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crisis debt economics environment Key Article politics problems society taxes

Can we afford for Britain not to lead?

Britain, partly on account of its preeminent financial center in the City, may be the only advanced country positioned to move to a new socio-economic model.

Any country proposing to make an even moderately radical break from the status quo will face deep scepticism from the establishment, and the establishment today is embodied in the international financier and the global corporation, on whom the peace of our societies and the satisfactions of the great majority are now dependent.

Our current system already rides a razor-thin line between plausibility and fantasy with never-seen-before levels of debt and monetary adventurism, the credibility of which are predicated on long term projections of growth and stability that beggar the imagination.

Any new ideas for how to structure our political economy must either promise to conform to the tightrope we are on, or provide a credible alternative. Any plan that increases spending or investment but does not raise new revenues must necessarily be dependent on some combination of growth, debt, or monetary expansion. Given the already stretched boundaries of the current construct, notions of higher levels of growth, debt, or monetary expansion can only be dependent on justifications that amount to postulation. What seems certain, and to which Greek politicians can attest, is that no country without control of its own currency and direct access to an international financial centre would be able to entertain deviating from the path of the status quo.

It is the very precariousness of the status quo that lends weight to the admonitions of the establishment, embodied in the advice doled out by Germany (through the Eurogroup) and the world’s financial überinstitutions. They are, rightly, deeply sceptical of novel approaches that refuse to adhere to the established limits of fiscal and economic boundaries, because the precious commodity of confidence that underpins the entire system is not within their direct control and rests on a generalised acceptance of models that use historical basis as their justification.

Thrust thus into the seemingly concrete confines of fiscal and economic rules that prescribe that “there is no alternative” (TNA), there are some that divine an escape route through the use of the very tools that support the status quo, and favourite amongst those is monetary adventurism, mostly in some form of “quantitive easing”. Primarily a despondent and confused left, but also an angry and careless right, are gravitating to justifications for their expansionist promises that rely on the use of the same growth, debt, and monetary adventurism that their nemeses already deploy. Irrespective of the quality of their arguments, what is evident is that their ideas are dependent for practical application on the existing financialisation of the economy. This new gloss on old ideas betrays their plans as contradictory to the analysis that they use to substantiate their intentions. If the current malaise is substantially explained by the financialisation of the political economy over the last 30 years, how can the remedy be to lean further on that same system to justify investment? If we are destroying the planet with our growth based models for advancement, how can it be a solution to devise new systems that are ever more dependent on further growth? If expanded debt has substituted for fiscal rectitude, how can more debt, justified by more growth, help to retrieve balance in our affairs?

This then is the root corruption at the base of the supposedly new models we are offered today: that they are at once a critique of the status quo, and they then lean on the established structures to enable their proposed remedies. They cannot stand, and they will face the same fate as Greece: to be subjugated to the established structures, or face penury and exclusion, lest they unbalance the precarious justifications used in the rest of the system by the rest of the world. This is not cruel punishment, this is simply self preservation by the majority.

No model that will not simultaneously increase public revenues and balance that burden with an increase in the quality of life of the great majority can walk away from the established constructs. If the model depends on the existing structures but refuses to accept the strictures of that regime it will be, and must be, frozen out when it comes to implementation.

Moving on from the vanities of the shallow philosophies of the new left and the new right, what of the possibilities for proper change? What of the fate of a properly constructed new political economy, wherein the fiscal logic is not dependent on infinite growth, debt, or monetary adventurism? Such a concept would also have to face the realities of the status quo, and navigate a future in which the rest of the world remained to be convinced of such a path. This could only be achieved in a society which had control of its own currency and direct access to a domestic financial market with sufficient depth and strength to weather the early phase of establishment. Otherwise the maintenance of the inherited debt would quickly overwhelm the nascent reconstruction. This substantial hurdle would be insurmountable in all except a very few countries, and amongst those possibly only the UK has the demos and the institutional fabric strong enough to make it happen.

Britain could lead the way and do what others want to do, but cannot do, because we host the institutional fabric necessary to enable change independently. There is a world of difference between proposing a fiscally balanced future that only needs to maintain the existing debt load, and a proposal to exacerbate the existing paradigm as a means of reaching a promised future. The sanctity of government bonds rests in the ultimate power of a state to raise taxes, which is the resorting guarantee behind the economic projections of any particular administration. If the financial markets have convinced themselves that the current debts are sustainable on the current projections then any new plan that incorporates raising the revenues to pay for its proposals leaves the current status unruffled. There would remain any number of underlying assumptions that a new plan would have to leave undisturbed, and that is where a strong domestic financial market becomes important. The critical impact of a judgement to sustain continued credibility, versus the costs of concluding otherwise, is only likely in a country that has monetary independence and a deeply integrated financial system. For those reasons Britain is uniquely placed to make the move to a more sustainable and joyful political economy, and to benefit from the first mover advantages.

Completing the next phase of the post 1945 settlement by extending the same principles embodied in the NHS to a complete range of basic life supporting services is well within our grasp, with recent research from UCL suggesting such an extension would need only a 2.3% GDP rise in taxes. The effect would be transformative and lay the foundation of a new age of innovation, social cohesion, and rebalanced labour relations.  By shifting the responsibility for a satisfied demos from material consumption to a more relational basis, dependence on finance is reduced at the same time that costs are reduced through social wage substitutions. Until other societies replicate the model, the first movers benefit from substantial competitive advantage.

If human societies are to break the current mould that seems to lead inexorably to never-seen-before destructions, then it can only happen if a new model is established free from the implausible justifications of infinite growth on a finite planet, unrepayable debt, and magic money. Few countries have the present time luxury to consider these long term problems, less have the predisposition to question their own orthodoxies, and even fewer have the capacity and strength to embark on such a journey. Can anyone other than Britain take the lead? Can anyone afford for Britain not to take the lead?

Categories
politics society WellFair

Free Social Care

LIFE will integrate social care services and the NHS to provide a nationwide service that ensures that everyone will have access to basic care services at all stages of their life.

Care homes will still be run and funded locally, but the budget will be allocated from national income taxes.

Categories
citizen politics society WellFair

Guaranteed Universal Basic Services

LIFE will guarantee that every citizen and resident in the UK has free access to basic public services, including old age care.

Universal Basic Services (WellFair) include the NHS, education, transport, housing, food, communications, as well as public safety, legal aid, and our democracy.

This includes a plan to build 1,000,000 new social housing units within 7 years, and free basic phone and Internet for everyone.

All funding will be from Income Taxes.

 

Categories
budget Democracy politics regions Scotland WellFair

New local governments get direct control of budgets & migration

LIFE will ensure that any constituency, local area, or region that organises itself to for a new local government will receive direct control of their allocated budgets for WellFair, and the right to set their own migration levels.

 

Categories
politics taxes WellFair

Income Taxes only used for NHS & universal basic services

LIFE will ensure that all money raised from Income Taxes, National Insurance, Inheritance Tax, and other personal taxes are only spent on public services.

Public services include the NHS, education, transport, housing, food, communications, as well as public safety, legal aid, and our democracy.

To provide the additional revenues to cover the cost of the expanded public services (WellFair) we will halve the personal allowance, treat capital gains as income, set corporation tax at the same as income tax, and change inheritance tax rules to a lifetime allowance of £1,000,000 per person.

 

Categories
politics problems society WellFair

The Tory’s Awful Honeymoon

It takes years of patient and hard work to rebuild communities if they breakdown, and so it makes perfect sense that it takes years of underfunding before the consequences of failing to nurture a community also become apparent.

Across this land the awful tragedy of the almost impossibly arrogant notion of a “big society” promulgated by the Tories in this decade is now unfurling. The idea that the voluntary sector can and would pick up and replace public services when the government abandoned them could only make sense to a shallow-thinking, protected group of naives. But it is the curse of those who view the world exclusively through the lens of motivation that they cannot see the social imperative that makes their view possible.

Leaders in the NHS are sounding alarms about the effect on health services, but they are just the ‘canary’ for a much wider thinning of our social fabric.

Categories
economics environment Key Article politics society

Discover LIFE

In the never ending quest to make the principles and ideas behind LIFE accessible to a wider audience we have produced an new iBook called “Discover LIFE”.

Understanding who we are requires that we can reach beyond our personal perception of the world to see ourselves as a species.

Who are humans?

How did we get here?

What makes us tick?

These are the important questions we must be able to answer first, before we can embark on our journey to find out what works for us.

With sound and compassionate understanding of our inherited natures, we will be on the road to developing effective new models around which the peoples of the world can organise themselves.

The book is available in the animated iBook format for Apple devices and computers here. Most graphics are clickable for more detail – it’s fun, try it out. Open in iBooks when prompted.

And a PDF Hi-Res version (30Mb) is here and a Low-Res (7Mb) version is here.

Please post your comments and suggestions below, or email then to info@uklife.org, that would be greatly appreciated

Many thanks!

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Categories
politics

Helicopter money !?

Martin Wolf provides the most succinct description yet of the current economic malaise: Helicopter drops might not be far away.

As described, the situation is the result of a two decade march to remove safety from our societies, asking individuals to take on the burden of their individual safety (an oxymoron) instead – this is what results in the savings glut.

Categories
Key Article politics

Citizen Income: a dead end

PDFThe time has come to give proper attention to an analysis of the idea of a Citizen Income (aka Basic Income, CI), and we are happy to see that Compass & the RSA are engaged in this process.

Summary

The analysis that we need to increase social safety is correct. The conclusion that the way to do that is by distributing cash is erroneous.

Cash distribution has to sit on top of universal, public service delivery. To deliver those services properly requires all of the cash available from a sustainable tax burden.

CI will always end up arguing for cash distribution over public service provision – and fail.

Categories
change crisis Key Article legacy parties politics problems society

Floundering on the Rocks of Policy

While it is increasingly obvious that what we are doing isn’t going to work, what to replace it with is an even bigger unknown.