“Where will the government find the money?” is no longer a valid objection to providing an economic safety net for the people. The government can find the money in the same place it just found more than $5 trillion for Wall Street and Corporate America: the central bank can print it. In an April 9 post commenting on the $1.77 trillion handed to Wall Street under the CARES Act, Wolf Richter observed, “If the Fed had sent that $1.77 Trillion to the 130 million households in the US, each household would have received $13,600. But no, this was helicopter money exclusively for Wall Street and for asset holders.”

“Helicopter money” – money simply issued by the central bank and injected into the economy – could be used in many ways, including building infrastructure, capitalizing a national infrastructure and development bank, providing free state university tuition, or funding Medicare, social security, or a universal basic income. In the current crisis, in which a government-mandated shutdown has left households more vulnerable than at any time since the Great Depression, a UBI seems the most direct and efficient way to get money to everyone who needs it. But critics argue that it will just trigger inflation and collapse the dollar. As gold proponent Mike Maloney complained on an April 16 podcast:

Typing extra digits into computers does not make us wealthy. If this insane theory of printing money for almost everyone on a permanent basis takes hold, the value of the dollars in your purse or pocketbook will … just continue to erode …. I just want someone to explain to me how this is going to work.

Having done quite a bit of study on that, I thought I would take on the challenge. Here is how and why a central bank-financed UBI can work without eroding the dollar.

In a Debt-Based System, the Consumer Economy Is Chronically Short of Money

First, some basics of modern money. We do not have a fixed and stable money system. We have a credit system, in which money is created and destroyed by banks every day. Money is created as a deposit when the bank makes a loan and is extinguished when the loan is repaid, as explained in detail by the Bank of England here. When fewer loans are being created than are being repaid, the money supply shrinks, a phenomenon called “debt deflation.” Deflation then triggers recession and depression. The term “helicopter money” was coined to describe the cure for that much-feared syndrome. Economist Milton Friedman said it was easy to cure a deflation: just print money and rain it down from helicopters on the people.

Our money supply is in a chronic state of deflation, due to the way money comes into existence. Banks create the principal but not the interest needed to repay their loans, so more money is always owed back than was created in the original loans. Thus debt always grows faster than the money supply, as can be seen in this chart from WorkableEconomics.com:

When the debt burden grow so large that borrowers cannot take on more, they pay down old loans without taking out new ones and the money supply shrinks or deflates.

Critics of this “debt virus” theory say the gap between debt and the money available to repay can be filled through the “velocity of money.” Debts are repaid over time, and if the payments received collectively by the lenders are spent back into the economy, they are collectively available to the debtors to pay their next monthly balances. (See a fuller explanation here.) The flaw in this argument is that money created as a loan is extinguished on repayment and is not available to be spent back into the economy. Repayment zeros out the debit by which it was created, and the money just disappears.

Another problem with the “velocity of money” argument is that lenders don’t typically spend their profits back into the consumer economy. In fact, we have two economies – the consumer/producer economy where goods and services are produced and traded, and the financialized economy where money chases “yields” without producing new goods and services. The financialized economy is essentially a parasite on the real economy, and it now contains most of the money in the system. In an unwritten policy called the “Fed put”, the central bank routinely manipulates the money supply to prop up financial markets. That means corporate owners and investors can make more and faster money in the financialized economy than by investing in workers and equipment. Bankers, investors and other “savers” put their money in stocks and bonds, hide it in offshore tax havens, send it abroad, or just keep it in cash. At the end of 2018, US corporations were sitting on $1.7 trillion in cash, and 70% of $100 bills were held overseas.

Meanwhile the producer/consumer economy is left with insufficient investment and insufficient demand. According to a July 2017 paper from the Roosevelt Institute called “What Recovery? The Case for Continued Expansionary Policy at the Fed”:

GDP remains well below both the long-run trend and the level predicted by forecasters a decade ago. In 2016, real per capita GDP was 10% below the Congressional Budget Office’s (CBO) 2006 forecast, and shows no signs of returning to the predicted level.

The report showed that the most likely explanation for this lackluster growth was inadequate demand. Wages were stagnant; and before producers would produce, they needed customers knocking on their doors.

In ancient Mesopotamia, the gap between debt and the money available to repay it was corrected with periodic debt “jubilees” – forgiveness of loans that wiped the slate clean. But today the lenders are not kings and temples. They are private bankers who don’t engage in debt forgiveness because their mandate is to maximize shareholder profits, and because by doing so they would risk insolvency themselves. But there is another way to avoid the debt gap, and that is by filling it with regular injections of new debt-free money.

How Much Money Needs to Be Injected to Stabilize the Money Supply?

The mandated shutdown from the coronavirus has exacerbated the debt crisis, but the economy was suffering from an unprecedented buildup of debt well before that. A UBI would address the gap between consumer debt and the money available to repay it; but there are equivalent gaps for business debt, federal debt, and state and municipal debt, leaving room for quite a bit of helicopter money before debt deflation would turn into inflation.

Looking just at the consumer debt gap, in 2019 80% of US households had to borrow to meet expenses. See this chart provided by Lance Roberts in an April 2019 article on Seeking Alpha:

After the 2008 financial crisis, income and debt combined were not sufficient to fill the gap. By April 2019, about one-third of student loans and car loans were defaulting or had already defaulted. The predictable result was a growing wave of personal bankruptcies, bank bankruptcies, and debt deflation.

Roberts showed in a second chart that by 2019, the gap between annual real disposable income and the cost of living was over $15,000 per person, and the annual deficit that could not be filled even by borrowing was over $3,200:

Assume, then, a national dividend dropped directly into people’s bank accounts of $1,200 per month or $14,200 per year. This would come close to the average $15,000 needed to fill the gap between real disposable income and the cost of living. If the 80% of recipients needing to borrow to meet expenses used the money to repay their consumer debts (credit cards, student debt, medical bills, etc.), that money would void out debt and disappear. These loan repayments (or some of them) could be made mandatory and automatic. The other 20% of recipients, who don’t need to borrow to meet expenses, would not need their national dividends for that purpose either. Most would save it or invest it in non-consumer markets. And the money that was actually spent on consumer goods and services would help fill the 10% gap between real and potential GDP, allowing supply to rise with demand, keeping prices stable. The end result would be no net increase in the consumer price index.

The current economic shutdown will necessarily result in shortages, and the prices of those commodities can be expected to inflate; but it won’t be the result of “demand/pull” inflation triggered by helicopter money. It will be “cost/push” inflation from factory closures, supply disruptions, and increased business costs.

International Precedents

Critics of central bank money injections point to the notorious hyperinflations of history – in Weimar Germany, Zimbabwe, Venezuela, etc. These disasters, however, were not caused by government money-printing to stimulate the economy. According to Prof. Michael Hudson, who has studied the question extensively, “Every hyperinflation in history has been caused by foreign debt service collapsing the exchange rate. The problem almost always has resulted from wartime foreign currency strains, not domestic spending.”

For contemporary examples of governments injecting new money to fund domestic growth, we can look to China and Japan. In the last two decades, China’s M2 money supply grew from 11 trillion yuan to 194 trillion yuan, a nearly 1,800% increase. Yet the average inflation rate of its Consumer Price Index hovered between 2% and 3% during that period. The flood of money injected into the economy did not trigger an inflationary crisis because China’s GDP grew at the same fast clip, allowing supply and demand to rise together. Another factor was the Chinese propensity to save. As incomes went up, the percent of income spent on goods and services went down.

In Japan, the massive stimulus programs called “Abenomics” have been funded through bond purchases by the Japanese central bank. The Bank of Japan has now “monetized” nearly half the government’s debt, injecting new money into the economy by purchasing government bonds with yen created on the bank’s books. If the US Fed did that, it would own $12 trillion in US government bonds, over three times the $3.6 trillion in Treasury debt it holds now. Yet Japan’s inflation rate remains stubbornly below the BOJ’s 2% target. Deflation continues to be a greater concern in Japan than inflation, despite unprecedented debt monetization by its central bank.

UBI and Fears of the “Nanny State”

Wary critics warn that a UBI is the road to totalitarianism, the “cashless society,” dependence on the “nanny state,” and mandatory digital IDs. But none of those outcomes need accompany a UBI. It does not make people dependent on the government, so long as they can work. It is just supplementary income, similar to the dividends investors get from their stocks. A UBI does not make people lazy, as numerous studies have shown. To the contrary, they become more productive than without it. And a UBI does not mean cash would be eliminated. Over 90% of the money supply is already digital. UBI payments can be distributed digitally without changing the system we have.

A UBI can serve the goals both of fiscal policy, providing a vital safety net for citizens in desperate times, and of monetary policy, by stabilizing the money supply. The consumer/producer economy actually needs regular injections of helicopter money to remain sustainable, stimulate economic productivity, and avoid deflationary recessions.

Republished from EllenBrown.com

The post A Universal Basic Income Is Essential and Will Work appeared first on P2P Foundation.

A national conversation has begun which is alarming, yet also familiar. It talks about costs and trade-offs, losses and accounts. It is a conversation about human lives framed in the language of economics.

A recent study by Philip Thomas, professor of risk management at Bristol University, suggests that ‘If the coronavirus lockdown leads to a fall in GDP of more than 6.4 per cent more years of life will be lost due to recession than will be gained through beating the virus’.

Research like this presents us with a terrible dilemma, even leading some people to wonder whether the trade-off for trying to save elderly and vulnerable lives is really worth it, when it would cripple the economy for decades.

In times like these it helps to remember that we are presented with this misleading narrative every time we decide to act on our conscience. We are told we cannot halt the arms trade, because we will lose jobs. We are told we cannot reduce carbon emissions, because we will lose jobs. Now we are told we cannot save people’s lives, because we will lose jobs. For decades governments have used the threat of recession to badger us into maintaining an economic system that has made the poor poorer and the rich richer at the expense of the Earth’s support system. We are told this makes economic sense, but does it? 

Economics vs Chrematistics

In their book ‘For the Common Good’ economist Herman Daly and theologian John Cobb, Jr explain the difference between the practice of economics (from the Greek word oikonomia ‘the management of the household so as to increase its use value to all members over the long term’) and chrematistics (from khrema, meaning money and referring to ‘the branch of political economy relating to the manipulation of property and wealth so as to maximize short-term monetary exchange value to the owner’):

“Oikonomia differs from chrematistics in three ways. First, it takes the long-run rather than the short-run view. Second, it considers costs and benefits to the whole community, not just to the parties to the transaction. Third, it focuses on concrete use value and the limited accumulation thereof, rather than on an abstract exchange value and its impetus towards unlimited accumulation…. For oikonomia, there is such a thing as enough. For chrematistics, more is always better… “

In this definition of economics financial wealth does not trump the wellbeing of the community, as it is distinct from the actions a society must undertake to look after its members. The threat to our livelihoods that a fall in GDP represents is due to a conflation of economics with chrematistics.  

If for a moment we were to prise them apart we would see a different picture.

Whereas the lockdown has caused a drop in GDP growth (chrematistics) with the threat of recession and likely hardship for many people, apart from restricting our movements, it generally does not make us less able. It will mean many of us will not have access to society’s current means of exchange (money), but it does not represent a loss of ability, talent and willingness to contribute in the population at large. 

In fact, despite the fear and anxiety generated by the crisis, what we are witnessing is a phenomenal upsurge in generosity and creativity as people pull together to support each other with whatever they have. We are collectively defying the popular economic notion of humans as selfish utility maximising individuals and mostly showing solidarity and kindness. In the process we are realising who the real wealth creators are. They are the frontline workers in the caring economy: the nurses and doctors, the shop assistants and delivery drivers, the shelf stackers, the cleaners, the 750.000 (and counting) volunteers that have come forward to help the NHS. Online, they are the people offering free education, performances, exercise classes, financial advice, museum tours, mental health support, the list just goes on.  Behind closed doors it is those managing the domestic life: the family members doing their best to keep their children and themselves healthy and happy and sane, the friends joining together at a distance via a multitude of platforms. 

In this moment of crisis the fragilities of a globalised system have been exposed and it is ‘ordinary people’ and communities working together that are heading off socio-economic breakdown. They are demonstrating in the words of Naomi Klein in her book No is Not Enough, that ‘If the goal is to move from a society based on endless taking and depletion to one based on caretaking and renewal, then all of our relationships have to be grounded in those same principles of reciprocity and care —because our relationships with one another are our most valuable resource of all.’

The effects of Covid 19 will continue to place an unprecedented strain on societies that will require international cooperation, imagination and courage to overcome, but these efforts must not be geared towards returning to business as usual. Instead, we need to foreground the countless social and economic practices that have been developed over the last four decades by academics and practitioners dedicated to creating economic systems that serve all life on earth, and put in place mechanisms that reward people for generating real wealth and value. 

Time for bold solutions

After years of waiting in the wings Universal Basic Income (UBI) has now entered public discourse. Many pilots are underway, but the oldest ongoing experiment, The Alaska Dividend Fund, has shown no decrease in labour market participation and has ‘significantly mitigated poverty, especially among Alaska’s vulnerable rural Indigenous population.’ 

Currency experts such as Bernard Lietaer have shown that diversifying our exchange systems will make them more resilient to shocks in the global market and enable us to support social and ecological regeneration. The Human Scale Development framework developed in Latin America in the 1980s can help us evaluate whether what we are currently producing is actually meeting our real needs or pseudo satisfying manufactured wants. Together with Doughnut Economics and Steady State Economics such frameworks can help us steer a course that keeps our economic activity within the Earth’s limits. 

Vulnerable international food chains must now be replaced by regenerative local food systems. Building a vibrant food culture could simultaneously tackle obesity and youth unemployment, while ensuring future food security and restoring our soils. Land and property ownership must come under scrutiny and re-imagined to ensure food sovereignty, the regeneration of natural habitats and truly affordable and secure housing for all. The creation of worker cooperatives and support for local businesses have been shown to multiply local wealth and wellbeing, and will be needed to create more cohesive living and working communities.

In order to give people a say in shaping their lives and their communities, local authorities could introduce participatory budgeting, citizens’ assemblies and community charters.  Both nationally and internationally we must look at ways to abolish the crippling debt that is forcing people into unsafe work or destitution. We must also urgently start a discussion about the internet as a public utility. Work done by the P2P Foundation and the Institute for Local Self-Reliance can provide a guiding framework for sharing the wealth created by our communal efforts and make sure we all have access to its vital services.

The unintended social experiment precipitated by the virus presents a once-only window of opportunity to re-think our economic and social organisation in ways that can help us survive both the Corona epidemic and the greater threat of climate change that is now playing out. Instead of making people and planet fit around the numbers, it is time for numbers (financial mechanisms, exchange systems) to start fitting around people and planet. 

GDP does not measure what we value most. This crisis must be an opportunity to challenge what we have allowed corporations around the world to do with the natural environment (conveniently referred to as resources) and people (labour) in the name of economic growth. Thatcher was wrong: there are alternatives. Many of us have been working on them for decades. We are ready to take our rightful place at the table to help us turn the corner into a possible and hopeful future.  

Lead image by Tim Mossholder

The post No more business as usual – Rethinking economic value for a post-Covid world appeared first on P2P Foundation.

Filmed by Jonathan Hiller: HillerVisual.com

CharlesEisenstein.org

The post Charles Eisenstein on the case for a Universal Basic Income appeared first on P2P Foundation.

The Federal Reserve alone could do the job. It could buy “Green” federal bonds with money created on its balance sheet, just as the Fed funded the purchase of $3.7 trillion in bonds in its “quantitative easing” program to save the banks. The Treasury could also do it. The Treasury has the constitutional power to issue coins in any denomination, even trillion dollar coins. What prevents legislators from pursuing those options is the fear of hyperinflation from excess “demand” (spendable income) driving prices up. But in fact the consumer economy is chronically short of spendable income, due to the way money enters the consumer economy. We actually need regular injections of money to avoid a “balance sheet recession” and allow for growth, and a UBI is one way to do it.

The pros and cons of a UBI are hotly debated and have been discussed elsewhere. The point here is to show that it could actually be funded year after year without driving up taxes or prices. New money is continually being added to the money supply, but it is added as debt created privately by banks. (How banks rather than the government create most of the money supply today is explained on the Bank of England website here.) – while leaving the money supply for the most part unchanged; and to the extent that new money was added, it could help create the demand needed to fill the gap between actual and potential productivity.

The Debt Overhang Crippling Economies

The “bank money” composing most of the money in circulation is created only when someone borrows, and today businesses and consumers are burdened with debts that are higher than ever before. In 2018, credit card debt alone exceeded $1 trillion, student debt exceeded $1.5 trillion, auto loan debt exceeded $1.1 trillion, and non-financial corporate debt hit $5.7 trillion. When businesses and individuals pay down old loans rather than taking out new loans, the money supply shrinks, causing a “balance sheet recession.” In that situation, the central bank, rather than removing money from the economy (as the Fed is doing now), needs to add money to fill the gap between debt and the spendable income available to repay it.

Debt always grows faster than the money available to repay it. One problem is the interest, which is not created along with the principal, so more money is always owed back than was created in the original loan. Beyond that, some of the money created as debt is held off the consumer market by “savers” and investors who place it elsewhere, making it unavailable to companies selling their wares and the wage-earners they employ. The result is a debt bubble that continues to grow until it is not sustainable and the system collapses, in the familiar death spiral euphemistically called the “business cycle.” As economist Michael Hudson shows in his 2018 book And Forgive Them Their Debts, this inevitable debt overhang was corrected historically with periodic “debt jubilees” – debt forgiveness – something he argues we need to do again today.

For governments, a debt jubilee could be effected by allowing the central bank to buy government securities and hold them on its books. For individuals, one way to do it fairly across the board would be with a UBI.

Why a UBI Need Not Be Inflationary

In a 2018 book called The Road to Debt Bondage: How Banks Create Unpayable Debt, political economist Derryl Hermanutz proposes a central-bank-issued UBI of one thousand dollars per month, credited directly to people’s bank accounts. Assuming this payment went to all US residents over 18, or about 241 million people, the outlay would be close to $3 trillion annually. For people with overdue debt, Hermanutz proposes that it automatically go to pay down those debts. Since money is created as loans and extinguished when they are repaid, that portion of a UBI disbursement would be extinguished along with the debt.

People who were current on their debts could choose whether or not to pay them down, but many would also no doubt go for that option. Hermanutz estimates that roughly half of a UBI payout could be extinguished in this way through mandatory and voluntary loan repayments. That money would not increase the money supply or demand. It would just allow debtors to spend on necessities with debt-free money rather than hocking their futures with unrepayable debt.

He estimates that another third of a UBI disbursement would go to “savers” who did not need the money for expenditures. This money, too, would not be likely to drive up consumer prices, since it would go into investment and savings vehicles rather than circulating in the consumer economy. That leaves only about one-sixth of payouts, or $500 billion, that would actually be competing for goods and services; and that sum could easily be absorbed by the “output gap” between actual and forecasted productivity.

According to a July 2017 paper from the Roosevelt Institute called “What Recovery? The Case for Continued Expansionary Policy at the Fed”:

GDP remains well below both the long-run trend and the level predicted by forecasters a decade ago. In 2016, real per capita GDP was 10% below the Congressional Budget Office’s (CBO) 2006 forecast, and shows no signs of returning to the predicted level.

The report showed that the most likely explanation for this lackluster growth was inadequate demand. Wages have remained stagnant; and before producers will produce, they need customers knocking on their doors.

In 2017, the US Gross Domestic Product was $19.4 trillion. If the economy is running at 10% below full capacity, $2 trillion could be injected into the economy every year without creating price inflation. It would just generate the demand needed to stimulate an additional $2 trillion in GDP. In fact a UBI might pay for itself, just as the G.I. Bill produced a sevenfold return from increased productivity after World War II.

The Evidence of China

That new money can be injected year after year without triggering price inflation is evident from a look at China. In the last 20 years, its M2 money supply has grown from just over 10 trillion yuan to 80 trillion yuan ($11.6T), a nearly 800% increase. Yet the inflation rate of its Consumer Price Index (CPI) remains a modest 2.2%.

Why has all that excess money not driven prices up? The answer is that China’s Gross Domestic Product has grown at the same fast clip as its money supply. When supply (GDP) and demand (money) increase together, prices remain stable.

Whether or not the Chinese government would approve of a UBI, it does recognize that to stimulate productivity, the money must get out there first; and since the government owns 80% of China’s banks, it is in a position to borrow money into existence as needed. For “self-funding” loans – those that generate income (fees for rail travel and electricity, rents for real estate) – repayment extinguishes the debt along with the money it created, leaving the net money supply unchanged. When loans are not repaid, the money they created is not extinguished; but if it goes to consumers and businesses that then buy goods and services with it, demand will still stimulate the production of supply, so that supply and demand rise together and prices remain stable.

Without demand, producers will not produce and workers will not get hired, leaving them without the funds to generate supply, in a vicious cycle that leads to recession and depression. And that cycle is what our own central bank is triggering now.

The Fed Tightens the Screws

Rather than stimulating the economy with new demand, the Fed has been engaging in “quantitative tightening.” On December 19, 2018, it raised the fed funds rate for the ninth time in 3 years, despite a “brutal” stock market in which the Dow Jones Industrial Average had already lost 3,000 points in 2-½ months. The Fed is still struggling to reach even its modest 2% inflation target, and GDP growth is trending down, with estimates at only 2-2.7% for 2019. So why did it again raise rates, over the protests of commentators including the president himself?

For its barometer, the Fed looks at whether the economy has hit “full employment,” which it considers to be 4.7% unemployment, taking into account the “natural rate of unemployment” of people between jobs or voluntarily out of work. At full employment, workers are expected to demand more wages, causing prices to rise. But unemployment is now officially at 3.7% – beyond technical full employment – and neither wages nor consumer prices have shot up. There is obviously something wrong with the theory, as is evident from a look at Japan, where prices have long refused to rise despite a serious lack of workers.

The official unemployment figures are actually misleading. Including short-term discouraged workers, the rate of US unemployed or underemployed workers as of May 2018 was 7.6%, double the widely reported rate. When long-term discouraged workers are included, the real unemployment figure was 21.5%. Beyond that large untapped pool of workers, there is the seemingly endless supply of cheap labor from abroad and the expanding labor potential of robots, computers and machines. In fact the economy’s ability to generate supply in response to demand is far from reaching full capacity today.

Our central bank is driving us into another recession based on bad economic theory. Adding money to the economy for productive, non-speculative purposes will not drive up prices so long as materials and workers (human or mechanical) are available to create the supply necessary to meet demand; and they are available now. There will always be price increases in particular markets when there are shortages, bottlenecks, monopolies or patents limiting competition, but these increases are not due to an economy awash with money. Housing, healthcare, education and gas have all gone up, but it is not because people have too much money to spend. In fact it is those necessary expenses that are driving people into unrepayable debt, and it is this massive debt overhang that is preventing economic growth.

Without some form of debt jubilee, the debt bubble will continue to grow until it can again no longer be sustained. A UBI can help correct that problem without fear of “overheating” the economy, so long as the new money is limited to filling the gap between real and potential productivity and goes into generating jobs, building infrastructure and providing for the needs of the people, rather than being diverted into the speculative, parasitic economy that feeds off them.

___________________

This article was first published on Truthdig.com. 

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Rok Kranjc | Feb 6, 2018 | The Commons Post: Many of today’s proposals for and experiments with Universal Basic Income (UBI) in so-called developed countries seem to be congruent with, and indeed in some instances explicitly catered towards maintaining the dominant political economic architecture and status quo imaginary. Some of the more salient narratives regarding UBI present it as a silver bullet for all kinds of (neoliberally framed) social and economic woes and as a remedy for the pressing issue of automation which is assuredly having disruptive effects on the business-as-usual as practiced to-date. On the other hand, more radical proposals relevant to the UBI debate find themselves confined to academic and political ghettos, while those that do make it to experimental stage are watered down to versions of ‘basic income light’[i] through processes and barriers integral to incumbent political economic structures and forms of political deliberation.

While such experiments and proposals may be crucial stepping stones in fostering social salience and political legitimacy around alternatives to dominant welfare and wage labour models, it is important to recognize their limitations, particular application contexts, scales and time-horizons, with reference to wider integrative visions and potential mechanisms of socio-economic and political transformation. However the reality is that at this time such wider and integrative visions are lacking, while radical and systemic alternatives to welfare remain severely undertheorized in crucial areas. In the following I outline three critical areas that in my opinion can further the UBI debate, guided by the overarching question of what might an open ended, ecologically sound and socially just welfare system and pathway towards it look like.

1. Considering UBI as an interim model for citizen empowerment

Imagining potential futures of welfare from a ‘long now’[ii] perspective necessitates the recognition that some solutions should be designed to have intentionally short life-spans while others should be designed to change over long periods of time.[iii] The reality is that the forms of UBI thus far explored are likely not the be-all and end-all of alternatives. It is thus important to consider the view that UBI models based on fiat money pooled and distributed by means of more or less conventional market and state mechanisms (e.g. taxes, redistribution of state funds) may be an an overall important, yet perhaps best seen as consciously interim step in institutional re-design and citizen emancipation and empowerment. It is relevant to note however that UBI models, defined as unconditional payments of certain sums of money to individuals of a society, already today find rivals, for example in the concepts of Universal Basic Assets (UBA)[iv] and Universal Basic Services (UBS)[v], which importantly shift the debate from income to access to and participation in the commons. Using the ‘city as a commons’ framework and the critical concepts of UBA and UBS as starting points, it is possible to conceive of commons-based welfare models that operate on the principles of universal rights and effective access to basic and potentially expanding asset and service options (e.g. housing, food, energy, healthcare, mobility, internet, education, sport, recreation) and the care, co-creation of and democratic deliberation about them using novel collaborative, open-source, circular, sharing and regenerative economy approaches, among others.

2. Anchoring alternative welfare systems in alternative currencies

One issue that is very rarely addressed even within more radical UBI debates is that of the currencies and accounting frameworks on which such systems are (to be) based.[vi] Arguably, pursuing the interrelated goals of ecological sustainability and social justice calls for a reconsideration of ‘money-as-usual’. Many currency systems have been proposed that too range from local, complimentary and other currency types more or less congruent with or supplementary to the economic status quo, to radical alternatives.[vii] The envisioned ‘commonified’ basic assets and services model(s), indeed commons and commoning activity generally, may be anchored in a rich ecosystem of alternative currencies, indices and accounting frameworks operating at different scales and in different socioeconomic and socioecological contexts. Some of the more prominent proposed money anchors specifically include energy, time, CO2 emissions, single resources such as water or grain, or ‘baskets of resources’.[viii] Additional aspects to consider include:

• the ethics, scales and forms of cosmopolitan and translocal solidarity
• gift cultures and economies
• open data
• forms of transaction (e.g. ‘commoner smart cards’ for food, public transportation and skill-sharing)
• the potentials of blockchain technology

3. A deep rethinking of ‘work’

The currently ongoing and planned UBI experiments in the Netherlands, once presented as a beacon of hope in mainstream media, have recently been subject to a number of relevant critiques. It is important to outline that these experiments are not of universal income as they specifically target the unemployed and those already receiving some form of social benefit; nor are they unconditional, but configured with mind to supporting existing ‘labour market integration’ policies and mechanisms. Today, it is crucial to expand our definition of work and to rethink our engagement with it, a discussion that should go well beyond the reductionism of the automation narrative as presented in the mainstream. What is thus needed are systems complimentary to UBI/UBA/UBS that open up and encourage access to skills, (co-production of) knowledge, and discovering and trying oneself out at various (sometimes not at once apparent) forms of social and ecological ‘service’ and ‘life callings’ in transitional times; as well as civic media infrastructures that can support proactive public discourse around and experimentation with alternative institutional options, balancing the challenges of sustainability and social equity with resilient subsistence and social welfare contribution and provisioning. An interesting idea in this regard is the ‘balanced job complex’,[ix] proposed by Michael Albert and Robin Hahnel in their model for participatory economics; a deliberative democratic model that may be found useful in conceptualizing dynamic ways of societal self-configuration of equitable and contributory work loads depending on needs, capacities, preferences and challenges.

Conclusion

By imbuing the UBI debate with a more systems-oriented and commons perspective, I have argued that an important shift is made from income and work as such to deeper interrelated questions of 1.) rights, capabilities and effective access; 2.) forms of deliberation, governance, entrepreneurship, collective care and accounting; 3.) forms and scales of pooling resources and work, and; 4.) forms and scales of equitable distribution and sustainable and resilient provisioning of universal basic commons entitlements. The perspective illuminates the contingent relationship between the contextual and subjective ‘political viability‘ of the UBI, and the scopes and salience of articulated (critical, open-source, open-ended) alternative institutional possibilities; and the prospects of a polity that exploits a dialectical relationship between interim or hybrid institutional models on the one hand, and radical experimentation with other socio-economic configurations, emergent city-making/place-making cultures and political possibilities in the here-and-now on the other.

[i] Schouten, Socrates. 2018. Baby Steps on the Road to Basic Income. Green European Journal. Available at: https://www.greeneuropeanjournal.eu/baby-steps-on-the-road-to-a-basic-income/

[ii] Brand, Stewart. 1999. The Clock of the Long Now: Time and Responsibility. New York: Basic Books.

[iii] Irwin et al. 2016. Transition Design: A Proposal for a New Area of Design Practice, Study, and Research. Design and Culture, 7(2), 229–246.

[iv] https://medium.com/institute-for-the-future/universal-basic-assets-abb08ca2f0fc.

[v] https://www.thersa.org/discover/publications-and-articles/rsa-blogs/2017/10/universal-basic-services-or-universal-basic-income

[vi] Bauwens, Michel. 2006. Complementary Currencies and the Basic Income. Available at: https://blog.p2pfoundation.net/complementary-currencies-and-the-basic-income/2006/02/14; Bauwens, M. & Niaros, V. (2017). Value in the Commons Economy: Developments in Open and Contributory Value  Accounting. Chiang Mai: Heinrich Böll Stiftung & P2P Foundation.

[vii] Dittmer, Kristofer. 2011. Local currencies for purposive degrowth? A quality check of some proposals for changing money-as-usual. Available at: http://degrowth.org/wp-content/uploads/2011/11/Dittmer_JCP_pre-pub-manuscript.pdf

[viii] New Economics Foundation. 2013. Energising Money: An introduction to energy currencies and accounting. Available at: http://neweconomics.org/2013/02/energising-money/

[ix] Albert, Michael. 2003. Parecon: Life After Capitalism. London: Verso

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For authors of business how-to books, it makes perfect sense. Who wouldn’t want to brag that Google is taking their business advice? For me, it was a little different. Throwing Rocks at the Google Bus was about the inequity embedded in the digital economy: how the growth of digital startups was draining the real economy and making it harder for people to participate in creating value, make any money, or keep up with rising rents.

I took the gig. I figured it was my chance to let my audience know, in no uncertain terms, that Uber was among the worst offenders, destroying the existing taxi market not through creative destruction but via destructive destruction. They were using the power of their capital to undercut everyone, extract everything, and establish a scorched-earth monopoly. I went on quite a tirade.

To my surprise, the audience seemed to share my concerns. They’re not idiots, and the negative effects of their operations were visible everywhere they looked. Then an employee piped up with a surprising question: “What about UBI?”

Wait a minute, I thought. That’s my line.

Up until that moment, I had been an ardent supporter of universal basic income (UBI), that is, government cash payments to people whose employment would no longer be required in a digital economy. Contrary to expectations, UBI doesn’t make people lazy. Study after study shows that the added security actually enables people to take greater risks, become more entrepreneurial, or dedicate more time and energy to improving their communities.

So what’s not to like?

Shouldn’t we applaud the developers at Uber — as well as other prominent Silicon Valley titans like Facebook co-founder Chris Hughes, bond investor Bill Gross, and Y Combinator’s Sam Altman — for coming to their senses and proposing we provide money for the masses to spend? Maybe not. Because to them, UBI is really just a way for them to keep doing business as usual.

Uber’s business plan, like that of so many other digital unicorns, is based on extracting all the value from the markets it enters. This ultimately means squeezing employees, customers, and suppliers alike in the name of continued growth. When people eventually become too poor to continue working as drivers or paying for rides, UBI supplies the required cash infusion for the business to keep operating.

When it’s looked at the way a software developer would, it’s clear that UBI is really little more than a patch to a program that’s fundamentally flawed.

The real purpose of digital capitalism is to extract value from the economy and deliver it to those at the top. If consumers find a way to retain some of that value for themselves, the thinking goes, you’re doing something wrong or “leaving money on the table.”

Back in the 1500s, residents of various colonized islands developed a good business making rope and selling it to visiting ships owned by the Dutch East India Company. Sensing an opportunity, the executives of what was then the most powerful corporation the world had ever seen obtained a charter from the king to be the exclusive manufacturer of rope on the islands. Then they hired the displaced workers to do the job they’d done before. The company still spent money on rope — paying wages now instead of purchasing the rope outright — but it also controlled the trade, the means of production, and the market itself.

Walmart perfected the softer version of this model in the 20th century. Move into a town, undercut the local merchants by selling items below cost, and put everyone else out of business. Then, as sole retailer and sole employer, set the prices and wages you want. So what if your workers have to go on welfare and food stamps.

Now, digital companies are accomplishing the same thing, only faster and more completely. Instead of merely rewriting the law like colonial corporations did or utilizing the power of capital like retail conglomerates do, digital companies are using code. Amazon’s control over the retail market and increasingly the production of the goods it sells, has created an automated wealth-extraction platform that the slave drivers who ran the Dutch East India Company couldn’t have even imagined.

Of course, it all comes at a price: Digital monopolists drain all their markets at once and more completely than their analog predecessors. Soon, consumers simply can’t consume enough to keep the revenues flowing in. Even the prospect of stockpiling everyone’s data, like Facebook or Google do, begins to lose its allure if none of the people behind the data have any money to spend.

To the rescue comes UBI. The policy was once thought of as a way of taking extreme poverty off the table. In this new incarnation, however, it merely serves as a way to keep the wealthiest people (and their loyal vassals, the software developers) entrenched at the very top of the economic operating system. Because of course, the cash doled out to citizens by the government will inevitably flow to them.

Think of it: The government prints more money or perhaps — god forbid — it taxes some corporate profits, then it showers the cash down on the people so they can continue to spend. As a result, more and more capital accumulates at the top. And with that capital comes more power to dictate the terms governing human existence.

Meanwhile, UBI also obviates the need for people to consider true alternatives to living lives as passive consumers. Solutions like platform cooperatives, alternative currencies, favor banks, or employee-owned businesses, which actually threaten the status quo under which extractive monopolies have thrived, will seem unnecessary. Why bother signing up for the revolution if our bellies are full? Or just full enough?

Under the guise of compassion, UBI really just turns us from stakeholders or even citizens to mere consumers. Once the ability to create or exchange value is stripped from us, all we can do with every consumptive act is deliver more power to people who can finally, without any exaggeration, be called our corporate overlords.

No, income is nothing but a booby prize. If we’re going to get a handout, we should demand not an allowance but assets. That’s right: an ownership stake.

The wealth gap in the United States has less to do with the difference between people’s salaries than their assets. For instance, African-American families earn a little more than half the salary, on average, that white American families do. But that doesn’t account for the massive wealth gap between whites and blacks. More important to this disparity is the fact that the median wealth of white households in America is 20 times that of African-American households. Even African-Americans with decent income tend to lack the assets required to participate in savings accounts, business investments, or the stock market.

So even if an African-American child who has grown up poor gets free admission to college, they will still likely lag behind due to a lack of assets. After all, those assets are what make it possible for a white classmate to take a “gap” year to gain experience before hitting the job market or take an unpaid internship or have access to a nice apartment in Williamsburg to live in while knocking out that first young adult novel on spec, touring with a band, opening a fair trade coffee bar, or running around to hackathons. No amount of short-term entitlements substitute for real assets because once the money is spent, it’s gone — straight to the very people who already enjoy an excessive asset advantage.

Had Andrew Johnson not overturned the original reconstruction proposal for freed slaves to be given 40 acres and a mule as reparation, instead of simply allowing them to earn wage labor on former slaveowners’ lands, we might be looking at a vastly less divided America today.

Likewise, if Silicon Valley’s UBI fans really wanted to repair the economic operating system, they should be looking not to universal basic income but universal basic assets, first proposed by Institute for the Future’s Marina Gorbis. As she points out, in Denmark — where people have public access to a great portion of the nation’s resources — a person born into a poor family is just as likely to end up as wealthy as peers born into a wealthier household.

To venture capitalists seeking to guarantee their fortunes for generations, such economic equality sounds like a nightmare and unending, unnerving disruption. Why create a monopoly just to give others the opportunity to break it or, worse, turn all these painstakingly privatized assets back into a public commons?

The answer, perhaps counterintuitively, is because all those assets are actually of diminishing value to the few ultra-wealthy capitalists who have accumulated them. Return on assets for American corporations has been steadily declining for the last 75 years. It’s like a form of corporate obesity.The rich have been great at taking all the assets off the table but really bad at deploying them. They’re so bad at investing or building or doing anything that puts money back into the system that they are asking governments to do this for them — even though the corporations are the ones holding all the real assets.

Like any programmer, the people running our digital companies embrace any hack or kluge capable of keeping the program running. They don’t see the economic operating system beneath their programs, and so they are not in a position to challenge its embedded biases much less rewrite that code.

As appealing as it may sound, UBI is nothing more than a way for corporations to increase their power over us, all under the pretense of putting us on the payroll. It’s the candy that a creep offers a kid to get into the car or the raise a sleazy employer gives a staff member who they’ve sexually harassed. It’s hush money.

If the good folks of Uber or any other extractive digital enterprise really want to reprogram the economy to everyone’s advantage and guarantee a sustainable supply of wealthy customers for themselves, they should start by tweaking their own operating systems. Instead of asking the government to make up the difference for unlivable wages, what about making one’s workers the owners of the company? Instead of kicking over additional, say, 10% in tax for a government UBI fund, how about offering a 10% stake in the company to the people who supply the labor? Or another 10% to the towns and cities who supply the roads and traffic signals? Not just a kickback or tax but a stake.

Whether its proponents are cynical or simply naive, UBI is not the patch we need. A weekly handout doesn’t promote economic equality — much less empowerment. The only meaningful change we can make to the economic operating system is to distribute ownership, control, and governance of the real world to the people who live in it.

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Guy Standing: Given that wages cannot be expected to provide the precariat with security, the system must find alternative ways of doing so. The secret lies in capturing rental income for society. We should want what Keynes predicted but which has yet to pass—“euthanasia of the rentier.” One way of capturing rental income for society would be to bring the commons into policy discourse. In the neoliberal era, the commons—natural, social, civil, cultural, and intellectual—have been plundered via enclosure, commodification, privatization, and colonization. This rent-seeking is an injustice and should be reversed.

The income from using commons resources should belong to every commoner equally. Accordingly, the tax system should shift from earned income and consumption to taxing commercial uses of the commons, thereby helping in their preservation. Levies on income gained from using our commons should become major sources of public revenue. This means such measures as a land value tax, a wealth transfer tax, ecological taxes such as a carbon tax, a water use levy, levies on income from intellectual property and on use of our personal data, a “frequent flyer levy,” and levies on all income generated by use of natural resources that should belong to us as commoners.

Fed by these levies, a Commons Fund could be set up as a democratic variant of the sovereign wealth funds that exist in over sixty countries. Then, the questions would become how to use the funds in a transformative way. The Fund should be operated on proper economic lines, adhering to investment rules geared to socially beneficial forms of capital, taking into account ecological principles and tax-paying propriety.

The Fund’s governance must be democratic and separated from the government of the day, to minimize the possibility of manipulation by politicians before elections. And every commoner should be an equal beneficiary, their stake in the Fund being an economic right, rather than dependent on contributions, as was the case with laborist welfare schemes. Everybody, regardless of taxpaying capacity, should gain, by virtue of being commoners.

The commons has been nurtured by many generations and exists for future generations. As Edmund Burke recognized, we are “temporary custodians of our commonwealth” and have the responsibility of passing on to the next generation our commons in at least as good a condition as we found it. Thus, levies on exhaustible commons resources should be preserved for future generations as well as serve existing generations. To respect this principle, only revenue generated by the Fund’s investments should be distributed to today’s commoners—you and me. This rule is applied in the world’s outstanding example, the Norwegian Pension Fund Global, which, drawing from Norway’s share of North Sea oil, generates a net annual return of 4% that can be disbursed to the populace.5

What is proposed here is even more transformative. The levies would be placed on all forms of commons, including non-exhaustible commons resources. Land, water, air, wind, and ideas are among non-exhaustible resources, and part of our commons. Some commons resources are replenishable, such as forests. Including non-exhaustible commons resources in the financing of the Fund is key to the transformative strategy. The only equitable way of disbursing proceeds from the Commons Fund is to give equal amounts to everybody deemed to be a commoner, and the easiest way would be to distribute “social dividends” or “commons dividends.”

Sharing the commons is one ethical rationale for basic incomes, which are justifiable for other ethical reasons as well, including ecological justice, freedom, and basic security.

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Originally posted on provocations.darkmatterlabs.org

We face a paradigm shift in the role of humans in our economy — The rise of the real C-Economy.

Indy Johar: Most of our human economy has since the industrial & managerial revolution functioned to fullfill and comply with roles & processes for predefined value and imagination.

The industrial economy made humans “labour”, designed, focused and instrumentalised in the fullfillment of corporate value creation and the imagination of the few.

This industrial human economy is coming to an end; we have begun a transformation which is massively signalled by a confluence of drivers and trends, from the rise of innovation labs & start up culture – all seeking to grow the innovation pie of cities, to the arrival of platform corporates, driving the disintermediation of middle management, to the growing capability of AI, automation and algorithms to manifest the reality of post managerial city. In fact it could be argued – our current paranoia of Brexit and Trump – extends from a deep worry for the growing redundancy of human value & labour and our perceived future as an overhead and liability to the capital class.

The above list could go on, but what is becoming apparent is process driven, codifiable labour – “jobs for bad robots” will be automated and commodified – it is only a matter of time and its also time to say good riddance. We need to liberate Humans from having to be “bad robots” as the industrial revolution liberated us from being bad domestic animals.

But the emancipation of Humans from labour – does not mean a redundancy of Humans, in fact its means the freedom of Humans from labour to discover what it means to be human in the 21st Century.

This is a future which needs us to embrace the awesome capacity of humans – for discovery, for expeditions into the unknown, to mine the future, to care, create, dream.

This is a future which needs us to invest and create the conditions to unlock the full potential and capacity for all citizens to care, create and discover.

This is a future not designed to instrumentalise and passively enslave humans and drive compliance – through debt and wage incentives but to use “Universal Basic Income” to unleash and liberate purpose, care, collaboration and the capacity to dream and disrupt the future.

This is a future which requires us to reimagine “Management” from being a means of control to a means to emancipate, nurture grow care and capacity.

This is a future in which the conditions for unleashing the full capacity of all humans must be the new 21st century public utility – where spatial justice is foundational to unleashing our democratic humanity.

This is a future we requires us to start by embracing the relatively infinite possibility of humans – as opposed to our limited capacity to make roles and manage process.

This is a future which is not about supply demand matching labour markets but about making the fertile conditions to grow the dreamers, disrupters and discovers of the future.

This is a future in which humans are not an overhead on the balance sheet but its foundational fragile asset.

This is a future where the human(e) corporate will be defined by its capacity to drive the 4C revolution — collaboration, care, creativity, contextual intelligence powered by democratized agency – not its aggregative efficiency to manage financial capital and procure in scale; these efficiencies are likely to distributed and platformed to the whole economy – with rise of zero overhead platform bureaucracy.

This is a future in which investing for the human development of an organisation manifests on its asset register.

This is a future which embraces a tomorrow, where humans are the source of economy not redundant to its function.

This is a future Beyond Labour, embracing the coming Human(e) Revolution.

Dark Matter Laboratories is a Strategic Design Studio at Project00.cc working at the interface of Disruptive Technology, Human Development & System Change with world leading organisations to transform and embrace the future.

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By Emily Yates, reposted from Medium.com

From open source innovation to the vanguard of the blockchain movement; the ‘global resilience guru’ discusses the conflicts, dangers and opportunities of the world to come.

The future we are facing calls for new perspectives, new concepts and new guides. How, then, should we introduce Vinay Gupta — a man who more than any other speaker at Meaning challenges our basic assumptions about reality, and the extent of the problems we are facing? In a simpler era we might have called him an inventor, a philosopher, or a spiritual activist. But all of these definitions are breaking down, and perhaps they must. If we are facing a fourth industrial revolution, then all our beliefs and assumptions are due for a radical overhaul.

We first heard from Vinay at Meaning 2012, where he began with a nod to his reputation for apocalyptic thinking — identifying himself as a ‘merchant of doom’ confronting a whole spectrum of ‘plausible utopias’. If the source of our creativity is to be found in our limitations, then Vinay draws his from worst case scenarios; unafraid to depict the likely trajectory of climate disaster and hypercapitalism. I caught up with him last month to inquire about his current outlook.

“The world is dying, and we have a 30% chance of making it through the end of this century. Certainly, we’re likely to see a capitalist famine in which maybe a few hundred million or a few billion starve to death. The first time that global warming gets heavily intersected with the food supply is going to be a massive termination event. And everybody is going to turn around and say ‘Oh my god this is terrible, we never saw it coming!’”

In the five years since Vinay shared his hexayurt housing project with Meaning, the stakes have clearly got higher. At the time, Vinay described how the hexayurt’s simple, open source structure could change the game in the housing market, returning the commodity to its use-value and removing the banking and speculation aspects that keep the market artificially inflated and static. In this, as in other disruptive grassroots technologies, he has argued that the creation of abundance (or the removal of scarcity) is the route to breaking industrial stalemates. How much has his hexayurt mission progressed in the interim; given the prospect of looming climate disaster and increasing political volatility in the West?

“At this point, what I’m working towards is trying to redesign how we handle refugees — for example, climate refugees. I came to the conclusion that I’m going to have to do a lot of privately financed, fairly large-scale research and development, so that has taken me into a kind of indirect loop forward which is: go into the markets, make some money in technology, hopefully come back and follow the Elon Musk strategy of ‘pay for the change you want to see in the world’. I tried ‘being the change’ and it wasn’t working all that well, but ‘paying for the change’ — that seems like it might work.

“So, step one is to make about £800 million. Step two is to spend this money setting up charter cities that are designed to accept refugees, and finance the process by having the refugees export goods and services on preferential tax rates; which would basically be a subsidy provided by the first world countries as a way of getting the refugee problem solved. So, you have a jurisdiction where the refugees can export goods into Europe without paying taxes on them, and that encourages foreign direct investment. You basically set up free trade zones for the refugees to be able to take care of themselves; rather than us trying to find the budget to cover 300 million displaced people.”

Hexayurt communities at the Burning Man festival

While on course to realising his vision for the hexayurt project, Vinay has emerged as one of the leading thinkers in the second generation of blockchain; speaking and publishing prolifically on the revolutionary potential of crypto-currencies to cut out the middle man. Now an undisputed pioneer of the smart contracts platform ethereum, he recently designed the Dubai blockchain strategy as well as presenting his new thesis — the Internet of Agreements — at the World Government Summit. Could Ethereum be the route to the £800 million he needs?

“I certainly ran into capitalism in a really dedicated way three years ago because I figured out that we were just screwed. It is time to run. If I was attempting to run now, I wouldn’t be at the head end of the blockchain as basically a late entrant. I’m in the position that I’m in because I started running early enough that I got a good position as I ran into the system. If you wait too late it’s quite hard to get a decent position inside of the next round. So, the awareness landscape is basically a sort of a stress network — I look in society for the places where stress has accumulated and I use that map to position myself forward, because I’m carrying this hexayurt thing. It’s going to require the investment of enormous sums of money to build hexayurt cities and then hexayurt countries for the climate refugees. If I get squashed now, none of that is going to get done.”

It seems that we are now entering a cultural explosion around the blockchain. This has come with a large amount of political baggage — with crypto-currencies claimed by libertarians, anarchists and survivalists as a revolutionary tool to break free of both the state and existing markets. I was interested to know to what extent Vinay would agree with their creed — that decentralisation is the key to political liberation:

“I’m running around with a view of the future which is far more realistic than almost anyone else in the blockchain space has. Therefore I’m continually three or four steps ahead because I don’t believe that decentralisation is utopian. I don’t think it’s going to produce a better world at all. Centralisation can be the FDA ensuring you don’t have dioxins in your food. Decentralisation can be people marrying their thirteen-year-old cousins in rural Utah. This all cuts both ways. There is getting it right and there is any particular given political dogma. And all of the political sides are wrong — all of them are wrong.

“I think accountability could produce a better world, and you could get accountability from blockchain; but decentralisation in the mode that people are currently practising it is simply hypercapitalism with another set of fangs. I also believe that the state is not going anywhere because the nuclear weapon stockpiles are exactly the way they were when we started and they’re not going away. So, at that point whatever we’re building is going to end up interfacing with the state. I have a fundamentally different view of where cryptography fits into the future — and I take the risk of terrorists using this stuff completely seriously. These are all fundamentally anathema to the vast majority of people in the blockchain space. They think you’re going to get full decentralisation, they don’t want to think about the black state and its weapon stockpiles, they absolutely don’t want to think about environmental constraints. It’s just a ‘yeah it’s all going to work out’ kind of future. But it’s not all going to work out. It might work out for well-armed white people in rich countries, but it’s certainly not going to work out for everybody else.”

With his arguments for post-scarcity economics, Vinay has also become associated with ‘left-accelerationism’ and the development of simple, open source technologies — even setting down principles for how ‘open source appropriate technology’ should be ethically approached. His hexayurt falls into this category, along with water filters and solar panels; commodities with an economic rationale of “the lowest investment for biggest increase in quality of life”. Where this kind of technological progress is emancipatory, ‘right-accelerationism’ is considered its technocratic counterpart; further intensifying the concentration of wealth under capitalism. I asked Vinay if this is still a battleground on which he wishes to fight:

“I’m going to get back to that stuff in ten years if I’m still alive. The ‘if I’m still alive is important, right!’ Of the 1960’s generation of leaders — the vast majority of them were dead by the 1990s. The Alan Watts and all the rest of that kind of crew, even the Robert Anton Wilsons of the world — he was broken down to a shadow of himself by the time the 90s came round. Over and over and over again we lose the top end of leadership because they just get crushed in history. People just stick to their guns and they carry the weight until the weight crushes them.

The mind-set should not be one of ‘stick to your guns, die with your boots on’. Every generation has tried that approach and it’s been completely ineffective. The activists keep getting suckered into that trap again and again — this is spiritually right, this is spiritually wrong, we’re only going to do the spiritually right — then they get materially broken and they get shoved off the wreck. Another generation of totally inept youngsters then stands up as the next round of spiritual leadership and then gets the shit kicked out of them again in the next round. Armies that go into battle with no general will lose, and the generals are dying in the streets — twenty years too young to actually have any real effectiveness. Forty-five is the age that you begin to enter structural power, and for the most part the hippy leadership never made it that far. It’s a recurring, inter-generational cycle.”

It seems significant that Vinay evokes the activism of the 1960s, and I get the feeling that it’s a cultural trajectory he’s spent a lifetime thinking about; one that could not be better expressed than by one of his favourite literary passages, Hunter S Thompson’s description of ‘the wave’ from Fear and Loathing in Las Vegas. I once heard him quip that the aftermath of the 60s would have been very different if the activists had emerged with something like blockchain. For Vinay, this is a time for building, not fighting.

Our discussion goes on to survey the contemporary political scene — the rise of the right and infighting of the left on both sides of the Atlantic. If activists have allowed themselves to be drained of their effectiveness, could this be because they have too often prioritised sensibility above strategy? I can’t help but raise that old bone of Marxist contention — does Vinay believe that the contemporary focus on identity politics has diverted the left from addressing the more urgent question of resources?

“This is why I think basic income is the next winnable fight — and the proper response to global hypercapitalism. Because you could potentially unite the shattered disparate wreckage of the left and indeed the former middle classes under basic income as a banner in the age of robot socialism. So, after the manufacturing economy is gutted by robots, after the drivers are gutted by self-driving cars, as all that stuff unfolds and the right promises the world to get into power and then completely fails to deliver, there will be an opportunity for large scale renegotiation. So, the objective is basically to keep the powder dry and keep the front line activists safe until that large scale renegotiation occurs. No one really understands the issues, you’ve got to wait until people are actively beginning to push for basic income before you start dropping everything to go and deliver basic income. It’s a waiting game.”

Vinay warns that we might be waiting ten years before the scene is set for the “next round” of activism for basic income. But, if activists are to leave the front lines and reinvent their strategies, is there really nothing to fight for in the meantime?

“The one thing that I think might be worth fighting for is laboratory grown meat. It’s now close enough that a fight for that might be really important. If the lab meat thing works and you wind up with the ability to get the population off cow, it will make an enormous difference to our global warming emissions. Enormous. Bigger than getting rid of cars. It takes all of the land use pressure of nature. So, you get the jungles beginning to grow back, you get the English countryside beginning to come back — you get a huge restoration of natural systems because you’re no longer grazing everything in sight to turn it into hamburgers, because the hamburgers are coming out of an enormous factory on the far side of Dundee for a pound a kilo! So, I actually think that beating the hell out of green resistance to lab meat — a ‘tech will save us’ kind of thing — is a really good idea. And getting into the lab meat industry — can you imagine how much money is going to come out of lab meat? Cutting greenhouse gas emissions by maybe 20%, hugely improving access to protein in the developing world, saves the lives of untold millions of cows by simply failing to have them exist. It’s something where the culture gets all up in arms about it, you can imagine the farming lobby now. But if they ban it we are screwed, because it’s the next big shift we could make technologically that could protect the ecosystem from our stupidity.”

The lab meat question is exactly the kind of pressure point that Vinay Gupta likes to hone in on, for the extent they challenge our comfort levels and ask us to think through our contradictions. He will regularly remind you that it’s impossible to confront the future without also tearing up your sensibilities; and it is clear that this is a deeply held existential position. As an advanced practitioner of Kriya Yoga, Vinay likens the task to the ancient principles of Tantric philosophy: ”the continual pursuit of truth over social conformity.”

This November, Vinay will share his experiences at the vanguard of Ethereum — in particular The Internet of Agreements, his thesis on how blockchain can build the future of global trade and co-operation. In approaching how data and commerce should interface with the state in the era of blockchain, he is sure to be fearless in addressing the blind spots created by the blockchain craze; and in deconstructing the belief systems that have so strongly influenced its first wave. As with any topic on which Vinay holds forth — you pigeonhole him at your peril.

You can hear more about Ethereum at the Meaning conference in Brighton, UK on 16 November 2017 — where Vinay Gupta will join a line-up of diverse speakers exploring the role of business in creating a more sustainable, equitable and humane world. Find out more via the event website.

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