A Citizen's Income for all would fairly address immigration too

The Occupy movement of 2011: ''we are the 99%'', fingered the top 1% in terms of income and wealth (25%/40%). Economist Joseph Stiglitz had published a paper in May saying these 1% are typical of the wealthy though history who whilst taking to themselves the best of education, doctors, houses and lifestyles, do not realise until too late that their fate is tied up with how the other 99% live.

Slow forward to 2017. Are lessons being learnt? Not if the Prospect magazine February 2017 article 'Voting out' by Tom Clark is a guide. Clark reviews a couple of books Against Elections (David Van Reybrouck) and Against Democracy (Jason Brennan). Apparently in the future we may need to be either a liberal or a democrat: 'The educated bourgeoise will put its own liberty ahead of other people votes'. Already in the US it seems that these trends have form, witness the deliberate disenfranchisement of black voters taking place. In late 2016 a court struck down laws having  'discriminatory intent'. Onerous regulations around voting can prevent or dissuade electors to enter their vote. Beware. Clark quotes a Daily Telegraph article by Ian Cowie who in 2011 proposed limiting the vote to those who pay tax. The recent Brexit and Trump votes may bring more such ideas aimed at those who didn't get the vote 'right'. The time is ripe for the issue of 'citizenisation' to be taken seriously - a central issue of the book The Free Lunch - Fairness with Freedom.

If the powerful really are so concerned about loss of their economic status quo that they will resist popular moves to level the playing field a little, what should we do? Justin Welby Archbishop of Canterbury  in The Times (11 Feb) when launching his book Dethroning Mammon, says that the trickle down effect of letting the rich make wealth in the hope that some gets to poor, has been shown not to work and thus the rich should pay more tax. Fair enough as far as it goes but how do you get permanent poverty alleviation?

One part of the solution is a Basic Income for all   (also known as Citizen's Income or Citizen's Royalty). This involves a regular, non-means-tested payment for everyone. The New Statesman quotes a scheme for the UK having an age-graded payment from £56 to £142 per week to all, even children, (leaving in place housing benefit and disability allowance). This payment would be instead of child benefit, income support, jobseeker's allowance, national insurance and state pensions.  It would be nearly revenue and cost neutral and would massivley cut bureaucracy. Most importantly it would remove the current disincentive to work for those on benefits currently who face swingeing losses through tax should they get a job. An additional benefit from this, with immigration being a worldwide issue, the payment of a basic income to all citizens - having a valid national identity - should allay fears of  'welfare immigration' at least.

However, whilst this is the obvious and simple solution to poverty, an adverse effect would be that in giving cash to all, some of those who receive it as an addition to an already sufficient income may use it in the housing market. A basic income for many such will enable them to do a property upgrade and thus fuel house price rises. Law of unintended consequences: those people who now rent and are just below the property buying level will find their hope of having their own roof over their heads rather than a rented one, pulled away from them.  And the irony would be this was caused by a measure that set out to help the poorest who are overwhelmingly renters of their homes!  We are increasingly a divided nation of home owners and home renters.    

The answer to this to levy land value tax on all freeholds. This would cover the land value of the plot and not the building value - a tax on say 30% of the 'house price' seen on property websites. There could be a basic tax free 'homestead allowance' allowance before tax is due to cover houses below the average value. The next step is to set the land value tax liability against any income tax paid so that the net, after-tax, income of most individuals and households would be unaffected. For property rich / income poor people the payment could be deferred until eventual property sale. Inheritance tax might be reformed at the same time. It should be possible for the general mass of taxpayers to be relatively unaffected. Taxing land would also bring land forward for building homes which would solve another problem.

As the Archbishop says the richest should indeed cover the bulk of the cost. A problem in making a real difference to poverty and maintaining freedom for all is, of course, human selfishness. If I am to be stung with just a little extra tax because I am fortunate enough to own a freehold property, should I vote for that as one of the 99%? Archbishop - what would you advise?

For a discussion of basic income, land value tax, and general issues of citizenisation, see The Free Lunch - Fairness and  Freedom.  A basic income is currently being tested in Finland.

Dr Peter Selby on money reform. London Occupy reaches Winchester. Malcolm Brown, Michael Northcott, Richard Werner

Two years after Tent City was dismantled from around St Paul's in London the ripples of Occupy London reached Winchester last week (9th April) when ex-Bishop Peter Selby delivered a paper 'An alternative to Chaos and Fear' that cut to a core problem of capitalism. This was at the Futures of Capitalism conference at the Business School of the University of Winchester, Hampshire.

Dr Selby said that what guides the religious life stems from God's own character and the outflow from that to society is mercy and justice. The religious tradition is that life is not a gamble, but as a result of a departure from faith which the structure of capitalism represents, the current view is that life is indeed a gamble and its effects are random. We have given ourselves over to the rule of money and allowed it to be given sovereign power over life - that is, to be an idol - with appalling effects on the vulnerable. William Cowper who campaigned against slavery in the 18th century was shocked at the purchase of people as slaves and found it to be wrong in principle and not merely an inconvenient way to have access to sugar and rum. Dr Selby finds that capitalism with its supposed 'free market' as we know it, is also morally wrong, and is not something to be endured and merely in need of being changed at the edges. It is unacceptable. He said that whilst the East German command economy failed it did contain some good ideas that started with concern for the poor. He referred to Psalm 82 with its exposure of favouritism to the unjust and its exhortation to prioritise the needs of the oppressed, the weak and the poor.  

He majored on the creation of money of which 99% is now made by private banks and 1% by the government. Historically it was the sole right of the sovereign to make the full 100%. He compared this with the right of the state alone to have an army - why is money so different today? With banks now having the power of money creation they have power over life, and overrule elected governments. International financial power is sovereign without frontiers, and nation states have less and less control under that empire. Thus is the creation of money the root of the capitalist problem.  Jesus said that the kings of the world lord it over others but that was not to be the way of his kingdom. God's love is to be shared to the ends of the earth bringing inclusion and law. Those who profess faith should: ' rediscover the expression of faith in God as one who offers a different economy, specifically one who replaces chaos and fear with mercy as the guiding economic reality'. Dr Selby wants the churches to find ways to bring fairness.

He said that the idea that cuts in welfare to the vulnerable are necessary to prevent dependency, whilst more money for the rich through tax cuts will encourage the rich to work harder, is a crass lie and such untruths must be exposed. Another falsehood is that the power of the wealthy is the key to a reasonable standard of life for all. During the discussion he cited a case where a large donation from The Big Lottery required that it must be permanently commemorated by a fixed plaque.  Whilst such a demand brings 'gratitude in perpetuity' to The Big Lottery as an organisation, the truth behind that system is the fact that the poorest are the biggest buyers of lottery tickets. 

Rev Dr Malcolm Brown who at Church House, Westminster is the Director of Mission and Public Affairs (CofE) gave a response to the talk which he said was a prophetic voice, and asked how it should affect our conversation with policymakers? He spoke of the tension between moral principles and economics, between the coming of the Holy Spirit in the past and the full incoming Kingdom of God at some time in the future and having to live in a sinful world meanwhile.  Illustrating the current scene he referred to Charles Clore's bid for Sears in 1953 as a shock to the city establishment culture, and likened it to a person standing up on the front row of a seated crowd to gain a slightly better view, thus forcing everyone else to stand and become slightly worse off with no compensating gains. But how do you legislate between altruism and selfishness? He spoke of the campaign he was involved in (when a Southampton vicar) that banned Sunday trading - they defeated the Thatcher government - but which is now being challenged. On the current issue of capitalism he thought the only way is to engender a new moral consensus, otherwise the only alternative to free markets is authoritarianism. How do we resolve between the 'society of the strongest' and 'the community of communities'? The moral argument can be seen by those who disagree as toxic. He said that banks are a contradiction in a market system whereas credit unions are robust.  

Professor Michael Northcott agreed that the private creation of credit is a core problem and combined with the market principle it brings money supply chaos. Professor Richard Werner said that the last 50 years of economics used the wrong postulates and axioms and when its supposed aim of achieving a  'Utopian dream world' is attempted by governments, unsurprisingly it fails. As to the Dr Brown's search for a moral consensus he said we already have one! When people are asked if they would agree to a fraudulent money system based on fictional deposits (i.e. the current fractional reserve banking system as it is) they say they would not support such a thing. He asked Dr Brown if he agreed that money creation should be in the public domain? Answer: Yes.

I asked Dr Brown about his view that apart from a new consensus, the only alternative to markets is authoritarianism, in that we at Local First CIC in Winchester are pioneering a community bank which will be a full-licence bank, raising profits for the common good.  As a response to the failure of the capitalist model it is not in any way a product of authoritarianism!  Dr Brown had no problem with the vision - but who decides ultimately, who controls it?

It seemed to me that an answer to Dr Brown's worries are in Dr Selby's appeal for the churches to give a lead and at least dare to support such pioneering efforts.  After all as a vicar he gave support to stopping Sunday shop opening in 1986, why not now, as an elevated church leader give support to community banks in 2014?  

Werner at Occupy London LSX: Drop university fees

Why do students need to pay fees for their university education? Richard Werner a leading international banking professor said at St Paul's Occupy LondonLSX site on 8th December that education could be free of charge if the government followed the no-usury law of the Bible. Werner said that the tax burden of £80 billion per annum  for the UK's interest bill is quite unnecessary. Hence the possibility of new wealth through a debt-free interest-free money system.


He wove a fascinating story for an attentive audience in Tent City University. St Paul's bells chimed on, police cars wailed, passers-by diverted into the tent, listened and joined the discussion:  'a wonderful talk' said one; another said he had never heard such a clear explanation of the current economic mess. 


Werner surprises you. You think you have understood his drift pretty well and then he slips in on your blind side with a whole new area of understanding and learning that gives dramatic colour to his expositions. Hey! He is talking about banking and money supply of all things!  With a fascinating narrative, this time out of English history starting at 1120 AD, he illustrated yet again that unless we tackle at the most fundamental level where we get our money supply from, and how we allocate it, we are doomed to yet further cyclical economic disruptions.  


Starting with King Henry I at Winchester and its treasury and hazelwood tally sticks he showed how this created the  government money supply without interest. The 'no usury' rule of the Bible, Werner says, means none other than 'no interest'. Forget clever and convenient interpretations like 'no excessive interest'. 'No interest' means: no interest. Then on to the later role of goldsmiths who charged interest on their imaginary loans of gold (actually bits of paper that they declared were as good as the gold which may or may not have been in their vaults), which gradually usurped the role of interest-free tally stick money. Then the usurping role of William from Holland, the deposition of the rightful King James II and, with the help of bankers from Amsterdam, the setting up of the Bank of England in 1694, which consolidated and made fully legal the doubtful goldsmith banking practices. [As Rebecca Fraser has it in 'A People's History of Britain' (Pimlico 2002), with the founding of the Bank of England the country now had very deep pockets to fund the war with King Louis of France who lost and settled up at the Treaty of Ryswick].


Werner touched on the Corporation of London with its ancient rights, unique in England, and confirmed by the same William and Mary in 1690. He said that the Corporation is still a very privileged body based in a money-creating system which makes 98% of our money supply and allocates it to its own profit-maximising ends. This City is a strange enclave that is somehow not really a part of England - the Queen is not allowed to enter the City boundaries without the Lord Mayor of London. 


It looks as though the Bishop of London is actually grasping the nettle of this financial cataclysm. He would have gained much clarity from Werner's 'sermon' in Occupy's Tent City University in the shadow of St Paul's that day.
posted by Charles Bazlinton
The Free Lunch- Fairness with Freedom


      

St Paul's London OccupyLSX

At the Tent City University outside St Paul's Cathedral, London yesterday I gave a talk with an interwoven discussion from a very attentive audience. The topic was the concept of the free lunches available on this planet. What are they? Who gets them? How might they be shared more fairly? 

Firstly: Land brings a huge value for owners. Value accumulates on land because of the particular location of every plot and is driven by the success of the surrounding community. A desirable school will drive up 'house+land' prices in an area so that the very teachers who create the educational excellence cannot afford to buy a home in the area! The value is nothing to do with the owner of any 'house+land' package.  All the owner can do is  improve the house and so add 'house value'.  The taking of some of the land value 'community inspired free lunch' for taxation, in place of income and other taxes is needed for fairness. The community which endowed the value would get value back.

Secondly:  Credit is a marvellous device that has been around a very long time. It enables people to plan and enact constructive projects sooner than otherwise. Because of human creativeness and co-operation, surplus wealth leading to human progress is relatively easy to produce. But  creation of credit is needed for this. Credit flow depends on a settled society and trust between people - in a war zone where society is hardly functioning, credit would be difficulty to get hold of. Thus the community, like in the case of land value, is the essential source of the credit and not the bank that demands the interest. The government could and should be the source of all credit money, just as it is the source of note and coin money which only comprises about 3% of the money needs. It could grant credit for public investment free of debt and free of interest. It could ban any credit towards speculative activity.  Take away these dangerous toys, then the economy would settle productively and a free lunch would flow to citizens through the saving of interest charges paid by goverment to banks as is the case now.

Currently banks merely seize the business opportunity and with the government's grant of their monopoly power create the credit and cook up another debt-laden free lunch for themselves.  And look what a mess they keep getting us into! This latest economic collapse since 2007 is merely the worst of many in the history of the modern economy. Many more will follow, because the UK government  is trying desperately to get the banks it has taken over, into some sort of shape so they can wreak their havoc yet again.

Some at Tent City yesterday were concerned about governments getting the power to create credit. Surely  democratically controlled credit creation and allocation under Parliament must achive a better outcome? [25 Nov: Banks would become retail outlets for local credit needs with credit at wholesale rates provided centrally.]

What will come out of the current crisis? The old wild capitalism again with 'banking as normal'? The rule of dictatorial oligarchs? Or will we reclaim the use of credit creation power back from incompetent banks, back into the hands of the people? 

It seemed to me on my first visit to an Occupy site that these people are waiting, they are waiting in some discomfort, but  peacefully and they will hear and listen and debate with anyone. They don't look as though they are going away soon. Ultimately they await politicians who alone can initiate a serious search for a solution. 

posted by Charles Bazlinton. Author: The Free Lunch - Fairness with Freedom