Monday, 7 December 2015

Outbreak of commonsense in Finland.

From City AM:

Just days after George Osborne announced his latest mass of adjustments to Britain’s tax and spend system, reports from Finland revealed that its government is looking into a somewhat simpler policy – giving each Finn €800 (£576) a month.

This may seem like madness. Why, I’m sure many of you will ask, should folk be handed money purely for existing? Won’t people respond by just sitting around doing nothing? Evidence suggests not. In fact, the Finnish experiment – if it goes ahead – is designed to reduce unemployment, which currently stands at over nine per cent...


And so on, all good stuff.

The interesting bit is this: "the policy, despite sounding – prima facie – like a left-wing fantasy, has been endorsed over the decades by pro-market economists such as Milton Friedman... This proposal is similar to a system endorsed by the free-market Adam Smith Institute called a 'negative income tax'."

That struck me after the vote on whether RAF planes should bomb Syria. Proper 'left wing' MPs voted against (Greens and most of the Labour Party), as did a few proper 'right wing/libertarian' MPs' such as David Davies and Peter Hollobone. Nigel Farage MEP also came out against.

So there are overlaps between 'fantasy left' and 'free-market/libertarian'. There are plenty of other examples, like legalising drugs or replacing taxes on earnings and output with LVT. The two groups give different reasons for supporting the policy, but they both come to the right conclusion, which is the main thing.

Hence and why I am perfectly happy to describe myself as "left/libertarian", which of course means I get shot by all sides, from the greenies, socialists, Conservatives, Homeys and Faux Libertarians alike.

13 comments:

Lola said...

Which further endorses my view that 'most' people are libertarian - they just don't know it yet.

The Stigler said...

When someone talks about "right" and "left", my first question is what axis they're measuring. Attitudes to war? markets? spending? monarchy? civil rights? They're unhelpful terms.

People are referring to the Front National in France as "far right", but really, they're quite left-leaning, pro-protectionism, state investment. And the nationalism/racism isn't in any way an exclusive preserve of the Conservatives, Republicans etc. The South of the USA was democrat until the civil rights act. Leicester council told foreigners to go home under Labour. Mosley was ex-Labour. Most Guardian lefties would quite like Hitler's economic policies.

Regarding Syria and ISIS, whether you think we should be involved, whether we should bomb targets is irrelevant. You're not solving the problem. OK, you might be saving some lives, but the economics of Syria and Iraq mean that you always have bastards fighting bastards. Or if they're weak (like the Iraqi government), the bastards will defeat you. The Western mindset is driven by WW2 and seeing the dictators of the Middle East like Hitler, as aberrant, and if you get rid of them, you get democracy. That's why this involvement doesn't work, unless you want to accept that we are there forever.

It's only industrialising these places that will sort them out. It's why Tunisia and Egypt kicked out their dictators a few years ago. They reached the point of industrialisation where "people power" can overthrow dictators. It'll all be rather messy for some years. Egypt isn't perfect, but then, nor was Weimar. Italy was a right mess after WW2 for some years.

Lola said...

TS Nice analysis. Mirrors my thoughts.

Shiney said...

I always sigh and tell people to go here

https://www.politicalcompass.org/

And I always despair about the fact there is nobody towards the bottom right... which is where my vote would go.

https://www.politicalcompass.org/uk2015

The Stigler said...

Lola,

Thanks. To be honest, even Hitler and Mussolini were just part of the difficulty in transition from kings to democracy. If you think about Italy, it didn't have democracy until 1945.

Bayard said...

Mark, what would £576/month for everyone in the UK cost compared to the current plethora of benefits/personal allowance or where could I find the figures?

Mark Wadsworth said...

L, sadly, the true libertarian is a tiny minority. Most people are socialists or Homeys, with a smattering of Faux Libs who say that all taxes are equally bad.

TS, yes, we've covered this. What interests me is the left-liberarian overlaps, because that's where I'm at.

Sh, that political compass is very crude as it expects stereotype replies. I usually end up pretty dead centre, even though I am scattered round the edges.

B, pensioners already get £576 a month. If we replace the entire working age welfare system (excl. Housing Benefit), personal allowances and pensions tax breaks and dished it out as CI instead, it would be about £330 per working age adult. The extra 'cost' of topping up all adults up to £576 would be about £246 x 12 x 35 million = £100 billion a year, less £25 billion Housing benefit and Council Tax benefit (no longer necessary) = £75 million. Which happens to be 5% or so of GDP.

Bayard said...

Mark, thanks for that. How much do you think would be saved by getting rid of the DWP (who would be effectively redundant under a CI system)?
I take it that you are assuming that it would be possible to rent a social housing home out of that £576/month (which at social rents being £70/week average it should be, just, especially if there were two people to a household).

mombers said...

@MW and B, I had such a nice feeling in my heart thinking about abolishing DWP. Maybe we could do a whip round for some go-away money for IDS?

Bayard said...

M, no need. He's on the gravy train, so he'll never be short of a well-paid job/sinecure.

Derek said...

If anyone asks me my politics from now on, I'm definitely going to say, left-librarian. Free books for all! Little libraries on every street corner!

Of course the Government, Big Publishing and the Faux Librarians are trying to stop us. The Danger of Being Neighbourly Without a Permit.

Mark Wadsworth said...

B: "How much do you think would be saved by getting rid of the DWP (who would be effectively redundant under a CI system)?"

DWP costs about £8 bn a year to run, according to their accounts. HMRC spend another couple of billion on tax credits admin and fraud and overpayments etc = £10 bn.

Seeing as the cost of non-means tested stuff like old age pensions or Child Benefit is pennies and for some reason, so that works out at about 5% of what they pay out. Which is pretty shit.

Personally, I think £576 a month, no questions asked is plenty enough for basics, a rented room in a shared house etc, if you want more you have to get a job.

D, funny you should mention that. As an atheist, the closest thing I know to a 'place of worship' is a good old fashioned public library.

Bayard said...

M, so there you are, the unemployment problem solved forever for only 4.5% of GDP. Finland leads the way!