And yes Jock, if LVT enables economic development of the domestic professional cricket circuit so that more talent is fostered to a higher extent it could. But it wouldn’t happen until 2013 at least

Erm, no. Saying that “planning the economy doesn’t work” and saying ” we can’t do anything about unemployment” are not the same thing. We might indeed lower interest rates. Or increase (or decrease) unemployment benefits. Or create make work schemes, or have a fiscal boost, or provide training schemes, or reduce taxation on entrepreneurs, or reduce the paperwork that reduces the number of entrepreneurs…..all of these would be doing somehting about unemployment but they wouldn’t be “planning the economy” in the sense that I meant.

BTW, it was the 30s, not the 20s, the Republicans (or at least Hoover, who was the Republican President) didn’t do nothing, they did a number of stupidly counter-productive things, like the Smoot Hawley tariffs etc. Roosevelt did some even more nakedly and embarassingly stupid things, like try to raise real wages in the middle of the Depression. As opposed to those, yes, doingnothing would be better. But there are things also which are better than doing nothing.

“we are looking at 2-3 million unemployed and I cannot for the life of me see which sectors the new jobs are supposed to come from*”

Nor can anyone else. That’s why planning an economy doesn’t work.

So you mean that governments should just say “we can’t do anything about unemployment, it’s all in the lap of the gods” – that’s what the US Republicans said in the 1920s, and much good it did them. But you no doubt think that the New Deal was an unmitigated disaster…

[70] Are you quite sure that CBI doesn’t also cure warts and ensure that England regain the Ashes next year? Do try harder, or alternatively re-arrange the following words to make a well-known phrase “oil salesman snake”.

I absolutely disbelieve that either of you give a flying f*rt about poverty.

With CBI why would there be any need for unemployment benefit or a Jobseeker’s allowance? There would be no such thing as unemployment, only inactivity. So I take the reverse view that a period of higher unemployment is actually the easiest time to introduce it.

At the same time we should consider the other mainstays of the welfare state.

The state pension and housing benefit could be abolished in a similar way, while child benefit would essentially be reallocated if it was into a scheme based on national endowment. All this massively helps solve the funding gap at the same time as reducing PSBR interest repayments.

And why stop there? Personal allowances in the tax system could be removed altogether, which raises a big chunk of cash, while national minimum wage legislation would be repealed at the same time thus liberating less profitable businesses and enabling the economy to grow into more marginal territory – that’s where you’ll find your millions of jobs, for example in exploiting less income-reliable (ie less profitable) but cleaner (ie more efficient) renewable energy sources.

Furthermore I’ve seen suggestions that CBI would have a positive impact on reducing a variety of crimes motivated by social deprivation, thereby not only reducing the damage to social capital and property involved but also the clear-up costs. Again if it was based on an endowment scheme criminals would have the means to pay compensation or for the costs of bringing about their justice (ie in legal aid, court fees and in paying for their board and lodging when in prison).

On a side note by tying investment levels during childhood to school attendance/performance a natural incentive against truancy and towards excellence could be created.

On the point of immigration – because the problems immigration and asylum stem from basic inequalities between individuals resultant from unequal states and unjust governments such a system which successfully levelled the playing field would reduce ‘negative migration’ due to illiberalism and circulate the flows of ‘economic migration’ by spreading economic development.

Finally the accumulated security all this brings would have a huge impact on reducing the risk and costs involved in insurance and would shrink premiums accordingly.

Even going beyond that you could start hypothecating parts of CBI for use on other necessary services such as some universal private healthcare, basic utilities, further education course/tuition fees, sports clubs subscriptions or even membership to political parties.

None of this would be uncontroversial, but it should prove hugely appealing to a brad enough mix of individuals, business and state alike.

For the individual most of the bureaucratic complexity would magically evaporate because the state would stop creating it for us to deal with. From the opposite point of view the state then has fewer problems to deal with and efforts can be focused on those that persist.

Of course it would be paradoxical for partisan politicians to propose any of this because they’d be doing themselves out of their jobs and could no longer manipulate the legislative programme to create the discontent from which they build their supporter base (it’s the old case of chicken and egg, just like the war on terror and ID cards/42 days etc).

To me at least CBI or a national dividend is a potentially wonderful all-encompassing idea because it levels the playing field out for the starting whistle rather than digging up the pitch and getting stuck in the holes of our own making while the game goes on around you.

Though I admit some demotivating factors may arise without sufficient inspiration – which can only be created in the education system – many perverse incentives would simply cease to exist.

Nor can anyone else. That’s why planning an economy doesn’t work.

I certainly think that the time to introduce radical fiscal change of this type is when there is at least a prospect of full employment – we are looking at 2-3 million unemployed and I cannot for the life of me see which sectors the new jobs are supposed to come from*. In part, this is due to our unwillingness to invest in the education sector (until recently) and the “capture” of such investment by the producer interest, within which I would include government ministers… but there remains the issue which you rightly flagged of being able to trust the motivation of whichever bunch of politicians actually introduce these changes, given that the most vulnerable people in our society are also the most disconnected from the political process.

*It would be interesting to know how many of our existing jobs couldn’t be performed by immigrants or else outsourced to Asia, etc. Precious few, I expect – and remember that employers will always prefer to hire immigrants rather than citizens, as they feel fewer qualms about treating them badly. We are all living in denial about what globalisation means for our lifestyles.

I’m assuming you’re not a cynical pessimist who thinks all political action is futile and that you’re opposed to a fully nationalised economy and the prospect of a state fully-dependent on charity, so the question remains how can it be rejigged to function better?

As to CBI, I have always tried to look at it from a “real world” perspective – it looks great on paper, but so did the Titanic!

I’m not sure about stopping here though, when this is a good opportunity to try and draw on the imagination of everyone else for some ideas on the financial mechanisms which would support CBI. Taxation wouldn’t do it and I’d be suspicious of political interference if the civil service administered it, so how would it work? Are we talking closer to a national dividend than a CBI?

Don’t you recall the reasons he was objected to as a potential buyer for the financial institution that was NR?

I admit to over-egging the pudding in claiming that a number of economists want the public sector cut by a third. I only know of one, who posts on Smithson’s site as “Ken” – he says our debt is £680bn and the tax base can only sustain £500bn (presumably he gets the latter figure from a historical trend line). I’d certainly welcome Chris Dillow’s thoughts on this – I do actually have a lot of time for him!

The issue of whether the poor have a political voice or not probably deserves a thread to itself. The view that the Labour movement – when it was an effective part of political society, say from 1910 to 1980 or thereabouts – represented the interests of the skilled, rather than the unskilled working class (i.e. the C2s, not the DEs) is a fairly mainstream one. I don’t think anyone would argue that the latter group has increased its political clout since the démise of “old Labour”, would they? At the very least, they are more fractured by race than ever they were in the past.

A “society full of sociopaths” isn’t exactly how I’d put it – I would however argue that we went through an unusually solidaristic – politically expressed as social-democratic – period in the thirty years after World War II: the havoc that wrought, together with the memory of Lloyd George’s broken promises a generation before, created a polity that was further to the left than at any time before or since. The NHS is all that remains of that world.

Why the fuck not?

-Market imperfection is a consequence of information breakdown among market participants. Some players view their interest in manipulating information about the market in order to gain additional advantage, however this vested interest has a tendency to work against them in the long run so there is a requirement to educate about the consequences of restricting the free flow of information.

To take your example of the granny and her painting. If one valuable painting is found there is a reasonable chance that another will also.

With the insight gained about your buyers behaviour from the previous transaction, are you likely to favour a sale to the same person a second time round? Obviously not, since their reputation as an honest broker has been damaged among their potential customer base. If they undertook the unfair transaction for pure profit motives they run the risk that their business will suffer, but if they bought the painting to build a collection then neither are they likely to be able to fulfill this ambition.

-The nature of capital cities is not towards overcrowding – this depends on the wider planning policy for the country. Britain has long suffered from unbalanced ad hoc planning arrangements and London is the ultimate magnification of this.

Equally, but on the other side of the argument, overly centralised planning for urban areas has its own set of problems. Take Brasilia, for example: a model core surrounded by densely populated shantytowns where crime and disease fester beyond any control. In many cases sanitation, education and most basic private or state services are missing.

-Relative poverty is not ineradicable, that is unless you mean relative lack of wealth.

Wealth inequalities are not necessarily accompanied by illiteracy, post-industrial health problems (like addiction, obesity or mental health disorders), social exclusion and the rest of it. Such problems have more to do with a lack of social mobility inherent in a closed class-based social system (which the soviet bloc did as much to reestablish as overturn, replacing a land-owning aristocracy with an ideological aristocracy in the process of militarising several generations through constant warfare).

-The political reality of introducing CBI is that the costs will fall on those less well able to afford them ONLY if it is introduced by an illiberal or not-wholly-liberal party (which is why I have some doubts about what it would be like if any of the current parties brought it in).

On the basis that CBI would be easier and cheaper to administrate, it would be fairer and more equal to the citizenry than the system of the welfare/workfare state we have at present and would liberate the population from the stranglehold of state bureaucracy I find it hard to raise objections to CBI in principle. On the other hand until economic and social mechanisms are better understood I see no way that a satisfactory formula can be calculated in practice any time in the forseeable near future and CBI will remain a truly liberal political aspiration.

CBI can be the basis of a lasting social and economic equality, but the monetized amounts must represent essentially equal human values for it to function effectively.

When investigating the idea my interest was taken by the idea of extending baby bonds, though even then it would take a literal lifetime to transition from the welfare state to a citizens state where all individuals were to be endowed with minimal financial means to subsist on.

So I sympathise with your problem of managing any transition, but because of the level of resolution required to maintain the political will for a sufficient period rather that the costs of introducing it might be prohibitive.

CBI would also require a complete reevaluation of the division of labour and the conception of employment relations, so I can understand any hesitation when trying to grasp the scope of its implications.

I wouldn’t mourn over leaving the EU either. I suspect that most European immigrants, even if they weren’t eligible to a CBI, would continue working & paying taxes, so they wouldn’t require benefits. Poles, for example, have much lower unemployment rates than many Britons, white or otherwise.

All genuine questions which you can ignore if you like. But I am finding immigration the hardest thing to deal with whilst forming my world view, so a little help would be appreciated

“Citizens” receive it as of right. So there are no work or tax requirements, no. But there is that pesky citizenship requirement, yes. I.e., eligible for a UK passport, collect your money. Not? No.

Asylum seekers would need a different system. Other immigrants, legal or illegal, wouldnot be eligible until they had passed whatever tests it is that we insist upon for gaining citizenship.

It was Milton Friedman who pointed out that you can’t really have open immigration and a welfare state. The latter would be overwhelmed by the former.

The biggest problem in our current set up is that it is illegal to distinguish between UK and EU citizens in such matters. So in order to make sure that we can indeed make such distinctions a CBI would mean that we need to leave the EU. But then I consider that a benefit of such a scheme.

Supporters of CBI, what do you make of immigration in general & how it would impact on this? Presumably, you can’t just have any old twat walking in & claiming on day 1. So what should be done?

Do you support a scheme whereby people have to work & pay taxes for a certain length of time (ie. become “citizens”) before they can receive a CBI? If they get into trouble before such a time, should there be any recourse to public funds? Do you, for example, support the current arrangements for supporting asylum seekers on NASS?

I can honestly say it only occured to me a few days ago that this would be a problem. I would like to hear what people make of the situation (genuine question).

The whole issue of immigration is one on which I’ve struggled to make up my mind, as I can see that the numbers coming in should be restricted because the country & it’s natural environment (like the world as a whole) cannot sustain an ever-rising population. I support reducing the causes of immigration by well-aimed aid targeted towards education, infrastructure & contraception but there also need to be restrictions, imho. On the other hand, I personally like most of the immigrants (economic migrants & asylum seekers alike) that I’ve met. I would like some input as to how it is meant to work in the context of a CBI.

Relative poverty is ineradicable. And we have the example of the former Soviet blocs to remind us that minimising it carries costs which are generally thought to be way too high.

Eradicating relative poverty is very difficult and would require a much more redistributive tax arrangement than we presently have, that’s for sure. And I don’t think that ‘relative poverty’ does much good as a measurement of social justice – I think we’d be better off focussing on achieving universal minimums for everyone, and there are many other measurements of social status that a mere income measurement cannot capture (e.g. risk of poverty might be present for lots of people who are not, necessarily, in poverty themselves and this might be a sign of market failure in insurance). Of course, another reason why relative poverty won’t be eradicated is that the continued existence of relative poverty provides most of the justification for government action, much of which – these days – is directed at harassing the poor.

Why is CBI a particularly dangerous proposal at this particular time? Because the economists you’re all so fond of by and large think that government spending needs to be cut by nearly a third to bring it in line with the tax base. The political reality is that the burden of those cuts will fall on the poorest, because they no longer have a political voice. The rest of the country is more than happy to reduce them to the level of squalor which they endured a century ago. In effect, they are no longer part of civil society – if they ever were (the Labour Party, when it was a Labour Party, was the political wing of the skilled working class). CBI simply presents a mechanism for effecting this dystopia.

What I really want to do is excerpt every single sentence here and respond with ‘why?’ to each one. You really do need to provide some explanation or cite some sources for these kinds of beliefs. Which economists want to cut taxes by a third? It’s hardly likely to be the same people proposing a CBI which would require a fairly hefty tax bill to pay for it.

The poor no longer have a political voice? Well, what are you doing about it? Some of us are arguing that the best way of helping the poor might be a non-means-tested annual grant of equal or greater value than the JSA and, in many parts of the country outside London, also higher than their housing benefit. What’s your proposal? I’d like to add a few other points, such as being in favour of devolution as a means of making politics more responsive to the concerns of citizens and less easily captured by expensive lobbying as another proposal worth consideration here, if we are concerned with boosting the political voice of the poor.

To say that most of the country is happy to reduce the poor to the squalor of the 19th (or early 20th) century is a frankly bizarre statement. What basis do you have for it? If Thatcher argued that there’s no such thing as society, you’re arguing that there is such a thing and it’s full of sociopaths. And even if you’re right, I can’t help but think that a non-withdrawable, no-strings-attached grant each year, to rise in proportion to GDP, is a pretty good way of guaranteeing that nobody ends up in the squalor of the 19th century and I’d be more than happy to debate your reasons for thinking otherwise if you’d be happy to tell me what they are.

Erm, a little economic history please. The past 25 years have seen the *removal* of many of the ways that the market was skewed in favour of owner occupied (which is what I assume you mean by “mortgaged” housing) housing.

First the limitation of MIRAS, then the abolition. The introduction of Assured Short Term Tenancies (think I’ve got that phrase right, but the lifting of the rules whereby a simple private rental agreement could create a life time tenancy), the ridding of the “Fair Rent” rules. That first removed the tax bias in favour of owner occupied. The two latter encouraged the creation again of a private rental sector (the abolition of which had pretty much been post-war policy).

It might be that you would prefer social, or State, or council, rather than private sector rentals but the actual policy mix since the early 80s has been to remove private ownership privileges and to encourage private sector rentals. Plus sell of the council housing as well.

[49] London has always been overcrowded, that’s the nature of capital cities. As to your hypothetical, since I don’t support CBI it doesn’t enter the question. Basically CBI offers simplicity of administration (although in practice I doubt that, you’d probably need ID cards to determine who was and was not a citizen) as against the present system which attempts, however poorly, to actually funnel funds where they’re needed. Defenders of CBI have to admit that there will be exceptions – such as the very severely disabled in long-stay hospitals and some form of child support, so even the promised simplicity is chimerical.

Relative poverty is ineradicable. And we have the example of the former Soviet blocs to remind us that minimising it carries costs which are generally thought to be way too high.

Why is CBI a particularly dangerous proposal at this particular time? Because the economists you’re all so fond of by and large think that government spending needs to be cut by nearly a third to bring it in line with the tax base. The political reality is that the burden of those cuts will fall on the poorest, because they no longer have a political voice. The rest of the country is more than happy to reduce them to the level of squalor which they endured a century ago. In effect, they are no longer part of civil society – if they ever were (the Labour Party, when it was a Labour Party, was the political wing of the skilled working class). CBI simply presents a mechanism for effecting this dystopia.

One miserably tiny thing. I’m not an economist and don’t claim to be. I’m an interested (perhaps too interested but that’s another matter) amateur.

As to the left wing bit though, I agree. I regard myself as being upon the left. I want the poor of the world to be richer than they are and I rail against the current power structure which prevents them from being so. That’s pretty lefty, isn’t it?