Wednesday 9 October 2013

BIG Ideas

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.

17 comments:

  1. Spurious claims about benefits cheats being less of a problem than tax 'cheats'. They don't even have the knowledge about, tax, expenditure and income to define 'cheat'. Is a cheat someone that is evading - purposefully not paying any tax whatsoever, or being efficient - paying their share according to the government rules?

    What about employers that are paying employees who subsequently pay income tax and NI on the PAYE system... then subsequently pay VAT on anything they purchase? What about the simple fact that private sector pays for public sector. Money has to be generated somewhere, it doesn't, despite David Cameron's best efforts to prove otherwise, grow on trees.

    I had a twitter conversation, or as best you can have in 140 characters a go, a few weeks ago, arguing about the new real-time tax system.

    They didn't seem to understand that the tax office is woefully understaffed, frequently gets it wrong, is ridiculously hard to deal with, and can bankrupt a company and then admit its mistake months later when lives are ruined. So in order to help that system, businesses provide an open set of accounts just once a year, to be analysed and evidence produced wherever required.

    Why change it? Evidence has to be produced for all expenditure, or you'll go to prison, and rightly so. The real time system could well do nothing but destroy cashflow and small businesses.

    These socialists make my blood pressure rise with their disgusting ideas on wage equality, and their delusions of 'fat cat' bosses in top hats, whipping their Victorian workforce and shoving 10 year olds up chimneys. Wages usually get higher according to skill, risk and location. Take some risk, grab the skills that this Country offers people for free from age 5, and move to where the work is.

    Of course the self employed and small business owner is going to minimise their tax, it improves their cashflow, it allows them to employ staff and grow their business, and less then gets spent on the scrounging feral underclass that nobody has a clue what to do with except feed, house and attempt to advise not to breed quite as much.

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    1. Nice one Chris! Mind that blood pressure now!

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  2. "Better off but furious about the pay cut"? What? Furious that theyre now 2 grand better off?

    "Those on more than £11,375 in benefits"? Benefits already being capped at £25,000 by the current government. A couple on unconditional basic income recieve £23,000. Not that much less, but the fact they get it unconditionally more than make up for that.

    "Low wage, welfare economy"? Welfare is scrapped under BIG proposal. Wages are then set by the free market. If I don't like the pay cut I am free to choose to do different work.

    Good blog though, well written, even though I don't agree with a lot of it

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    1. Welfare isn't scrapped at all - you just put EVERYBODY on it.

      And many of those on higher current welfare payouts are single adult households, so your idyll of well-fed couples living comfortably without making any contribution is way off the mark.

      Give people the chance to do fuck-all and that's exactly what most of them will do. I cannot, for the life of me, see how you could sustain any form of economy like this beyond a few years of steady decline before they turn into a worthless pool of starving people unable to fend for themselves.

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    2. Also, humans being what they are, it would take no time at all before a student household suddenly had a combined income of £40-50-60k depending on numbers. It would then be a small logical leap then to set up communes of loafers, pooling their 'free' dosh and living high on the hog, at the expense of the diminishing numbers left to pay taxes.

      That paying tax lark would soon be seen as a mug's game and when the exchequer ran out of money - because it very much would - you'd have herds of feral idlers storming the Treasury. It would be a bloodbath.

      As for the unemployed 'creating employment'; they are not. The payment of welfare is a ransom arrangement in return for not rioting. ALL employment is created and paid for by those who actually create things that people want.

      You can have capitalism - which works, or various forms of communism - which ends up killing millions. BIG is a communist party.

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    3. How do you know that those students wouldn't spend their time creating an innovative product to sell in order to become rich rather than just live off a basic income. How can anyone spend money living high on the hog, if no one is making/selling the stuff they need in order to live high on the hog. If all these loafers have all that dish to spend and want to live high on the hog, then there's a huge market for some budding entrepreneur to make a killing supplying it huh ;-)

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    4. Plus one minute you say its not enough for single families, next minute you're saying its too much because people will club together and live the high life. Which one is it?

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    5. How do I KNOW they wouldn't create something great? Where's the incentive? Very very few people are instinctively creative and very very few people go to work for any other reason than to make a living.

      Your plan won't work; it could never work. It simply de-motivates everybody to do any more than simply exist.

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    6. The incentive lies in wanting to live off more than a basic income, the same incentive that make anyone bother earning more than £11,375 a year in salary at present.

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    7. Ho ho ho, ha ha ha, hee hee hee!

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    8. So why do people bother earning more than £11,375 then?

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  3. "these ‘tax cheats’
    also provide employment, spend liberally" - so do benefit claimants. The unemployed are some of the most prolific “job creators” on the planet. They create work for thousands of job centre employees nationwide. The “millions” they spend on shopping, helps create countless jobs in the retail sector, and without an audience for the Jeremy Kyle Show, alot of your marketing and advertising donors would be out of work, and who would fund the Conservative Party then?

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    1. Nope. You just don't understand human nature at all. Under your system eventually nobody would create anything whatsoever, the population would continue to be skewed towards the idle and those who pay for ALL of it - the actual workers - would, just as they are doing now, gradually leave the country.

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    2. This is what happens when you put socialism to use. http://www.thecommentator.com/article/646/does_socialism_work_a_classroom_experiment

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  4. In fact, look up the United States Internal Revenue Code "Earned Income Credit," which is effectively the topping-up of the incomes of those who, for whatever reason, do not qualify to remain on the dole continuously, and need to punch a time-clock occasionally. In order to receive the credit one must of course file an income tax return, but when one does, one finds that, given the standard deduction and personal exemptions, plus other available non-refundable credits like that for child-care expense, there is no tax liability, and the credit, a refundable one, is simply gravy. (Pure "public assistance," as the dole is called, is never taxable in the first place, hence not taken into account when one files.)

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  5. Basic income is not some speculated way to enslave you to the government. It's a proposed way of fixing that the money sequence of value is no longer reflecting the interest of humans. Making money by trading debt, planned obsolescence, wasting resources and polluting the environment are some of the best ways to make money. Not only are these things not in the interest of human life-value: They will eventually ensure our extinction.

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