Interesting article.
Paying a basic income with quantitative easing (QE) based on the difference between growth in GDP and (lack of) growth in wages. I think this has the best chance to reboot the economy in the mid- to long term. All the other measures are just quick and dirty patches not addressing the root cause from an economic perspective.
I like the article as it is pointing out what actually went wrong with the economy and proposes the solution rather than playing the blame game.
About the crisis of 2007:
How has this come about? The popular answer trotted out as the daily news mantra that governments have been reckless, bankers have been greedy, and consumers have been overspending, is too simplistic. The problem has deeper roots and causes, and will continue unabated unless these are better understood and addressed by policy.
Current talk is entirely monetarist. Economics itself is in crisis. It is reduced to some sort of meta-accountancy. Keynes is derided by people who have never read him. Leading economics media commentators often have no formal economics training or degree. Economics degrees themselves have often been restyled as ‘economics, finance and business’ degrees. The British Chancellor of the Exchequer thus tells the nation that it ‘cannot afford’ economic activity, which has to be cut because we simply ‘don’t have the money’. But the real economy is about real resources of people, skills, infrastructure, technology, land. They are all available.
How the system works:
In the present structure, governments must raise money from the bond markets, who insist on repayment at interest rates which these markets determine according to their own level of confidence. Thus society and its governments are entirely subject to the prescriptions of bond dealers and credit rating agency speculators, who have no remit or capability in social governance.
…
Standard and Poor’s, Moody’s, and Fitch are entirely unelected and lack any democratic accountability, and yet are allowed to sit in easy judgment on our total economies, and to determine their prospects and scope for action.
Rethinking money chapter is the one I would like that you all to read.
We need a new paradigm in which we understand money and financial agencies as servants rather than as masters of the real economy. Money is virtual, not real. It does not obey the laws of thermodynamics. It can be created or destroyed.
The system is supported only by confidence. The only rule is that the amount of money in circulation has to be matched by real output, if its value is to be maintained, and hyper-inflation avoided. Money does not have to be supported by gold, or by bond purchases, but only by output GDP.
Alternative proposals about how should the system work are in chapter New thinking and bellow, and IMO should be read.
What is the most interesting in this basic income scheme, is how to organize it and where should the money come from. I am talking about flow of the money, not how is it earned.
In my personal opinion all middleman should be dropped, and basic income should come from companies making the money directly. So we skip the exchanges, the taxmen, the legislation. Basic income is a dividend coming straight from the company to your wallet. This means that you are encouraged to get shares of multiple companies.
This can be done with blockchain technology and programmable money.
There is a problem with the dividends and having tens of thousands small stakeholders in some company though. Humans generally do not realize that by holding the stake in something where they are entitled to dividend they are also entitled to loss of value. Humans in general do not understand that they need to behave as they own the company, as they actually do. Each stakeholder holds a stake in responsibility as well.
I presume that people can be trained to behave rationally about this, and I hope that in near future we will prove this by organizing DAC’s and making them thrive, profit and yield dividends.
Unlike classic company a DAC’s based on PeerAssets runs on the internet, and company is in wallet of the person holding PeerAssets tokens that represents shares. People do not need to go to remote office in some glass building to participate in decision making, they can do it from their mobile phone.
It is about moving economy from remote glass buildings to your smartphone.