A systems approach to Universal Basic Income, monetary reform and tax reform

One of the biggest political challenges is to clean up the welfare mess. So many people have known for so long that means tested welfare is not working. We have seen good people not able to earn more than $80 a week or their benefit would be docked. We have seen de facto couples split up so they can get more combined income, a terrible situation if we want to foster intimacy and honesty.

The movement for a Universal Basic Income – a proposed system of social security that regularly provides each citizen with a sum of money unconditionally – has been going for many decades now. Advocated by both socialists and libertarians, to my knowledge there is still no sign that any political party is taking it seriously. The long list of benefits can be found on Wikipedia.

I couldn’t help reflecting on the absence of a UBI when Parliament recently debated the Bill to pay those who care for highly dependent adult children the minimum income. All sorts of other questions arose from that debate. The government was clearly terrified that this precedent, forced on them by a Court of Appeal decision, was going to lead to an uncontrollable blowout of claims for government support for those who care for dependents.

When you do the sums the cost of UBI is enormous. Bringing in a full basic income would shock the economy.

It is the same with changing from a system where income tax and sales tax and company tax dominate the sources of Government revenue to a tax system where you are taxing the monopoly use of the commons, in particular the use of the land.  It would be a massive shock the economy.

And then again there is another one. Carry out massive monetary reform of the national money system and whoosh, it is all too much of a shock to the economy.

imagesI was on a skype call the other day with a wonderful young permaculturist from the Canary Islands, Stella Strega Scoz. She was enthusing about the systems approach to big problems – look at the problem as a system and tackle it as a whole.  And during the online course that Stella ran (Eonova), I learnt that Hazel Henderson also enthuses, and that the wonderful Donnella Meadows (Limits to Growth) had written a book called Thinking in Systems: a Primer quite a while ago. Hazel told me that the influential economics professor Jeffery Sachs is also a now a convert to systems thinking.

The challenge to our political creativity is to face these three big problems together.

So let’s look at the permaculture teaching that new growth comes gradually from the decaying old system. Hazel says “Breakdown brings breakthrough”. Leave the old system to die and start up a lot of new initiatives. The Living Economies Educational Trust has been a pioneer in its support of complementary currencies like time banks, and now of a growing number of savings pools which leave out banks.

images-1I believe we (both in New Zealand and in the world) are capable together of finding a solution to all three of these big problems together, and in a way that doesn’t shock the economy. Our solution must introduce a scaled-up complementary system that creates a healthy interest free currency, puts a full ground rent on at least some land and which redistributes this income in the form of a small per person Citizens Dividend. Who said creativity is confined to artists and scientists? Political creativity seems to be underrecognised and undervalued.



Natural Economics by Gary Williams

UnknownGary, a long time permaculture teacher has recently written a booklet called Natural Economics.  Gary has a Master of Commerce, a Bachelor of Science and a Bachelor of Engineering. He works as a soil engineer.  He lives with his partner Emily on a small farm in Manakau, north of Otaki. They have a wide diversity of farming and forestry activities, from home gardens and orchards to staple crops, animal grazing, firewood and plantation forests and wilderness.

Our party is very much about applying the principles of permaculture to economics and Gary in this work has written of life and death, growth and decay, expansion and contraction. “Natural ecosystems”, he says “have a very different rhythm to that of our present economy with its time-rigid orderliness, high energy and destructive technology and ever increasing exploitation and expansion of consumption”.

“Well functioning ecosystems are self-organising and maintain themselves by continual exchanges and the flow through of energy or information, with multiple connections and feedback linkages.”

He talks of natural economics being achieved through a common ownership of the basic resources of the land and a universal income for all citizens.

There is more. This little booklet is attached for all to read. A fuller review of it is here

Amazing people join this website

Today I have been making a list of those who are registered on our site. They are awesome people.

We have people over a wide age range from 75 down to late teenagers. Three people said they trawled the internet trying to find a political party which seemed to address the issues they were worried about and had solutions they thought would work. Others hit upon it by accident.

We have many professions here from financial advisers to teachers, engineers, architects, lifestylers who practise permaculture, permaculture teachers, IT people who are fully aware of the challenges of peak oil and a wide range of other challenges. We have those who read Spontaneous Evolution by Bruce Lipton and Steve Bhaerman (remember Swami Beyondananda? He said “I have good news. There will, indeed be peace on Earth.. I sure hope we humans are around to enjoy it”. We have psychologists, a theology graduate, someone who built an electric car, someone who sells raw milk and someone who has been a leader in many sustainability organisations. We have members of Transition Towns from various places and a farmer who hates land tax policy. We have many who have read widely on the topic of money systems and a lot of people who have read my book Healthy Money Healthy Planet. Some have been to Christoph Hensch’s course on money in Christchurch. We have followers of Max Keiser, Bernard Lietaer, environmentalists, a pharmacist, an activist in the Occupy movement and an anthropology scholar.

Some have been involved in Green dollars in the past and many have been founding members of intentional communities and were once keen Social Credit Party, Values Party or Green Party voters. There is a keen land value tax man and someone connected with a church based Liberty Trust. We have Steiner School enthusiasts and daughters and sons of ministers in a church. Some are involved in coast care and river care. Some are interested in small business and entrepreneurship.  It goes on. Amazing people, leaders in thinking and that’s how it will be.

Collectively many of us believe, as Bruce Lipton and Steve Bhaerman write; “A miraculous healing await this planet once we accept our new responsibility to collectively tend the Garden rather than fight over the turf. When a critical mass of people truly own this belief in their hearts and minds and actually begin living from this truth, our world will emerge from the darkness in what will amount to a spontaneous evolution.”

So I have had my first interview with a radio station and it was a student radio station who picked up the piece on how Auckland needs an Auckland currency. It was fine, I enjoyed it. Every time you speak to the media it stimulates you to learn more so you can answer better the next time.

And I have been working still on thinking about how we can get a politically acceptable policy on land tax. Is to be a Location Value Covenant or a Land Value Tax? We need a policy which isn’t going to take ten years to implement. Every time I raise land tax someone says “Well that is political suicide”. But if I start talking about getting a policy based on existing contract law which means that instead of paying the banks for your house you pay the Council or Central Government, the reaction is different. If you pay Central Government, then will have enough revenue to drop GST and soon income tax.

Imagine a time when all landowners have to pay and nobody can gain advantage by taking their assets overseas or paying for an army of accountants who minimise their tax. Imagine a time when you can work all you want and don’t get penalised for it, but prices are low because there is no interest built into the price of goods, no GST and no income tax. More spending power. Imagine a time when we have thriving local economies because local authorities have issued a different sort of money, one that depreciates like the goods they represent. Imagine a time when people spend their local money in sustainable business investments rather than in speculating in land or simply banking the money and keeping it out of circulation. As Silvio Gesell says in his book The Natural Economic Order “Money is an instrument of exchange and nothing else”.

Last week both Laurence and I were interviewed by Rose Diamond in her A Whole New World Series

News from the New Economics Party

Well the election is over and we can start planning seriously for the next few years as we develop as a party. And we watch anxiously as Europe goes through so continual financial crises.

We have had our first skype call among those who were involved from the start and now have to plan to build our membership to 500 so we can register. We are also working on a form to register properly for the party and where people can donate money. And our IT team is connecting us to Facebook and Twitter and everything. Everyone who joins the website is sent an email and we are learning about the range of people that this attracts – ex Greens, climate change activists, peak oil transitioners, tweeters, bloggers, Max Keiser fans, students of human evolution and consciousness, Georgists, monetary reformers, thinkers, businesspeople who care for the earth. We have an enthusiastic fan from Greece and ongoing encouragement from some in USA.

Frank de Jong, the leader of the Greens in Ontario for 16 years, and now president of Earthsharing Canada has made contact and sent us his calculations on how they could raise $210 billion in resource rentals from oil, land value, Tobin Tax, other resource rents, infrastructure access and Pigouvian taxes to equal the revenue they currently raise from income tax, corporate tax, GST and other sources.. (Yes there was an economist called Pigou) It makes sense not to tax work. Ridiculous. But those who take from the commonwealth must contribute to the common good in equal measure. And we would add excise taxes from tobacco and alcohol as before and have a tariff for climate change too.

Frank’s calculations raise rent from oil, tar sands, natural gas, land, trees, fish, minerals, EM spectrum, internet, stock markets, patents, quotas, licences, and the Pigouvian taxes include roads, parking, docks, towers, wires, landfills and water.

Today I was reading Sacred Economics by Charles Eisenstein, a brilliant 2011 book available from Living Economies. He sees resource taxes as internalising the true cost of production so that the public doesn’t pay the cost while the business reaps the profits. “I use the water, irrigate my dairy farm, keep the income and the public pays the cost of depleted aquifers and polluted rivers” would be our equivalent. He says as long as we think of ourselves as separate from others and from  Earth we will have this view that I keep the income and someone else pays. “But from the perspective of the connected self, connected to other people and to the earth, your well-being is inseparable from my own because you and I are not fundamentally separate”. His online course at http://evolverintensives.com/upcoming/ce-sacred-economics.html starts tomorrow!

Laurence is working on the Living Economies sector (April 12-13) of the Australasian Permaculture Convergence being held in Turangi next year (April 11-15) and the New Economics Party will be among those participating. He is also working to find a place where our party members can all stay together, and have our session on Friday 15 April.

Europeans should consult permaculturists not bankers

Every educated and concerned individual on the planet appears to be puzzling over the web of debt problem in Europe.  Many instinctively know that because of our interconectedness the austerity package in Greece and the riots in Rome will be coming to a city near them soon unless this dilemma is solved. The grotesque web of debt graphic published on the BBC News website at http://www.bbc.co.uk/news/business-15748696 is authoritative and clear. It shows that Greece owes to France, US, UK, Germany, Portugal and Italy and does this for each country.

We first need to understand that bailout packages aren’t bailouts really  – they are just further loans. But anyone will know you can’t solve debt with more debt.  Sooner or later the crisis is going to come back and each round it gets worse. And it is rather like the poor having to borrow from loan sharks to pay their interest on their complicated hire-purchase obligations – the further they get into debt the more interest they pay.

How come so many owe so much to so many? Companies, governments and individuals have been borrowing across borders for years. Why couldn’t they rely on their own country instead?  Are there no boundaries between countries any more? Is capital to roam free across the globe in search of the best returns? Oh yes, in the current system it is. Borders mean little these days when it comes to capital flow.

So what to do? Put bankers and economists in to run Italy and Greece?

Einstein said you won’t solve the problem with the same thinking that created it. I have just read an article by a permaculture teacher on energy flows between living organisms. Instead of inviting bankers to their conference to solve the Eurozone debt dilemma, European leaders should have invited permaculturists. They would have learnt that all living systems have semi-permeable borders to control the material and energy flowing in and out. If too much energy (money) flows in the system expands and implodes. If too much energy flows out the system winds down and collapses. This is the principle of reciprocity.

There are other principles but the only one I will touch on here is the idea of holarchies. This, in contrast to hierarchies, means that in Nature there are wholes within wholes within wholes. Each whole-part has its integrity and each is constantly in negotiation with other whole-parts in a dynamic dance to maintain system balance. You can read more about holarchies at http://www.jaredbhobbs.com/holarchy-the-nested-hierarchy-of-holons/  and about the principles of living systems  at http://www.lindaboothsweeney.net/thinking/principles

We will put aside the issue of the gigantic derivatives market for the moment.  Suffice to say Merkel and Sarkosy in their proposal for a financial transaction tax are on the right path.

Now if we apply the holarchical organisational structure to currencies, we need currencies for small areas, currencies for larger areas and currencies for the whole globe. In an ideal system (and private corporations are still I am afraid still in charge of the issuing and controlling a country’s money supply), to ensure there is always the right amount of money the public body issuing each currency will be in a constant state of negotiation with the others. It brings complexity and resilience to a system.

So all this talk of “leaving the Euro” or “joining the Euro” might have to be replaced by other thinking. If we were to imitate Nature we would have a holarchical system. We would have currencies within currencies within currencies. So the Euro would co-exist with the drachma and the mark and the franc. Now, that will take some thinking out, but it is Nature’s model and we are part of Nature aren’t we?

There are many other critical questions like the ridiculous and unfair system where the global currency is effectively still the US dollar and the as yet unquestioned usurious money creation system that allowed all this compounding interest to take place. But let’s leave that for another time.  Just get in the permaculturists!