Blimey: Richard Murphy and Howard Reed manage to say something sensible!

Our proposed system is based around two simple components:

1. Basic income payment – Minimum Income Standard . All families would receive an unconditional, tax-free basic income payment that would be set at levels sufficient to alleviate poverty.

2. Unified Income Tax (UIT). The current Income Tax system and the entire National Insurance Contributions system would be replaced by a single Income Tax structure which would be clear and progressive.

A citizens\’ basic income and unification of tax and NI.

I agree, they\’re only a decade or so behind us neoliberals but better late than never, eh?

53 thoughts on “Blimey: Richard Murphy and Howard Reed manage to say something sensible!”

  1. Is this the same as the Citizens Basic Income thing? I can never seem to get clarity from supporters of that as to what level it would be set to; since it seems to me that to replace benefits you’d need to set it very high; would have to cover not just JSA but housing costs, child benefit (?) etc.

    I don’t see how we can pay that much to everyone.

  2. Surreptitious Evil

    Yup, almost entirely sensible.

    My only qualm is exactly which bunch of “the great and the ‘certainly better than you plebs'” would get to decide what represented:

    levels sufficient to alleviate poverty.

    There’s also whether they would be ‘Courageous’ enough to introduce a regional component. The Mrs and I were working in London and spent a couple of minutes waiting for pedestrian lights to change by an estate agent window. Rental for a one bedroom flat, centralish but nowhere posh, is more than double our (Scots, suburban, largish house) mortgage.

  3. Just back of a fag packet, £100 a week, which is nowhere near enough to live on, works out around £250bn per year, if that’s any help.

  4. IanB, Charles Murray suggested (five or so years ago in In Our Hands) 10,000 US dollars (in the US obviously).

    So on the basis that he’s right and it’s all comparable, you’re looking at 7000GBP ish.

    Which I suppose wouldn’t be enough – in RM’s eyes, I think – to alleviate poverty. But it was costed by Murray as being within a relatively short time affordable vs the current system.

    Plus in Murray’s case, that replaces all other bennies. I doubt Murphy buys into that part of it either?

  5. IanB, from memory, it also (the Murray plan transferred to the UK) would require withdrawal from the CAP and all other subsidy programmes, and would only apply to those over 21.

  6. Surreptitious Evil

    £100 a week, which is nowhere near enough to live on, works out around £250bn per year

    Okay, so this actually on the order of the state pension and the total is significantly less than double the current welfare bill.

    I’m not sure anybody proposing this doesn’t also propose (even the LHTD does) a radical restructuring of Income Tax (and its close cousins). So we’d need to identify the income level at which your tax liability would balance your CBI.

    Anyway, I thought you were the “this is obviously broken, just because the alternative is crazy is no reason not to try it” guy?

  7. By the way, only slightly off topic, but I just visited the fucking idiot’s blog to see if I could get more detail on this from him, (I couldn’t) and I read down one of the threads to find this mind boggling exchange between Pellinor of this Parish and Murphy:

    Pellinor:
    Hodge and Naughtie shouldn’t be allowed to comment. All they did was assert that Starbucks made profits, and mock Dodwell for looking at the figures rather than blindly accepting the axioms.

    Murphy:
    Respectfully, saying people should not be allowed to comment is absurd
    That is censorship
    And since you add no value here moderation might be applied ….

    There is enough here for an entire conference, as a psychiatrist once said.

  8. Surely, if you’re going to have a CBI, that gets rid of the tax personal allowances? And simplifies the tax system. Murphy’s paymasters will hang draw & quarter him, if they hear this.

  9. @BIS

    Wait… are you saying you think Murphy might not have thought this through???

    But… but…

  10. SE,

    Don’t be daft. I’ve never been in favour of crazy alternatives. It’s not crazy to suggest reforming the financial system.

    As to the issue at hand, remember that this thing replaces *all* benefits. Looked at rents lately?

    I remain mystified as to what the advantage is in replacing benefits with a system of giving money to wealthy people. I mean, no doubt Dave and SamCam will be delighted with 7 more grand a year to play with, but I’m fucked if I want to give them it out of my taxes.

    Anyway, back down the other end of the scale: can I take it this will go hand in hand with relaxing planning laws to allow legal shanty towns? Because otherwise, I am entirely unclear where unemployed people are going to live.

  11. I was wondering about that bit 🙂

    Yes, Murphy has banned me again, which I think is unsurprising. But the ban comes because my thinking that people should refrain from commenting on matters they misunderstand is tantamount to advocating censorship; censorship is always wrong; so I must be banned for suggesting anything close to it.

    I think it a fair enough thing for Murphy to do, on his own blog. But the thought processes involved, and the justification, are very interesting 🙂

  12. Pellinor, he is genuinely nuts.

    I love his involvement in politics, actually, the more we hear of and from him the better.

    Eventually his nuttiness will become apparent to everyone bar Len McCluskey and Mark Serwotka, at which point they will become bathed in the same light.

  13. This has pensions at £127bn and welfare at £116bn, so in totall about £243bn. I might be reading it wrong though. The Guardian had total welfare (ex pensions) at £88bn in 2010.

    Either way, looks like most of the spend is on pensions.

  14. @ Ian B

    “I mean, no doubt Dave and SamCam will be delighted with 7 more grand a year to play with, but I

  15. @ Ian B

    “I mean, no doubt Dave and SamCam will be delighted with 7 more grand a year to play with but I

  16. @ Ian B

    “I mean, no doubt Dave and SamCam will be delighted with 7 more grand a year to play with but I-m fucked if I want to give them it out of my taxes.”

    It won’t come out of your taxes. It-ll come out of theirs. If everyone gets it, and we all fund it, then the richer amongst us will fund our own.

    Even if I am put in exactly the same position as now (i.e. I lose allowance or pay more tax to balance out my CI) then it’s still a better world, because we’ve cut out an ocean of fuss’n’nonsense and scope for Brownist social engineering. Hopefully the benefit of that can be passed on to the people who need it.. just what is the effective admin rate on all the out of work benefits compared to, say, child benefit or the state pension?

    Of course, the whole thing *really* works if you can find a way to fund it with an LVT (and cut income taxes accordingly). Then the CAM’s will suddenly be paying for a whole bunch of other folks’

  17. Pellinor

    I asked you yesterday why you bothered with the fascist bastard. Now I realise, you’re doing it for us. Your exchange has been printed and is currently circulating around my office. Thanks mate.

    Regarding the CBI: is there anything Milton Friedman ever advocating that didn’t eventually become regarding as simple common sense?

  18. CBI is the stupidest idea in the history of stupid ideas. How about a fucking JOB GUARANTEE? You know, something that would be targeted at people who need it (because people who have better things to do would do those instead), and which requires practically nothing in the way of fraud prevention because people can’t be in two places at once?

    Of course the Leftists won’t allow it because of some crowing about “forced labour”, as if they cared about such things. “Under capitalism, work is a universal right. Under socialism, work is a universal duty. Under communism, work is a universal condition.”

  19. Well Tim

    They might have got this right, but have you read the rest of the paper – a train wreck from what I can see…..

  20. Richard Allan: How would you propose to operate a “job guarantee”? What kind of job would be guaranteed? Who would fund the jobs?

  21. @Richard Allan

    A CBI is a good idea for precisely the reasons you outline, if you think about it. Read the Charles Murray book, it’s interesting.

  22. No CBI can replace *all* benefits. You’ll always need extra money for disability benefit, since the disabled have greater needs.

  23. Pellinor (#14)

    I like the fact that you, like most of us here, have been banned multiple times – his commitment to ‘acts of editorial freedom, an issue as important as free speech’ is heartening. To be honest, I’d give it a month and if you still feel like challenging him, try again – I did that and reappeared, at least temporarily.

    His final rejoinder is also clear evidence that rather as he once said:

    ‘Worstall’s abuse is clear evidence that they’re scared’

    He sees the ‘number two economic blogger in the UK’ trouncing him soundly in any intellectual contest and is warily looking over his shoulder, knowing that the game is about to be up, even assuming Labour wins in 2015.

    Regarding the paper itself, it’s the usual combination of mindboggling economic ignorance and historical unawareness. I challenged the co-author to point out what his sources were for the glib assumptions that underpinned their section on ‘A fiscal policy to tackle idleness’ (page 22 of the paper)

    To abridge:

    ‘This is not the place to suggest a detailed
    programme (of Public investment) but obvious candidates have to be capable of delivering rapid
    impact and that means they must be relatively small scale, with low training
    required and with a good chance of being implemented quickly. ‘

    Then proceeding to suggest the following projects:

    ‘a) Extensive programmes of repairs should be undertaken. By extending
    asset lives this qualifies as investment for these purposes, and by
    shifting expenditure from future periods when we might hope markets
    can deliver fuller employment, to the current period when they cannot,
    the effective cost is reduced considerably;
    b) Large numbers of small scale investments such as the retro-fitting of
    double glazing, cavity wall insulation and loft insulation where impact
    can be large and quick and investment returns are also, conveniently,
    high;
    c) The building of housing where the impact of investment can be widely
    diversified.’

    Thus they display their ignorance in assuming that Construction is currently a low skill industry, and that those semi-skilled positions there are in it, are occupied by British workers. The odds they, or indeed many of their CLASS colleagues have been anywhere near a building site other than to walk past one are practically nil – rather like the merit of this paper….

  24. @Richard Allen: what happens when the person guaranteed a job fails to turn up? Or assaults the supervisor “because he was looking at me funny, innit?”? Do they still get paid? Or chucked out into the gutter and left to starve? Because there are now vast swathes of the UK population that are functionally unemployable. Incapable of getting to work regularly on time, following instructions and generally being productive. (As evidence see the BBC documentary that took people in Boston, Lincs (I think), gave them a minimum wage job (as being done by Poles and other Eastern Europeans) and followed their progress, or lack thereof. Some never even showed up for work, others turned up for a day or so, and found it ‘too hard’ to continue). What will your Job Guarantee do with people like that?

  25. So Much for Subtlety

    Ian B – “Just back of a fag packet, []100 a week, which is nowhere near enough to live on, works out around []250bn per year, if that’s any help.”

    You are giving the 100 quid to every man woman and child in these Blessed Isles? That means that Philpott guy would be getting 1800 or so a week?

    7000 pounds a year for every man, woman and child would be something like 350 billion. The so-called Social Protection parts of the budget, together with the Personal Social Services and Housing and Environment parts comes to over 210 billion. Another 20 billion for Industry, Agriculture and Employment. I think it could be found. It soon adds up.

    The trade-off would be that income tax could start at the first penny earned. A basic flat 20% (say) on all income for instance with no deductions would work out quite nicely. Be a lot simpler. Thus Cameron would be getting nothing much extra. But the poor would be better off and the more they worked the better off they would be. That has to be an improvement. Then they could add higher rates if they wanted.

  26. So Much for Subtlety

    Matthew L – “How would you propose to operate a [job guarantee]? What kind of job would be guaranteed? Who would fund the jobs?”

    We could tie the CBI to a Job Guarantee easy enough – pay it as Tax Credits. Then everyone would have to work to get it. Who cares what sort of job is guaranteed? We already fund unemployment benefits. Why not attach a job requirement to that payment?

    But if the State has to step in and provide jobs, I have a simple enough suggestion – guarantee a job where they can be socially useful, but not too disruptive to the British economy and where they can do the rest of us little harm by stealing our DVD players. I suggest that anyone who cannot find a job on their own can be guaranteed work building schools and roads. In Jamaica. We can call it foreign aid.

    As long as we change the law so that no marriage to a foreigner is legal any more. It is a win-win.

    31 Andrew M – “No CBI can replace *all* benefits. You-ll always need extra money for disability benefit, since the disabled have greater needs.”

    I am not sure that follows.

  27. @Thought Gang
    Mark Wadsworth has a carefully worked out Citizen’s Income scheme based on LVT over on his site.
    I would prefer a CI based on the Government resuming the right to create money, with the LVT as anti inflationary back-up, but people are far too nervous of challenging the banks monopoly of creating money (see recent threads).
    But on its own terms ,and the terms you mention, the MW scheme stacks up perfectly well.

  28. @Thought Gang
    Mark Wadsworth has a carefully worked out Citizen’s Income scheme based on LVT over on his site.
    I would prefer a CI based on the Government resuming the right to create money, with the LVT as anti inflationary back-up, but people are far too nervous of challenging the banks monopoly of creating money (see recent threads).
    But on its own terms ,and the terms you mention, the MW scheme stacks up perfectly well.

  29. You are giving the 100 quid to every man woman and child in these Blessed Isles? That means that Philpott guy would be getting 1800 or so a week?

    No, just the men and women. And “I’m” not giving any money to anybody, because (a) I’m not actually a government minister and (b) I’m questioning this idea, not supporting it.

    – guarantee a job where they can be socially useful, but not too disruptive to the British economy

    Well, best of luck with that. But you’ll probably find to your disappointment that a massive government slave labour system isn’t going to be achievable without affecting the rest of the economy.

    You’ve basically got two sorts of jobs you can offer. One is makework jobs that wouldn’t otherwise be done. These will cost you more money than smply giving people money to stay at home, since they will consume unnecessary resources. Give a man a job digging holes, you’ve got to provide workwear, boots, a spade, transport, administration, etc etc.

    The second type is jobs that would be done without the program. In that case, you’re displacing productive paid workers with slaves (a problem Rome had, by the way).

    And, ignoring the barking mad slave labour programme, and back with the CBI, we get back to the problem that £100 isn’t enough anyway; it’s already costing us far more than current welfare spending, so we can give money to people that don’t need it, for some unfathomable reason. Current JSA is, what, around £65 to cover food and utilities and clothes? Now you’ve got £35 a week left for rent. I haven’t paid that little since the 1980s, and that was because I was lodging with the parents of a college friend.

    So, now we’ve got a marvellous system in which you pay somebody a hopelessly inadequate subsistence, and require them to do work that either is unnecessary or displacing people previously employed on a wage.

    Fabulous system. Brilliant!

  30. So Much for Subtlety

    Ian B – “No, just the men and women.”

    That would bring costs down.

    “But you-ll probably find to your disappointment that a massive government slave labour system isn-t going to be achievable without affecting the rest of the economy.”

    It is not a slave labour system. People are perfectly free to reject it if they want. No one would have to do a damn thing. But if they want government hand outs, they have to offer something in return.

    Such language sits oddly with your proclaimed Libertarian/Austrian identity.

    “You-ve basically got two sorts of jobs you can offer. One is makework jobs that wouldn-t otherwise be done. These will cost you more money than smply giving people money to stay at home, since they will consume unnecessary resources.”

    No it will not. Because a man who is occupied with work, even pointless work, is a man who is not stealing my DVD player. The costs to society as a whole would be vastly less than the costs of providing shoes. If we had to do that.

    “The second type is jobs that would be done without the program.”

    You miss the third type – jobs that would be done if wages were lower. There is an infinite amount of work that could be done. And would be done, if only wages were lower. If we make labour cheaper, that work will be done.

    “In that case, you-re displacing productive paid workers with slaves”

    Still not slaves.

    “we get back to the problem that []100 isn-t enough anyway”

    I fail to see why that is the case. Certainly 100 quid a week plus whatever else they can find by getting a damn job would be.

    “it-s already costing us far more than current welfare spending”

    No it is not. You may think it is, but you have no reason to think so. Welfare costs us a vast sum of money from hospital emergency rooms to prison cells to failing schools.

    “so we can give money to people that don-t need it”

    All we are doing is replacing the present system of deductions with a cash transfer. It is not that much of a change for those who have work.

    “Fabulous system. Brilliant!”

    Still better than what we have now.

  31. I fail to see why that is the case. Certainly 100 quid a week plus whatever else they can find by getting a damn job would be.

    They can’t get a job “as well”. They’re in your government chain gangs. Good grief.

  32. Sorry for being so snippy and brief, but this really ticks me off. In your binary world, there are two sorts of people; hardworking good people and lazy parasites who steal your DVD players. Apparently type A instantly turns into type B as soon as he loses his job. Yes?

  33. “They cant get a job as well. Theyre in your government chain gangs.”

    One assumes in the SMFS system everyone gets the money if they are in a job, of some sort. The Government chain gang job is only for those that don’t have anything else. You can leave the chain gang and get a real one if you are able/prefer.

    But I dont know how such system would cope with self employment – if you have to have a ‘job’ to get your Basic Income, how do you know whether someone claiming to be self employed is actually doing anything or not?

    The whole point of a Basic Income IMO is that there are no requirements. You just get it for existing. Thats the States obligation to the citizen fulfilled. Everything else is up to the individual. You can sit on your arse if its enough to survive on, or go out and work. Your choice.

  34. So Much For Subtlety

    Ian B – “They can-t get a job [as well]. They-re in your government chain gangs. Good grief.”

    I am not sure. It depends on what scheme we go with. You could just give out the cash to everyone regardless. In which case there is nothing stopping anyone getting a job as well. I would prefer they have to show evidence of working to get it, which means if they cannot find work, the government could give them something to do. Ideally in Jamaica. Where 7000 quid a year goes a long way.

    I do not see the problem.

    41Ian B – “In your binary world, there are two sorts of people; hardworking good people and lazy parasites who steal your DVD players. Apparently type A instantly turns into type B as soon as he loses his job. Yes?”

    Well not instantly. It takes a while. A couple of weeks perhaps. The dole is inherently bad for people. Working is inherently good for them. You may choose to see this as a binary simplification – and it is an irony to see this from you – but it is grounded in the reality.

  35. “how do you know whether someone claiming to be self employed is actually doing anything or not?”

    Nothing new; that’s a major problem with tax credits.

  36. Jim @ 43:

    Thats the States obligation to the citizen fulfilled.

    Since when did the state have an obligation to give out “free” money to everyone? I’d much prefer it left most of what I earn in my pocket and spend my taxes on the essentials, including finding a fair way of making sure that the needy don’t starve and have somewhere to sleep without making it attractive to be beholden to the taxpayer.

  37. Well not instantly. It takes a while. A couple of weeks perhaps.

    As long as that? It takes as long as a couple of weeks for our hardworking salt of the earth bloke to turn into a ned?

    The dole is inherently bad for people. Working is inherently good for them.

    No, not at all. That’s the damned Calvinism obsession with labour rather than production. That’s why the Germans are such fabulous engineers. They care what comes out the factory gates; here in the Anglosphere we’re just obsessed with how many people we can herd into the factory.

    Good for you? I can’t agree. Some years ago I myself concluded that it’s a mug’s game and vowed never to have a job again. I’d rather be a bit poorer, frankly, and have my life to myself.

    It’s a necessary evil at the moment, but for most of human history most humans didn’t have a job and, in the post industrial world, it seems likely that we’ll return to that better state. We really shouldn’t confuse necessary evils with “goodness”. As I said, that’s the scourge of Calvinism, treating work as a moral endeavour- because idle hands, devil’s tools, all that.

    But if we treat work as a moral imperative, we fail to understand why people seek to avoid it. We can rightly criticise scroungers for living off other people. But it is also why so many women, even in feminist times, stop working and stay at home if they can find a supporting male. And why rich people don’t get cleaning jobs for the good of their souls. And so on. It’s because working really is rather sucky.

    Fools and horses, and so on.

  38. I strongly suspect that Tank (Comment # 3, above) might possibly offer the single USEFUL comment on the matter, were he so inclined (rather than being dissuaded, as I’ve been, by an overwhelming preponderance of what has come to pass for a “free market” viewpoint).

    Mises and Austrian-school adherents walked out of the Mt. Pelerin meeting in 1947, Mises insist-ing that Milton Friedman (and Chicago-school
    acoluytes) were “just a bunch of socialists.”

    Mises was right. What is a mystery to me is why anyone of a free-market persuasion would today–more than two generations later–doubt what he “put it on the line” to tell us.

    Despite that Austrians use only deduction, piling truism on truism to achieve conclusions (decried as “unscientific” by “empirical” analysts), real empirical evidence, i.e., experience of our (and everybody elses’s) lives tells us empiricists have NEVER been right, whether short-term (such as LTCM failure widely predicted by Austrians) or in the long run (best exemplified by Mises’ prediction in 1921 that the USSR would, one day, simply cease to exist, collapsing “like a house of cards,” while acknowledging such denoument might take a generation or two, attributing “a certain efficacy” to ruthless brutality.

    A free market must be, you know, “free.” It’s just incompatible with ANY system of entitlements, all of which fall in the “moral hazard” category.

    Only when the human propensity to charitable behavior, however distributed, is left for those individuals (and their groups organized for the purpose), their impulses and consciences–will
    civilization be enabled to rise above that we now experience. Minds must change before behavior.

  39. So Much For Subtlety

    DocBud – “I-d much prefer it left most of what I earn in my pocket and spend my taxes on the essentials, including finding a fair way of making sure that the needy don-t starve and have somewhere to sleep without making it attractive to be beholden to the taxpayer.”

    I would too. But that is not the world we live in. We have lived too long with the idea that it is right and proper to take from the politically weak to give to the politically strong. And that is not going to go away any time soon.

    So harm minimisation seems a reasonable idea to me.

    47Ian B – “No, not at all. That

  40. So Much For Subtlety

    47Ian B – “No, not at all. That-s the damned Calvinism obsession with labour rather than production.”

    No it is not. It is a simple sociological observation. It is just a fact that work makes people better off. Whether you are talking about the idle rich or the feckless poor, it is the same.

    “That-s why the Germans are such fabulous engineers. They care what comes out the factory gates; here in the Anglosphere we-re just obsessed with how many people we can herd into the factory.”

    I think you would be hard pushed to distinguish British puritanism from German puritanism. No doubt you are about to make the effort, but I am not sure anyone is going to be convinced. If anything Germans are even more puritanical.

    “Good for you? I can-t agree. Some years ago I myself concluded that it’s a mug-s game and vowed never to have a job again. I-d rather be a bit poorer, frankly, and have my life to myself.”

    And how is that working out for you?

    “It-s a necessary evil at the moment, but for most of human history most humans didn-t have a job”

    But they did have to work 18 hour days.

    “As I said, that-s the scourge of Calvinism, treating work as a moral endeavour- because idle hands, devil-s tools, all that.”

    If the welfare state has taught us anything, and it has not, it is that the Calvinists were right. Idleness destroys the character of most people. However my arguments are not Calvinist arguments. Nor does it follow that people who want to stop you having sex before marriage (or whatever else it is that causes your grudge against them) are therefore wrong about everything.

    “But if we treat work as a moral imperative, we fail to understand why people seek to avoid it.”

    On the contrary, the Puritan has no problems with that. Nor does anyone else. I am not saying work is fun – although it often is – I am saying that it provides a necessary structure and discipline to people-s lives. When they lack that structure they suffer in all sorts of ways.

  41. And how is that working out for you?

    Well, other than the collapse of my moral fabric, fine thanks.

    Are we to take it that allowing (nay, requiring sometimes) people to retire is condemning them after a couple of weeks to certain ruin? Or does the human spirit’s need for ordered labour expire at age 60/65/the appropriate age in their jurisdiction?

    And what of housewives? Or is this just a guy thing?

  42. Decommodification of labour cannot work. It undermines the very process it relies upon. If the market equilibrium process worked in the first place, there would be no need for a Citizens Income policy.

    See the paper by Pavlina Tcherneva at http://t.co/a6ClMwFicu

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