Critique my economy fix.

ILW

suki1001 wrote: »

Or everyone gets basic minimum income, this does not affect anything you earn, a bit like child benefit. Wonder how many people would go back to work?

I think it's Qatar where every citizen get about 30 grand a year from the oil revenue. The only people that do any work are immigrant workers who get paid peanuts. Meanwhile the citizens are all dropping dead from obesity and diabetes.

suki1001

Well, it wouldn't be that much! This would be a low amount, but it should in theory inspire more people to work, because they would still get the benefit as everyone would.

dtsazza

It's a very interesting proposal and I congratulate you on having formed it and posted it for criticism.

So, the criticisms...

Actually first off I really like the overall principle, since I think that getting anything completely for free is distortive, and "you get out what you put in" is a fairer way to work things.

However on particular aspects:

• How do you decide on which jobs are "beneficial to the economy", and how do you decide the "correct" level of extra benefit they get? Should a nurse for example get 0%, 20%, 40% or more? What about a really great/terrible nurse? More controversially, what about a good banker who releases the funds to support a whole chain of business expansions creating more wealth for all?
• The law thing I kind of agree with in principle, but arguably that's what our current legislative system is trying to be - the specific situations which pertain to "don't be a !!!!!!". Under your proposal it would be broadly the same eventually but with loads of grey areas where judges would set precedent about whether doing 90 m.p.h. on a kind-of-busy-but-not-quite road in nearly-twilight was infringing those human rights or not. Maybe that's not a great example in fact, but the point remains that right now you have a generally good idea of whether you're breaking the law or not - your idea, while well-intentioned, leaves a huge amount open to interpretation so I'd argue that you could be doing a lot of things that you consider legal and somebody else considers illegal. And neither of you would know which way it went until or unless you went to court. (Also, what would policemen do in this situation - would they use their own judgement of what tangentially violated human rights? Would there be compensation payouts for arrests that late turned out to be spurious due to bad judgement?)
• (An aside) Wars will increase the output of the country in purely GDP-related terms, but all of that output is used to bomb other countries, etc. - it doesn't actually mean that people domestically get more goods/services available to them for cheaper (which is ultimately what wealth is). I suppose you might argue that if we didn't go to war our standard of life would suffer when we were invaded (which might be true or false), but that's a political argument. From a purely economic perspective the extra GDP created during a war is "wasted" in the sense that it doesn't raise the aggregate standard of living, in the sense that GDP usually does. (Strictly, all the extra wealth is "spent" overseas).

As a final aside, I consider this quite a bizarre alternative to capitalism. As I understand it, capitalism is simply the idea that you have something of value (be that goods or labour) and you exchange it, in a mutually agreeable fashion, for something else that someone else has. Hence the idea of getting something for nothing (benefits) is anathema to the pure capitalist concept; whereas the idea of contributing more to get more is actually exactly along capitalist lines. Don't get me wrong, I consider capitalist principles as described above to be essentially fair, but I'm intrigued to see what you define as capitalism, and how this represents an alternative.

Along similar lines, I don't personally have a problem with the wealth divide so long as it's based on creating things that people are prepared to pay for; but I don't think it's obvious that this would reduce the wealth divide. Maybe a little in the sense that it would encourage the unemployed to work more, but by and large I can't see it really changing things for those already employed.

bendix

spadoosh wrote: »

Please bear with me on this one but im struggling to find many flaws with it, im sure it will be shot down straight away but i cant see many problems with it apart from implementing it.

!

I'm struggling to understand why I should continue reading your proposal if you yourself say it can't be implemented.

How about this for an idea? We send a message to Martians to come to Earth and sprinkle fairy dust on us all to make things better?

It's about as realistic as your idea, and as easy to implement.

vivatifosi

Ok here's the problem. Within the tax system you have those who in net terms are currently taking out (eg pensioners; unwaged) and those who in net terms are putting in (eg high waged; couples with no kids). The high waged, who pay the most taxes, will probably opt to pay the minimum tax, rather than 40% and up. They can then put aside money for their own safety net. There won't be enough of a redistributive mechanism to get the taxes of the rich to help the poorest.

I'm not sure how this then sits with your point that you would tax a celeb as they two seem contradictory. However we do have too many worthless celebs here, so driving their tax take abroad in exchange for their not filling our TV screens with vapid reality shows may be a fair swap. Perhaps we could send them to a jungle in Australia, they seem quite keen on that, though possibly less so without the cameras. I'd keep Strictly of course, that is TV gold.

dtsazza

vivatifosi wrote: »

However we do have too many worthless celebs here, so driving their tax take abroad in exchange for their not filling our TV screens with vapid reality shows may be a fair swap.

I agree with you but sadly there are many well-paid "celebs" because ultimately that's what the majority of people want on their screens. They watch the shows with those celebrities in, follow their gossip stories and believe their endorsements - ultimately leading to multiple input streams which make it worthwhile for a production company to pay multiple millions of pounds a year for these celebrities.

If everyone treated them as boring and vacuous their work would dry up overnight, but until then they'll continue to be paid a lot as in a very real (economic) sense they're the opposite of worthless.

To be honest it's actually incredibly democratic, but I do despair.

mel12

This would do away with most benefits, anyone who can not afford/doesnt pay contributions will be housed/fed/watered by the government at a very basic level (enough to meet human needs and rights) so for them to recieve additional benefits they will have to contribute.

This may be controversial, but in a society where some people are already having to choose between heating and food, and we are experiencing price inflation, I don't think you could cut basic benefits any further and still meet people's basic human needs and rights.

That said, I think people contributing is a good idea. However where you have an average ratio of 6 jobseekers per job, someone is inevitably going to be unemployed. Why not introduce a right to work, so that everyone who is able to has the right to a job. It might seem counterintuitive but I think it would actually reduce costs because there are a lot of social costs associated with unemployment

suki1001

vivatifosi wrote: »

I'd keep Strictly of course, that is TV gold.

And then you lost me!!!

sabretoothtigger

The best system might be negative income tax system. Everyone gets paid 4k rich or poor.
Making more money for yourself and of course contributing in taxes of some kind never becomes a negative. To the rich they are just repaying society and to the poor they just do their best possible. Society is more productive and so richer

Ultimately whatever system encourages people to earn most will do best.
A subsidy or imposing minimum costs to operating either as an employee or as a business can be destructive in that it eliminates the lower end of a otherwise competitive market