Land taxation could fund basic income

Last month readers from 20 countries (listed below) were attracted to the site, many reading Richard Murphy’s review of Colin Hines’ book about Progressive Protectionism but even more focussed on basic income, as John McDonnell announced that Labour has set up a ‘working group’ to investigate universal basic income, with Guy Standing (SOAS) as one of its economic advisers, a co-founder of the Basic Income Earth Network (BIEN).

For some years, America’s Nicholas D Rosen, a Patent Examiner at the Patent and Trademark Office, has advocated land taxation. In a 2012 forum entry he cites a book by economist Joseph Stiglitz, ” The Price of Inequality: How Today’s Divided Society Endangers our Future”.

Though Joseph Stiglitz expresses concern about America becoming less egalitarian and mentions reducing rent-seeking as a solution, Rosen points out that he does not mention the ultimate form of rent-seeking: collecting the ground rents of land.

He continues: “If an increasing share of gross national product is going to the top 1%, it is at least in part because they are the people who own most of the valuable land, and the rents of land are absorbing a larger share of production”.

The revered laws of the market do not apply: Rosen (2008) points out that no one is making more land to keep the price down by competition. 

Rosen’s solution: tax the value of land, and cut taxes on earned income, sales and so on, making the tax system more progressive. He comments: “Unlike most schemes for doing so, it would not cause the productive to quit work, turn their efforts to finding loopholes in the tax code, or take their skills and capital elsewhere”.

Nine years later he has written a letter to the Financial Times’ editor:

Your editorial “Robot tax, odd as it sounds, has some logic” (February 21).

Regarding the possibility of taxing robots to preserve jobs, calls to mind Henry George’s Progress and Poverty. Writing in 1879, George noted that if labour-saving technology reached perfection, labourers would get nothing and capitalists would get nothing; all production would go to the owners of land, as land would still be needed despite automation.

Rather than proposing to tax robots, the great economist advocated a single tax on the value of land.

If we should ever achieve complete automation, this would enable people to be supported out of citizens’ dividends.

Short of complete automation, land value taxation still has important advantages, such as letting people keep what they earn by their own efforts, and putting the burden of taxes on those who enjoy the privilege of holding land that they did nothing to create.

He ends: “It would also help to make housing affordable and prevent the speculative bubbles in land prices that currently contribute to the boom and bust cycle”.

 

 

 

 

A new deal for self-employed workers and small businesses – the ‘precariat’ ?

 

There was an outcry when the Chancellor Philip Hammond unveiled a National Insurance hike for self-employed workers in the Budget – now postponed. Some 4.6 million people, around 15% of the workforce, are now self-employed and data from the Office for National Statistics show that two thirds of new jobs in the UK created in recent years are down to self-employment.  

Self employment, often insecure, low-paid, with no access to holidays, sick pay, maternity and paternity leave

Now sometimes known as ‘the precariat’, the self-employed, often work in service industries such as fast food, for security firms on temporary, even zero-hours contracts, or in the so-called ‘gig economy’. The precariat includes many workers who used to have skilled or semi-skilled but relatively well-paid and secure jobs, under-employed graduates, often working in insecure jobs requiring a much lower education level, migrant workers, and people from ethnic minority communities. As long as they have a contribution record established, they get the standard state retirement pension and older self-employed workers attaining pension age today have, in many cases, some pension accrued as employees for a number of years of their life which the present generation will not have. Benefits the self-employed cannot access relate to holidays, sick pay, maternity and paternity leave.

                                             Via: https://twitter.com/trishgreenhalgh/media 

Earlier this month it was reported that Labour is to convene a summit to develop a new deal for self-employed workers and small businesses to develop Labour’s policy on self-employment. – recognising “that the world of work itself is changing”. John McDonnell, the shadow chancellor, said. “The labour movement has risen to challenges like this in the past. It was born out of the struggle for decent pay and conditions when new technologies were ripping up existing ways of working . . . We need that same spirit and vision again. So I’ll be convening a summit next month of unions, the self-employed, and small businesses to develop Labour’s policy on self-employment”.

Some have been in the forefront, pressing for such action, including Pat Conaty, David Hookes and – for many years – Guy Standing, a leading proponent of Basic Income. Pat writes: “The work of Professor Guy Standing at UCL SOAS and formerly at the ILO for 36 years on the Precariat Charter is superb”. See the links at the foot which include Standing’s 2011 Policy Network article. 

Pat Conaty, Alex Bird and Philip Ross produced the Not Alone report that Co-operatives UK and the Wales Co-operative Centre have published with Unity Trust Bank – the trade union bank. It focusses on the needs of people in self-employment who face low income and social and economic insecurity – the ‘self-employed precariat’.

The executive summary records that there are now more self-employed workers than at any time since modern records began. Some 4.6 million people, around 15% of the workforce, are now self-employed and data from the Office for National Statistics show that two thirds of new jobs in the UK created in recent years are down to self-employment.

Many of the self-employed are among the lowest-paid workers in the country; their potential income is eroded by other costs such as agency fees and additional challenges relate to difficulties in not being paid on time and not having the right to a contract.

The report calls for the ‘cousins of the labour movement’ – co-operatives, trade unions and mutual organisations – to come together and help form cohesive institutions to unite the self-employed precariat, as illustrated in the model of a ‘solidarity economy’ partnership. 

As Conaty says in correspondence: “God knows something has to be done for zero hour workers, growing ranks of exploited self-employed and those working all hours of the week in the gig economy to make ends meet”.  

Read more?

Guy Standing: http://www.policy-network.net/pno_detail.aspx?ID=4004&title=+The+Precariat+%E2%80%93+The+new+dangerous+class

David Hookes: http://www.uk.coop/sites/default/files/uploads/attachments/not_alone_-_trade_union_and_co-operative_solutions_for_self-employed_workers_3.pdf

http://pcwww.liv.ac.uk/~dhookes/IWFA.pdf

Pat Conaty: https://www.opendemocracy.net/uk/pat-conaty/not-alone-what-uk-can-learn-from-union-co-ops

 

 

 

 

Event: launch of post Brexit & Trump report commissioned by Green MEP

The Brexit vote and the election of Trump have been hailed as marking the reversal of the long trend towards increased globalisation.

These changes possibly also mark the end of neoliberalism as the dominant ideology of our times. For opponents of what globalisation and neoliberalism have meant in practice these developments might be seen as welcome. Yet at the same time Brexit and Trump seem highly problematic for anyone concerned with social justice and ecological sustainability.

A new report by Green House authors Victor Anderson and Rupert Read, commissioned by MEP Molly Scott Cato (no stranger to WMNEG) will be launched on Tuesday 28 March from 14.00 – 16.30 at Europe House in central London.

The report considers the impact of the UK’s withdrawal from the EU on trading practices and the opportunity to move to a less globalised and more localised economy. It emphasises that there are many different versions of Brexit, and aims to put a green version firmly on the political agenda.

Note: Panel discussion with Nick Dearden (Global Justice Now) and Helena Norberg-Hodge (Local Futures and International Alliance for Localisation of which Localise West Midlands is a member). Helena’s contribution will be by pre-recorded video due to prior commitments.

 

Register and get full details here. 

2003: MSC contributed to WMNEG project: Sustainable Housing in Small Heath

2007: She also spoke at ‘Adapting to Climate Change’, with Marc Reeves, Editor of the Birmingham Post, at the BMI

NEF’s Laurie MacFarlane lists five Budget omissions

 

In the latest New Economics Foundation mailing there is a useful summary of these five omissions. One question asked by MacFarlane* is “What about the housing crisis?”

The Chancellor failed to mention housing even once, despite the fact that we are in the grip of a serious and escalating housing crisis. One of the things fuelling that crisis is the fact that the government is insisting on selling off public land rather than using it to help deliver more genuinely affordable housing.

At the current rtate, the new homes target on sold-off public land will not be met until 2032, 12 years laer than promised. And the majority of homes being built on the land sold are out of reach for most people — only one in five will be classified as ‘affordable’. Even this figure is optimistic as it uses the government’s own widely criticised definition of affordability. If the government ended the public land fire sale they could use that land to partner with local authorities, small developers and communities themselves to deliver the more affordable homes people need.

According to the latest Nationwide House Price statistics, as most people cannot afford to buy now even with a mortgage, cash buyers such as second homeowners and buy to let landlords are propping up the market. Things are getting worse for people left at the mercy of this failing market. The Chancellor could have put a stop to the fire sale of public land yesterday, but instead he acted as if there were no housing crisis all.

*

*Laurie MacFarlane is an economist whose work focuses on reforming the financial sector and the economy to align with long term interests of society. Before joining NEF he was Head of Analysis at the Water Industry Commission for Scotland, an economic regulator which ensures that water customers receive value for money and led a small team of economists undertaking economic and financial analysis and engaging with industry stakeholders. He also spent one year in the Markets and Economics division at Ofwat, where he worked on establishing the recent water company price determinations. He has worked closely with Common Weal, a progressive Scottish think tank which aims to promote a new vision for economic, social and cultural development in Scotland and has a particular interest in analysing the links between UK housing crisis, the finance system and inequality.

Read more here: http://action.neweconomics.org/people/entry/laurie-macfarlane

 

 

 

Urban rental housing co-op built on Welsh brownfield site

rhyl

West Rhyl Housing Co-operative is Wales’s first urban rental housing co-op, formed by North Wales Housing, West Rhyl Community Land Trust and Wales Co-operative Centre, was funded by the Welsh Government and North Wales Housing and completed in January.

Anwyl, a local construction company, built the £1.4m housing scheme, in Abbey Street at the heart of Rhyl’s west end, overlooking the Gerddi Heulwen green space (above), which opened last year.The Afallon housing co-operative consists of seven new terraced three-bedroom family homes with gardens, built on the small brownfield site. The commercial premises on the site have been renovated, providing a community shop and bakery on the ground floor with four flats above.

afallon-co-opLocal families have moved into these affordable family homes built to a high specification and Code 4 standard of energy efficiency. People who currently live or work in Rhyl or surrounding areas were eligible to become tenants and members of the housing co-op. They are involved in managing their properties and will have a voice on future plans and projects in the area.

Wales is still building social housing and is about to abolish the right to buy. Its homelessness prevention legislation in 2015 is working well; the charity Crisis reports that though the number of households accepted as homeless in the last quarter of 2015 rose by 6% in England to 14,470. Kate Murray of the Guardian adds that in Wales the number fell by some 67% to 405 in the same period.

Those who remember our colleague Pat Conaty, now living in Wales, will be interested to hear that he has had a hand in the venture via his work with community land trusts and the co-operative sector.

Click on this link for information about other new co-operative housing projects in Glasgow, New Hampshire, South Lanarkshire and Rochdale, and about the February government white paper which includes an earlier proposal for a new £60m community housing fund in areas ‘affected by second-home ownership’ to support community-led housing projects and help local groups to deliver affordable housing aimed at first-time buyers.

 

 

 

 

Update on correspondence and new section on website

.

George Morran emailed re the WMCA: wmneg2-stats

“My starting point has to be what future we see for Westminster, Whitehall and the shape of local government. These issues can only be seen in a wider English and UK context.

“The WMCA is a vehicle for Westminster and Local Government as it is.

“If you take my view that strengthening civic society and moving to a more sustainable economy are needed this requires a real downsizing of Westminster and Whitehall, the transfer of power and resources to the English Regions, a much more localised system of local Government and voting reform to give a wider range of interests a stake in new arrangements.

“Focusing on WMCA diverts scarce resources. We have to challenge the status quo and work up a real alternative to the Westminster and big LA conspiracy to maintain their stranglehold over Government, economic development and public service delivery”.

Despite George’s comment it seemed good to open a new WMCA section on the website after receiving a 50+ paper by Richard Hatcher.  There is also a link to the WMCA Mayoral Election slides presented at the last meeting.

To see it, go to https://goodmorningamericaword.wordpress.com and hover over the WMCA headline to find these two entries/links.

Supporters of John McDonnell and/or UBI will be interested to know that random visitors flocked to that article – over 150 people in a few days – from many countries – see left.

And 18 people found the WMCA section only 15 minutes after posting!

 

 

 

 

Rethinking economics 2000-2017

In 2000 the Post-Autistic Economics movement attracted attention and its website now redirects us to the active and well-read Real World Economics Review and, following the 2008 crash, the Post-Crash Economics Society (PCES) was formed.

David Pilling reports that seven undergraduates met on the top floor of Manchester university’s student union, four years ago. Two founding members gave a brief PowerPoint presentation explaining what they thought was wrong with the economics curriculum.

economics-post-crash

The most glaring failure of mainstream economics, the students argued, is its failure to explain, much less foresee, the financial crash of 2008. Joe Earle, founder member of the PCES recalls that the crisis was not mentioned once during his entire first year at Manchester in 2011. His lecturers appeared to believe in a rational economic system that was largely self-correcting, one that would return naturally to a state of equilibrium. He arrived at Manchester, aged 20 after working in several sectors, with a broader perspective than most. The economics he encountered seemed unconcerned with real-world problems, such as inequality or financial stability.

“You are taught a narrow way of thinking about the economy as this set of rules and laws not to be questioned and not to be engaged with,” he says. He would like to “put politics and philosophy and, well, in plain language ethics” back into economics by teaching it as a “contested”, cross-disciplinary subject in which different approaches are tested against real-world scenarios.

Debunking ‘trickle -down’

ha-joon-chang-quote

The analysis of the Post-Crash Economics Society is shared by Ha-Joon Chang, a developmental economist who teaches at Cambridge. He remembers students banging on his door, saying, ‘There’s the biggest financial crisis since 1929 going on around us and our professors teach as if nothing has happened.’ Chang – a prolific author – says he is the “last of the Mohicans”, the last non-mainstream economist to make it on to the Cambridge faculty before the powers-that-be drew down the drawbridge.

coyle-book-coverDiane Coyle, professor of economics at Manchester university, defends the basic methodology of economics. She says there is confusion among critics between microeconomics, the study of the behaviour of individuals and firms, and macroeconomics, the study of whole economies. Macroeconomics, she admits, “is broken”. But microeconomics is both robust and often verifiable with real-world data

“Almost anybody teaching economics accepts that, post-crash, the curriculum needed reforming, though I understand why for students this is all impossibly slow.” Diane Coyle also reminded us in 2011, that the financial crisis is just one of the many economic challenges we face: “More pressing is the instability in our natural environment, as consumption demands by an ever-expanding world population continue to put strain on the earth’s resources”.

Post-Crash Economics has now become Rethinking Economics, a registered charity that links more than 40 student groups pressing for curriculum changes in campuses from Italy to Canada and from China to Brazil.  One member, Neill Lancastle, tweets about the 19th Annual Conference of the Association for Heterodox Economics in July at Dalton Ellis Hall, University of Manchester.

ahe-het-econ-header

Its theme: SUSTAINABLE ECONOMY AND ECONOMICS:

“The shrinking of the polar ice caps suggests a dangerous rise in sea level by 2050. Declining biodiversity and growing sea pollution indicate that change is needed in the dominant narratives about growth and profit. Heterodox economics needs to offer a compelling alternative. We welcome abstracts and stream proposals which theorise such issues, or do empirical work, or both”. More information: https://drive.google.com/file/d/0B6WcIic0m806Q0dGU1RTRi1Eb0U/view

Those who dismiss these initiatives should remember, as Pilling points out, that today’s students are tomorrow’s trained economists, some of whom will be running economies from their desks in government, banks, multilateral institutions and think tanks. He believes that what these students learn about how economies work and how governments can influence outcomes – and will have a profound impact on future policies covering everything from tax and spending to interest rates, minimum wages, greenhouse gas emissions and trade. 

The writer welcomes aspirations to ‘democratise’ economics – but hopes for beneficial change falter because of the lack of reference to ethics or morality in the material read.

 

 

 

John McDonnell announces that Labour has set up a ‘working group’ to investigate universal basic income

john-mcdonnell-smallThe group is working with Guy Standing, one of its economic advisers. Guy is a British professor of Development Studies at the School of Oriental and African Studies (SOAS), University of London, and co-founder of the Basic Income Earth Network (BIEN).

Standing has written widely in the areas of labour economics, labour market policy, unemployment, labour market flexibility, structural adjustment policies and social protection. His recent work has concerned the emerging ‘precariat’ class and the need to move towards unconditional basic income.

During the summer of 2016 Mr McDonnell, who has been the MP for Hayes and Harlington since 1997, suggested he could “win the argument” on basic income within the Labour party. He now intends to publish a report on the idea to encourage discussion on the topic around Europe.

The Shadow Chancellor launched the first of Labour’s regional economic conferences in Liverpool on February 4th– read more here

 jmcd-ne-lectures-video

 

Transforming our Economy’ Conference in Newcastle Saturday 18th March 2017, details TBC

Annual ‘State of the Economy’ Conference in Birmingham Saturday 20th May 2017, details TBC

‘Transforming our Economy’ Conference in Bristol Saturday 8th July 2017, details TBC

‘Transforming our Economy’ Conference in Cardiff Saturday 28th October 2017, details TBC

Speaking about the idea – floated by Benoit Hamon during the socialist primaries of the French presidential elections – Mr McDonnell added:

“Interestingly, [Narendra] Modi’s government has brought forward a report in India as well about the need to develop basic income ideas and again see how they can implement it over a period of time. All of a sudden it’s become… an idea whose time may well have come . . .

“We’re exploring it. We think there are elements of it that we can bring forward as first steps towards a basic income that people can support.

“I was involved in the early campaigns many years ago on the development of child benefit – at that point in time there were all sorts of anxieties about whether you could bring forward a benefit for everybody that wasn’t based upon an assessment of need and we won the argument. I think child benefit is like one of the foundation stones of a future basic income”.

 

 

 

Review of ‘Progressive Protectionism’: a new book by Colin Hines

An article by Richard Murphy, Tax Research UK, has been added to our Papers and Correspondence section

Edited extracts:

These are unusual political times. When I first started writing this blog the risk of fascism was present, but thankfully remote. The rise of the populist far-right was not unimaginable, but in the form it then took was hard to realistically foresee. The UK leaving the EU was quite impossible to predict. And that immigration would rise to the top of the political agenda seemed particularly unlikely. About as unlikely, to be candid, as it was that the FT might seriously discuss the end of global capitalism. But times change. Prevailing opinions do too. And the failure of the body-politic to address the issues arising from the 2008 global financial crash has changed a great deal about the UK. What that means is that we have to think differently.

All of which is a long winded way of saying that a while ago I may have found it difficult to discuss a book on protectionism on this blog, even if it was written by a friend of mine. And now I don’t. Now I think that even if we find ideas uncomfortable and we think that they challenge our long held perceptions then we still have to consider them: changed political sentiments requires that those with progressive inclinations rethink what they have to offer, and why, if they are to continue to shape the fortunes of people in this country and elsewhere in ways that social justice suggest desirable.

colin2-book-coverA new book called Progressive Protectionism by  Colin Hines, who is the convenor of the Green New Deal group, provides some such uncomfortable thinking. I do not agree with all Colin says, and nor do many in the Green New Deal group, and yet what Colin has to say is now both timely and maybe even necessary. . . he argues . . . that the Treaty of Rome that underpins that whole edifice should be amended and replaced by what he calls a Treaty of Home.

Colin is a long time environmentalist and argues that we should replace global capitalism with strong local economies. This is not only green, but he also argues it is the way to tackle many other issues. Capital controls, for example, would let us more effectively tackle tax abuse and so build a more equal and just society. They would also end a focus on speculation that is creating massively harmful inequality in our country, and others. Controls on trade would, Colin argues, support local economies and jobs and massively reduce the enormous carbon cost of much of world trade.

But, and this is where for many the argument will be uncomfortable, this also requires control on migration.

Colin does not argue that anyone should have to leave their country of residence. And nor does he suggest there should be no migration: he is quite explicit about the fact that there will be many reasons why it can and should exist. But equally he argues that economic migration is not a virtue, and even that is troubling for many. Colin has been banned from some left of centre discussion forums for even raising it as a concern.

colin_hines-standingColin carefully documents that our open doors policy for those who train in poorer countries and then work here denudes those countries of the skills they need to provide a better standard of living for those who live in their home countries and is little better than a new form of economic colonialism on occasion. We extract people and their incomes from other countries as surely now as we once extracted the raw materials and products of those countries at an undervalue in the past.

In that way Colin argues that a policy that deliberately fosters the idea of encouraging people to stay where they are, and builds foreign and aid policy around that goal is now not just a priority, but an issue of social justice when data shows that most migrants move the minimum distance possible from their homes to achieve their goals . . .

What he is doing is offering a radical, left of centre, concerned view on the way the world should develop if social justice is to be achieved.

And whilst facing some of the issues Colin raises may be difficult for many, those who are serious about building credible left wing politics that can and will win electoral support should now be willing to recognise that the assumptions on which old edifices have been built do need to be challenged – if only to find out what is really worth retaining and what is worth discarding.

Colin’s book offers a chance to do that. What he is offering is of real value, not least because he focuses on solutions, and they’re in short supply right now.

Richard’s review may also be read in full on his website:

http://www.taxresearch.org.uk/Blog/2017/01/12/progressive-protectionism-a-new-book-by-colin-hines/

 

 

 

A Green perspective: MP Clive Lewis’s position reflects views of many

(Links & bracketed content added)

Natalie Bennett, writing in the FT, expresses disappointment that unnamed Labour “colleagues” of shadow business secretary Clive Lewis have joined the FT’s arch anti-Corbynite Jim Pickard (despite his ‘neutral not hostile’ Twitter profile) in criticising his statement about the privatisation of public services and assets. (FT January 11).

mp-clive-lewisLewis said “public good, private bad”, referring specifically to these sectors. We add a fairer picture than the unpleasant image selected by the FT.

That reflects the views of many millions of Britons who have seen public services handed over to be managed for private profit, an approach built on cutting the quality of services, eating away at the pay and conditions of workers, and shovelling public money into private hands.

As she says: “Across the country, the privatisation of our NHS, with the importation of the failed US healthcare system with for-profit providers, is causing disquiet”.

At risk also, Ms Bennett continues, is “The vital purpose of the Green Investment Bank, to fund the infrastructure we need for an affordable, secure energy future, replaced with asset-stripping”. (Note the parliamentary debate here: https://hansard.parliament.uk/Commons/2017-01-11/debates/C92ACCCC-380F-4277-87FC-D42B2B7B0443/GreenInvestmentBank)

Natalie ends: “We have a mixed economy in which the private sector plays many critical roles, but for-profit businesses have no rightful place in running public services”.

Natalie Bennett is the Prospective Green Party candidate for Sheffield Central, Sheffield, S Yorks