citizen’s wage,
with commentary on the misconstruing of property,
ownership and subsidy

a briefing document

Index
introduction
confusions with ownership
heritage of knowledge and resources
citizen’s wage
the idle poor
taxation
common wealth and the common wealth dividend
a considerable proportion of waste is caused by the wage and dole economy - what to do
useful background reading

summary of the experiments on work reduction for negative income tax, April 1981
      a cautionary tale - incentives change cultures

is citizen’s wage becoming a reality?

introduction

A citizen’s wage, or common wealth dividend (c.w or c.w.d.), is an amount paid out to every member of a society as a matter of right. It is normally discussed in terms of tax neutrality. The c.w.d. is directed to replacing all the array of means-tested, and other, handouts from government. This includes pensions, wage supplements, child or family allowances, and so on. Everybody is then taxed according to the same rules.

Taxes are set at levels that effectively recoup the c.w.d. from the better-off. The c.w.d. is steadily raised to replace the various allowances etc. referred to above, which are then phased out. This removes ‘poverty traps’ and the dependency culture, while greatly simplifying administration. This results in the removal of much unproductive (counter-productive) make-work.

confusions with ownership

I have written in power, ownership and freedom on some of the basics of ownership. I now intend to extend the analysis of ownership in order to remove some other confusions.

Marx, in confusion and resentment, outlined a wholly false pseudo-analysis of the sources of ‘profit’ in response to the perceived inequity/injustice of the control of power and wealth in his society. Arriving at a conclusion that profit was ‘exploitation’ of ‘the workers’ and that ‘them’ were to ‘blame’, he thence embraced ideas of ‘class’ warfare and revolution inherited from Saint-Simon.

While it is clear that ‘the workers’, in the sense of those working directly upon an artefact, impart some of the value produced; in modern society, a very great deal also goes into organising, transporting, publicising and marketing the products from the factory system of mass production. A very great deal of the value of these products is that of accrued knowledge transmitted down the ages through culture. Without Newton and the founders of libraries, without the organisers of factories and those who worked out the production processes, without the thousands of ancestors who worked out how to use materials like metal and rubber; there would be no products for ‘the workers’ to produce and little wealth to spread around, including productive wealth to improve the lives of the majority of working people.

heritage of knowledge and resources

I discussed the logic of power in power, ownership and freedom, and I will not repeat that here. It is clearly necessary for able people to build and run the factories of modern production. However those, who apparently own that capital and the power that accrues to the ‘owners’, heavily rely upon appropriation of the cultural heritage. The manufacturing capital and resultant power is no more ‘all their own doing’ than is the air we breathe or are the elements we access from the earth. Often, this power is inherited by those who currently claim ownership without having made any contribution to that accumulated wealth, and by people with little ability to develop or manage that largesse. Such claims to individual ‘ownership’ of this cultural accumulation are dubious at the minimum. This wealth is an inheritance of the culture of the world at large, and not that of some particular living individuals within that culture.

Such wealth has no natural rightful living owner.

This wealth makes up a considerable proportion of the items valued by present humans. Current production is at least fifty or a hundred times greater than it was one hundred years ago. The quality and efficiency of the products have greatly advanced, and include the means to push back disease and starvation. This inherited common wealth does not ‘belong’ to the government. It does not naturally ‘belong’ to those with signatures on documents.

It is a trust inherited from our ancestors.
It is the general natural human patrimony.

The society at large, the natural inheritors, have a reasonable claim on at least a large proportion of the common wealth. A citizen’s wage is not a ‘redistribution’ of the wealth of natural ‘owners’; it is a reasonable distribution to those who naturally inherited it from the past; in a false sense, a return of misappropriated goods. ‘False’ because I have little reason to believe that those currently with their names on title documents took any deliberate acts to ‘steal’ that wealth.

citizen’s wage

Now, in some degree this is recognised by the clumsy tax and redistribution programmes of modern states. But it is not tolerable to have this wealth taken arbitrarily and redistributed through ‘means tests’ by those assuming the power of control over such goods; nor are the goods theirs to control. As stated, they are the common inheritance. Those administering a citizen’s wage are merely intermediaries, not legitimate power brokers.

A citizen’s wage is a natural right, not some human administered charity or dole

A citizen’s wage is not something to be begged for by mendicants from the largesse of a controlling class.

The change from begging and intrusive means testing represents a considerable difference from the puritanical attitudes of the socialist state, and even from those of the self-righteous, self-anointed ‘owners’ of wealth.

To introduce the citizen’s wage, at a high value suddenly and without thought, may well disrupt work motivation and the current culture to which people are habituated. It should be started at a fairly low level, and steadily phased in until the plethora of ‘allowances’ (pocket money) doled out by the state, with all the associated spies and intrusions, are eventually removed and replaced by the universal unconditional right of the citizen’s wage.

A citizen’s wage will bring a raft of associated advantages to society at large

Now we are entering an age wherever more is produced with ever less labour, to such an extent that those of little skill cannot make a reasonable living in the advanced cultures. This is aggravated by a situation where ever more jobs require ever higher skills, while the numbers of low-skill jobs shrink continuously. I see no reason why this process will not continue until the amount of leisure time available to most people becomes very great indeed. As Iain Banks puts it in his novels on ‘the culture’, “Money is a symptom of poverty”; or as an old joke has it, “Work is the curse of the drinking classes”.

France, where such matters are being handled with more sense that elsewhere, have now introduced a 35-hour week and are beginning to discuss a citizen’s wage [2003]. In my view, modern societies are reaching the point where it will not be possible to function without such a wage.

It is essential to educate to the greatest possible degree, in order that an advanced civilisation can function and move forward (see franchise by examination, education and intelligence); but education is also necessary in order that people become not bored or destructive. There remains vast work around the world, if we are to improve the lot of the poor and to develop an advanced civilisation where low technology methods do not destroy and poison the planet. The West is in an advantageous position to train and educate the millions, in such a manner that they will come to know how to apply the best and least damaging, current technology.

See also confusing politics, theories and manipulation - Douglas and Keynes.

the idle poor

However, in Western societies, a continually growing group of people are not able to command sufficient return from their work to sustain a minimal standard of living, unless they go begging to the governments for handouts. Such people are also placed in a position where large corporations can gouge their wages, because there is a considerable surplus of people with insufficient skills to fill a steadily lessening number of low-skill positions. Both the demeaning demands of socialistic governments, and the puritans of  the right, must adapt to modern conditions, not continue with practices that grew from a far more backward and poverty-stricken era.

Much of the reason for low wages is that market competition in the presence of a growing over-supply of lower skilled workers will not allow corporations to pay a reasonable living wage. The competition among the weak for limited wages is also unreasonable because of the fear and health-threatening insecurity that is associated with such stress. A citizen’s wage can be set to allow the markets to clear, while those on a small citizen’s wage will have the free choices and independence to take jobs only if they wish to increase their basic standard of living, thus removing the unreasonable power and bullying by the more fortunate and the more able.

taxation

Some have suggested that a citizen’s wage should be funded from a very large inheritance tax, but this is to misunderstand basic economics and the nature of tax.

All tax is collected from current production

It does not matter a fig where a tax is applied, it is always a tax on current transactions or production. There is no special merit in an inheritance tax, and much difficulty in the application or collection of such a tax. The citizen’s wage would primarily be spent on goods here and now (or saved/invested). It would not be spent on deals concerning the great concentrations of wealth. It would be spent on the production from the factories, or on services, or go towards accommodation (for instance, on land).

A large amount of intrusive modern government is devoted to deciding just to whom they award a mess of ‘allowances’ and ‘wage supplements’, ‘pensions’ etc. All this can be steadily and systematically removed with a citizen’s wage, and the great superstructure of government administrators released instead to do useful work. Much everyday government intrusion would no longer be ‘necessary’.

Citizens would be considerably more free to choose their activities and contributions. They could in due course live frugally on the citizen’s, while writing their masterpiece; or learn to play a banjo in the attic. If they wanted to move into better accommodation, purchase a new music player, eat more luxuriously or visit the cinema regularly, they could select the work and hours necessary, while not constrained to accept wages below a level they considered acceptable. So, there would be no need for minimum wage laws either.

common wealth and the common wealth dividend

Some dislike the term ‘citizen’s wage’ because it is not a wage for any effort or work. It is a right allowed to all citizens.

Some claim that any such wage must be taken from the work of others but, in fact, a very great deal of the wealth available to modern society does not stem directly from the hand and head work of those performing the tasks. It comes from the inventions and efforts of long dead ancestors, and from the fact of the earth we find ourselves upon and the air we breathe. Quite apart, this argument fails on the inconsistency that very large amounts are already distributed by taxation.

It is quite reasonable to regard any fund as a royalty upon those efforts of past generations, distributed as a dividend to those now living. What Marx was pleased to call “Mister Moneybags” did not somehow gain a moral right to the results of the inventions of Newton, or to possession of the land. That Moneybags builds a great industrial empire from his (or her) creativity and energy is admirable and useful to us all. But his children have no obvious ‘right’ to the power that accrues to large accumulations of wealth, once the founder and builder moves on to the great factory in the sky.

However, breaking up such organisations on the demise of Moneybags and dispersing the organisation for whatever it will fetch is a bit harsh on the rest of the ‘family’, especially if some of them have spent years training under the originator to run the organisation effectively. A tax to repay the windfall extending over say 20 years may mitigate such complications.

The part of the productive machinery that is not down to the creativity of Mr. Moneybags can easily be considered common wealth, and hence our citizen’s wage can as easily be called the common wealth without even changing the initials! Or else, call it the common wealth dividend – c.w.d. In due course, it is probable that the c.w.d. would become converted into actual share or loan certificates. With these certificates, future Moneybags or co-operatives could assemble the large concentrations of wealth required for productive corporations.

The ‘right-wing’ puritanical classes [3] use different excuses from the ‘left-wing’ socialist puritans to keep the poor enslaved (always for the ‘moral good’of the poor, of course). The‘right-wing’ puritans wish to ensure that government ‘charity’ is not ‘misdirected’ and that the poor do not lose the motivation to work! It is strange that the puritans do not imagine that their own wealth has no such deleterious effect on their moral standing and motivation!

An examination of a large proportion of those who have contributed to the advance of civilisation shows that they have indeed come from the ‘idle’ moneyed classes. The leisure has, in fact, given them time to think and to develop human knowledge. I see not the slightest reason why greater freedom to choose among all citizens should not also greatly increase the numbers who choose to benefit society and study with that objective in mind. Increasing leisure, and spreading that leisure around throughout society, is a high public good. Most of what is necessary is reasonable access to adequate education when necessary.

a considerable proportion of waste is caused by the wage and dole economy - what to do

The drive to ‘get a job’ and to ‘stay off the dole’ pushes people to waste time, energy and resources producing rubbish. Then they seek ever bigger peacock feathers as they strive for meaningless status with 10,000 sq ft houses and SUVs.

The normal person does not have to strain to ‘be different’ in among a herd of conformist sheep. Individuality comes along naturally by simply doing whatever you want to. In among a bunch of sheep, ‘individuality’ amounts to an ear-ring, a shorter skirt, or a pierced belly button.

The richest man in the world lives in the same house he purchased in 1950. Children are now being taught that the bigger the box, the more important the scraps of plastic inside.

Only with a citizen’s wage will people be able to decide whether their time is of more value than pieces of plastic crap.

You do not need a full-time job to feed, clothe and house yourself, but to work for just enough to feed, clothe and house yourself requires a full-time job. After all, you cannot just go and do a bit of casual work when you wish or the mood takes you. You must register with the government and satisfy their spies.

To pay the dole requires a vast army of means testers, tax collectors and other useless time-wasting parasites. Earn enough for the full-time job and the parasites are on your case. Don’t earn at all, and you must go begging to the parasites.

With a citizen’s wage, vast amounts of this time-wasting, followed by inevitable resource wasting, can be removed.

With a citizen’s wage, there is nothing to stop you earning more, and there is no need for the begging bowl.

With a citizen’s wage, most of the parasites become redundant, so you do not need to work to keep them either.

And there is no need for Gordon Brown the Clown’s ever expanding, polluting, useless make-work.

useful background reading

In our hands by Charles Murray

This book studies a worked-out form of citizen’s wage based on giving every American $10,000 a year for life from the age of twenty-one.

The book is fairly short at a little over a hundred pages, with another hundred pages of appendices and other notes. It has a lot of detailed work., but at points, in one or two of the short chapters, verges on ‘idealism’ and the rose-coloureds’ puritanism.

“America’s population is wealthier than any in history. Every year, the American government redistributes more than a trillion dollars of that wealth to provide for retirement, health care, and the alleviation of poverty. We still have millions of people without comfortable retirements, without adequate health care, and living in poverty. Only a government can spend so much money so ineffectually. The solution is to give the money to the people.” [p.1]

Charles Murray also discusses setting aside $3,000 of the $10,000 citizen’s wage for health care coverage [chapter 4, pp.37-51] and implications of such a plan.

As you will see, John McCain during his presidential bid was also moving along these lines to improve health care coverage for the poor.

McCain, 6 Oct. 2008
“At issue is McCain's proposal to offer a $2,500 tax credit for individuals and $5,000 for families to help them afford private health insurance. That credit would be offset, however, because workers would no longer to be able to exclude from their income taxes the value of the insurance coverage paid by their employer.”

There has been some discussion on whether a citizen’s wage should apply to ‘children’. Charles Murray thinks in terms of an age of majority of twenty-one. Unfortunately, any allowance that goes unconditionally to ‘children’ would motivate the feckless and/or incompetent to select breeding as a career choice. [See also Darwin, economics, citizen’s wage and population] To select an age in the mid to late teens may well motivate the rebellious to leave home and/or education in order to escape from discipline, but also possibly from dependency. [See also Franchise by examination, education and intelligence.] So this decision requires a cautious and experimental approach.

“The experimental NIT [negative income tax] produced disappointing results. The work disincentives were substantial and ominously largest among the youngest recipients. Marital breakup was higher among participants than among the control group in most of the sites. No headlines announced these results, but the NIT quietly disappeared from the policy debate.” [p. 8, In our hands]

For extended details, see chapter 11 of Losing Ground: American Social Policy 1950-1980 by Charles Murray, Basic Books, 1984. This is one of the seminal books of the twentieth century. The central message is that welfare causes poverty and social dysfunction. [This book by Murray is reviewed at linked page.]

Similar discussions were afoot in the late 1930s and even earlier. You can trace some of them in an utopian form at Utopianists : Heinlein, Wells, Morris.

Another major fear is that irresponsible, left-wing governments will offer irrational increases in attempts to buy votes.

summary of the experiments on work reduction for negative income tax, April 1981

Robert A. Moffitt: The negative income tax: would it discourage work?

"The sample sizes for the experiments were: 1,300 in New Jersey and Pennsylvania ; 800 in the rural tests ; 4,800 in Seattle-Denver ; and 1,800 in Gary."

The large test in Seattle-Denver is often referred to as SIME/DIME [Income maintenance Experiment]. The average marginal rate was 50%, and more stringent than Richard Nixon’s proposals, from the document:

“One interesting finding that has emerged from the experiments relates to the form which work reduction has taken for men. There are strong indications that reductions in total hours of work most often reflect reductions in likelihood of being employed at all, rather than marginal reductions in the hours of those who remain employed . That is, the reduction in total work hours shows up as a decline in the employment rate of the experimental sample relative to that of the control sample.

“The policy implications of this finding are ambiguous. On the one hand, withdrawal from the labor force is a major change in work effort, one that society is not likely to accept . On the other hand, this also implies that the total reduction in work hours stems from a rather large response by a small number of men. Therefore, the negative income tax does not appear to have a pervasive effect on the work ethic of the low-income male population ; in fact most of the men do not respond at all .”

That is, they keep striving (remember this was 1981, we have had another thirty years of the dole). The primary objective of such schemes is, of course, to reduce poverty.

In our hands by Charles Murray American Enterprise Institute [AEI Press 2006, ISBN-10: 0844742236 / ISBN-13: 978-0844742236 $13.60 [amazon.com] {advert} £9.45 [amazon.co.uk] {advert}

a cautionary tale - incentives change cultures

An excellent summary of the potential disincentives of socialist social engineering - meddling - can be found in Scandinavian unexceptionalism. The essential thesis is that the Scandinavian societies were blessed with strong work ethics and social capital. It took a long time for government programmes to undermine those advantages, but over the long run , public ethics have slipped to such an extent that governments are now being driven to moderate their 'generous' hand-out policies.

"Nordic nations have long relied on a culture that generates economic success and positive social norms. Historical factors can explain why unusually high levels of trust, a strong work ethic and an emphasis on individual responsibility developed in these cold lands , inhabited for long by independent farmers not generally subject to feudal systems. It is not the welfare state that created high levels of social capital: the relationship is the other way round. In the early days, the unique culture of success in the Nordic countries meant that high taxes and welfare benefits could be introduced with limited avoidance and shirking. However, this changed over time as norms adjusted to the new economic circumstances. It takes time for deep-rooted social behaviour to adapt. As has been shown, Nordic citizens now have unusually high levels of sickness absence (despite being healthy societies), high youth unemployment and a poor record for integrating migrants into the labour force. In response to these trends, policies have been introduced to try to strengthen incentives to work, but further reforms are needed."[pp.116-117]

(See also social capital, social welfare and the tax merry-go-round.)

	Scandinavian Unexceptionalism: Culture, Markets and the Failure of Third-Way Socialism (Readings in Political Economy) by Nima Sanandaji
	Institute of Economic Affairs, 2015, pbk, 120 pp.+ references ISBN-10: 025536704X ISBN-13: 978-0255367042 [amazon.com £10.00 [amazon.co.uk] {advert}

The Politics of a Guaranteed Income: The Nixon Administration and the Family Assistance Plan by Daniel Patrick Moynihan

“What went wrong? Most of Moynihan's eloquent, polemical book is devoted to an exhaustively researched attack on the liberal opposition. To be sure, he does not spare the right (and is impressively blunt in recounting Nixon's own self-defeating partisanship in 1970--the year of Carswell, Cambodia, Scammon and Wattenberg). But the intriguing question--for the reader as for Moynihan--is why the left helped kill the guaranteed income.”
See also speech by Richard Nixon on guaranteed income - a citizen's wage.

is citizen's wage becoming a reality?

December 2016

Citizen's income pilot, Canada

This looks like a very small scheme, with only hazy details at present .

"The Canadian province of Ontario is pushing forward with plans for a trial run of universal basic income, making it the first government in North America in decades to test out a policy touted as a panacea to poverty, bloated bureaucracy and the rise of precarious work."
—
"...basic income, once championed by Martin Luther King Jr and Milton Friedman...basic income projects are in the pipeline in Finland, the Netherlands and Kenya..."
—
"...found was promising. Hospitalisations, accidents, injuries and mental health issues had all declined when the stipend were flowing into the community..." Regarding a, earler Manitoba ending in 1977.

6 June 2016 : Switzerland

A referendum in Switzerland votes "No" to a citizens' wage in the form it was proposed.

The Swiss government, when setting up the parameters for the proposed citizens' wage, may as well have deliberately undermined the proposal by setting the citizen's wage far too high. It had been set at 2,500 Swiss francs/month [approx. £1,755 / 2,270€ / $2,555]. A sane citizen's wage should start between £200-400 maximum in order to assess how it beds in, and did not become a disincentive to work (see also Murray; A cautionary tale).

"At the end of last month, Y Combinator announced an experiment with basic income in Oakland — saying it would pay basic income to a group of people over a five-year period and study the effects. There are also experiments planned in Europe, in the Netherlands and Finland. The group behind the Swiss proposal had suggested providing adults a UBI [universal basic income] of 2,500 Swiss francs a month — well below the mean income of the wealthy nation — plus 625 CHF for children." [Quoted from techcrunch.com]

January 2016 : France

France to consider researching a citizens' income

"Members of France's National Assembly are to vote on the principle of a so-called "universal basic income" for the first time. Former minister Delphine Batho, an MP from Francois Hollande's ruling Socialist Party, has tabled an amendment asking the government to launch a feasibility study of the policy."

December 2015 : Netherlands

Although a start date has still to be set, the city of Utrecht is planning a trial of providing benefits claimants with a non-repayable income, even if they also take on some work. The trial is being organised by the City council and Utrecht University, with five groups including a control group. Several other municipalities have been invited to participate. This similar to the experimental scheme of Nixon, as outlined above, and in detail at Richard Nixon's speech on a guaranteed income.

December 2015 : Finland

"Abolish the entire welfare system in its totality and just give every citizen just enough to scrape by each month. Why not? We're a rich country, we can do this. After someone else has proven that it works of course."

"This is a basic income. It is not a living wage, it doesn't even reach the full year full time minimum wage. But you can, just about, in all the countries mentioned and with the sums for those countries, just about get by.

"From the right it gets rid of the thing we worry most about welfare: the immense tax and benefit withdrawal rate that makes poor people not desire (because they are rational in the face of 60 and 70% tax rates) to increase their incomes. And from the left it actually increases workers' bargaining power without, of course, needing those potentially self-interested unions standing in the middle. If you can live, just, without working, then the boss' power over you is vastly reduced. Another way of putting this is that reservation wages rise–the amount you have to be offered to go to work rises." [Quoted from forbes.com]

Late October 2015 : citizen's wage now receiving increased attention in the UK
Both of the following linked papers are a bit thin.

• The Citizen's Income Trust have published Citizen's Income: A brief introduction
  This .pdf includes some proposed numbers. The paper is a bit 'idealistic'.
  The Citizen's Income Trust are 'advisors' to the Green Party, and have quite a substantial resource at their web site.
  
  
• The Adam Smith Institute is also now promoting form of citizen's wage.
  The link is a rather chatty page reviewing some of the more recent psychological studies on the credible moans from the 'poverty' advocate groups.

Both papers have an awesome confidence that their schemes will work with no unintended consequences. Any reader is strongly advised to read the Scandinavian review quoted above, and to familiarise themselves with the work of Charles Murray.

August 2015 : 80% of Finns want a citizen's wage

June 2015 : Utrecht to experiment with universal basic income

October 2013 : Switzerland to vote in 2016 on 2,500 Franc basic monthly income.

October 2015: The Swiss parliament voted down a guaranteed basic income, but this does not stop the referendum from being held in 2016.
Setting the monthly incomeso high, at the equivalent of £700 a month is a way to guarantee the failure of this proposal.

 

2013 : All the indications are that the Cameron administration in the UK is now preparing the ground for rectifying the problem in the UK.
Germany also appears to be moving in this direction.

End notes

1. There is also a version at Ecclesiastes 5:15
   As he came forth from his mother's womb, naked shall he go again as he came, and shall take nothing for his labor, which he may carry away in his hand.
   
   Then Job arose, and rent his mantle, and shaved his head, and fell upon the ground, and worshipped,
   And he said, “Naked came I out of my mother's womb, and naked shall I return thither: the Lord gave, and the Lord hath taken away; blessed be the name of the Lord.”
   Bible, Job (ch. I, v. 20-21)
   
   We brought nothing into the world, and we take nothing out. The Lord gave, and the Lord has taken away: blessed be the name of the Lord.
   1 Timothy 6: 7
   Or in another version:
   Paul wrote to Timothy: "Godliness with contentment is great gain. For we brought nothing into the world, and we can take nothing out of it. But if we have food and clothing, we will be content with that"
   1 Timothy 6: 6-8
   For the love of money is the root of all evils
   1 Timothy 6: 10
   
   
2. Associated with current state allowances is a national ‘health’ service. This also has some negative effects - it becomes a tax consumer instead of a tax producer.
   
   Sane people are looking at a different model that is presently run by the likes of Singapore and Chile. Here health insurance is divided into two sections:
   
   1. A saving account which pays for incidental health costs. You own this account and you can hand it on to your descendants.
   2. A catastrophic insurance, which pays if you get a bad cancer, or get crippled in an accident.
      
      
3. Because those whom I am discussing here impose their puritanism upon others through mechanisms such as church and state, rather than merely practicing their vices in isolation, they are also obviously authoritarians. For more detail see socialist religions.

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