Basic income in the new world order

A basic income has been promoted from the left and right for years but nothing has come of it. Maybe new leaders and a new world order will change that.

  image: Steemit.com

Sometimes called a guaranteed annual income, it has been supported by progressives and neoliberals alike. Progressives argue that a basic income would help reduce poverty. Neoliberals say it decreases government bureaucracy by combining a number of social services like welfare, child benefits, employment insurance, and Old Age Security into one.

What politicians have failed to do, the leaders of technology may accomplish. They clearly see the loss of jobs due to automation. Innovators such Elon Musk, CEO of Tesla and Space X, says:

“There is a pretty good chance we end up with a universal basic income, or something like that, due to automation,” Musk told CNBC in an interview last year.

Facebook’s Mark Zuckerberg sees it differently. A vital society depends on everyone having the opportunity to create new ideas. That’s why billionaires like him should pay for a financial safety net that allows everyone to find their purpose.

“The greatest successes come from having the freedom to fail,” said Zuckerberg. “Now it’s our time to define a new social contract for our generation. We should explore ideas like universal basic income to give everyone a cushion to try new things.”

Zuckerberg is on to something when he suggests a new social contract. The failure to implement a basic income takes place in an old world order that values industrial jobs and resource extraction above those of human interaction. Industrial jobs have been reduced and more automation is on the way. Resource extraction is pushing the limits of what the earth can deliver, and pushing the conditions under which humans can live.

Jobs that involve human interaction, such as child and elder care workers, have been low-paying. What kind of crazy world order invented a system where monotonous, often dangerous, planet-threatening, industrial jobs pay more than jobs that nurture our future in children, and care for the frail and elderly?

A new world order would include Zuckerberg’s transfer to the poor through a new social contract and much more. Former Greek finance minister Yanis Varoufakis envisions an end to globalization and the start of a new era in which a basic income would be part:

“And we need a universal basic dividend that would be administered by the New Bretton Woods institutions and funded by a percentage of big tech shares deposited in a world wealth fund.”

By Bretton Woods Institutions, he means the World Bank and the International Monetary Fund. They helped rebuild the shattered postwar economy and to promote international economic cooperation.

Varoufakis is leading the post-globalization era in Europe with The Democracy in Europe Movement 2025. President Trump (don’t laugh) is leading the post-globalization era in the U.S.

Trump’s grip on reality may be somewhat tenuous but he does understand turmoil; he thrives on the thrill of the circus. His constituents have had it up to here with the existing order. Trump is tearing globalization apart with a world tariff-war.

These are exciting times. Where politicians failed, maybe tech leaders, global visionaries and clowns will excel.

 

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The rise and fall of globalization

As the sun sets on globalization, what will a new day bring? The new era will face challenges of rampant parochialism, environmental destruction, inequality and greed.

image: Timetoast.com

The dawn of globalization was unremarkable. Yanis Varoufakis, professor economics and former finance minister of Greece gives the date:

“On Aug. 15, 1971, then-president Richard Nixon announced the ejection of Europe and Japan from the dollar zone. Unnoticed by almost everyone, globalization was born on that summer day (Globe and Mail).”

Before Globalization, it was the dawning of a New Deal (1944). A clever plan, it gave America’s former enemies the resources to rebuild through arrangements such as the Marshall Plan. As an industrial power, the U.S. had shiny new things to sell; now Germany and Japan had money to buy them.

The New Deal ushered in a Golden Age of prosperity. Well-paying jobs, unionization, opportunity grew.  The middle class expanded and inequality shrank.

As a baby boomer, I remember that era. After I graduated from the Southern Alberta Institute of Technology in Electronics, I had a choice of well-paying secure, jobs. After I quit one job and traveled around the world, I easily found another.

The era of globalization in the 1970s promised to reduce global poverty. Before it began to rot at its core, it blushed with ambition.

“Mr. Nixon’s decision was founded on the refreshing lack of deficit phobia particular to American decision-makers,” says Varoufakis. “Unwilling to rein in deficits by imposing austerity . . . Washington stepped on the gas to boost them.”

World-wide prosperity also produced global industrialization. Americans went into debt to buy exports from Germany, Japan and later, China. The American administration didn’t seem to notice, or didn’t care, that cheap global labour was at the heart of industrial decay at home. Why should they care when money was pouring into the U.S. as well as cheap goods?

The flow of global money into the U.S. seems counterintuitive. If Americans were buying global goods, it would seem that the money should be flowing the other way. The magic of Wall Street made it happen.

The deregulation of banks was a catalyst for the financial wizardry of Wall Street. Global investors were attracted by higher interest rates generated by mystical, incomprehensible, investment devices such as derivatives. A lot of the investments went into loans to home-owners who had no way of repaying them.

Then, in 2008, the rabbit no longer emerged from the magician’s hat and the whole financial edifice fell apart.

All that remains of the sad tatters of globalization is massive inequality and loss of jobs in the Western world. Most money sits idle in the hands of the rich while the poor struggle without. Varoufakis characterizes it:

“Its crisis is due to too much money in the wrong hands. Humanity’s accumulated savings per capita are at the highest level in history.”

As globalization sinks below the horizon, two options emerge. One is the walled-state proposed by President Trump and the Brexiters in the U.K. The other is a Universal New Deal that redistributes global wealth, creates new jobs, and lifts the burden of consumer debt.

If such a new deal seems unlikely, it’s worth remembering that the first New Deal and globalization were as well. And if we need an issue to rally around and mobilize action, as World War II once was, we need look no further than the biggest threat to humanity: climate change.