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Time To Catch Up With Reality

King Cnut the Great, the king of Denmark and England a thousand years ago, is famous for trying to command the waves and the tide from rising.

It’s now pretty well known that he was not trying to do something this mindless, he was actually trying to teach his courtiers a lesson that no matter how powerful a man might be, some things were more powerful. Humanity has not learned the lesson well, however, so we struggle with change, we cling to the past, we hark back to the “good old days”.

But let’s go back to, ahem, basics… what is a Universal Basic Income?

Simply put, it is an amount of money to be paid by the government to every adult of working age under its jurisdiction.

The argument against a Universal Basic Income is obvious… give a person something for nothing and they won’t value it.(*1) If someone does not have to work to put food on the table then family, society, the nation and civilisation itself will all crumble. “Our Way Of Life” will come to an end and the socialists, radicals, communists and anarchists will take over. Those who “work hard” will be ignored and the lazy and the entitled will inherit the earth. Oh, woe is me!

But take the emotion out of the argument and, at its core, UBI is just another clunky phrase to describe one element of the transition that the world is currently undergoing. Human beings are infinitely adaptable to change but, and it’s a huge BUT, every time significant change happens economically, politically, societally, religiously, scientifically, artistically and even linguistically (*2), there are winners and losers. Those who think they might lose ferociously resist the change, even if it is inevitable.

My argument is that the discussions around UBI are exactly like trying to stop the waves rolling in, with one extra element. Every aspect involving UBI is controlled by humans, as opposed to the waves Cnut dealt with. We should be able to get a better outcome then… yes?

The bigger question might therefore be how to fund UBI. Some experiments have been carried out in Finland, Canada and elsewhere, and these were funded from regular national or municipal budgets. That’s not how it would work in reality though. If UBI were to be introduced comprehensively in Australia (where I live) it would require a fundamental restructuring of government income sources to finance payments to 20 million adults. What is compelling for me is that the Australian federal government is fully aware that the underpinning of its source of income – taxation – is already shaky and the only ways that it can currently grow are either increasing the rates (*3) of one or more taxes, or increasing the base of one or more taxes. Government borrowing is not income, it’s just debt. Fees charged for services are miniscule.

It’s unlikely that tweaking the rates or the bases is going to drive massive increases in revenue for the government, especially in a recession, so you would think that they’re already creatively pinging around ideas in Canberra, surely?

Park that thought for a minute and now let’s throw the autonomously coded grenade into the melting pot… ROBOTICS and AI.

It’s axiomatic in any Covid related conversation that work practices, travel, commercial property, education, healthcare, social gathering, etc, will all be significantly changed as we come out of the pandemic. Articles about the acceleration of robotics and AI have exploded. It is now possible in some parts of the world to check into a hotel, order room service, use the leisure facilities, have a drink at the bar, and pay your bill without ever having to “interface” with a human being. Research, development and deployment by Amazon is moving at warp speed as it makes billions from the current demands, and all the time people are being replaced by robots who work longer hours, complain less, never get sick, and always do what they’re told (even if some of the instructions are a tiny bit iffy). We’ve long had driverless trains hauling thousands of tons of material across Australia. These will be followed by the normalisation of other autonomous vehicles, cashier-less supermarkets, algorithm-based tax and legal services, AI driven medical diagnosis and treatment, and expanded self-programmed manufacturing.

This article is not arguing against any of these developments. On the contrary, each one can make life easier and more human-focused, but ONLY IF THE FRUITS OF THE REVOLUTION ARE USED FOR THE BENEFIT OF EVERYONE.

And the only way to achieve that is via a generous Universal Basic Income.

And the only way to fund that is to level the playing field via the taxation of the organisations and individuals that will reap the huge rewards of this fourth industrial/technological revolution.

And the only way to do that is for every sensible country to work together to level the playing field on corporate and personal taxation. *4

And that’s where my argument falls flat on its human face… for now.

Individual countries compete on taxation policy for good historical reasons. There does not seem to be any likelihood of that changing in the short term, mainly because the impact of such change would be huge and felt by every level of society, every industry and every non-commercial sector.

However, if it does not change we will carry on towards infinity, with more and more wealth filtering to fewer and fewer organisations and individuals. The logical endgame is that the masses will have few jobs, little purchasing power and appalling standards of living. But that creates a massive paradox:

If people have no economic resources, they cannot buy the goods and services that created the super-wealth for the oligarchs, plutocrats and mega-companies.

So, the logical conclusion is that these powerful people and entities have a vested interest in supporting the introduction of a Universal Basic Income. Which means a reluctant acceptance that tax policy across the world would have to be co-ordinated and stabilised.

Call it a Geneva Convention on Taxes.

I suspect King Cnut would come to the same conclusion.


*1  PS: the existence of inherited wealth should totally demolish the argument that everyone has to work hard to receive any income or wealth. If UBI is bad for society then surely the inheritance of unearned wealth is its iniquitous equivalent?

*2  PPS: I’m a closet member of the Apostrophe Preservation Society, and the Why-Can’t-Americans-Use-Adverbs Society.

*3  PPS: why, oh, why are corporate, capital and personal incomes taxed at different rates?

*4  PPPS: SUGGESTION… stop calling it TAXATION; re-brand it as Life Subscription, Society Service Charge, Support My Loved Ones Fee, or Influence Contribution. 


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