Complexity

Universal Basic Income Accelerates Innovation by Reducing Our Fear of Failure

Failure is not an option. Failure is the goal. And fear of failure is the enemy.

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By Scott Santens

Almost two centuries ago an idea was born with such explanatory power that it created shock waves across all of human society and whose aftershocks we’re still feeling to this day. It’s so simple and yet so powerful, that after all these years, it remains capable of making people question their very faith.

The idea of which I speak is that through random mutation and natural selection, every living thing around us was created through millions and even billions of years of what is effectively trial and error, not designed by some intelligent creator. It is the process of evolution through natural selection.

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It’s almost impossible for many people to accept that everything around us, including our own lives, could ever be the result of trial and error, but that’s what the scientific method has revealed. Mutations happen. Some of them work better than others depending on the environment. A longer beak here and a longer neck there can be the difference between life and death. Successful mutations are passed on. Iterations continue generation after generation. Discovering this process of evolution was one of the great accomplishments of our species. It’s also possibly the most powerful reason to support another world-changing idea — an unconditional basic income.

Let me explain.

Markets as Environments

Our economy is a complex adaptive system. Much like how nature works, markets work. No one central planner is deciding what natural resources to mine, what to make with them, how much to make, where to ship everything to, who to give it to, etc. These decisions are the result of a massively decentralized widely distributed system called “the market,” and it’s all made possible with a tool we call “money” being exchanged between those who want something (demand) and those who provide that something (supply).

Money is more than a decentralized tool of calculation however. It’s also like energy. It powers the entire process like the eating of food powers our own bodies and the sun powers plants. Without food, we starve, and without money, markets starve. A sufficient amount of money for all market participants is absolutely key to the market system for it to work properly.

If you’ve ever played Monopoly this should be apparent. The game would not work if all players started the game with nothing. Some wouldn’t even make it once around the board. Additionally, if no one received $200 for then passing Go, the game would end a lot sooner. Ultimately the game always grinds to a halt once everyone but one person is all out of money, which is inevitable. No money, no purchases, no market, no game. Game over.

Supply and Demand as Trial and Error

With sufficient money however, markets adapt and evolve based on trial and error. Someone thinks of something to create or do. If people like it, it does well. If people don’t like it, it goes away. What does well is modified. If people like the modified version, it does well. If they don’t, it goes away. If they like it enough, the original version goes away. Survival of the fittest we call it. This is the evolution of goods and services, which runs on supply and demand, which both in turn run on money and one other thing — the willingness to take risks.

Risks as Genetic Mutation

Taking risks is equivalent to random genetic mutation in this biological analogy. A new product or service introduced into the market can result in success or failure. The outcome is entirely unknown until it’s tried. What succeeds can make someone rich and what fails can bankrupt someone. That’s a big risk. We traditionally like to think of these risk-takers as a special kind of person, but really they’re mostly just those who are economically secure enough to feel failure isn’t scarier than the potential for success.

As a prime example, Elon Musk is one of today’s most well-known and highly successful risk takers. Back in his college years he challenged himself to live on $1 a day for a month. Why did he do that? He figured that if he could successfully survive with very little money, he could survive any failure. With that knowledge gained, the risk of failure in his mind was reduced enough to not prevent him from risking everything to succeed.

This isn’t just anecdotal evidence either. Studies have shown that the very existence of food stamps — just knowing they are there as an option in case of failure — increases rates of entrepreneurship. A study of a reform to the French unemployment insurance system that allowed workers to remain eligible for benefits if they started a business found that the reform resulted in more entrepreneurs starting their own businesses. In Canada, a reform was made to their maternity leave policy, where new mothers were guaranteed a job after a year of leave. A study of the results of this policy change showed a 35% increase in entrepreneurship due to women basically asking themselves, “What have I got to lose? If I fail, I’m guaranteed my paycheck back anyway.”

Meanwhile, entrepreneurship is currently on a downward trend. Businesses that were less than five years old used to comprise half of all businesses three decades ago. Now they comprise about one-third. Businesses are also closing their doors faster than new businesses are opening them. Until recently, this had never previously been true here in the US for as long as such data had been recorded. Startup rates are falling. Why? Risk aversion due to rising insecurity.

Growing Insecurity

For decades now our economy has been going through some very significant changes thanks to advancements in technology, and we have simultaneously been actively eroding the institutions that pooled risk like trade unions and our public safety net. Incomes adjusted for inflation have not budged for decades, and the jobs providing those incomes have gone from secure careers to insecure jobs, part-time and contract work, and now recently even gig labor in the sharing economy.

Decreasing economic security means a population decreasingly likely to take risks. Looking at it this way, of course startups have been on the decline. How can you take the leap of faith required for a startup when you’re more and more worried about just being able to pay the rent?

None of this should be surprising. The entire insurance industry exists to reduce risk. When someone is able to insure something, they are more willing to take risks. Would there be as many restaurants if there was no insurance in case of fire? Of course not. The corporation itself exists to reduce personal risk. Entrepreneurship and risk are inextricably linked.Reducing risk aversion is paramount to innovation.

Failure as Evolution

So the question becomes, how do we reduce the risks of failure so that more people take more risks? Better yet, how do we increase the rate of failure? It may sound counter-intuitive, but failure is not something to avoid. It’s only through failure that we learn what doesn’t work and what might work instead. This is basically the scientific method in a nutshell. It’s designed to rule out what isn’t true, not to determine what is true. There is a very important difference between the two.

This is also how evolution works, through failure after failure. Nature isn’t determining the winner. Nature is simply determining all the losers, and those who don’t lose, win the game of evolution by default. So, the higher the rate of mutation, the more mutations can fail or not fail, and therefore the quicker an organism can adapt to a changing environment. In the same way, the higher the rate of failure in a market economy, the quicker the economy can evolve.

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There’s also something else very important to understand about failure and success. One success can outweigh 100,000 failures. Venture capitalist Paul Graham of Y Combinator has described this as Black Swan Farming. When it comes to truly transformative ideas, they aren’t obviously great ideas, or else they’d already be more than just an idea, and when it comes to taking a risk on investing in a startup, the question is not so much if it will succeed, but if it will succeed BIG. What’s so interesting is that the biggest ideas tend to be seen as the least likely to succeed.

Now translate that to people themselves. What if the people most likely to massively change the world for the better, the Einsteins so to speak — the Black Swans, are oftentimes those least likely to be seen as deserving social investment? In that case, the smart approach would be to cast an extremely large net of social investment, in full recognition that even at such great cost, the ROI from the innovation of the Black Swans would far surpass the cost.

This happens to be exactly what Buckminster Fuller was thinking when he said, “We must do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest.” That is a fact, and it then begs the question, “How do we make sure we invest in every single one of those people such that all of society maximizes its collective ROI?”

What if our insistence on making people earn their living is preventing those one in ten thousand from making incredible achievements that would benefit all the rest of us in ways we can’t even imagine? What if our fears of each other being fully free to pursue whatever most interests us, including nothing, is an obstacle to an explosion of entrepreneurship and truly huge innovations the likes of which have never been seen?

Fear as Death

What it all comes down to is fear. FDR was absolutely right when he said the only thing we have to fear is fear itself. Fear prevents risk-taking, which prevents failure, which prevents innovation. If the great fears are of hunger and homelessness, and they prevent many people from taking risks who would otherwise take risks, then the answer is to simply take hunger and homelessness off the table. Don’t just hope some people are unafraid enough. Eliminate what people fear so they are no longer afraid.

If everyone received as an absolute minimum, a sufficient amount of money each month to cover their basic needs for that month no matter what — an unconditional basic income — then the fear of hunger and homelessness is eliminated. It’s gone. And with it, the risks of failure considered too steep to take a chance on something.

But the effects of basic income don’t stop with a reduction of risk. Basic income is also basic capital. It enables more people to actually afford to create a new product or service instead of just think about it, and even better, it enables people to be the consumers who purchase those new products and services, and in so doing decide what succeeds and what fails through an even more widely distributed and further decentralized free market system.

Such market effects have even been observed in universal basic income experiments in Namibia and India where local markets flourished thanks to a tripling of entrepreneurs and the enabling of everyone to be a consumer with a minimum amount of buying power.

Basic income would even help power the sharing economy. For example, imagine how much an unconditional monthly income would enable people within the Open Source Software (OSS) and free software movements (FSM) to do the unpaid work that is essentially the foundation of the internet itself.

Markets as Democracies

Markets work best when everyone can vote with their dollars, and have enough dollars to vote for products and services. The iPhone exists today not simply because Steve Jobs had the resources to make it into reality. The iPhone exists to this day because millions of people have voted on it with their dollars. Had they not had those dollars, we would not have the iPhone, or really anything else for that matter. Voting matters. Dollars matter.

Evolution teaches us that failure is important in order to reveal what doesn’t fail through the unfathomably powerful process of trial and error. We should apply this to the way we self-organize our societies and leverage the potential for universal basic income to dramatically reduce the fear of failure, and in so doing, increase the amount of risks taken to accelerate innovation to new heights.

Failure is not an option. Failure is the goal. And fear of failure is the enemy.

It’s time we evolve.

Originally published at Scott Santen’s Medium blog here.

2017 February 12


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  • geonomist

    If you liked that, you’ll love a rent-share. Indeed, while a BI remains a proposal, a rent-share already exists. Alaska pays residents based on oil rent, Aspen pays all its working families — and you can be a doctor earning over $100k and qualify — housing assistance from a tax on sales of land (+ whatever’s on it). And Singapore pays citizens a dividend from surplus garnered by keeping taxes on effort low, on things like land high. So it’s politically viable while the same ol’ “take from the rich, give to the poor” is not. Further, the amount is not set by political people arguing. The amount is set by the health of the economy. That shows up in the value of locations — witness San Francisco. Divide that by the citizenry. It amounts to more than a BI, and is economically stable. Plus, you don’t have to spend it on basic needs. Spend it on buying art or whatever you fancy. An added bonus: recovery of rent drives owners to use Earth efficiently, without polluting — the other great issue of our time. Nobody can point to a big-scale example of a BI. The BI is a discussion point of idealists. The rent-share is an actuality created by normal, middle-class, pragmatists. Which has more potential? Hop on the Citizen’s Dividend and win now.

  • Regardless of the whether a UBI is a good idea, the statement at the heart of this article is suspect: “Startup rates are falling. Why? Risk aversion due to rising insecurity.”

    First, it is unlikely that insecurity is rising, the government created social safety net is actually more robust that ever. Economic dissatisfaction may be rising, but that is not the same as insecurity and it is unlikely to be ameliorated by a UBI.

    Second, the increased regulatory constraints on economic activity seem to explain better why you see fewer startups, e.g. all the licensing requirements re running a business. Higher tax rates may have something to do with it too.

    • Dan & Ben

      Spoken like a true Neo-con. Reality is tax rates are extremely low already while the services government actually provides for those taxes are next to nothing thanks to the GOP. There are millions of people itching to start their own companies but can’t because they can’t risk losing their “real” job.

  • Liane Gale

    Evolution does not just happen because of mutation and
    selection. There are many other processes in play, including genetic drift,
    migration, horizontal gene transfer and symbioses, to name just a few mechanisms
    that can have a big influence on evolutionary processes. By the same token to
    call our economy a “complex adaptive system” that is rational, that “works” is
    likewise a simplification and just not true. Ask the billions of people that
    are victims of the “market” and ask our planet how well the market is working
    for them. The market has failed people and the planet. AND to compare nature
    with markets is also a stretch. While nature as a whole moves towards
    characteristics and features that make sense and are therefore rational,
    markets are” profit-oriented”, which is neither “natural” nor “rational”. An
    economic system that exploits people and the planet is not a natural system and
    it does not make sense. It is highly contrived and it will never be able “to
    work properly” as claimed. Even if you throw in a Basic Income. AND to refer to
    “survival of the fittest” or competition as the essence of evolution doesn’t
    work either, because first, you don’t have to be the fittest to survive and second
    is that differential reproduction is what is the most important aspect in
    selective processes. “Survival of the Fittest” is an outdated concept and
    should be abandoned. NEVERMIND that in current evolutionary theory
    “competition” is not the only game in town anymore, and that cooperation and
    coordination is now seen by many as an evolutionary force with more importance
    than competition. Read up on the evolutionary history of mitochondria and
    chloroplasts, on nitrogen-fixing bacteria, and gut flora for example. Humans
    would not exist if not for these symbiotic processes. So, if evolution is rife
    with examples of cooperation, how do we relate this then back to markets? If we
    really wanted to model the economic system after nature, we would build it
    based on cooperation and coordination. We would design an economy based on
    care.

    • Kevin O’Leary

      “So, if evolution is rife with examples of cooperation, how do we relate this then back to markets?”
      I’ll tell you how by example. Open Source Software. Here is an ecosystem that is self-perpetuating and self-sustaining. It it built on the freely donated efforts of like-minded people who organize themselves around a particular idea. As a result of their co-operative work a parallel economic system develops alongside the open-source development ecosystem of users who don’t contribute but want to benefit from the software which in turn enriches the experts who are there to provide them with support and development expertise at a fee.
      Bringing this back to the original argument of the author it is unquestionable that basic income would free more people to participate in these types of co-operative endeavors either inside or outside the tech world. But there’s an even deeper benefit. The type of co-operative effort an Open-Source type community produces is not tainted by the ‘specualtive’ problems that ideation in other economic areas falls prey to, eg. ‘What can I do that is most likely to make me rich fast”. This distortion of creative effort is what gives the world too many Chia pets and not enough Cancer cures.

  • Jeff White

    What a load of absolute rubbish! We’re going to solve the problem of income inequality by giving everyone a tiny amount of “capital” and letting natural selection take care of the “fittest” while killing off the “unfit”. All thanks to the magic of the market. Yeah, right.

    • Sue

      I read it as being more thanks to the magic of the people. Which is really no magic at all, but just what people do when they’re not as constrained by an insane economic system.

      We actually need to go further and dismantle the whole thing. First to go would be debt-based, trickle-up money creation

  • UBI is a possible element in a transition strategy.

    Evolution is an amazing process.
    All it needs to start is something that can replicate, and occasional errors in the replication process leading to variants, then differential survival probabilities between those variants in different contexts or niches.
    Fitness in this sense is whatever works in terms of survival probabilities, and varies substantially between contexts.

    While evolution can start with this simple expedient, it rapidly explores more complex strategic spaces (potentially infinitely recursively so).

    By the time we get to us as human beings using language, we are the totality of some 20 levels of cooperative systems (as well as a few competitive ones, but mostly cooperative).

    The term fitness when applied to humans includes about twenty levels of complex arrays of probabilities which vary substantially with context.

    Being human also involves many levels of strategic systems. Even at the genetic level, there are many different mechanisms that deliver different probabilities of different sorts of mutations in different areas of the genome in different contexts. It is an extremely complex set of systems. Cultural and personal complexity bring added evolutionary dimensions (domains).

    And within our bodies the cells do not compete for the resources of survival. Every cell gets what it needs in terms of oxygen, pH balance, nutrients, temperature etc. The whole functions best when all the parts are functioning best.
    That seems clearly to now be the major role of our social systems, to ensure all have whatever they reasonably need to explore whatever they reasonably choose.

    In this sense, the competitive view of modern economic systems is fundamentally flawed, and the systems themselves have deep systemic issues that now work directly against the real interests of the vast majority of individuals. UBI – set at a reasonably high level (about $20K in the hand per year) delivered daily ($55/day) would give every individual a level of security and freedom that only a very few enjoy today.

    In terms of material goods and services, most manufacturing is already partially automated, and much of it could be fully automated very quickly – it doesn’t actually take the efforts of many people to meet the reasonable material need of everyone. And some things are more complex than that simple statement indicates.

    So while automation fundamentally changes the incentive structure of markets, and markets are very complex adaptive systems, as is life and evolution more generally, and all raw cooperation is vulnerable to exploitation by cheating strategies, and requires for secondary strategies to detect and remove the benefit from cheats, when cooperation is so stabilised it is a fundamental requirement for life forms such as us.

    The recent 7.8 earthquake here in Kaikoura bought home to me just how reliant we are. While I was well prepared with reserves of food and energy and water, most were not, and they needed food and shelter. It wasn’t really an option to ignore anyone else’s needs. Given that Kaikoura is a tourist town, and thousands of visitors required food and transport (as all access roads were destroyed by the quake and took weeks to reopen (some will take over a year), the degree of reliance on outside aid was (is) substantial.

    So in part it is about removing fear of failure, and in part it is about acknowledging the fundamental change bought about by fully automated systems, and in part it is about high level cooperation and freedom.

    If we have the fundamental systems that support high level cooperation, then we all benefit; if we do not then we are all at risk.

  • smjhunt

    I’m not sure how this would work in the current world. After all, money is used to buy goods and services. You use it to pay for food,for rent, for medical care etc but this assumes that people will provide these things in return for money. If everyone is given enough money to live on, why would they work on farms to produce food or drive the food to markets in trucks to supermarkets or stock the supermarkets or work at the checkout stands. Why would people work for utilities to supply water or electricity ? Why would they work building the trucks to transport the food. Why would they work in banks accepting all the currency the markets and transferring into bank accounts.

    Let’s consider the places these people rent as well. Since everyone has a base amount of money, if supply is limited aren’t the landlords just going to increase the rents just as we see today. After all, in capitalist societies the standard way to deal with demand that outstrips supply is to raise prices. If everyone has a baseline amount of money then they must raise the prices higher in order to get supply to equal demand.

    • pyradius berning

      First and foremost, most peg the initial amount at $10,000 / year. This isn’t going to disincentivize work but will provide some very basic economic security. Second, what we tax is more important than how much. Taxing the unimproved value of land is effectively collecting ‘social value’ from land sites, which can be used to fund such things. By taxing land and not productivity, there is no discincentive to work.

  • GaryReber

    Scott Santens makes his argument that “If everyone received as an absolute minimum, a sufficient amount of money each month to cover their basic needs for that month no matter what — an unconditional basic income — then the fear of hunger and homelessness is eliminated. It’s gone. And with it, the risks of failure considered too steep to take a chance on something.

    “But the effects of basic income don’t stop with a reduction of risk. Basic income is also basic capital. It enables more people to actually afford to create a new product or service instead of just think about it, and even better, it enables people to be the consumers who purchase those new products and services, and in so doing decide what succeeds and what fails through an even more widely distributed and further decentralized free market system.

    The author, without outright stating it, is making his case within the economic reality that technological progress has become a job killer. But a redistributed “cash payment” made equally to every citizen, while it sounds good, is not a solution to the continuous concentration of wealth-creating, income-producing capital asset ownership among the already wealthy ownership class and their heirs. This class has designed the system to ensure that their wealth in the form of past savings will ensure that will own the future productive capability of the society.

    The author, without outright stating it, understands that our society will divide into a small elite who own the technology and a huge army of the unemployed living in squalor. And yes, we must put money into people’s pockets. But instead of putting money into people’s pockets, we should empower EVERY citizen to be individually productive and earn the money they put in their pockets, and that does not mean demanding that EVERY citizen be employed and work in return. There is a difference.

    The author, without outright stating it, believes that technology makes workers more productive. That’s because, as with virtually all others who write along these themes, the author only see productivity as related to the human work force, and do not see the distinction between the non-human factor and the human factor of production, as independent factors of productions. Fundamentally, economic value is created through human and non-human contributions. And with technological invention and innovation killing jobs, it is essential that EVERY citizen become an owner of the wealth-creating, income-producing capital assets of the future.

    A national basic income or universal basic income is a “welfare” scheme, which does not tie people to individual productive input, but redistributes through taxation of those in society who are productive to those who are unproductive or underproductive. Because it is not tied to new productive engagement, it will not strengthen the incentive to work or take risks, where there is no work to be had due to the economy’s stagnation resulting from poor consumption demand.

    What we really need is monetary and tax reform, by which an annual Capital Homestead Account in the form of insured, interest-free capital credit is extended equally to EVERY citizen, without any requirement for past savings, a job, or education. The capital credit loans would strictly be used to invest in new wealth-creating, income-producing capital assets formed by qualified, successful corporations growing the economy. The capital credit loans would be repayable out of the future earnings of the investments, and once paid would continue to produce income for the new productive owners, who would use the income to satisfy their needs and wants, thus resulting in spiraling green economic growth.

    The problem is that technological invention and innovation––change––makes the non-human means of producing––tools, machines, structures, and computerized processes––ever more productive while leaving human productiveness largely unchanged (our human abilities are limited by physical strength and brain power––and relatively constant). This means that fewer and fewer people are necessary to produce the products and services needed and wanted by society. But when a job is one’s ONLY way to be productive and earn an income and jobs are disappearing and the worth of labor is being devalued, we have a problem. The problem is magnified by the fact that upward of 95 percent of the products and services are produced by physical productive capital––the non-human factor–– owned by less than 10 percent of the population and highly concentrated among less than 1 percent of the population. The result is that primary distribution through the free market economy, whose distributive principle is “to each according to his production,” delivers progressively more market-sourced income to capital owners and progressively less to workers who make their contribution through labor.

    Unfortunately, ever since the 1946 passage of the Full Employment Act, economists and politicians formulating national economic policy have beguiled us into believing that economic power is democratically distributed if we have full employment––thus the political focus on job creation and redistribution of wealth rather than on equal opportunity to produce, full production and broader capital ownership accumulation. This is manifested in the myth that labor work is the ONLY way to participate in production and earn income. Long ago that was once true because labor provided 95 percent of the input into the production of products and services. But today that is not true. Physical capital provides not less than 90 to 95 percent of the input. Full employment as the means to distribute income is not achievable. When the “tools” of capital owners replace labor workers (non-capital owners) as the principal suppliers of products and services, labor employment alone becomes inadequate. Thus, we are left with government policies that redistribute income in one form or another, such as a proposed universal basic income.

    The capitalism practiced today is what, for a long time, I have termed “Hoggism,” propelled by greed and the sheer love of power over others. “Hoggism” institutionalizes greed (creating concentrated capital ownership, monopolies, and special privileges). “Hoggism” is about the ability of greedy rich people to manipulate the lives of people who struggle with declining labor worker earnings and job opportunities, and then accumulate the bulk of the money through monopolized productive capital ownership. Our scientists, engineers, and executive managers who are not owners themselves, except for those in the highest employed positions, are encouraged to work to destroy employment by making the capital “worker” owner more productive. How much employment can be destroyed by substituting machines for people is a measure of their success––always focused on producing at the lowest cost. Only the people who already own productive capital are the beneficiaries of their work, as they systematically concentrate more and more capital ownership in their stationary 1 percent ranks. Yet the 1 percent is not representative of the people who do the overwhelming consuming. The result is the consumer populous is not able to get the money to buy the products and services produced as a result of substituting machines for people. And yet you can’t have mass production without mass human consumption made possible by “customers with money.” It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being, not to a hand-out derived from government coercion that takes from those who make productive contributions as workers and capital owners and gives to those who are unable to earn a minimum sustainable income.

    Binary economist Louis Kelso postulated: “When consumer earning power is systematically acquired in the course of the normal operations of the economy by people who need and want more consumer goods and services, the production of goods and services should rise to unprecedented levels; the quality and craftsmanship of goods and services, freed of the corner-cutting imposed by the chronic shortage of consumer purchasing power, should return to their former high levels; competition should be brisk; and the purchasing power of money should remain stable year after year.”

    As we build general affluence for EVERY American, only then can we successfully alter the choices people must make between choosing alternative, more costly greener choices that do not threaten the environment and their very livelihood. This challenge is particularly a challenge for the property-less struggling middle class and the poor who must deal daily with livelihood issues, due to the precarious situation and loss of employment and the devaluing of the worth of labor as a result of tectonic shifts in the technologies of production resulting in less need for human worker input. Thus, realistically most people cannot be expected to sacrifice what little wealth and income they have to support more costly greener choices.

    To see the change that so many Americans would like to see with respect to the support for greener choices will require that American lifestyles and tastes adopt more costly processes, products, and activities that are the greener substitute.

    But the reality is that none of these changes can be practically achieved unless enough people can afford them.

    Without this necessary balance hopeless poverty, social alienation, and economic breakdown will persist, even though the American economy is ripe with the physical, technical, managerial, and engineering prerequisites for improving the lives of the 99 percent majority. Why? Because there is a crippling organizational malfunction that prevents making full use of the technological prowess that we have developed. The system does not fully facilitate connecting the majority of citizens, who have unsatisfied needs and wants, to the productive capital assets enabling productive efficiency and responsible economic growth.

    America has tried the Republican “cut spending, cut taxes, and cut ‘entitlements,’ eliminate government dependency and shift to private individual responsibility” and the Democrat “protect ‘entitlements,’ provide tax-payer supported stimulus, lower middle and working class taxes, tax the rich and redistribute” through government brands of economic policy, as well as a mixture of both. Republican ideology aims to revive hard-nosed laissez-faire appeals to hard-core conservatives but ignores the relevancy of healing the economy and halting the steady disintegration of the middle class and working poor.

    Some conservative thinkers have acknowledged the damaging results of a laissez-faire ideology, which furthers the concentration of productive capital ownership. They are floundering in search of alternative thinking as they acknowledge the negative economic and social realities resulting from greed capitalism. This acknowledgment encompasses the realization that the troubling economic and social trends (global capitalism, free-trade doctrine, tectonic shifts in the technologies of production and the steady off-loading of American manufacturing and jobs) caused by continued concentrated ownership of productive capital will threaten the stability of contemporary liberal democracies and dethrone democratic ideology as it is now understood.

    Without a policy shift to broaden productive capital ownership simultaneously with economic growth, further development of technology and globalization will undermine the American middle class and make it impossible for more than a minority of citizens to achieve middle-class status.

    We are absent a national discussion of where consumers earn the money to buy products and services and the nature of capital ownership, and instead argue about policies to redistribute income or not to redistribute income. If Americans do not demand that the contenders for the office of the presidency of the United States, the Senate, and the Congress address these issues, we will have wasted the opportunity to steer the American economy in a direction that will broaden affluence. We have adequate resources, adequate knowhow, and adequate manpower to produce general affluence, but we need as a society to properly and efficiently manage these resources while protecting and enhancing the environment so that our productive capital capability is sustainable and renewable. Such issues are the proper concern of government because of the human damage inflicted on our social fabric as well as to economic growth in which every citizen is fairly included in the American dream.

    Our current system is rigged to continually concentrate the ownership of capital in the 1 to 5 percent of the population. The current system is presently propelled by greed in our society, which creates dire moral implications. A new system that would ensure equal opportunity for every child, woman, and man to acquire productive capital with the earnings of capital and broaden its ownership universally does not require people to be any better than they presently are, but it does enable our society to leverage both greed and generosity in a way that honestly recognizes and harnesses productive capital as the factor that exponentially produces the wealth in a technologically advanced society.

    The resulting impact of our current approaches has been plutocratic government and concentration of capital ownership, which denies every citizen his or her pursuit of economic happiness (property). Market-sourced income (through concentrated capital ownership) has concentrated in individuals and families who will not recycle it back through the market as payment for consumer products and services. They already have most of what they want and need so they invest their excess in new productive power, making them richer and richer through greater capital ownership. This is the source of the distributional bottleneck that makes the private property, market economy ever more dysfunctional. The symptoms of dysfunction are capital ownership concentration and inadequate consumer demand, the effects of which translate into poverty and economic insecurity for the 99 percent majority of people who depend entirely on wages from their labor or welfare and cannot survive more than a week or two without a paycheck. The production side of the economy is under-nourished and hobbled as a result.

    While Americans believe in political democracy, political democracy will not work without a property-based free market system of economic democracy. The system is the problem, but it can and must be overhauled. The two prerequisites are political power, which is the power to make, interpret, administer, and enforce laws, and economic power, the power to produce products and services, whether through labor power or productive capital.

    Kelso wrote: “In the distribution of social power, whether it be political power or economic power, all things are relative. The essence of economic democracy lies in the elimination of differences of earning power resulting from denial of equality of economic opportunity, particularly equal access to capital credit. Differences of economic status resulting from differences in advantages taken and uses made of differences based on inequality of economic opportunity, particularly those that give access to capital credit to the already capitalized and deny it to the non- or -undercapitalized, are flagrant violations of the constitutional rights of citizens in a democracy.”

    We need a recognition in America that we should deliberately begin to broaden the capital ownership base in a way that is consistent with the laws of property and the Constitutional safeguards of the rights of men and women to own property and be productive.

    What needs to be adjusted is the opportunity to produce, not the redistribution of income after it is produced.

    The government should acknowledge its obligation to make productive capital ownership economically purchasable by capital-less Americans using insured, interest-free capital credit, and, as Kelso stated, “substantially assume financial responsibility for the economy through establishing and supervising the implementation of an economic, labor and business policy of democratized economic power.” Historically, capital has been the primary engine of industrialization. But as used, as Kelso has argued, has, as well, “been the chief cause of the institutional deformities that have created and maintained two incompatible classes: the overcapitalized and the undercapitalized.”

    We cannot balance the budget without cutting out coerced taxpayer-dependent redistribution of the earnings of capital workers, which if we did at this juncture would collapse the economy and ruin lives, resulting in social strife, personal suffering and degradation, the erosion of freedom, and ultimately anarchy, which will bring on totalitarian government. While welfare, private charity, boondoggle employment and other redistribution measures are now seen as necessary, they do not have to be sustained indefinitely. There are policies that can be adopted and executed to reverse the ultimate direction of collapse of the American market economy system. Such policies are based on the recognition that as the production of products and services changes from labor intensive to capital intensive, the way in which every human being––not just a few, but every person––earns his or her income must change in the same way. At the core of this quiet revolution is the understanding and commitment to broadening the ownership of productive capital.

    We need new justice-committed leaders, especially those who want to end the corruption built into our exclusionary system of monopoly capitalism––the main source of corruption of any political system, democratic or otherwise. We need to advocate the need to radically overhaul the Federal tax system and monetary policies and institute proposals to get money power to the 99 percent of American citizens who now only rely on their labor worker earnings. Under the Just Third Way’s (http://foreconomicjustice.org/?p=5797) more just and simple tax system, access to ownership of the means of production in the future would by provided to every child, woman and man by requiring the government to lift all existing legal and institutional barriers to private property stakes as a fundamental human right. The system was made by people and can be changed by people. Guided by the right principles of economic justice, “we the people” can organize and demand that the system be reorganized to make true economic democracy the new foundation for true political democracy. The result of this movement of new justice-committed leaders and activists will be inclusive prosperity, inclusive opportunity, and inclusive economic justice.

  • Duncan Cairncross

    I would like to add another positive feature that everybody having a UBI behind them would have

    At the moment when you are “negotiating” your pay you are negotiating from a position of extreme weakness – your house, your family and their health are in your “pot” whereas your employer only has a small proportion of his disposable wealth in his “pot”

    This means that those negotiations are not fair – a true libertarian would be up in arms about so many people being forced into such unfair negotiations

    If you have a National Health Service and a UBI behind you then you can negotiate with your employer from a much stronger position
    This will go a long way towards replacing the strength of the unions in driving a more equitable share of the common wealth and may be enough to start to reverse the recent trend towards greater inequality