Thursday, May 19, 2011

Economic Transition Income

Arnsperger's latest blog post talks about a economic transitional income (ETI) that supports alternative, sustainable lifestyles. And this income would be a government welfare program for those that chose this more frugal, less consumptive way of life. This transitional income would be reduced over time as more sustainable economies gained ground and generated their own income, with the result being a transition into this as the main economy with the gradual phase out of what he calls industrial-financial-capitalism. He not only envisions what we're moving toward but how to get get there practically. I hope I'm still alive to see and participate in this ETI and be part of creating this new political-economy. (Actually I am now is small ways like promoting these ideas and already choosing a less consumptive lifestyle, but I could do more with societal support and assistance.) And note below its “spiritual” orientation. From section 4:4:

One central addition to the set of renewed framework conditions would be a deep overhaul of the current income-redistribution logic of our social democracies.

The most pressing issue, therefore, is what shape the transition toward a frugal economy will take.

But the transition to a post-fossil fuel age is not only a matter of external adjustments, but also of an altered worldview, a new conception of the good life. New macro-systemic conditions and an evolution in worldview actually go hand in hand and are a necessary condition for changes in personal behaviors and in spiritual as well as cognitive modifications.

Many of us are still under the spell of technophilia, wanting to believe that some miracle technology will make growth possible and postpone the need for change. There is also a resistance to anything seen as "going backwards," and a reluctance to embrace what is viewed as marginality or impracticability. The sustainable niche, however, is not the end of work, nor is it the realm of idle hippies, as the mainstream media often like to portray it. It will mean more work and less consumption, but also a shared commitment to neighbors, with more regard for the well-being of all, rather than trying to stand out from others in a large, impersonal economy.

The challenge is to provide assistance to those interested in the sustainable economy, while simultaneously contributing to the primary need of keeping the mainstream economy on track. We will focus here on one possible such scheme, a welfare reform measure known as the Family Assistance Program (FAP), which was first proposed by U.S. President Richard Nixon in the 1970s. It provided an incentive for recipients to find work by allowing them to keep a portion of the FAP payment as their incomes rose. By the time a modest income base was reached the FAP payment would have declined to zero. Because the FAP would be administered through the Internal Revenue Service, it was often referred to as a "negative income tax." That's how I will conceive it from now on, too, using the acronym ETI: Economic Transition Income. The ETI would not only help those wishing to move in sustainable directions, but would also reduce the stigma of welfare for the poor. This stigma would be reduced even further if ETI payments were used by educated young people -- and, more generally, by those who gave up jobs in the mainstream economy -- to build sustainable ways of life. Creative people could be among the first to use ETI payments as they explore new avenues of living sustainably, but so could those who wanted to try traditional ways that are difficult to uphold now, especially in intentional communities formed around shared values.

The difficulties of getting started in the sustainable economy are reduced with more experiences and more people joining it, the ETI payments will decrease automatically, if for no other reason than more people are receiving them, which also means that fewer people are working in the mainstream economy to generate the tax revenues to pay them. As time passes, the sustainable economy will be able to continue more on its own, with lower ETI payments and then none at all.

All such mechanisms would be halted as sustainability replaced growth as the goal. Public budgets could be balanced as the building of sustainable ways of life gets under way. The main motivation in all of this will be to create livelihoods that have ongoing value, as opposed to a job that often provides little beyond a paycheck. A key to economic survival will be to learn how to get by with a lower real income.

The initial trigger for a move toward the "frugality frontier"...would be a new cultural model. It takes a highly motivated and creative person or family to undertake the risk of developing one's work while getting by with less and learning how to become more self-sufficient.

An ETI is not a basic income. It isn't given "for free" to everyone, whether rich or poor, on top of whatever income they are already earning. The State only pays the gap between what one is earning and the guaranteed income level.

Clearly, without some sort of guaranteed income, many citizens today who would like to make the transition to a frugal life will be afraid to do so, because they might lose most, or too much, of the (direct and indirect) income support currently associated with participating in the capitalist social democracy. A guaranteed-income scheme is a crucial centerpiece of any genuine equal-opportunity policy that includes the chance to act on one's "alternative" choice.

1 comment:

  1. Being enmeshed in "business" I am constantly challenged by the abusive work load under the euphemism of "productivity." If one even challenges the notion by correctly naming it as labor abuse one has a "negative attitude," they must be lazy and are therefore expendable. All of course motivated by the bottom line, generating profit for the stockholders in a never-ending race to ever-accelerating growth. There is absolutely no notion that this growth cycle is unsustainable, not only in terms of the devastating costs to labor and environment but in the very economy itself.

    Having said that, while I'd love to see something like an ETI government subsidy to those that chose a more frugal lifestyle I don't know how in hell this idea is going to fly with business-controlled government. They of course have no problem extending the subsidies for oil companies in the US budget under the rationale it motivates further exploration for new sources, and provided incentives for exploring alternative energy. But they have so much profit, record-breaking profits in the last year alone, that such subsidies are a cruel joke to where that money should now go, to those with real need.

    So it's not like the idea of government subsidies is a new or foreign idea; we've had corporate welfare since forever. Perhaps its time to reinvest that capital in a sustainable economy? What Arnsperger is proposing is not a lot of money, at least at the individual level. And it is certainly not a living wage as a handout. As he said, it is to "fill in the gap" of an existing income to perhaps bring one's total income up to something resembling a living wage. He hasn't said as yet what constitutes said living wage, but it is certainly more than the existing US minimum wage.

    The typical minimum wages (or slightly higher) offered by existing democratic workplaces, like food coops, are just not living wages to me or I'd have giving up my relatively high-paying insurance job and worked there long ago. It's unfortunate to be the case, but such alternative economic models are still too young and not financially feasible enough to offer such wages and still make their very tight budgets. What Arnsperger proposes would fill in that income gap for people like me, giving me a bit of a subsidy on top of that minimum wage so that I can pay for things that are the result of the aging process, like healthcare, which costs only increase exponentially the more one travels down that road.* It's a wonderful idea and would give me that incentive to take the leap into the democratic workplace. Now the big problem is getting the government to go for it, since they are at the mercy of their corporate masters that want no part of a democratic economy.

    *Yes, one can get health insurance as a benefit of working even for a coop, but such insurance has high deductibles and insurance companies (I know) find any way possible to not allow certain necessary services and charge as high a co-pay as possible,, etc. They are after all "in business" to make a profit, not actually provide healthcare. That the US lags far behind every other civilized 1st-world country in not providing a feasible "Medicare for all" plan is again the result of the powerful insurance business lobby that refuses to give up their outrageous profits so that people as a whole can have a healthy life. And now the Republican Ryan budget plan wants to gut even Medicare...


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