my feet. . .

Katz does not address relative masses, but I think mass is actually the more important factor. And, in fact, I actually think my first metaphor was too modest. The difference between an individual getting modest help and the size of the economy is less like a basketball-to-golf-ball comparison than it is to an Earth-to-basketball comparison. The economy of the country is huge, and the amount of help needed to provide sustenance is tiny. It’s impacts are felt heavily on the individual and weakly on the economy not just because the individual is more elastic (can make more individuated choices) but also because the mass difference is so great.

Think about it: you move the Earth. Everyday. When you jump off the ground, you push on the Earth and the Earth pushes back. Equally. It’s an astounding thought when you first think of it, but it’s a law of physics (Newton’s Second). But though the law states as an ironclad rule that the effects are equal in terms of their physical force, the three feet you may be able to jump are much greater than the tiny, many-zeroed, decimals-of-a-micrometer that your motion affects the trajectory of the Earth– though it technically does affect its trajectory.

Astounding. The world around us is amazing. Let’s make sure everyone can enjoy that wonder.

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An argument for a guaranteed minimum income in Rhode Island


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IvinsI spent the afternoon today gathering papers, riding the bus, waiting in lines, and copying things.

The Food Stamps/SNAP office in Rhode Island is a humanizing experience compared to what I’ve experienced in lines like these in Pennsylvania. The sharpest memories I have of Pennsylvania welfare lines was that they happened within a room that was all harsh orange, like a ginger snap box. The rooms never had windows. In Rhode Island, I’m surprised by how much some high vaulted ceilings, picture windows, and muted colors do to make my waiting process less stressful. It feels like the perfectly designed factory-farm line. I get clocked on the head, and I don’t even know what hit me! I do have to dodge state employees’ cars as I walk across the parking lot, and being patted down and searched is always a fun experience as I enter. But my goodness! There’s natural light!

That’s the kindest thing I can say about it.

Every time I’m in a line like this, I end up next to a Talker. Today the Talker was well ahead of me in line, but kindly shifted her place with another woman carrying a child.

“Well, when youse got little ones, youse gotta’ get ahead in line. ‘S only faihhh, really.”

The Talker replaced the child-carrying woman and started to carry on talking to me.

“Yeah, I agree,” I say, smiling, “That was a nice thing you did.” Then I try to turn my eye contact away, as if to say, and now I’m going to go back to my pretension of anonymity. The Talker talks.

The gist of the Talker’s spiel is always the same–always far more personal than I want to deal with in my pig-slaughter line–but usually right nonetheless. I can’t believe the papers I’ve got to gather. Or I had to take a day off for this. Or sometimes, alternatively, I wish I could be home looking for a job. It’s been rough being out of work.

“Yeah, I know what you mean,” I say. “It’s frustrating. Why don’t they just give us our food stamps automatically when we fill out our taxes, like with the Earned Income Tax Credit?”

The Talker stares at me as I say this. She blinks three times. Then she continues.

“Well, my boyfriend’s been living with me fahhh ages. And ‘s real impahhhtant that. . . “*

A man next to me clenches his jaw as if to say shut this person up. His expression also says, this is your @$#!ing fault. Why are you engaging her? I’ve gotten this look before, and it’s part of why usually avoid eye contact with the Talkers in line.

“I know, it’s really frustrating,” I say again. And this time I feel like I’m trying to share eye contact with two people, and hoping that no one gets upset.

I’ve stood in enough lines like this next to Talkers, watching other people get even tenser about their talking than I am, and I’ve often thought about how stupid the lines are.

Why is it that I can fill out my taxes at the end of the year, and my employers have already sent in what I’ve earned, so that essentially all I have to do is type it into a box on the computer, or write it on a sheet of paper, and then add, but we can’t get a streamlined system for the welfare office to figure out what my income is for food stamps? Why is it that when I submitted my lease last year (a two-year lease, that I negotiated to keep the rent stable, the landlord talking me down from my three-year offer) that the welfare office is not able to keep that on file and use it again? Why do I have to rifle through my stuff, waste my time on a bus, stand in at least one (and usually two or three) lines, all to keep a modest government benefit? (I could fax it, which is always fun, because a. I have to find a fax machine somewhere outside the confines of 1987, and b. I have to wonder whether the damned thing actually got accepted).

And being me, I think about this in a way that would probably confound liberals and conservatives alike. Why are all these state employees kept working, kept wasting taxpayer money, doing things that could be streamlined and made easier? Why is our benefit system so lousy and stingy and unhelpful?

And then there’s cultural aspects of the experience. I’d like to bring the bargain-basement laptop I got whose battery works for all of twenty minutes, and sit and work on job applications while I wait for people to call me from various lines (to various other lines….). But all over the walls, there are English and Spanish instructions telling me not to enchufe mi telefono. For me, it’s not even a matter of feeling entitled to free electricity. I would pay a kilowatt charge to use the plug, because the amount of electricity I’m actually going to use is likely extremely negligible (What are they going to charge me, fifty cents?). But I can’t count on the office to let me know a reasonable time to get back and interview, so I have to wait in my pig line for the time when they call me. All the while, I have to waste time.

There’s no food in the welfare office, please. But I have to sit there and deal with bureaucratic mishaps a couple hours at least, about every six months.

If I was to formulate a system for dealing with welfare, it would be a lot different:

First of all, all benefits would be increased by fifty percent. And in line with the principles of a guaranteed minimum income, I would make sure that people don’t have to lose benefits as they try to climb the ladder. I have a very modest amount of unemployment right now, but the part-time job I have cuts right into that. Meanwhile, the cash-payment of the job means that I’m going to have to fill out an “outside contractor” tax form at the end of the year, and perhaps lose even more money. I have to get a special letter to prove that I work, because I don’t have pay stubs. Then I have to wait in line.

What if we could just sign up easily for things like Food Stamps, Medicaid, and so on through our 1040 form? It would cut down on bureaucracy, increase aid to people who needed it, and save money at the same time.

Secondly, in order to cut down on waste, we would start automatically starting and stopping benefits according to one’s tax status. It’s absolutely absurd that I can get an EIC, or sign up to start or end Medicaid through a streamlined process, but I can’t do so for food stamps. A lot of people don’t seek the benefits they deserve because they feel ashamed to do so. Simply having an office like this stigmatizes the process (and, of course, lots of benefits exist that socialize the costs of middle and upper class people, but those are dealt with through the tax system: the parking deduction, the mortgage interest deduction, write-offs for various kinds of Wall Street investments, all exist through normal tax forms and are not recognized by right-wing voters as forms of socialism-for-the-haves, even though they are). We should make sure that all tax information is available and understandable in multiple languages, and available to all residents. If we can make the enchufe signs multi-lingual, then we can also do this with tax benefits on a 1040.

Third: Let’s join the 21st Century. I’ve lived many of my years without a computer, though I have one now. I understand that somewhere in the system we may have decided that not doing things through email was a way of accommodating people who don’t have access to the internet. But I’ve never had a fax machine in my house. I’m not sure why fax machines are still something I have to track down in order to deal with food stamps. I’m not sure why they ever were something I had to deal with. I either have to find a friend who has one at work, or I have to go to Fed-Ex and spend usurious amounts of money to use theirs, and at the end of the day, I could have sent documents a lot easier using screenshots, PDFs, or any number of other tools off of a library computer.

Fourth: Plugs should be available for use. It’s absurd that we have free wifi at McDonalds but we can’t even have pay-as-you-go plugs in the walls at the welfare office. Ideally, this point would be moot because no one would ever have to stand in a stupid line like this ever again. But while we’re still continuing this dumb situation, we should at least modify some of the worst aspects.

These are modest goals. We have some of the worst income inequality in the developed world, but we spend a pretty similar amount of our GDP distorting free market capitalism (we’re on par with Denmark). We just do so in ways that don’t benefit poor people. And then we make sure that many of the programs we do have are hard to understand and hard to access. Republicans should support my plan because it will cut down on state workers, and focus energy on the actual goal of the program. Democrats should support my plan because it would increase direct support to low-income people in a way that gets past unfair information asymmetries. This is common sense, everyone.

Why the hell am I in this stupid line is a question I’m sick of asking myself. I apply for things and I’m either over-qualified or under-qualified. I’ve been at three-person-panel interviews for barista work. So maybe there’s something going wrong with me that someone who thinks about 1040 forms and economics is standing in a line like this. Or maybe it’s some legacy of my childhood background, of not having the right connections to make better use of my education. But whatever it is, I stand here in this goddamned line every six months, and I’m sick of it! We should be able to make our income redistribution programs both more generous and more streamlined, and save taxpayer waste that is put into unnecessary bureaucracy.

~~~~

Just to be clear, I’m adding this person’s accent for narrative color, not to make fun of her. When I open my mouth, a cavalcade of working class jibberish comes out too, it’s just working class jibberish from the Mid-Atlantic, and not from New England. Yuge cup of byeahd cawfee anyone–or yuzz just wunt to geow heowme and have hyeahf a cup then?