A "Culture of Entitlement"?

Kia-ora


With the current dialog about welfare, It is time to look at the people who are the real  beneficiaries, of the welfare system.
Who use the educated and healthy  workforce, the safe environment and the functioning infrastructure, our taxes and work, provides.
The people who say "everyone should stand on their own two feet", "you don't work you don't eat",  and "take personal responsibility",
The business sector.
What Business wants.

1. Staff fully educated and trained. "Job ready".
2. Low wages.
3. Tertiary education.
4. Better infrastructure, including power, roads, transport links and other services.
5. Better Government services.
6. Protection from crime.
7. Help with research.
8. Help with exporting.
9. Help with business development.
10. More immigration to keep wages and training costs down.
11. A pool of casual labour/unemployed, available when and where wanted.
12. Welfare benefits at starvation level, so people will take any low paid irregular hour job offered.

All supplied by tax payers and/or  employees, at great cost to the rest of us, that pay our taxes......
Now get this.
Not happy with being able to use, tax rebates, PAYE earners cannot, and the numerous accounting loopholes to minimise tax, as well as outright tax fraud, they also want.............
TAX CUTS for business!

What business wants, is a lot of benefits supplied by tax payers, and the unemployed.
But.
They want someone else to pay for it.
"Socialism for Business".
Where is the outrage from the "Tax Payers Union" and the "bene bashers"

Excuses/reasons, for not doing anything about children in poverty.

Kia-ora


This is a re-post from 2013. Unfortunately the need to talk about poverty is even greater now.

Right wing excuses reasons, for not doing anything about children in poverty.
1. “It costs too much”.
2. “Taxation is theft”.
3. “They are not as poor as they are in (Insert a third world Nation with less than half our GDP, and a 10th of our resources per capita)”.
4. “The statistics are wrong”.
5. “It is not as many as they claim”.
6. “You can’t get rid of poverty by giving people money”.
7. “I was in a poor persons house and they had “Chocolate biscuits, a colour TV, or, horrors, a bottle of beer”!!
8. “It’s all those solo mothers on the DPB breeding for a living”.
9. “I know a person who…………..”
10. “It is a choice they make”.
11. “It is people who make poor choices”.
12. “They shouldn’t have had kids they couldn’t afford”.
13. “Why should “I” pay for other peoples kids”.
14. “The centre will never vote for it”.
15. “We will do something if finances allow”.
16. “Giving them money made them poor”.
17. “Those socialists made them poor by giving them benefits”.
18. “I pay enough taxes”.
19. “There are no poor in New Zealand”.
20. “Not now, later!”

TPP, Corporate Coup or "Free trade"?

Kia-ora


"Free trade" or Corporate Magna Charta.
The overall benefits of "Free Trade agreements" to participants, especially smaller economies with less economic power, are often dubious, and frequently just a matter of how you rig the accounting. Leaving out externalities, like the increase in numbers on the dole, is common when counting "benefits". As the "parties of business" forget a ledger has two sides.
In fact no country has ever succeeded on exports alone, without a healthy internal economy. Export Share of GDP.
And no country has ever succeeded in benefiting from an export economy, without initial State support of the export sector. New Zealand's successful Dairy industry being a prime example of continued State support. Banned for future industries, if we sign the TPP.
"all major developed countries used interventionist economic policies in order to get rich and then tried to forbid other countries from doing similarly".
Kicking away the ladder. Ha-Joon Chang.
"Freer trade always results in benefits for both countries". Well no.
Even Ricardo never suggested that Britain give up making wine altogether, or Portugal textiles. As usual, simplistic slogans/magical thinking, seem to sway shallow intellects.
One where every country is going to get rich by out exporting every other country.
There are examples of "Free Trade" agreements, such as CER, which have been of net benefit to both countries. Notably where labour laws, the rule of law and democracy, and standards of living, are already, somewhat congruent. (Though it should be noted the Australian banks take more profit out of New Zealand, than the dairy sector earns).
The EU, has worked, as economic stimulus for Germany. It is debatable how well it has worked for Southern European countries. Clever of the Germans to get them to take on debt, from German banks,  to pay for German economic stimulus, though.
Then, there was our abandonment of our own businesses and workers, in the 80's and 90's, in pursuit of an ideological dream thinking that other countries would be mad enough to follow suit. Leaving us nothing to bargain with in future agreements. Only their purpose is mad.
That some have worked, is not, evidence that all such agreements will work. Or that adding services, law making and finance, is a good idea.
TPP
However. TPP ( The trans Pacific partnership) is NOT a "Free trade" agreement. It is an attempt to cement in corporate power, to override inconvenient  local Democracy, and collect rents from local communities in perpetuity.
Since when was giving large companies extra rights in law, and rights to extract even more economic rents, "Free trade"?

TPP gives corporations rights to overrule Democratic Governments.
The proponents of TPP claim that New Zealand has never been subject to an ISDS case. Of course not.
Our Governments in recent years, have been ideologically opposed to legislating against corporations for the common good. They are not bothered about giving foreign corporations rights above individuals and local business. Because they don't want to "interfere" with the "free market", and I suspect, with their own wealth..
We may want our future Governments, however, to legislate for the rights and welfare of New Zealanders and our environment. Not for Nestle', BP, Apple, Orivida,  Amazon and Exxon.
The future under TPP.
We can see the effect of TPP and ISDS in current "Free trade" agreements.
Local and State Governments looking at legislation in terms of "will we get sued" under "Free trade" or ISDS agreements.
Australia being sued by a tobacco company is just one example.
The EU has enough trouble trying to ban bee killing insect sprays in their own courts. Imagine if they had to answer also to "independent" ISDS tribunals.
Osceola A small town of 2 thousand fighting against water extraction.
Under NAFTA's ISDS provisions Canada is One of the most sued countries in the world.

The rest of the world is catching up to Canada. ISDS cases.
Corporate legal rights are already having a detrimental effect on progressive  legislation worldwide. Corporations do not need more rights that locals and individuals do not have.
For example. If Whangarei decides to take dog control, from the foreign corporation that currently has the contract. Having to pay for an ISDS case will give the council pause. A local firm does not have that recourse.   An overseas shipping company  pays extra, to get priority over other companies at NZ ports. A future Government may want to prevent such uncompetitive behavior, because it is disadvantaging coastal shipping.   We decide we want to re Nationalise banking. Because the country cannot afford to bleed so much money to the finance sector. Or close private prisons. Or restrict water extraction. Or cut CO2 emissions.
We don't really know what we may need to do in future to protect ourselves, local business and our environment, from corporations, who have been shown to have no other interests, apart from extracting as much money from local communities as they can.
Benefits?
The most optimistic benefit analysis is less, than the costs of ISDS and extra drug and copyright expense, we will have to pay overseas firms. Not to mention local job losses and even more offshoring of profits.
And giving drug companies, copyright holders and proprietors, rights way in excess of their original contribution.
Of course, our pursuit of pure "free trade" has worked so well? How much has our number of people in poverty increased by, again?

Can we have a future, with capitalism?

Kia-ora


I'll come clean. I am a capitalist. I've started two businesses, one not so successful, due to injuries and health issues at an inconvenient stage. Though we did OK in the end. Another which shows all the signs of a healthy infant. I don't expect we will make a fortune, but it will make, enough. Currently I work for a multinational.
It is one of life's irony's that someone like me, an advocate for the mixed economy, Democratic Socialist, model that has proven the most successful economic system, to date, is considered any way, radical.

No one has yet found a better system for allocation of day to day resources, within a community, than a market capitalist system.
You see potential customers for your market garden or building skills, you invest in training as a builder, buy a set of tools, or in a plot of land and seeds. If you do it well, you make a good living, but how much profit you can make is limited, by the fact there are many other small builders and market gardeners, and your potential customers can see who grows the best vegetables, or builds houses that stay up. At this level a "free market" works fine. The economy is pretty much in a steady state, as is the use of natural resources.

As soon as you grow the community larger, than one where everyone knows the skills and honesty of the other members, you need ways of ensuring those with market power do not accumulate too much of the communities wealth. Basically that real contributors to the community don't lose out to cheats, resulting in the breakdown of the system

No capitalist society has succeeded without a healthy dose of co-operation, common infrastructure, goods and services and regulation, "socialism". Countries that are, "successful" by all our normal measures, have an economy balanced between private and State. The most successful have high progressive taxation, and a State share of the economy, around 50 to 60%. Ours is down to 28%, and it shows.

Without the rule of law, healthy and educated  workers, public infrastructure and regulation of the "cheats" if you like, we cannot have a successful business, and wider economy.
Private provision of mass 'public' goods has proven to be incredibly inefficient, and wasteful. like our power companies.

It suits Bill Gates, and others, to attribute human advancement to capitalism, a self justification for having extorted extreme wealth.
Others attribute advances to human co-operation in developing infrastructure and services, laws, and sharing wealth and advancement, which capitalism can never deliver.

Both are correct.

The USA's post war advancement was due  to high taxes, socialist redistribution, a high quality public education system, State sponsored research and innovation, public infrastructure spending, anti trust laws, banking regulation and a large middle class.
All were needed to make capitalism work.
The concentration of wealth and power with late stage, insufficiently regulated, monopoly  capitalism, and the winding back of social infrastructure and redistribution, is causing the USA's decline.

In our example of small community capitalism above, people pretty much get out what they put in. The market limits how much they can take as profit. A "steady state economy, without growth, is possible.
You are buying yourself a job, if you like.

In a truly free market, an impossibility of course, where there is perfect information and competition, there cannot, of course, be any profit. "Free" marketeers/"free traders", don't want a "free market", they simply want one distorted in their favour.
Any business knows, that to make a profit you have to distort the market in some way. Convince people you are better than your competitors, get Government to legislate in your favour, or give you subsidies or public goods, or use monopoly or oligopoly power, to eliminate competition and keep wages low. Your profit is always someone else's loss.

Capitalism requires "growth" to function?
The motivation behind capitalists' is profit. Getting out more than you put in. Why start a business and take that risk, if you are going to make the same amount as you would as an employee.
However most people do make less than they put in, so that others can profit.
Many functioning businesses don't make a real profit. Including most of our essential small businesses. They make enough.  Small builders make a good living. But you could hardly say they take out more than they put in. The degree of competition precludes that. Building material suppliers, however, make huge profits in New Zealand, because they are a duopoly. Big box stores, and banks, are extremely effective, in removing wealth from communities.

In a finite world, the exponential growth required to make increasing  profits, and pay interest, is not possible.

Capitalism is cannibalising, the human and natural environment, it needs to survive.

The concentration of wealth and power insufficiently regulated capitalism, and excessive profit taking, has caused, now works against the survival of human civilisation. With the wealthy opposing any attempts to limit the damage.

UBI (3). Taxes, income and Welfare.

Kia-ora

An often repeated argument against increases in welfare, including UBI, minimum wages or payments to alleviate poverty, is that it will fuel inflation and most will end up no better off. (More market advocates don't seem to have the same faith in "the market" to hold prices down for the poor, as they do for the rich).
We never see that argument made against the 17 to 20% increases at the top end, which are already fuelling inflation, in food and housing, making prices too high for poorer people.

The answer is, to make the rich less wealthy.

The Laffer curve theory, the idea that Government share of the economy displaces private share, is often cited as a reason for not expanding the size of Government spending.
The theory is generally given as an argument against higher taxes along with the idea that higher taxes will simply be avoided.
 The evidence shows, however, up to a certain point, Government spending on infrastructure, education, health, services, welfare and social policy helps the private sector as well.
The worlds most successful economies generally have a Government share of the economy greater than ours. We have a lot of room to move in this direction.
However, a UBI is a change in distribution of incomes, not an increase in the size of Government.
WINZ will shrink, for a start. So will tax compliance costs for small business.

Higher progressive taxes are inevitable. As Obama said "it is math". We cannot have a viable economy/society while reducing Government services below a minimum and continuing to borrow, so a few wealthy people can pay less tax.
We cannot afford the compounding interest, on the billions required over time, for National's unaffordable tax cuts.

Middle to upper middle income PAYE earners claim, with some justification, they are paying a disproportionate share of taxes.
They are in the middle, between the better off, who can use tax dodges, and the poor, who do not have enough to pay tax.
A more even distribution of taxes, maybe, with capital gains taxes, financial transaction taxes, wealth taxes, which share costs more fairly around all sources of income/wealth, will  allow us to reduce PAYE income taxes share..
Broader definitions of income, for tax, makes the system fairer.

The psychological effect of universality. "I am getting something back for my taxes, even if I am paying more tax than I am getting back" should not be underestimated.
If New Zealand super was not universal, it would have been steeply reduced, or gone, 2 decades ago.

The highest marginal tax rates are paid by those on the lowest incomes. Then there are regressive taxes such as GST.  At the bottom end high marginal rates really are a disincentive to work. Abatement rates, plus work and transport costs means a welfare recipient that does some work is often worse off. At the other end I do not know of anyone who will turn down an extra million dollars in income becuase they may have to pay 600 thousand in tax.
Certainly didn't stop me from trying to work harder to raise my income, when marginal tax rates were 60%, in the early 80's..


I have no sympathy at all with those on high incomes who complain they use the same services as those on low incomes, but are paying a greater dollar amount of tax.
They are benefiting the most from the society NZ taxpayers and workers have built, and from Government services. That is how they became  wealthier! It is only fair that they pay the most. Chances are,  if they had been born in a country without our education, infrastructure, social and health systems, they would be the one in the cardboard box on the street.

Progressive taxation  is the price of living in a well resourced, pleasant, and cohesive society.

If you don't like it, move, to a tax free paradise, like Somalia!

But first, Please be consistent with your principles, and give back to New Zealanders all the proportion of your wealth that you earned because of our  efforts and support.

UBI (2) Why should we push for a UBI? (Universal basic income).

Why a UBI?

Firstly. To overturn some paradigms:
That a great many people should lead poor and constricted lives, so a very few can be rich.
That ordinary people are disposable economic production units.

The economy, and I use the word in its broadest sense, exists for people, not the other way around.

New Zealanders, apart from a few extremists, generally accept that some of the income/resources available to those in paid work is transferred to those who are too young, old, ill or incapable to undertake paid work and those who undertake work, such as childcare, which is essential to our society.

The debate is about the amount, and how to fund and distribute it.


So. Why should we use a UBI?

A UBI empowers everyone, especially those who are currently marginalised, with the principle, everyone should have enough of societies resources as of right, for, at least, the necessities of life. I would go further, and say that everyone deserves enough, to be a inclusive part of the community.

A UBI acknowledges, and enables a living, for the many people, such as those bringing up children, (Mostly women) who carry out essential, but currently poorly paid or unpaid, services for our society.

A UBI looks after those whose work is displaced by the necessary shift to a more energy efficient and environmentally sustainable economy.
We cannot expect the involved workers, for example, coal miners, to bear the whole costs of the shift.

A redistribution of income to those at the lower end, who have to spend all their income, will be “good for business”, especially local small and medium enterprises (SME’s).

A UBI and initial flat tax rates removes the high marginal rates on low income earners. Encouraging workforce participation, entrepreneurship and progress away from “welfare dependency”..

The simpler tax system possible with a UBI makes compliance easier, especially for SME’s, and avoidance harder.

Redistributing income to those who spend it locally, instead of on Maseratis, Hawaii holidays and imported electronic junk is good for our balance of payments.

It reverses the, economically and socially disastrous, re-distribution of income upwards of the last 3 decades.

Increases the money available for savings and investment locally.

Libertarians, the principled ones, can see a lot to like in giving people choices in how they spend income, rather than giving it to the Government to spend. Less Government involvement in income redistribution and allocation may well “shrink” some parts of Government. We see from the “mincome” experiment http://en.wikipedia.org/wiki/Mincome , that spending on welfare, health care, crime and other effects, of poverty and social dysfunction, will reduce over time.

A UBI allows time out; to study, get well, bring up children, carry out voluntary community work, teach, start a business, avoid burnout, add to community services/wealth.

We already have a UBI, for older people. NZ super.
It has been totally successful in removing poverty amongst the elderly, (less than 3% in poverty).

We can, at least, extend it to children.

Time we “made poverty, history!”

Also published in  The Standard

UBI (1). Memes and Paradigms.

This post is a follow up from.  http://thestandard.org.nz/ubi/


The way human beings process information means that  memes and slogans  are powerful ways of influencing people.
We are all aware of the persistence of memes like “we cannot afford super”, “bludging beneficiaries”,  “poverty is unsolvable”, people will only work if forced” etc……….

Propagandists know that if you repeat a meme or slogan often enough it becomes truth, even in the minds of those who should know better. The extreme right wing know this. Which is why they often just endlessly parrot the same mindless slogans.

More thoughtful people try and counter memes with facts and figures. Trying to persuade with reality.
In fact we  need to counter memes with our own.
“We cannot afford super/welfare”.
With;  We did in the 30’s to the 70’s when New Zealand was supposedly much poorer. Or, “We do very well out of the unpaid contributions of the elderly,  (and mothers,  carers, and all the other unpaid community workers). ”.
“Bludging beneficiaries”.
With;  “Those on welfare are you and me,  given a bit of bad luck or ill health”.
“People  are inherently lazy and need to be forced to work”. (I consider this a piece of projection from the greedy section of the right, who cannot conceive of anyone doing anything without reward).
With;  Most people contribute to society if they can.
“Poverty is unsolvable”.
With;  We solved it for the elderly in New Zealand.  (less than 3% in poverty).

A paradigm shift happens when someone challenges the accepted way of doing things.
When, for example, they ask.  “Why should electric vehicles be the same as fossil fuelled ones?”.

Those growing up after the 80’s will find it hard to imagine the paradigm shift, that was the rise of Neo-liberalism, in the 80’s, in New Zealand. The colossal untested experiment, it really was,  and the huge shift of wealth from the lower and middle classes to the richest of us.

Fairness, inclusiveness, equality, and the right of everyone to a decent life, was basically accepted by the left and right wing in New Zealand.  It wasn’t perfect, of course, but the existence of the ladder to a decent life, for everyone, was a large part of our national goals. Something we were, rightly, proud of.
The great neo-liberal experiment has succeeded in changing our social paradigm to a much more “dog eat dog”,  unequal and mean spirited society. The promised economic gains have only eventuated for a very few.

I don’t want to paint us into a corner and say that a UBI is the only answer.  (Thanks McFlock)  It is not,  it may not even be the right one.  (More on pros and cons next post).  Big changes  without deep thought,  examination, research, discussion and consensus,  is something we should leave to the other side.

But. In exploring ideas like this (Thanks Weka) we are, hopefully, starting a paradigm shift away from Neo-liberal acceptance of meanness and inequity  towards inclusiveness, equity, fairness and the right of all of us to a decent and hopeful life.
Why should we accept poverty in a country which has more than enough resources for everyone?
New Zealand once led the world in social policy. New Zealanders, of all political colours, are proud of our world leading human rights and social welfare initiatives.

Dauphin was the “town without poverty” http://en.wikipedia.org/wiki/Mincome

New Zealand could be,

“The country without poverty” .

Also Published in The Standard

UBI

Thanks to NZ Femme who put up this link.

https://decorrespondent.nl/541/why-we-should-give-free-money-to-everyone/31639050894-e44e2c00
“‘It Can Be Done! Conquering Poverty in the US by 1976’, James Tobin, who would go on to win a Nobel Prize, wrote in 1967. At that time, almost 80% of the American population was in favor of adopting a small basic income. Here is an interesting article about this episode of American history. Nevertheless, Ronald Reagan sneered years later: ‘In the sixties we waged a war on poverty, and poverty won.’
Milestones of civilization are often first considered impossible utopias. Albert Hirschman, one of the great sociologists of the previous century, wrote that utopian dreams are usually rebutted on three grounds: futility (it is impossible), danger (the risks are too big) and perversity (its realization will result in the opposite: a dystopia). Yet Hirschmann also described how, once implemented, ideas previously considered utopian are quickly accepted as normal.”

Encapsulates the empowerment of people inherent in both income security and real democracy.
“Almost 80% of the American population was in favor of adopting a small basic income”.

New Zealand was once considered one of the best places on earth to live.

It could be again …

Also published in The Standard. UBI.

Comparative Advantage?

Kia-ora

Even Ricardo never suggested that Britain give up making wine altogether, or Portugal textiles.

Comparative_advantage 

In fact no country has ever succeeded on exports alone, without a healthy internal economy.

And no country has ever succeeded in benefiting from an export economy without State support of the export sector.

Of course, our pursuit of pure free markets has worked so well? How much has our number of people in poverty increased by, again?

Ha-Joon on free trade.

""Almost all of today’s rich countries used tariff protection and subsidies to develop their industries. Interestingly, Britain and the USA, the two countries that are supposed to have reached the summit of the world economy through their free-market, free-trade policy, are actually the ones that had most aggressively used protection and subsidies.

Contrary to the popular myth, Britain had been an aggressive user, and in certain areas a pioneer, of activist policies intended to promote its industries. Such policies, although limited in scope, date back from the 14^th century (Edward III) and the 15^th century (Henry VII) in relation to woollen manufacturing, the leading industry of the time.  England then was an exporter of raw wool to the Low Countries, and Henry VII for example tried to change this by taxing raw wool exports and poaching skilled workers from the Low Countries.

Particularly between the trade policy reform of its first Prime Minister Robert Walpole in 1721 and its adoption of free trade around 1860, Britain used very dirigiste trade and industrial policies, involving measures very similar to what countries like Japan and Korea later used in order to develop their industries. During this period, it protected its industries a lot more heavily than did France, the supposed dirigiste counterpoint to its free-trade, free-market system. Given this history, argued Friedrich List, the leading German economist of the mid-19^th century, Britain preaching free trade to less advanced countries like Germany and the USA was like someone trying to “kick away the ladder” with which he had climbed to the top.""