Three Policy Pillars of Economics for Planet and People

One of the positive things to come out of the pandemic is some radical questioning of our current economic system. Fundamental flaws have been exposed in terms of what is valued and how money is used. In the Why Work book I identified three main pillars in terms of policy that would set us on a course for a more sustainable economics: Eco-tax reform, Basic Citizen’s Income and Redistribution of Work.

Eco-tax Reform

At present it is more economically efficient for a producer to intensify energy use and cut back on human labour, due to the relative expense of the two. The present taxation system encourages the use of scarce natural resources and discourages the use of abundant human labour. Eco-tax reform aims to reverse that situation. It involves:

  • the phasing out of taxes on incomes, profits and value added;
  • taxing unsustainable energy at source;
  • taxing the unimproved site value of land;
  • taxing the use of other common resources (e.g. oceans).

Basic Citizen’s Income

The Citizen’s Income (also known as a Basic Income) is, in its purist form, an income, sufficient to meet basic needs, paid unconditionally to all individuals, independent of all other income and without any requirement to work.

The ideal Citizen’s Income would be unconditional, permanent and cumulative. In more detail, it would be:

  • tax-free income paid by the state to every man, woman and child as a right of citizenship;
  • unaffected by other income, wealth, work, gender or marital status;
  • age-related (higher for adults than children, and higher for the elderly than those of “working age”);
  • a replacement for all existing benefits and pensions, but would include additional supplements for people with disabilities and for housing for low-income families.

Redistribution of Work

Bertrand Russell illustrated clearly the ridiculous logic of the present system:

Suppose that, at a given moment, a certain number of people are engaged in the manufacture of pins. They make as many pins as the world needs, working (say) eight hours a day. Someone makes an invention by which the same number of men can make twice as many pins as before. But the world does not need twice as many pins: pins are already so cheap that hardly any more will be bought at a lower price. In a sensible world, everybody concerned in the manufacture of pins would take to working four hours instead of eight, and everything else would go on as before. But in the actual world this would be thought demoralizing. The men still work eight hours, there are too many pins, some employers go bankrupt, and half the men previously concerned in making pins are thrown out of work. … Half the men are idle while half are still overworked. In this way, it is insured that the unavoidable leisure shall cause misery all round instead of being a source of universal happiness. Can anything more insane be imagined?

Sharing out the paid work that is available more widely would appear to be the more logical solution. A number of different methods could be stimulated to achieve this. They include:

  • job-sharing;
  • shorter working week/year;
  • overtime restrictions;
  • longer holidays;
  • more part-time work;
  • V-time (trading time for income in employee/employer negotiation);
  • flexitime (employee fixes start and finish times);
  • sabbaticals;
  • mid-career training;
  • opportunities for earlier retirement.

For more on each of these areas see the Why Work book.

See my other post of the creation of a parallel economy focusing on what we can all do at the community level (as opposed to policy proposals like the above).

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