Tag Archives: Precariat

Against meaninglessness and precarity: the crisis of work

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work

By David Frayne

Source: ROAR Magazine

If work is vital for income, social inclusion and a sense of identity, then one of the most troubling contradictions of our time is that the centrality of work in our societies persists even when work is in a state of crisis. The steady erosion of stable and satisfying employment makes it less and less clear whether modern jobs can offer the sense of moral agency, recognition and pride required to secure work as a source of meaning and identity. The standardization, precarity and dubious social utility that characterize many modern jobs are a major source of modern misery.

Mass unemployment is also now an enduring structural feature of capitalist societies. The elimination of huge quantities of human labor by the development of machine technologies is a process that has spanned centuries. However, perhaps due to high-profile developments like Apple’s Siri computer assistant or Amazon’s delivery drones, the discussion around automation has once again been ignited.

An often-cited study by Carl Frey and Michael Osborne anticipates an escalation of technological unemployment over the coming years. Occupations at high risk include the likes of models, cooks and construction workers, thanks to advances such as digital avatars, burger flipping machines and the ability to manufacture prefabricated buildings in factories with robots. It is also anticipated that advances in artificial intelligence and machine learning will allow an increasing quantity of cognitive work tasks to become automated.

What all of this means is that we are steadily becoming a society of workers without work: a society of people who are materially, culturally and psychologically bound to paid employment, but for whom there are not enough stable and meaningful jobs to go around. Perversely, the most pressing problem for many people is no longer exploitation, but the absence of opportunities to be sufficiently and dependably exploited. The impact of this problem in today’s epidemic of anxiety and exhaustion should not be underestimated.

What makes the situation all the crueler is the pervasive sense that the precarious victims of the crisis are somehow personally responsible for their fate. In the UK, barely a week goes by without a smug reaffirmation of the work ethic in the media, or some story that constructs unemployment as a form of deviance. The UK television show Benefits Street comes to mind, but perhaps the most outrageous example in recent times was not from the world of trash TV, but from Dr. Adam Perkins’ thesis, The Welfare Trait. Published last year, Perkins’ book tackled what he defined as the “employment-resistant personality”. Joblessness is explained in terms of an inter-generationally transmitted psychological disorder. Perkins’ study is the most polished product of the ideology of work one can imagine. His study is so dazzled by its own claims to scientific objectivity, so impervious to its own grounding in the work ethic, that it beggars belief.

It seems we find ourselves at a rift. On the one hand, work has been positioned as a central source of income, solidarity and social recognition, whereas on the other, the promise of stable, meaningful and satisfying employment crumbles around us. The crucial question: how should societies adjust to this deepening crisis of work?

 

This is an excerpt from David Frayne’s “Towards a Post-Work Society”, which will appear in ROAR Issue #2, The Future of Work, scheduled for release in June/July.

On the Process of Awakening

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lifestyle

By Charles Hugh Smith

Source: Of Two Minds

We cannot help but feel a hunger for authenticity, honesty, spiritual solace and human connection, but these are precisely what is scarce in our social and economic structure.

There is a tremendous amount of pain in our society. There are many sources of this pain: the emotional desertification of dysfunctional families, the knowledge that we don’t fit in and never will, a widening disconnect between the narratives we’re told are true and our experience, and a social and economic structure that tosses many of us on the trash heap.

The lifestyle we’re told we need to be happy is unattainable to many, and disconcertingly unsatisfactory to the top 10% who reach it.

We cannot help but feel a hunger for authenticity, honesty, spiritual solace and human connection, but these are precisely what is scarce in our social and economic structure.

The process of awakening has many paths. For some, the path starts with the incoherence of official explanations and narratives. For others, it’s the inner search for truth via psychotherapy or spiritual practice.

For some, it’s an investigation into the way our economic and political hierarchy function. For others, art is the starting point: a film, a novel, a comic, a song.

For many of us, it begins with this simple but devastating realization: I don’t fit in. I don’t fit in, have never fit in and never will fit in. I play along because it’s easier on me and everyone I interact with to do so, and I value my independence which means I have to find a way to support myself. That is difficult, as what I like to do has little to no value in our economy.

What interests me is how the epidemic of pain and alienation that characterizes our society is the direct result of how our economy and social order is structured. Incoherence, self-destruction, pain and alienation are the only possible outputs of the system we inhabit.

I have explored this dynamic in my books, starting with Survival+ in 2009 and working forward to my latest book, Why Our Status Quo Failed and Is Beyond Reform. (My other books are: A Radically Beneficial World: Automation, Technology and Creating Jobs for All; Get a Job, Build a Real Career and Defy a Bewildering Economy; The Nearly Free University and the Emerging Economy: The Revolution in Higher Education; Resistance, Revolution, Liberation: A Model for Positive Change; Why Things Are Falling Apart and What We Can Do About It and An Unconventional Guide to Investing in Troubled Times.)

I recently had an amazing free-form 1:50 hour conversation on these topics with New Zealand talk-show host Vinny Eastwood. Any conversation that stretches from the erosion of community to loneliness to Daniel Ellsberg to Marx to Taoism to alienation to Michelangelo Antonioni and on to the process of awakening is amazing in my view.

Here’s Vinny’s page with listening/viewing/downloading options, and the program on Youtube (please ignore my goofy expressions): The magic of bitcoin and cryptocurrencies (1:49:54)

My conclusion may strike many as radical, but to me it is self-evident: the primary source of the rot, insecurity, inequality and alienation of our society is the way we create and distribute money, which is the conduit for creating and distributing political power.

I explain why this is so in my books A Radically Beneficial World: Automation, Technology and Creating Jobs for All and Why Our Status Quo Failed and Is Beyond Reform.

If we don’t change the way money is created and distributed, we change nothing. Money = power. If we don’t devise a form of money that is beyond the reach of central banks and states, all “reform” is just window-dressing, simulacra of “change” that simply solidifies the system’s bogus claim of being reformable.

Cryptocurrencies are in their infancy. There will be many more iterations of Cryptocurrencies beyond bitcoin and Ethereum; recall that bitcoin went public in 2009.

There are security challenges with cryptocurrencies, and the potential for central-state meddling via backdoors in computer operating systems. But once we understand that community and the potential for a less toxic society and economy are crippled by the centralized structure of the state and its money, then there is no way forward but to develop structures of money, work, community, purpose and meaning that are outside the direct control of the state and central bank.

This sort of “crazy talk” is unwelcome. As I noted earlier this week on my chart of the Ministry of Propaganda, in the status quo, skepticism is always a conspiracy or a hoax.

So instead we consider an exploding opiate epidemic, an epidemic of obesity and metabolic illnesses, a discourse of inchoate rage and a Grand Canyon-sized gap between what we’re told is true and what we experience as true “normal.” These things are not normal; they are manifestations of a system that can only generate one output: self-destruction.

“Why Don’t You Just Get a Better Job” and Other Dumb Shit People Say to Low-Income Earners Stuck in Precarious Work

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precarious-work

By Chloe Ann King

Source: The Hampton Institute

For most of my working life I have been stuck in the hospitality industry which is lowly paid, painfully precarious and poorly regulated. In New Zealand, where I live, hospitality employers mostly treat you as nothing more than an easily replaceable unit to turn-over-profit. I have spent over a decade in this industry and as such I have become acutely aware of the fact that no matter how many shifts I work or how many poorly paid jobs I undertake; I will never have enough money to meet rising living costs.

Sometimes, my life is a bit depressing. You know what I mean? I get up, I go and work one of my multiple jobs and I come home. Each week I check my bank balance and I feel pretty put-out about how low my pay is as compared to how hard I worked for it.

Obviously, working hard at minimum wage jobs is never going to land me economic security. No matter how hard I have worked in the hospo industry I have never ever received a pay-rise, not once. The lie of “hard work” serves to convince us that if we fail to achieve happy, healthy and joy filled lives which are economically secure thanks to well paid jobs, it is because we failed to work hard enough for it. Constantly we are told that external factors do not affect us. This type of pervasive ‘positive’ rhetoric isendlessly used by many self-help Gurus such as Tony Robbins, one of America’s most well-known motivational speakers.

The lie of “hard work” is pitched to us – those from the working and lower classes, by not only self-help gurus and spiritualists but politicians and well intentioned high school teachers and even our parents, as being one of the best paths to prosperity. This myth is perpetuated and disseminated by the mainstream media as motivational newsworthy ‘human interest’ stories. However, there is very little which is human about these types of stories. The core of these news pieces has nothing to do with humanity or being human and everything to do with selfishness and individualism and play on insecurities and our need to compare our lives to others who we think or we are passive aggressively told, have it better than us.

A few months ago the NZ Herald (New Zealand’s most read newspaper which controls the national narrative) ran yet another one of these “motivational” articles on a young landlord named Gary Lin. Who has managed to buy up a staggering eleven properties citing “hard work” as a reason for his success. He told the NZ Herald,

“Work hard, work smart, save hard, and invest smart. Wealth creation is not rocket science – perseverance and hard work can get you there.”

As if wealth creation is something we should as young people, be aspiring to. In times of great wealth inequality, we should be demanding wealth dispersal not setting out to create and covet wealth for ourselves. Gary, unlike most of us, was given a hefty “leg up” or what we poor folk call a “handout” by his father in the sum of $200,000 as a wedding gift which allowed him to buy his first home which cost him $175,000. I guess for some people money really does grow on trees.

I hate to break it to you Gaz – can I call you Gaz? But “hard work” had nothing to do with your successes in life.

Gaz got lucky. He won the genetic lottery and was born into wealth – he did not earn the money that helped him buy his first home. It was given to him. Instead of using his unearned wealth to help others he made the choice to punch-down and profit off the growing number of people stuck in the rental trap by hoarding properties. Gaz has engaged in predatory behavior by renting his properties out at market rental rates. In an unregulated rental market the odds are never in favor of tenants. As George Monbiot wrote for the Guardian, “Rent is another term for unearned income.”

People like Gaz rarely acknowledge their economic success is at the expense of those from the lower and working classes. To recognize this Gaz, might have to feel a little bit bad about how he came into his millionaire property portfolio. He might have some kind of world shattering epiphany that he is not as smart as he believes and his successes are owed more to an ability to stomach the ruthless actions and attitudes needed to ‘make it’ in a society that is quickly turning into a dystopian one. Which makes The Hunger Games, look like child’s play. Sociopathy and luck had more to do with Gaz’s successes in life than actual “hard work”, talent and intelligence.

Lawyer and anti-poverty activist David Tong, responded to Gaz’s flawed belief that anyone can own property if they just “work hard” enough, with these words:

“Motivational read from the NZ Herald: You too can be a rich property investor. If dad gives you a $200,000 gift”

“Hard work” and motivation don’t mean shit in a broken economy that was built on the blood, backs and bones of the working class and the most marginalized and vulnerable. Increasingly, accessing upward mobility – which buying property can help you obtain as well as a better quality of life, is becoming an impossible task because of low wages, insecure work and a flooded job market. People are just struggling to get off minimum wage let alone save for a house.

***

The New Zealand Council of Trade Unions states that “At least 30% of New Zealand’s workers – over 635,000 people – are in insecure work. We believe it may well cover 50% of the workforce.” No matter how hard you work it is impossible to get ahead when your employer only offers you inconsistent hours and denies your basic right to a guarantee of minimum hours.

Casual contracts are used widely within the hospitality and service industries and state that your employer owes you “no minimum of hours.” But the expectation is that you will cover and come in when needed and if you refuse you are often faced with penalties. Such as having your shifts cut the next week. Having the stability of a salary as opposed to waged work is a far off dream for so many of us. You can’t budget let alone save money for a house when you never know what your pay-check is going to be from one week to the next.

Economic insecurity because of cut shifts and insecure hours has been a major feature of my working life. For example, last year just before Christmas I had my shifts cut in half. I went from working between four and five shifts a week down to only two. I was given six days’ notice and when I pointed out how hard this would hit me economically to a Duty manager I was told, “I should go and find a second job” and reminded that “I was only on a casual contract so there was not much I could do about it.”

For the last few months I had been back-breakingly flexible for this employer. I had come in whenever I was needed and covered shifts at short notice. I had worked hard to make every customer’s experience an enjoyable one, all this for minimum wage. I spent most of December desperately scrounging around for a second job, as did two other workers who had suffered the same fate.

I popped into the same work soon after my shifts had been cut to collect my tips and one of the regulars who had been drinking, accosted me verbally and demanded to know why I was in such vocal support of the recent rolling strikes of Bunnings Warehouse workers. These workers had been subject to Zero Hour contracts, eternal bullying and harassment from managers and no guarantee of shifts or rosters. He said “why don’t these Bunnings workers just go out and get a better job”. This statement coming from a white male Baby Boomer who enjoyed free tertiary education and did not start his working life off in debt. All is crimson and gold in middle class Whiteywood, I guess.

“Why don’t you just go and get a better job?” This singular narrative epitomizes the ignorant attitudes of people like Gaz and the regular from my work whose name is ironically Gary, as well. It also puts the sole responsibility of finding well paid and meaningful work onto the worker, while absolving a government’s responsibility to push for job creation which serves their citizenry and the environment and to raise the minimum wage to a living wage, in New Zealand.

If over 30% of the workforce is stuck in precarious work and large sectors of the workforce earn below Aotearoa’s living wage of $19.25 an hour, finding “better work” is statistically impossible for a vast majority of us. There are thousands of hospitality businesses in Auckland, New Zealand, and only a handful pay a living wage and nearly none offer a guarantee of hours. As such telling people to “get a better job” is like telling them to buy a lotto ticket and live in hope they take out the jackpot.

***

No matter what the Gaz’s, Gary’s and the self-help superstars such as Tony Robbins of this world have to say on the myth of “hard work” and perseverance paying off one day, the reality is our ability to access upward mobility; buy a house; obtain a decent standard of living is tied to what type of work you can access. External factors not only deeply impact people’s lives they oppress those who do not benefit from certain types of privilege. Not all roads lead to Rome. More often than not for us poor folk they lead to roadblocks and hurdles that increase based on the colour of your skin, the class you were born into and/or your gender, how bodily abled you are and your sexuality or a combination of all of these.

People’s situations are complicated and difficult and cannot be curtailed into passive aggressive motivational “one liners” that nearly always punch-down and not up. Our working class struggles cannot be solved by a set of self-help rules or keys or steps which are meant to guide anyone to economic stability and lead you to the life of your dreams and a perfect job. In the book, The New Soft War on Women, the chapter entitled ‘Doing Well May Not Work Out So Well’, Caryl Rivers and Rosaling C. Barnett, write,

“We like to believe that the workplace is fair and that if we do a good job, we will be rewarded. After all, that’s the American way. But this belief is less true for women than it is for men. Indeed, too often women’s performance which is stellar gets fewer rewards than men do – even men who are less than outstanding.”

During a major speech at Wellesley College, presidential candidate Hillary Clinton, talked about the role women can play in politics and public life, she said,

“We know we’ve got to keep pushing at that glass ceiling. We have to try and break it… Obviously. I hope to live long enough to see a woman elected president of the United States.”

Encouraging women to break the glass ceiling is all well and good but what if moving off minimum wage and accessing a living wage, is no easy feat? In America alone, 6 out of every 10 women are stuck on minimum wage.

The Glass Ceiling is so high up most of us can barely even see it. Researchers at the non-profit group Catalyst point out, “[…] when you start from behind, it’s hard enough to keep pace, never mind catch up-regardless of what tactics you use.” Both Rivers and Barnett went on to write,

“Doing all the right things to get ahead-using those strategies regularly suggested in self-help books, coaching sessions and the popular press-pays off much better for men than it does for women.”

As women, we do not struggle to “get ahead” because of personal failings but this struggle is born from structural sexism which creates gendered inequality.

Telling white women and women of colour to be more ambitious and just “work harder” if they want to smash the Glass Ceiling and obtain a decent standard of living is almost laughable. Considering many women, in particular, indigenous women and women of colour, are still struggling to make it out of the basement. Still, self-help gurus such as Tony Robbins preach to millions that none of what I am writing about actually matters: race, gender… whatever you were born as, and into, does not have to hold you back. You just have to believe in yourself and follow the Tony Robbin’s step-by-step guide to snagging a life beyond anything you could ever dream of. Which he has called: ’12 Keys to an Extraordinary Life’. You couldn’t make this shit up. He said at a recent event:

“I don’t care if you are young or old, I don’t care what your colour is, what your gender is, what country you come from, if you understand the science of building wealth you can have an abundance of it. If you violate those rules [of the 12 keys to an Extraordinary Life] either because you’re ignorant to them or you don’t apply then, you are going to have financial stress”

Tony, who sounds uncomfortably like Gaz in his belief anyone can become a millionaire, may as well have just said “we are all one”! “Everyone can make it no matter what grinding and economically depressive situations you come from”! And be done with it.

Financial stress is not brought about because you have unknowingly violated one or more of the ’12 Keys to an Extraordinary Life’ which Tony has made tens of millions off. Violating female stereotypes of passivity have a lot more to do with our failure or success in the workplace than how hard we do, or do not, hustle for top positions and top earning brackets. Rivers and Barnett write, “Competent women violate the traditional female stereotype of passivity. And that violation can trigger a reaction of fear and loathing [in the workplace].”

Financial stress is brought about because of injustices such as the pay-gap and the coloured pay-gap. Something Tony, has clearly gone out of his way to ignore. Self-help gurus and people like Gaz and Gary tend to, “displace questions of social justice and frame their rhetoric by the individualist and corporatist values of a consumer society,” as both Jeremy Carrette and Richard King wrote in the book, Selling Spirituality: the silent take over of religion.

Both Rivers and Barnett point out in relation to the American pay gap,

“Hispanic/Latino women have the lowest median earnings, earning just 55 percent of the median weekly earnings of white men; black women have, median weekly earnings of 64 percent of those of white men.”

The pay gap for America’s first nation indigenous women also sits at 55 cents in the dollar compared to white men, as non-profit AAUW reports. Indigenous women are faced with earning nearly half of what white men do in America.

Similarly, in Aotearoa indigenous Maori and Pasifika women, face significant coloured/indigenous pay-gaps compared to white men and women. TheDominion Post, reported last year, “Maori and Pasifika women are more likely to be in the lowest paying jobs, which increases the poverty in their lives and communities.” The Human Rights Commission has been tracking unfairness and inequality at work and cites that Pasifika women on average earn $57,668 while white men earn $66,900. What this data shows us is that, “Men are paid more than women overall and within ethnic groups. The effects increase when combining several factors as is the case between New Zealand European men and Pacific women. These patterns have persisted over time.”

These “patterns” of women of colour and Indigenous women being paid significantly less than white men and women, to do the same damn jobs have “persisted” all over the world from America to Aotearoa. Injustice and oppression is locally and globally connected.

A more accurate description of what the aspirational metaphor of the Glass Ceiling is made out of is to say it is made from lead. So many women are much more likely to fall off what Rivers and Barnett have labelled the “glass cliff” than triumphantly smash the glass ceiling into a million little pieces. Following Tony Robbin’s guide to obtaining some magical, fairy-tale life, or any other pseudo bullshit glittery guides to financial freedom, aren’t going to be very effective for women born into a system which was built to silence and eradicate them.

The only thing I am aspiring to “smash” is white imperial patriarchal systems that at best disempower women and at worst, brutally and often violently oppress them.

***

As workers we are criticized for our behavior whether we are told we need to be “more ambitious” or we “just need to work harder” in response to our perceived failure to land a great job with good pay and consistent hours. I am so tired of listening to people who endlessly tell me to go and get a “better job” or a “real job” (what does that even mean?!). And I have lost count of the times I have been told by people who hold anti-protester positions to “go and get a job” while I am on the picket line or the protest ground. As if the low waged work I do counts for absolutely nothing. As if service industry work is some kind of phantom job.

This is for anyone who has ever told a service worker to go and get a “job” or a “real job”: why don’t you make your own double shot soy latte, flip your own burgers and pour your own damn beer and make your own designer espresso martini, which costs more than I make in an hour.

When as a worker, I refuse to put up with horrible workplace conditions and hit the picket line or call the Union as a form of resistance I have been called a “trouble maker”, “dirty hippy” and an “inconvenience”. I am proud to be all of those things. I am glad I stood up and was brave and risked job loss (sometimes I have lost my job for speaking out) and arrest in an attempt to better my workplace conditions. The only people who are “dirty” are those who seize on disaster capitalism and economically benefit from the oppression of others… I am looking at you Tony Robbin’s and Gaz.

We need more workers collectively rising up and following the lead of Health Care workers, Bunning Warehouse and Supermarket workers and more recently Bus drivers. Who have all relentlessly hit union backed picket lines to demand ‘fair pay for fair work’ and better work conditions, in New Zealand. And less people thinking magically one day their lives will get better if they just play by the rules and perform their duties at work without complaint. This is nothing but blind faith. It is like believing in god: no matter how long you patiently wait he is not going to come and save you.

People from the working classes and those who have been in the wake of the 2008 financial crash, disenfranchised from the middle and upper-classes can save each other. But we need to refuse to allow those who hold power to continue to pit us against one another in some kind of Capitalist Death Match. Where the only prize you get is some demeaning job where the wages are so low you have to pick between buying food or paying the electricity bill. Starving or freezing does not sound like much of a “win” to me. It sounds like bullshit.

The more people who push against injustice in staggering numbers the harder it is for the media to ignore us and distort our messages of resistance.

Many people’s grinding situations have nothing to do with individual ‘bad choices’ or laziness or you know, violating the ’12 Steps to an Extraordinary Life’. No matter how many times we hear rotten rhetoric like this we must refuse – absolutely – to accept these types of pervasive and dominant narratives. At their core these narratives use shame and ruggedly focus on the individual as a method to pacify and silence. We must disrupt language that is designed to disempower and divide workers while seeming to empower. We need to seek out ways to elevate the voices of our most vulnerable and the messages of people of conscience who can envision a better world and whose political imaginations outstretch the dominant reality.

Lastly, we need to fight and stand with other workers against employers who exploit their employees and view them as nothing more than units to turn-over capital. Jeremy Carrette and Richard King, went on to write in their before mentioned book:

“We are never obliged to accept the dominant version of reality (however conceived throughout history) without question.”

In a highly indebted world, austerity is a permanent state of affairs

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By Mark Blyth

Source: Aeon

By 2010, everyone had heard the ‘austerity’ rallying cry. Immediately following the 2008 financial crisis, especially in Europe, it resounded: ‘Stimulate no more, now is the time for all to tighten!’ And tighten governments did, cutting public expenditure across continental Europe, and in the United Kingdom and the United States.

The logic behind ‘austerity’ holds that ‘the market’ – which the public had just bailed out – did not like the debt incurred when states everywhere rescued and recapitalised their banking systems. Unsurprisingly, tax revenues fell as the economy slowed and state expenditures rose. And what were once private debts on the balance sheets of banks became public debt on the balance sheet of states. Given this sorry state of affairs, states (policymakers and business leaders argued) had to take action to restore ‘business confidence’ – which is apparently always and everywhere created by cutting government spending. So governments cut.

Public debt, however, grew, because economies got smaller and grew slower the more they cut. The ‘confidence fairy’ as Paul Krugman named the expected effect, simply failed to show up. Why?

The reason is simple – and it is surprising anyone thought that anything else would happen. Imagine an economy as a sum, with a numerator and a denominator. Make total debt 100 and stick that on the top (the numerator). Make Gross Domestic Product (GDP) 100 and stick that on the bottom (the denominator) to give us a 100 per cent debt-to-GDP ratio. If you cut total spending by 20 per cent to restore ‘confidence’, the economy is ‘balanced’ at 100/80. That means the debt-to-GDP ratio of the country just went up to 120 per cent, all without the government issuing a single cent of new debt.

In short, cuts to spending in a recession make the underlying economy contract. After all, government workers have lost jobs or income, and government workers not shopping has the same effect as private sector workers not shopping. So the debt goes up as the economy shrinks further. States respond by cutting spending further. The pattern continues.

Having a common currency among different countries actually aggravates the problem because cuts in one state reverberate through many states, depressing them all. In 2008, euro area government debt as a share of the economy, including the already profligate Greeks, averaged around 65 per cent of GDP. Following budget cuts and monetary tightening (the European Central Bank twice pushed up interest rates in 2011) Euro Area government debt, by 2014, had risen to 92 per cent of GDP.

Greece is the poster child for this ‘denominator effect’. Under the auspices of ‘bailouts’ from the IMF and the EU, Greece cut more than 20 per cent of GDP in spending. It lost nearly 30 per cent in final consumption. Yet its debt increased from 103 per cent in 2006 to more than 180 per cent by 2014. That’s a 57 per cent increase in debt while spending is being cut.

Let’s look at the originating question again: how is destroying a third of the economy supposed to inspire consumer and business confidence? It won’t – unless you are a creditor – and that’s where the politics comes in.

If you are a holder of government debt (a creditor), three things hurt the value of your asset: if the inflation rate goes above the interest rate on your bond; if the exchange rate moves against you so that what the bond is worth vis-à-vis other currencies falls; and, of course, default – if the government takes the money and runs.

In the post-crisis world, despite major central banks putting trillions of dollars into the global money supply, there is almost no inflation anywhere in the developed world. Exchange rates (Brexit effects apart) are comparatively stable and ultimately move against each other relatively, so that’s not a huge worry. If the country whose debt you hold can have elections, and the public dares to vote against more budget cuts, the European Central Bank will shut down their banking system to make them revisit their choices. That’s what they did to Greece in the summer of 2015.

In this world, our present world, creditors will get paid and debtors will get squeezed. Budgets will be cut to make sure that bondholders get their money. And, in a highly indebted world, austerity – introduced as an ‘emergency’ measure to save the economy, to right the fiscal ship – becomes a permanent state of affairs.

As Britain’s former prime minister David Cameron said (standing beside a throne in a white bow-tie and tails) in 2013: ‘We need to do more with less. Not just now, but permanently.’ But here’s the question hidden in that blithe statement – are you and me part of the ‘we’ here?

Let’s go back to the huge jump in public debt that occurred when governments, ie the people, bailed out the banks. That debt was not, and is not, a liability. As difficult as it can be to make this reality part of the political conversation, public debt is an asset. Even at today’s low rates, it earns interest and retains value. No one is forced to invest in public debt, but every time bonds are issued investors show up and buy them by the truckload. By market criteria, public debt is a great investment.

But who pays for it? That would be the taxpayer. More generally, those who contribute to the payment of debts by not consuming government-produced services that have been cut. Basically, in most countries, this means that the bottom 70 per cent of the income distribution bears the cost of paying for public debt.

Over the past 25 years, to make up for chronically low wage growth, that same 70 per cent of the population has increased its personal indebtedness. Massively. Which means that in an economy deformed by austerity, they are the ones paying out – twice. With stagnant or declining wages, they have to service both the massive private debt they have accumulated to live and the public debt issued in their name.

Meanwhile, those whose assets the public bailed out – those with investible wealth, those who hold ‘all that debt’ and make money from it – do not suffer from the decline in public spending. Since they are net lenders, the hike in personal indebtedness does not trouble them either.

The result, and the situation in which we find ourselves, is a classic bad equilibrium. Those who can’t pay, and don’t earn enough, are being asked to pay the most to service debt, from which they do not and will not benefit. Those who can pay, and earn almost all the income, both contribute the least and benefit the most from ‘all that debt’.

Strip away all the electoral politics at the moment in the US, the UK, Italy, Spain and elsewhere, and that’s the underlying political economy. It’s a creditor/debtor stand-off where the creditors have the whip hand.

And yet, the more they crack the whip, the more the backlash against austerity, in all its forms, gains strength. Donald Trump, Jeremy Corbyn, Marine Le Pen, Pablo Iglesias: Left or Right, they are all riding debtor anger against creditor strength. It might be expressed as anger against, variously, ‘trade’ or ‘the elite’ or the ‘EU’. But what’s underneath all that is the politics of debt.

This is the ‘new normal’. It’s not about flat interest rates or anaemic growth rates. They are the consequences of austerity, not its causes. The new normal is the new politics of debtors versus creditors. It’s here to stay. As we already can see, it’s going to be anything but normal.

For Purely Technical Reasons

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peak-oil

By Dmitry Orlov

Source: Club Orlov

It is tempting for us to think that our technological choices—whether we choose to live in a city, a suburb or out in the country; whether we want to drive a pick-up truck, a gasoline-electric hybrid or ride a bicycle; whether we take a train, drive long distances or fly—are determined by our tastes. We may flatter ourselves that we are in control, and that our choices are reflective of our enlightened, environmentally conscious values. This view rests on a foundation of circular reasoning: we behave in enlightened ways because we are enlightened, and we are enlightened because, to wit, we behave in enlightened ways. As to why what we consider enlightened is in fact enlightened rather than a question of possibly questionable personal taste—that is not to be discussed: de gustibus non est disputandum.

But there is an alternative viewpoint, which seems more realistic in many ways, because it rests on a foundation of physical, technical specifics rather than fickle and arbitrary consumer preference, whim or taste. From this viewpoint, our technology and associated lifestyle choices are dictated by the technical requirements of their underlying technologies, both physical (the operation of the energy industry, the transportation industry, etc.) and political (the operation of political machines that segregate society by net worth and income, relegating wage-earners to a global disenfranchised underclass).

A few years ago I found out that I needed to replace the diesel engine on my boat (the old one blew up definitively) and looked at a number of options, one of which was to replace it with an electric motor and a large bank of batteries. The electric option was touted as being quiet, non-polluting, and having just enough range to get in and out of the marina and to get back to dock if the wind died during a typical daysail. It turned out to be more than twice as expensive as a replacement diesel engine. As to what one might do to take such a boat any great distance (that involves many hours of motoring) the solution is to… add a diesel engine hooked up to a very large alternator, at triple the cost of just replacing the diesel. And so I just replaced the diesel.

Diesel engines have a lot of positive qualities: they can run continuously for tens of thousands of hours; they can be rebuilt many times just by replacing the bearings, the cylinder sleeves, the piston rings and the valves; they are exceptionally reliable; the fuel they use is energy-dense. For these reasons, they are found throughout freight and construction industries and are used for small-scale power generation. They can be very large: the larger ships have engines that are as big as houses, with ladders welded to their cylinder walls, so that servicemen can climb down into them to service them after the cylinder head and the piston assembly are pulled out using an overhead shop crane. Small diesel engines make a lot less sense, and the silliest of them are the ones found on small yachts. There are many aspects of their design that make them silly, but there is also an overriding reason: they use the wrong fuel.

You see, diesel is a precious commodity, used in the transportation industry (by trucks, locomotives and ships), and in construction equipment, with no alternative that is feasible. A cousin of diesel fuel is jet fuel—another petroleum distillate—that is used to power jet engines, again, with no alternative that is feasible. And then there is a fuel that is only really useful as a small engine fuel: gasoline, that is. Gasoline engines beyond a certain size become much more trouble than they are worth.

Each barrel of crude oil can be distilled and refined into a certain amount of diesel and jet fuel, a certain amount of gasoline, some tar and some far less useful substances such as naphtha. The diesel is spoken for, because it literally moves the world; but if enough small engines cannot be found to burn all the gasoline that is produced, it becomes a waste product and has to be flared off at the oil refinery, at a loss. Indeed, prior to Henry Ford coming up with the brilliant plan to build cars cheap enough for his workers to afford, gasoline was dumped into rivers just to get rid of it, because while everyone burned kerosene (a distillate, like jet fuel and diesel) in lamps, cars remained playthings of the rich, and there simply wasn’t a market for any great quantities of gasoline.

Therefore, it became very important to find ways to sell gasoline, by finding enough uses for it, no matter how superfluous they happened to be. And although some people think that the private automobile is a symbol of luxury and freedom and feel the thrill of the open road, the reason they think that is because these ideas were implanted in their heads by the people who were tasked with finding a market for gasoline. Alongside cars, great effort was put into marketing all sorts of other small engines: for lawn mowers, jet skis, motorcycles, ATVs, boat outboard motors… The only semi-industrial use of gasoline is in chainsaws, small generators and air compressors, service and delivery vehicles, and outboard engines.

And so people were sold on the idea of driving their own car, whether they needed to or not, and spending lots of time stuck in traffic—all so that they would pay for gasoline. By causing all that excess traffic congestion, they also created the need to widen roads and highways, generating demand for another borderline useless petroleum product: road tar. And since there was a problem with cramming all these cars into cities (where cars are generally not needed if the cities are laid out using proper urban design, with sufficient numbers of tram, light rail and subway lines, etc.) the solution was to move everybody out to the suburbs. And so the reason half of the US population now lives in suburbia and drives has nothing to do with their needs, and everything to do with the need to sell them gasoline.

Some people may react negatively to the idea that their suburban castle and their magic chariot are all just part of a plan to make them spend much of their life paying for the right to dispose of toxic waste in unsafe ways. Rest assured, their preprogrammed negative reaction is part of the plan. Every effort has been made to program people to think that this waste disposal job—carried out at one’s own expense—is, in fact, something that should be considered a sign of success. The most efficient way to motivate a slave to perform is to convince him that he is free. To this end, driving is celebrated in music and film and portrayed as a way of life. Calling it what it is—being a slave to a machine—is bound to cause cognitive dissonance, all the more so because driving a lot destroys one’s mind: in the immortal words of a character from the movie Repo Man, ”The more you drive, the less intelligent you become.” In this respect, most of the people living in the US are far past the point of no return, and it is pointless to attempt to impart to them any ideas that are discordant with the dead-end lifestyle into which they have been unconsciously coerced.

Getting back to electric vehicles, such as what my boat would have ended up if I were gullible and made of money: they are obviously a defective idea. Their range is limited, they take longer to charge than it takes to fill a gas tank, and they use expensive and dangerous lithium-ion batteries that need periodic replacement. There is not enough lithium available to continue making batteries for laptops and smartphones (which periodically burst into flames), never mind providing for a giant expansion of battery-building to support lots of electric cars. Perhaps most importantly, they shrink the market for gasoline. So, what’s the reason behind the push?

It certainly isn’t part of any particular effort to electrify transportation in general, because no electric solution exists for ships or planes, and electrifying rail freight is an impossibly expensive proposition. It certainly isn’t part of an effort to cut greenhouse gas emissions, because most of the ways electricity is currently generated is by burning coal and natural gas—and will be, while supplies last, because electricity is hard to store, and no matter how many solar arrays and wind farms are installed something will be needed to power the electric grid on overcast, windless days.

No, the push for electric cars is motivated by a different sort of technology—political technology. You see, the oil age is drawing to a close. Last year the oil companies only discovered 1 barrel of oil for every 10 barrels they produced; at the turn of the century it was closer to 1 for every 4. At the same time, most of the easy-to-get-at oil has already been produced, and now it takes 1 barrel’s worth of energy to produce something like 10 barrels, whereas at the dawn of the age of oil it was closer to 1 for every 100 barrels. Such a low level of net energy production is turning out to be insufficient to maintain an industrial civilization, and as a result economic growth has largely stalled out. And although large investments in oil production have succeeded in keeping large volumes of oil flowing, for now, this is turning out to be an ineffective way to invest money, with many energy companies, once so profitable, now unable to pay the interest on their debt. And even though constant injections of free money are currently keeping developed economies from cratering into bankruptcy, it has been clear for some time that each additional dollar of debt produces significantly less than a dollar’s worth of economic growth. Growing debt within a growing economy can be very nice; but if the economy isn’t growing as fast, it’s fatal.

As the oil age winds down, personal transportation, in the form of the automobile, is bound to once again become a plaything of the very rich. But then, when it comes to electric cars, it already is! And I don’t mean Tesla: the most commonly used electric vehicle worldwide is the golf cart. And who uses golf carts? Members of golf clubs; guests at resorts; residents of posh gated communities; employees at corporate and academic campuses… And what do all these people have in common? They are all members of the salaried elite; they are definitely not members of the wage-earning class. To them, the electric car offers a way of preserving a semblance of the status quo for themselves while setting themselves apart (in their own minds) from all of the gasoline-burning riffraff. Let the great unwashed in the flyover states, with their pickup trucks complete with gun racks, burn what’s left of the gasoline while overdosing on synthetic opiates while the salaried elites and individuals of high net worth, ensconced in their campuses and gated communities, will create a different future for themselves, replete with wind turbines, solar panels and electric cars (until they all get shot by all those they have disenfranchised).

Slowly, Then All at Once

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By James Howard Kunstler

Source: Clusterfuck Nation

The staggering incoherence of the election campaign only mirrors the shocking incapacity of the American public, from top to bottom, to process the tendings of our time. The chief tending is permanent worldwide economic contraction. Having hit the resource wall, especially of affordable oil, the global techno-industrial economy has sucked a valve in its engine.

For sure there are ways for human beings to inhabit this planet, perhaps in a civilized mode, but not at the gigantic scale of the current economic regime. The fate of this order has nothing to do with our wishes or preferences. It’s going down whether we like it or not because it was such a violent anomaly in world history and the salient question is: how do we manage our journey to a new disposition of things. Neither Trump or Clinton show that they have a clue about the situation.

The quandary I describe is often labeled the end of growth. The semantic impact of this phrase tends to paralyze even well-educated minds, most particularly the eminent econ professors, the Yale lawyers-turned-politicos, the Wall Street Journal editors, the corporate poobahs of the “C-Suites,” the hedge fund maverick-geniuses, and the bureaucratic errand boys (and girls) of Washington. In the absence of this “growth,” as defined by the employment and productivity statistics extruded like poisoned bratwursts from the sausage grinders of government agencies, this elite can see only the yawning abyss. The poverty of imagination among our elites is really something to behold.

As is usually the case with troubled, over-ripe societies, these elites have begun to resort to magic to prop up failing living arrangements. This is why the Federal Reserve, once an obscure institution deep in the background of normal life, has come downstage front and center, holding the rest of us literally spellbound with its incantations against the intractable ravages of debt deflation. (For a brilliant gloss on this phenomenon, read Ben Hunt’s essay “Magical thinking” at the Epsilon Theory website.)

One way out of this quandary would be to substitute the word “activity” for “growth.” A society of human beings can choose different activities that would produce different effects than the techno-industrial model of behavior. They can organize ten-acre farms instead of cell phone game app companies. They can do physical labor instead of watching television. They can build compact walkable towns instead of suburban wastelands (probably even out of the salvaged detritus of those wastelands). They can put on plays, concerts, sing-alongs, and puppet shows instead of Super Bowl halftime shows and Internet porn videos. They can make things of quality by hand instead of stamping out a million things guaranteed to fall apart next week. None of these alt-activities would be classifiable as “growth” in the current mode. In fact, they are consistent with the reality of contraction. And they could produce a workable and satisfying living arrangement.

The rackets and swindles unleashed in our futile quest to keep up appearances have disabled the financial operating system that the regime depends on. It’s all an illusion sustained by accounting fraud to conceal promises that won’t be kept. All the mighty efforts of central bank authorities to borrow “wealth” from the future in the form of “money” — to “paper over” the absence of growth — will not conceal the impossibility of paying that borrowed money back. The future’s revenge for these empty promises will be the disclosure that the supposed wealth is not really there — especially as represented in currencies, stock shares, bonds, and other ephemeral “instruments” designed to be storage vehicles for wealth. The stocks are not worth what they pretend. The bonds will never be paid off. The currencies will not store value. How did this happen? Slowly, then all at once.

We’re on a collision course with these stark realities. They are coinciding with the sickening vectors of national politics in a great wave of latent consequences built up by the sheer inertia of the scale at which we have been doing things. Trump, convinced of his own brilliance, knows nothing, and wears his incoherence like a medal of honor. Clinton literally personifies the horror of these coiled consequences waiting to spring — and the pretense that everything will continue to be okay with her in the White House (not). When these two gargoyle combatants meet in the debate arena a week from now, you will hear nothing about the journey we’re on to a different way of life.

But there is a clear synergy between the mismanagement of our money and the mismanagement of our politics. They have the ability to amplify each other’s disorders. The awful vibe from this depraved election might be enough to bring down markets and banks. The markets and banks are unstable enough to affect the election.

In history, elites commonly fail spectacularly. Ask yourself: how could these two ancient institutions, the Democratic and Republican parties, cough up such human hairballs? And having done so, do they deserve to continue to exist? And if they go up in a vapor, along with the public’s incomes and savings, what happens next?

Enter the generals.

Living In A Van Down By The River – Time To Face The True State Of The Middle Class In America

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By Michael Snyder

Source: InvestmentWatch

Do you remember the old Saturday Night Live sketches in which comedian Chris Farley portrayed a motivational speaker that lived in a van down by the river?  Unfortunately, this is becoming a reality for way too many Americans.  As the middle class has shrunk and the cost of living has increased, a lot of people have decided to quite literally “live on the road”.  Whether it is a car, a truck, a van, a bus or an RV, an increasing number of Americans are using their vehicles as their homes.  Just recently, someone that I know took a trip down the west coast of the United States and stayed at a number of campgrounds along the way.  What she discovered was that a lot of people were actually living at these campgrounds.  Of course there are some that actually prefer that lifestyle, but many others are doing it out of necessity.

Earlier this week, Circa.com posted a story about “the van life”.  One of the individuals that they featured was a recent graduate of the University of Southern California named Stephen Hutchins.  Without much of an income at the moment, he decided that the best way to cut expenses was to live in his van…

“The main expenses are insurance for the van, which is like $60 a month,” said Hutchins. “Then, I have a storage unit for like $60.”

That puts his monthly rent at $120. The van cost him just $125 at an auction.

Living in a van is certainly not the most comfortable way to go, and many of you are probably wondering how he performs basic tasks such as cooking and bathing.  Well, it turns out that he makes extensive use of public facilities…

He showers at the gym, cooks on a portable stove on a sidewalk (he stores his butane at his friends’ place nearby) and uses wifi at nearby coffeeshops.

For a while such a lifestyle may seem like “an adventure”, but after a while it will start to get really old.  And not a lot of women are going to be excited about dating a man that lives in a van, and you certainly wouldn’t want to raise a family in a vehicle.

Sadly, just like during the last economic crisis many Americans are getting to the point where staying in their homes may not be an option.  Just check out the following excerpt from a recent New York Post article entitled “The terrifying signs of a looming housing crisis“…

The number of New Yorkers applying for emergency grants to stay in their homes is skyrocketing — as the number of people staying in homeless shelters reached an all-time high last weekend, records show.

There were 82,306 applications for one-time emergency grants to prevent evictions in fiscal 2016, up 26 percent from 65,138 requests the previous year, according to the Mayor’s Management Report.

I put a couple of phrases in that quote in bold because I really wanted you to notice a couple of things.

First of all, it is very alarming to hear that the number of New Yorkers staying in homeless shelters “reached an all-time high” last weekend.  I thought that we were supposed to be in an “economic recovery”, but apparently things in New York are rapidly getting worse.

Secondly, the fact that applications for emergency grants are up 26 percent compared to last year is another indication of how rough things are right now for average families in New York.  We all remember what happened when millions of families lost their homes to foreclosure across the nation during the last financial crisis, and nobody should want to see a repeat of that any time soon.

During this election season, Barack Obama and Hillary Clinton would like all of us to believe that the economy is doing just fine, but that is not true at all.  Even using the doctored numbers that the government gives us, Barack Obama is solidly on track to be the only president in all of U.S. history to never have a single year of 3 percent GDP growth, and he has had two terms to try to do that.

Gallup CEO Jim Clifton is also quite skeptical of this “economic recovery”, and he recently authored an article on this subject that is receiving a tremendous amount of attention.  The following is how that article begins…

I’ve been reading a lot about a “recovering” economy. It was even trumpeted on Page 1 ofThe New York Times and Financial Timeslast week.

I don’t think it’s true.

The percentage of Americans who say they are in the middle or upper-middle class has fallen 10 percentage points, from a 61% average between 2000 and 2008 to 51% today.

Other surveys have found that it is even worse than that.

For example, a Pew Research Center study from the end of last year discovered that the middle class in America has now actually become a minority in this country.

Here are some other numbers that Clifton included in his article…

  1. According to the U.S. Bureau of Labor Statistics, the percentage of the total U.S. adult population that has afull-time job has been hovering around 48% since 2010 — this is the lowest full-time employment level since 1983.
  2. The number of publicly listed companies trading on U.S. exchanges has been cut almost in half in the past 20 years — from about 7,300 to 3,700. Because firms can’t grow organically — that is, build more business from new and existing customers — they give up and pay high prices to acquire their competitors, thus drastically shrinking the number of U.S. public companies. This seriously contributes to the massive loss of U.S. middle-class jobs.
  3. New business startups are at historical lows. Americans have stopped starting businesses. And the businesses that do start are growing at historically slow rates.

Once upon a time, America was the land of opportunity.

We were the place where anything was possible and where entrepreneurship was greatly encouraged.

But today we strangle small businesses to death with rules, regulations, red tape and taxes.

If we want a stronger middle class, we need to create a much better environment for the creation of small businesses.  Small business ownership often lifts individuals into the middle class, and small businesses have traditionally been the primary engine for the growth of good jobs in this country.

If the middle class continues to shrink, poverty will continue to rise.  Previously I have written about how the number of homeless children in the United States has shot up by 60 percent since the last economic crisis, and Poverty USA claims that a staggering 1.6 million children slept either in a homeless shelter or in some other form of emergency housing during 2015.

If you will be sleeping in a warm bed in a comfortable home tonight, you should be thankful.  An increasing number of Americans are sleeping in tent cities, in their vehicles or on the streets.  These hurting people deserve our love, our compassion and our prayers.

 

A Universal Basic Income Is The Bipartisan Solution To Poverty We’ve Been Waiting For

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What if the government simply paid everyone enough so that no one was poor? It’s an insane idea that’s gaining an unlikely alliance of supporters.

By Ben Schiller

Source: FastCoexist.com

There’s a simple way to end poverty: the government just gives everyone enough money, so nobody is poor. No ifs, buts, conditions, or tests. Everyone gets the minimum they need to survive, even if they already have plenty.

This, in essence, is “universal minimum income” or “guaranteed basic income”—where, instead of multiple income assistance programs, we have just one: a single payment to all citizens, regardless of background, gender, or race. It’s a policy idea that sounds crazy at first, but actually begins to make sense when you consider some recent trends.

The first is that work isn’t what it used to be. Many people now struggle through a 50-hour week and still don’t have enough to live on. There are many reasons for this—including the heartlessness of employers and the weakness of unions—but it’s a fact. Work no longer pays. The wages of most American workers have stagnated or declined since the 1970s. About 25% of workers (including 40% of those in restaurants and food service) now need public assistance to top up what they earn.

The second: it’s likely to get worse. Robots already do many menial tasks. In the future, they’ll do more sophisticated jobs as well. A study last year from Carl Frey and Michael Osborne at Oxford University found that 47% of jobs are at risk of computerization over the next two decades. That includes positions in transport and logistics, office and administration, sales and construction, and even law, financial services and medicine. Of course, it’s possible that people who lose their jobs will find others. But it’s also feasible we’re approaching an era when there will simply be less to do.

The third is that traditional welfare is both not what it used to be and not very efficient. The value of welfare for families with children is now well below what it was in the 1990s, for example. The move towards means-testing, workfare—which was signed into law by Bill Clinton in 1996—and other forms of conditionality have killed the universal benefit. And not just in the U.S. It’s now rare anywhere in the world that people get a check without having to do something in return. Whatever the rights and wrongs of this, that makes the income assistance system more complicated and expensive to manage. Up to up to 10% of the income assistance budget now goes to administrating its distribution.

For these reasons and others, the idea of a basic income for everyone is becoming increasingly popular. There has been a flurry of reports and papers about it recently, and, unusually, the idea has advocates across the political spectrum.

The libertarian right likes basic income because it hates bureaucracy and thinks people should be responsible for themselves. Rather than giving out food stamps and health care (which are in-kind services), it thinks people should get cash, because cash is fungible and you do what you like with it.

The left likes basic income because it thinks society is unequal and basic income is redistributive. It evens up the playing field for people who haven’t had good opportunities in life by establishing a floor under the poorest. The “precariat” goes from being perpetually insecure to knowing it has something to live on. That, in turn, should raise well-being and produce more productive citizens.

The technology elite, like Netscape’s Marc Andreessen, also likes the idea. “As a VC, I like the fact that a lot of the political establishment is ignoring or dismissing this idea,” Albert Wenger, of Union Square Ventures, told a TED audience recently, “because what we see in startups is that the most powerful innovative ideas are ones truly dismissed by the incumbents.” A minimum income would allow us to “embrace automation rather than be afraid of it” and let more of us participate in the era of “digital abundance,” he says.

The exact details of basic income still need to be worked out, but it might work something like this: Instead of welfare payments, subsidies for health care, and tax credits for the working poor, we would take that money and use it to cover a single payment that would give someone the chance to live reasonably. Switzerland recently held an (unsuccessful) is planning to hold a referendum on a basic income this year, though no date is set. The proposed amount is $2,800 per month.

But would it actually work? The evidence from actual experiments is limited, though it’s more positive than not. A pilot in the 1970s in Manitoba, Canada, showed that a “Mincome” not only ended poverty but also reduced hospital visits and raised high-school completion rates. There seemed to be a community-affirming effect, which showed itself in people making use of free public services more responsibly.

Meanwhile, there were eight “negative income tax” trials in the U.S. in the ’70s, where people received payments and the government clawed back most of it in taxes based on your other income. The results for those trials was more mixed. They reduced poverty, but people also worked slightly less than normal. To some, this is the major drawback of basic income: it could make people lazier than they would otherwise be. That would certainly be a problem, though it’s questionable whether, in the future, there will be as much employment anyway. The age of robots and artificial intelligence seems likely to hollow out many jobs, perhaps changing how we view notions of laziness and productivity altogether.

Experiments outside the U.S. have been more encouraging. One in Namibia cut poverty from 76% to 37%, increased non-subsidized incomes, raised education and health standards, and cut crime levels. Another involving 6,000 people in India paid people $7 month—about a third of subsistence levels. It, too, proved successful.

“The important thing is to create a floor on which people can start building some security. If the economic situation allows, you can gradually increase the income to where it meets subsistence,” says Guy Standing, a professor of development studies at the School of Oriental and African Studies, in London, who was involved with the pilot. “Even that modest amount had incredible effects on people’s savings, economic status, health, in children going to school, in the acquisition of items like school shoes, so people felt in control of their lives. The amount of work people were doing increased as well.”

Given the gridlock in Congress, it’s unlikely we’ll see basic income here for a while. Though the idea has supporters in both left and right-leaning think-tanks, it’s doubtful actual politicians could agree to redesign much of the federal government if they can’t agree on much else. But the idea could take off in poorer countries that have more of a blank slate and suffer from less polarization. Perhaps we’ll re-import the concept one day once the developing world has perfected it?