Fake promises in the next presidential election

It appears the next American presidential election will be a battle of fake promises as Donald Trump and a left-wing democrat appeal to American emotions.

Trump will almost certainly bases his campaign on the formula that worked last time; vague general promises (make America great again) and some easy to keep promises that appeal to his core supporters (move embassy to Jerusalem.). Most of his promises will be appeals to emotions.

White House Flag Democrates RepublicanThe democrats will base their campaign on a promise of full employment as reported in this recent article in The Economist. Full employment has been an American policy goal for a long time, If it were possible it would have been attained a long time ago. To promote it now is an emotional appeal to counter Trump’s emotional promises. And it is destined to failure and will probably destroy the economic future of a lot of Americans.

One could probably predict that both Trump and the democrat will come out of the election with DBS degrees. (The D stands for doctor and the rest all English speakers should know).

The main issue, which will not be acknowledged during the campaign, is the size of the resource base for future economic activity. This blogger believes there are loads of energy and mineral resources left on the planet. However, we have cherry picked those which are readily available. Those which are left are so difficult to extract they are for the most part useless for future economic development.

If this analysis is correct then promises of full employment will be impossible to keep. Attempting to keep them will accelerate the use of the remaining energy and mineral resources and bring forward a major economic collapse.

Another factor when employment is an issue is our commitment to the work ethic. Some people believe their salvation depends upon their working hard and others worry that some people will receive benefits which they have not earned or to which they are not entitled. Everyone must do their share.

This blogger believes the material standard of living to which we have become accustomed is based on the agricultural surplus which allows a few people to produce enough food for everyone. As this surplus is the result of several millenia of technological development it should be a part of our inheritance. All of us should be entitled to a standard of living equal to everyone else regardless of what we do with our time.

With our standard of living dependent upon jobs and with our psychological well-being also dependent up on our having a job, promises of full employment will have a very strong appeal to many Americans. The success of the promise depends upon the ability of the economy for even more growth. This blogger has serious doubts about that. I am old enough to remember when people were saying we will just have to get used to an unemployment rate of three per cent.

The economic challenges facing the people of this world are overwhelming. Solutions will required a major rethinking of values about work and economic growth. An American presidential election would be an ideal time for a serious debate about the economic future.

The toughest part of this issue is how to deal with it. In the past I have voted for candidates with the least chance of winning because they have been the most honest. I have also deliberately spoiled by ballots. Both of these seem like a cop-out. I do not have the personality nor the skills to be a candidate let alone convince people of my economic policies. I do not even have the skills to go to election meetings and challenge the candidates. I also believe any candidate who tried to be honest would be nailed to the cross by fake election promises and appeals to emotions.

 

 

 

 

 

Daydreaming reform: basic income, money and work ethic

To say we face an economic crisis is hardly controversial but the crisis is so severe that the reforms needed make Karl Marx look a part of the establishment.   The changes needed are radical beyond the comprehension of many people as they require more than just tweaking what we already have.

The basic problem is that we have used up most of the easily accessible energy and mineral resources.  Those that are left require so much energy to extract that they are almost useless.  There have been other times in economic history when humans have had to cope with resource shortages but these were temporary as more resources were waiting to be discovered.  This time the problem is not knowing where the resources are located but the cost/energy required to extract them.

The three basic changes are a basic universal income, the way in which we create money and overcoming the work ethic.  To accomplish anything all three reforms will be needed at the same time.  As there are so many conflicting vested interests this will be an impossibility.  Prove me wrong.  While these appear to be radical ideas, this writer did a degree in conventional economics at the University of British Columbia and has a strong commitment to a market economy.   The radical comes from wanting a market economy when a major feature of the current economy is that competition is restricted by government legislation.

The basis for an income scheme is the agricultural surplus resulting from all the technology which has developed at least since a farmer discovered he could produce more by using a collar on a horse rather than a harness on an ox.  Through the centuries the elite have confiscated most of the surplus with the use of force. Since the industrial revolution psychological tactics such as legal restrictions on competition,patents, copyright and the work ethic have been less messy.  The need for labour to man the empires has allowed workers to claim a share of the surplus.  As robots replace workers it will be interesting to see what happens to the agricultural surplus – and workers.

This writer would like to see the agricultural surplus treated as an inheritance to be shared equally by all the people of the world.  The way to distribute this inheritance is with a basic income scheme.  Some ideas as to how to do this are in the free e-book, Funny Money: Adapting to a Down economy, available from this weblog.

One of the advantages of an income scheme is that individuals would be able to take action on social and environmental issues related to their employment.  Workers would no longer have to work for exploitive employers and people who disagreed with a firm’s social or environmental policies would not have to bite their tongues for the sake of a pay check.

There is an old saying that money is the root of all evil.  When I studied the economics of money and banking I decided it was the lack of money that is the root of all evil.  I now think the way in which we create money is the root of all evil.

In most of the world’s economies money is created when the banks  make loans and because banks are generally required to keep a fraction of their deposits on reserve most loans become additional deposits in the banking system.  This is called fractional reserve money.  It is a problem because loans that have to be written off reduce the amount of money available, with a multiplier, and because interest is charged on the loans.  A sudden reduction in the money supply is the most difficult of all economic crises.   If all the loans outstanding had to be repaid at the same time there would not be enough money to repay the principle and the interest.  We would recognize the problem as a financial crisis.  This is why I titled my book Funny Money.  I encourage you to get a free copy from Smashwords for an explanation of this problem.

Money is useful because it is a tool which facilitates the exchange of goods and services especially when a lot of our exchanges are with strangers.  We have traditionally used gold or other material items as a basis for money.  Some people still talk about the gold standard although fractional reserve money is based on faith rather than gold.

A few small groups around the world have established what they call Local Exchange Trading Systems.  These people base their exchanges on credits.  You get a credit when you sell a good or service to another member and use credits when you purchase something.  I like this system because the credits are a form of money without the problems of fractional reserve and interest.  In my book I propose we adopt a national exchange trading system and combine it with credits from a guaranteed income scheme.  This would be using money as a tool rather than a commodity.  See the book for more details.

Adopting this system would be revolutionary because it would be a transfer of decision making power from bankers to individuals.  Under fractional reserve bankers get to make decisions about what projects get funded and who gets to do them.  A National Exchange Trading System would allow individuals to make these decisions as they decided what to do with their share of the agricultural surplus.  Some of us would use our share to vote for zero economic growth and more leisure activities.

Many people feel guilty if they do not work continuously.  The work ethic and a distribution of the agricultural surplus via employment are the main motivators that keep our economy going. But the truth is that we do not need everyone to work full-time to provide foods, shelter and entertainment to everyone.  Most of the work people do is work for the sake of work and to maintain the empires of the one per cent.

The bushmen of the Kalahari desert in Africa are/were known for not being interested in material things and for not working hard.  But as hunters and gatherers they had no need to store food.  Any day of the year they could go out and collect the food they needed for that day.  When our ancestors moved to agricultural pursuits, they had to store food and this meant working at least at some times of the year.  We have now taken this need to an extreme.

One of the reasons work is so important is that most of us get our self-identity from our employment.  To save our resource base and to preserve the environment we will have to get our self-identity from other activities.  How about a leisure ethic which encourages people to perform operas, write poetry, write economic weblogs or many other useless things.

This blogger keeps by his computer a little statue of the Laughing Buddha to remind him not to take life too seriously.  Most of the time it works but when thinking about the current economic outlook it is hard to laugh.  Most of us think and act in our own short-term interests as opposed to the long-term in interests of our selves or our communities.  So long as that holds true the outlook is for a lot of human suffering.  But  what does it matter.  To quote a famous economist, in the long term we will all be dead.

 

Answering concerns about an income scheme

A discussion forum on the Canadian Broadcasting Corporation website brought out a number of concerns about proposals for a basic income scheme. There were more than 2,000 comments.  Here are answers to some of the concerns.

How do we pay for a basic income scheme?

There are two answers to this question.  The first is that it would replace a range of existing social welfare payments and would make these payments with more efficiency.  Employing fewer people this would increase the need.  Also I believe subsidies should be given to consumers rather than producers so this would release a lot more money for an income scheme.

For the second answer we have to focus on the agricultural surplus, the excess production by each agricultural worker which allows food for people to do other things. Without the agricultural surplus we would not have civilization as we know it.

Until now the agricultural surplus has been distributed via employment but the current level of technology is making this more difficult.  Thus the interest in a universal basic income scheme.  We should note that the agricultural surplus is based largely on petroleum and could be somewhat precarious.

As most of the technology that has gone into the agricultural surplus has been developed over the last 2,000 years and most if not all of us have ancestors who worked on that, we should consider it a part of our inheritance. We are all entitled to a share.  We should have a collective responsibility to ensure everyone has the opportunity for the same standard of living as most other people.  The amount of payments should depend upon the population and the quantity of goods and services we are able to produce.  If this ratio goes up then the payments should go up and if this ratio goes down then the payments will have to go down.

I believe there are some serious problems with the way in which our economy creates money.  As an income scheme involves money this would be a good time to deal with that problem.

How do we stop people from smoking dope all day?

The simple answer to this question is that we do not. We do not need everyone to work all the time to maintain the agricultural surplus.    We no longer need a work ethic.

A basic income scheme would be a tremendous transfer of decision-making power to individuals (from governments and from bankers who create money via the fractional reserve banking system) and we have to allow people to make their own decisions and to take or benefit from the consequences.  The agricultural surplus should give us all the right to decide what to do with our time.

An income scheme would be communist.

This blogger dislikes the isms because they tend to be mostly meaningless.  As I understand communism it involves treating people humanely and government control of the economy.  It seems to appeal to people who wants to tell others how to live their lives.    I believe we should try to treat people humanely and I do not want others telling me how to live my life. As decision making power goes with money an income scheme would be a transfer of power to individuals.  It is difficult to think many communists would want that.

A guaranteed basic income scheme would help with a lot of social and economic problems but such major changes would go against a lot of vested interests.  Even people who would benefit the most are likely to fear the unknown.  Therefore concerns need to be taken seriously.

This blogger has just published an eBook Funny Money: Adapting to a Down Economy which discusses a lot of these issues. The price is only 99 cents.  I encourage you to have a look at it. Until April 19, 2016 you can get a free copy from Smashwords.  Use the link and code at the top of this weblog.

Equality – the impossible dream

Charlie can’t breathe

The most evil of all people are those who believe they can force their religion, beliefs, values and will upon others.  There are evil people in all nations, religions and cultures.

Inequality is an issue that will probably never go away because it has traditionally been the natural order and because its solution, perfect competition,  is something few people will be able to accept.

Inequality was a feature of Roman and Medieval societies and probably of most historical large-scale civilizations.  To find true equality one would probably have to look to small tribal groups where everybody knew each other and were probably related.  (I suspect these groups had relationship problems in that lots of people didn’t speak to each other.)

In historical civilizations the elite depended upon the work of the peasants for their food and luxuries.  The challenge was to confiscate as much of the agricultural surplus as possible while leaving enough for subsistence.  Probably a factor in the calculations was the supply of workers.  If there was a shortage, the workers were able to retain a little more than when there was a good supply.

Inequality has historically been so much the norm that the general prosperity following  the industrial revolution should be considered an aberration. One of the things which has happened since the start of the industrial revolution has been  the exploitation of energy and mineral resources found in the earth’s crust.  The result has been a lot of prosperity which had to be shared with most of the population because the prosperity depended upon the labor of the working people.  Once again supply of workers was  a concern and generally  there was a shortage – until recently.  With a limited supply of labor the elite had to tolerate sharing some of the wealth.

In historical times the agricultural surplus was probably taken with the use of force or the threat of its use.    Since the industrial revolution the elite has discovered a less messy way of getting the greater share – legislation which restricts competition and allows for profits.  If we had perfect competition there would be no profits, we would have equality and the one percent would be just like the rest of us.  Licensing, copyrights, patents, health and safety regulations and tariffs all work to restrict competition.  If we did not have copyright Bill Gates would be just another programmer and we would all be using super great software. Recent prosperity has been so great leaving some for the rest of us was not an issue.

Other ways in which  the elite exploit us are  by the work ethic and debt.  So long as we believe in the divine nature of work we will continue to produce the profits which the elite need to maintain their fortunes.  So long as our money system is based on debt we will be chained to our employers.

It may be the golden age of prosperity is coming to an end.  We still have lots of mineral and energy resources but the most easily accessible have been taken.  It now takes more energy and effort to get at what is left and this limits the potential for future growth.

With the end of growth and a surplus of workers we are ripe for a return to historical inequality.where the elites take for themselves most of the agricultural surplus and leave a minimum for everybody else.  The difference is that we now have technology to replace workers.  This guy does not want to think about the implications of this.

It is my understanding that in some parts of the United States some local level governments are getting a significant part of their revenues from petty  fines enforced by police.  This source of revenue falls heaviest on poor people.  The justice of this program is questionable. Another source of revenue is called civil forfeiture where authorities confiscate the proceeds of crime even if there has been no conviction.  Once again this has potential for abuse and raises justice questions.   I am sad to report that my home province of British Columbia uses this process.

I have to wonder if these developments are part of increasing inequality and a return to inequality enforced with force in that they have a lot of potential for abuse of poor people and involve police.

This writer is pessimistic about the future.  To increase equality we will probably have to increase competition and introduce an income scheme.  These are controversial concepts although they will never come into being if we don’t talk about them.  In the meantime,   probably the best way for individuals to deal with inequality is to become a part of the minority  and one does that by taking advantage of legislation which restricts competition.

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Why we have unemployment

We have unemployment because our agricultural surplus is such that we don’t need for everyone to be “working”.  More important issues are who decides how to use the surplus and how is it distributed.

This post was prompted by a question on Reddit asking why we have unemployment.  It’s an important  question because unemployment can be devastating.

The agricultural surplus is the food produced by workers which exceeds their own needs.   This surplus means some/many people can do things other than produce food.  In our society we have used this surplus to produce a wide range of goods and services which have themselves become a part of the surplus.  Unemployment is an indicator of how rich we are.

Think of a small group of hunters/fishers and gathers on a small island where the living is so easy food and shelter requires only and hour or two a day.  By our terms these people would have a high unemployment rate.  Distribution of food would probably not be a problem as they would probably share their produce but they would have to decide what to do with all the spare time.

This model could get  complicated if they had lots of children and increased their population to the limits of the available food.  It would still take only an hour or two a day to harvest the food even though there wasn’t enough for everybody.

In such a small society distribution of food would be by sharing.  I know an anthropologist who did his field work in such a society and he said you could not buy food there.  Whatever one needed was shared.  What to do with the “free” time would probably be up to individuals with collective activities partly by consensus.

Modern technology, especially that applied to agriculture, gives us the same magnitude of surplus.  We too could be approaching the limits of our ability to produce food.

We too have to decide how to share the produce and what to do with the time. So far these decisions have been influenced by our commitment to the work ethic.  Everyone should spend most of their time working and their share of the surplus should come in the form of wages.

As our exchange of goods and services is facilitated by money the decision-making goes with the money.  To the extent that a person has money one can decide how the surplus will be used.  So the more equally money is distributed the more decision-making will equal. The ancient Egyptians did not use money and it appears the pharaohs decided the surplus would be used to build burial chambers.

In the industrial economies we do not need full employment but we do need a more equitable way of distributing the surplus.  With the ups and downs of the economy full employment may not be a realistic goal.  There are lots of things people could do that would be satisfying but which do not contribute to gross national product.

I believe a universal income scheme would give us a more equitable distribution  of the agricultural surplus.  If we are approaching the limit of our ability to produce food, it might provide a more equitable way of dealing with shortages.   It would also spread the decision-making among more people.

Unemployment can be financially and psychologically  devastating for the people who experience it.   But it is not the real problem.  The urgent problems are an equitable distribution of the agricultural surplus and how it is to be used.

 

If you liked this post your are invited to comment, press the like button and/or click  one of the share buttons. If you disagree you are invited to say why in a comment.  While I like the idea of sharing this platform, my personality is such that I don’t reply to many comments.

 

The complexities and limitations of freedom

We value “freedom”  so much that people have lost their “freedom” by fighting to death for it.  But it is a complex concept with lots of limitations.

This post was inspired by an article on economic freedom with a nice graph showing we now have more economic freedom than we have ever had..  I was too lazy to try to figure it out but it did get me thinking.

Definitions are sometimes fuzzy. For for this post there are two aspects to freedom.  There is the freedom to make decisions and to act accordingly and there is the freedom from having to do what others tell us.

The main factor affecting our freedom is the agricultural surplus because that relieves us of the drudgery of producing or gathering or hunting for food.  The less time we use for food the more time we have with which to do what we want or which other people want us to do.  If the agricultural surplus per person were to decrease we may find ourselves with less freedom.

Freedom varies in different parts of our lives.  In British Columbia we have freedom of religion and can attend any church of our choosing – or mostly not.  However, we are required by law to educate our children.  The options are home schooling, a few expensive  private schools (mostly religious) or public schools (in effect a monopoly) over which we have very little say.  So we have freedom of religion but very little freedom as to how we educate our children.

Here are some of the things which limit our ability to make and act on decisions.

Our own values, morals and religion.  If your religion tells you salvation comes from work, then that limits your right to goof off.  The work ethic is part of many people’s belief system but it is also very much in the interests of people who want others to work for them.

The values, morals and religion of other people.  The most evil of all people are those who try to force their values, morals and religion upon others.  Unfortunately my belief in this evil does not stop others from trying and often succeeding.  The greatest evil comes when these people get into government.

Politicians and their bureaucrats sometimes like to tell the rest of us how to live and our commitment to the “rule of law” gives them means to do so.  Try to sell unpasteurized milk in Canada and you will probably have a rule of law learning experience.

At least in the industrial countries many people worry, and probably rightly so, about their pensions and their well-being in retirement.  This could be a natural need for security or it could be a result of marketing by the financial industry.  In any case it limits our freedom to do things that do not contribute to a pension plan such as extended travel or going to live in the forest.  The problem is that our well-being in retirement will depend up on the quantity of goods and services the economy is capable of producing at that time.  Pensions and savings are vulnerable to inflation or bankruptcy.

Economics is about relationships and relationships can  be both supportive of freedom or restrictive.  I believe relationships are most satisfactory when there is a more or less equal exchange but there is no law which states that relationships have to be satisfactory.  Relationships are as complex as the personalities of the participants.  The key to happiness may be in finding a partner whose personality compliments our own.

I have long believed that little girls should not be allowed to play with dolls because they learn that they can have relationships in which they have total control over actions and thoughts.  When they grow up this tends to limit the freedom of their husbands.  Us guys have to learn to be assertive.

It may be that some people can’t cope with a lot of freedom and seek out life situations where their right to make their own decisions is limited.  Erich Fromm was concerned about populations giving up political freedom to dictators and wrote a book in 1941 called Escape From Freedom.

There are people who feel they have the right to tell others how to live their lives and these people limit the freedom of others.  There may have been times and places where these people could use force but at least is some places today force is not easy.  It is much less messy to use psychological tactics.  For example the work ethic,  fears about future security or psychological marketing can be used to encourage people to do what somebody else wants them to do.

It may be the great industrial societies in which some of us live and which we associate with freedom were in fact created because most people have given up a some of the freedom of the agricultural surplus.  Sometimes I think we have overdone the technological development and work for the sake of work although there is a lot I would not want to give up.

Freedom appears to be a complex concept which varies by individual and by the different aspects of our lives. Those of us who value the right to make our own decisions should fare reasonable well and those with a submissive personality should find it easy to meet their needs.

 

If you liked this post your are invited to comment, press the like button and/or click  one of the share buttons. If you disagree you are invited to say why in a comment.  While I like the idea of sharing this platform, my personality is such that I don’t reply to many comments.

The unemployed scapegoats

Apparently a lot of people are blaming themselves for their own unemployment.  This is sad because there is a high probability that our committment to the work ethic will make it difficult or impossible to cope humanely with the economic crisis.

I believe economics is largely about relationships and for relationships to be satisfactory they require a  more or less equal two-way exchange including compassion and understanding.  Too often the victims of the economic crisis are being blamed for their misfortune which is neither understanding nor compassionate.  For them to blame themselves must be psychologically devastating.

Our economic problems are a result of our having consumed the most easily accessible energy and mineral resources and are aggravated by a financial system that has a built-in collapse mechanism.  Those of us who have lived through and enjoyed the recent golden age of prosperity should collectively  take responsibility for the crisis even  though we would not be human if we had not used the resources. To blame any one group for what we have all done is to make them into scapegoats.

Our economic problems could be a lot worse than we would like to think and could lead to a population reduction up to 80 per cent.  That is what the native North Americans experienced when the Europeans arrived.  Of course we are exempt from that kind of disaster but there are so many things threatening our civilization and our way of life that we might be wise to think about how we can cope with a serious disaster so as to minimize human suffering.

One approach may be to look at anthropology and history.  How have other cultures organized themselves and how have they organized the exchange of goods and services.  This has allowed me to see that there are other ways of doing things.  Sometimes those other ways are very appealing.

Our culture places too much emphasis on jobs and employment.  Not only do jobs provide us with food, clothing, shelter and entertainment, they also provide us with self-identity.  If one does not have a job one is a nobody and deserves to be look down upon.  The proper place for such people is that famous burning garbage dump in Jerusalem known as hell.

The reality is that full employment is not a realistic expectation.  The huge agricultural surplus we currently produce makes it unnecessary and our having used up the most easily accessible resources makes it impossible. We need to reorganize our economy so that all people can have the opportunity for a standard of living similar to most other people regardless of what they do with their time.  This means we need to look at some sort of universal income scheme.  Before we can have an income scheme we have to get over our committment to the work ethic.

To some extent we all have to take responsibility for how we live our lives within limitations.  Sometimes we must live in circumstances that are beyond our control.

This blogger feels quite pessimistic about the economic future but has to recognize that people have been pessimistic about the future for millenia.  On the other hand, there have been times during the millenia when pessimism has been justified.  Please don’t blame the economic crisis on those people who are suffering from it.

 

If you liked this post your are invited to comment, press the like button and/or click  one of the share buttons. If you disagree you are invited to say why in a comment.  While I like the idea of sharing this platform, my personality is such that I don’t reply to many comments.

 

 

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