Economic Democracy - Reform Agendas - Social Credit - National Dividend

National Dividend

Cook also proposed a national dividend, sometimes known as a Basic Income Guarantee or "BIG", was advocated in the United States by economists, politicians and reformers, including Thomas Paine, Milton Friedman, Dr. Martin Luther King Jr., and John Kenneth Galbraith. Friedman originally proposed a negative income tax to support this system, but then opposed the bill because its revised implementation would have merely supplemented rather than replacing existing tax-structures. Cook suggested that racism might have been at the root of BIG's demise in the late 1960s, as "many beneficiaries of the program would have been African-American". In 2006, State Representative Bob Filner (D-CA) as H.R. 5257, proposed a basic income guarantee. According to the U.S. Basic Income Guarantee Network:

"The basic income guarantee (BIG) is a government insured guarantee that no citizen's income will fall below some minimal level for any reason. All citizens would receive a BIG without means test or work requirement. BIG is an efficient and effective solution to poverty that preserves individual autonomy and work incentives while simplifying government social policy. Some researchers estimate that a small BIG, sufficient to cut the poverty rate in half could be financed without an increase in taxes by redirecting funds from spending programs and tax deductions aimed at maintaining incomes."

Cook suggests existing U.S. (GDP) could support such a system. GDP of $12.98-trillion minus $9.21-trillion in purchasing power ("wages") equals a difference of $3.77-trillion. Distributed equally amongst United States citizens, Cook estimates a "National Dividend" of approximately $12,600 could be provided annually to every U.S. citizen. A primary function of monetary reform is to "provide sufficient individual income"—not merely "create jobs"—for American workers displaced by technological advancement, outsourcing, and other economic influences beyond their control. Funding of the National Dividend would be drawn from a national credit account, which would include all factors that generate production costs and create new capital assets. The national credit account could also be used for price subsidies to discourage manufacturers from cutting costs by shipping jobs overseas. Rather than Federal Reserve Notes, circulated only through debt payable to a bank with interest, the National Dividend would be "real money", based on the productive capacity of the economy expressed as GDP. Cook says, "it's important to realize that Social Credit is not a socialist system. Rather it is 'democratic capitalism,' in contrast to the 'finance capitalism' that has become so damaging". Rooted in the ideals of Social Credit, proposed by Douglas in the 1920s, Cook explains:

"The difference between a National Dividend and a basic income guarantee is that the dividend is tied to production and consumption data and may vary from year to year. During years that the dividend falls below a designated threshold, the balance of a basic income guarantee could be provided from tax revenues. But in a highly automated economy such as that of the U.S., the National Dividend would normally be sufficient".

In his book, Capitalism 3.0, Peter Barnes likens a "National Dividend" to the game of Monopoly, where all players start with a fair distribution of financial opportunity to succeed, and try to privatize as much as they can as they move around "the commons". Distinguishing the board game from real-world business, Barnes claims that "the top 5 percent of the population owns more property than the remaining 95 percent", providing the smaller minority with an unfair advantage of approximately "$5-trillion" annually, at the beginning of the game. Contrasting "redistribution" of income (or property) with "predistribution", Barnes argues for "propertizing" (without corporately privatizing) "the commons" to spread ownership universally, without taking wealth from some and giving it to others. His suggested mechanism to this end is the establishment of a "Commons Sector", ensuring payment from the Corporate Sector for "the commons" they utilize, and equitably distributing the proceeds for the benefit of contemporary and future generations of society.

One real-world example of such reform is in the U.S. State of Alaska, where each citizen receives an annual share of the part of the state's oil revenues via the "Alaska Permanent Fund Dividend". Barnes suggests this model could extend to other states and nations because "we jointly own many valuable assets". As corporate pollution of common assets increased, the permits for such pollution would become more scarce, driving prices for those permits up. "Less pollution would equal more revenue", and over time, "trillions of dollars could flow into an American Permanent Fund".

However, none of these proposals aspire to the mandates recommended by Dr. Martin Luther King Jr.:

Two conditions are indispensable if we are to ensure that the guaranteed income operates as a consistently progressive measure. First, it must be pegged to the median income of society, not the lowest levels of income. To guarantee an income at the floor would simply perpetuate welfare standards and freeze into the society poverty conditions. Second, the guaranteed income must be dynamic; it must automatically increase as the total social income grows. Were it permitted to remain static under growth conditions, the recipients would suffer a relative decline. If periodic reviews disclose that the whole national income has risen, then the guaranteed income would have to be adjusted upward by the same percentage. Without these safeguards a creeping retrogression would occur, nullifying the gains of security and stability.

Barnes deem any such reform unlikely. Thomas Paine originally recommended a National Dividend to compensate for the brutality of British Enclosures, but his idea was never adopted.

Read more about this topic:  Economic Democracy, Reform Agendas, Social Credit

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