Wednesday, 9 October 2013
First off Capitalism isn’t so much a political ideology as a system by which humans trade goods and services. Socialism, despite its name, isn’t so much a social system as a political ideology by which human activity is controlled; ideally every second of the day. Advocates of capitalism are usually busily engaged in the business of getting on and have a healthy despair for the socialists looking to gain from their endeavour. Socialists appear to despise any form of success over and above the ‘average’ and seek to skim off the fruits of capitalists’ labours while simultaneously spouting irrational hatred towards those who provide for them.
Somebody tweeted, “Tax cheats cost us £95bn while benefit cheats cost us £1.5bn, so why do the right go after the benefit cheats?” At first glance a legitimate question but it's not just £1.5bn, is it? Those on welfare, cheats or not, use an incredibly disproportionate amount of state-provided services - health, housing, social services, police, courts, legal aid, jail time, probation and other containment methods, etc. Whereas the 'tax cheats' if illegal are pursued and prosecuted but if legal are doing nothing other than finding ways of avoiding handing over a penny more of their hard-earned wedge for the state to piss away. And of course these ‘tax cheats’ also provide employment, spend liberally and use very much less in the way of the aforementioned state services; it’s hard to avoid the phrase ‘politics of envy’.
The phrase ‘something for nothing’ has also been over-used of late, usually to drive home the point that nobody owes anybody a living… but then I discovered the Basic Income Guarantee Party – the BIG Party – an apparently serious attempt to present a solution to the politics of envy. Click on the link and watch the short video. A clear and obvious spoof, I thought, until I stumbled into a lengthy twitter conversation about it.
The BIG Party has a manifesto and foremost of its pledges are these two: “£11,375 a year Unconditional Basic Income Guarantee paid to every Resident Adult UK Citizen, whether they are also working in other paid work, non-working or retired.” And “50% income tax on ALL other earned income.” Adding that “The Unconditional Basic Income Guarantee will give you the time and the freedom to do stuff just for the love of it.”
This, it is claimed, will eradicate poverty. The costings are outlined here and involve replacing welfare and tax-free allowances with the basic income guarantee. Again, a rudimentary analysis of the proposals does indeed show that lower paid workers would be better off straight away. For example, somebody on £15k would initially be taking home almost £19k, which sounds superb. A bit more number crunching and you discover that up to an income of around £60k all looks rosy. Above that although the tax burden rises it’s not by as much as you’d think. As the BIG Party says, “what’s not to like?”
What’s wrong with it is, as always, socialism’s failure to account for human nature. Those already on more than £11375 in benefits would immediately be worse off – and that includes many on housing benefit in large cities. The howls would be heard across the land as they bewailed the loss of their entitlement. What do you do, pitchfork them out into the country? Good luck with that; governments have been trying that for decades.
But hey, sod the doleys, what about the workers - the majority will be better off, won’t they? Initially, yes, but how long before employers simply cut wages? A £15k worker currently takes home around £13k so their wage could be cut to £5k and they’d still be better off... but bloody furious about their pay-cut. Far easier to sack them and re-hire at the lower rate. A current £13k worker could simply stop working and be no worse off.
Hey presto, what all this does is perpetuate a low-wage, welfare economy the likes of which we have been trying to dig ourselves out of for years. As for “the time and the freedom to do stuff just for the love of it” the fanciful ‘creative bonus’, that is just wishful thinking. Those who are genuinely creative already create however busy they are. The rest of the herd just sits around farting.
Oh and, economics? Simple supply and demand. As wages rise, so do prices. Always. Presumably the BIG Party will also introduce price and rent controls? Oh, hang on; haven’t we been here before? The BIG Party claims to be libertarian but it sounds a lot like New Old Labour to me.