On May 10, 2017, Tom Ward writes on Futurism:
IN BRIEF
Universal Basic Assets (UBA) is a system in which each citizen receives an equal amount of baseline assets, in contrast to Universal Basic Income, which deals only with money. But could UBA produce a more equal society?
WHAT IS UBA?
Universal Basic Assets (UBA) have been suggested by the Institute for the Future (IFTF) as a more progressive and fair way to challenging inequality — which, at this point, is staggering. Currently, according to Oxfam, eight people own as much wealth as half of the world’s population.
This inequality will become more severe with the exponential increase of two factors: The first is climate change, which creates “climate refugees” due to water and food shortages as well as the wars that start as a result. The second is advancements in artificial intelligence (AI) and automation technology, which will displace many workers. Stephen Hawking has recently added his name to the growing list of scientists worried about the impact of AI on middle class jobs.
UBA has been proposed as a way of averting economic disaster by properly assessing and distributing our resources to meet the needs of every person. It can be seen as an evolution of the concept of Universal Basic Income (UBI), which gives every citizen, regardless of how much they earn, a set amount of guaranteed money. The biggest criticisms of this concept are that it is hugely expensive, not all individuals have equal skills in managing money, and that — as Lenny Mendonca of NewCo Shift wrote in an opinion piece — “it is giving crumbs to pacify rather than means to participate.”
The IFTF defines UBA as “a core, basic set of resources that every person is entitled to, from housing and healthcare to education and financial security.” Rather than just focusing on money, the IFTF divides assets into three categories: First, private assets owned personally, such as housing, land, and money. Second, public assets owned collectively and usually managed by a government, which can include anything from the police force to public art galleries to national parks.
And third, open assets owned by neither an individual nor the government, but by a defined group. Resources in this category are epitomized by how open-source software operates today. John Clippinger, founder of the Institute for Data-Driven Design, said this category usually evolves with society, giving the example of British Common Law in an interview with Forbes, “It was constantly reinventing itself around the circumstances, and there was no single point of control.”
BETTER THAN UBI?
The IFTF is still early in its planning stage, so its members are vague about exactly how they propose to implement UBA. Their model going forward is to:
- Catalyze a community to create a “new economic operating system built on universal basic assets.”
- Conduct research, particularly on open assets.
- Launch experiments from which they can forecast the kind of society we can create.
However, there are some key issues that will have to be faced in order to change the economic operating system:
Firstly, there is the issue of quantification. In order to distribute something equally, there must be a way of measuring it in order to assign the same amount to each individual. While this is fairly simple with private assets (money can be counted, land measured in feet etc.), it becomes murkier when applied to the IFTF’s categorization of open assets.
Secondly — and linked to the above point — while private and public assets lie within a country’s borders, open assets do not. An example of this could be the air we breathe. So even if we can find a way to quantify open assets, how will we be able to distribute resources that we do not own, and cannot be owned?
Finally, if a problem with UBI is that not everyone has equal financial management skills, then the same criticism can be applied to asset management.
Douglas Rushkoff states in Economics Is Not a Natural Science that “The marketplace in which most commerce takes place today is not a pre-existing condition of the universe.” UBA is a promising means of making the economy a more equal space. However — like any new idea — there are some problems it has to overcome first.
https://futurism.com/there-is-a-solution-to-our-broken-economy-besides-universal-basic-income/
The singular problem that Universal Basic Assets (UBA) and Universal Basic Income (UBI) present is the destruction of private property principles as a direct result of redistribution of the earnings or capital assets of those in our society who contribute to the economy via their human labor and/or their non-human productive capital assets, which they own as individuals. These solutions are in direct conflict with the private property principles our nation was founded upon.
The “pursuit of happiness” phrase in the Declaration of Independence was interchangeable in those times with the word “property.” The original phrasing was “the right to life, liberty and property.” “The pursuit of happiness” phrase was a substitute for the “property” phrase. In the forerunner of the Declaration of Independence and Bill of Rights, the 1776 Virginia Declaration of Rights declared that securing “Life, Liberty, with the means of acquiring and possessing Property” is the highest purpose for which any just government is formed. Thus, democratizing economic power and empowering EVERY citizen to contribute productivity to the economy, not redistributing earnings and capital assets, will return us to the innocence and economic power diffusion we had in a pre-industrial society where labor was the principal factor in the creation of wealth.
As Lenny Mendonca of NewCo Shift wrote in an opinion piece — “[Universal Basic Income] is giving crumbs to pacify rather than means to participate.”
Along with Universal Basic Income and Universal Basis Assets proposals, the key means of redistribution is taxation — taking from the legitimate producers and giving to the non- or under-producers — to make up the economy’s ever-wider income and purchasing power shortfalls.
Unlike the pre-industrial society, today and in the future productive capital is (and will) increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all. Binary economist Louis Kelso postulated that if both labor and capital are independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive, and ignore the necessity to broaden personal ownership of wealth-creating, income-producing capital assets simultaneously with the growth of the economy.
Another aspect of the Universal Basic Assets proposal is that everyone should be equal. This is a belief system fallacy. This will never be in a free society. What does need to be equal is opportunity to the means of acquiring and possessing property for EVERY citizen.
Thus, rather than focus studies on how to redistribute earnings and capital assets, our focus should be on empowering EVERY child, woman and man to become a productive contributor to the economy via universal equal access to financial mechanism that create wealth and produce income from OWNERSHIP of newly formed productive capital assets simultaneously with the growth of the economy, without taking anything away from those who already own capital assets.
Kelso said, “We are a nation of industrial sharecroppers who work for somebody else and have no other source of income. If a man owns something that will produce a second income, he’ll be a better customer for the things that American industry produces. But the problem is how to get the working man [and woman] that second income.”
There’s nothing new about the non-human factor (productive land; structures; tools; machines; robotics; computer processing; etc., which are owned by people individually or in association with others) replacing people, but the rate of replacement is exponential and the result is that productivity gains lead to more wealth for the OWNERS of the non-human factor of production, while for others who have always been dependent on jobs as their source of income, there has been a steady decline to poverty-level labor incomes as private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role.
Thus, we can no longer ignore the necessity to broaden personal ownership of wealth-creating, income-producing capital assets simultaneously with the growth of the economy.
What must be understood is that fundamentally, economic value is created through human and non-human contributions.
Also what needs to be understood is that human productivity has not advanced (our human abilities are limited by physical strength and brain power — and relatively constant), but that the productiveness of the non-human factor of production — productive capital — is the reason that private sector corporations, majority owned by the “1 percent,” are utilizing the non-human factor of production increasingly to create efficiencies and save labor costs. It is the function of technology to save labor from toil and to enable us to do things that otherwise is humanly impossible without non-human input. The critical question becomes who should own productive capital? The issue of OWNERSHIP is unbelievably overlooked by those in academia and politics. Yet we live in country founded upon private property rights.
Today, large streams of data, coupled with statistical analysis and sophisticated algorithms, are rapidly gaining importance in almost every field of science, politics, journalism, and as well as digitalization of the manufacturing and service industries. What does this mean for the future of work?
“The era we’re in is one in which the scope of tasks that can be automated is increasing rapidly, and in areas where we used to think those were our best skills, things that require thinking,” says David Autor, a labor economist at Massachusetts Institute of Technology.
Businesses are spending more on technology now because they spent so little during the recession. Yet total capital expenditures are still barely running ahead of replacement costs. “Most of the investment we’re seeing is simply replacing worn-out stuff,” says economist Paul Ashworth of Capital Economics.
Yet, while the problem is one that no one can no longer ignore, the solution also is one starring them in the face but they just can’t see the simplicity of it. Instead, they pursue redistributive solutions such as UBI and UBA to equalize economic inequality. Thus, the political focus on job creation and redistribution of wealth rather than on equal opportunity to produce, full production and broader capital ownership accumulation.
We need to reevaluate our tax, monetary and central banking institutions, as well as, labor and welfare laws. We need to innovate in such ways that we lower the barriers to equal economic opportunity and create a level playing field based on anti-monopoly and anti-greed fairness and balance between production and consumption. In so doing, every citizen can begin to accumulate a viable wealth-creating, income-producing capital estate without having to take away from those who now own by using the tax system to redistribute the income of capital owners. What the “haves” do lose is the productive capital ownership monopoly they enjoy under the present unjust system. A key descriptor of such innovation is to find the ways in which “have nots” can become “haves” without taking from the “haves.” Thus, the reform of the “system,” as Kelso postulated, “must be structured so that eventually all citizens produce an expanding proportion of their income through their privately owned productive capital and simultaneously generate enough purchasing power to consume the economy’s output.”
Failing to abate the monopoly ownership of productive capital assets is being an accomplice to murder. And anyone who seeks to own productive power that they cannot or won’t use for consumption are beggaring their neighbor — the equivalency of mass murder — the impact of concentrated capital ownership.
As long as working people are limited by earning income solely through their labor worker wages, they will be left behind by the continued gravitation of economic bounty toward the top 10 percent capital ownership class of the people that the system is rigged to benefit. Working people and the middle class will continue to stagnate, resulting in a stagnated consumer economy. More troubling is that this continued stagnation will further dim the economic hopes of America’s youth, no matter what their education level. The result will have profound long-term consequences for the nation’s economic health and further limit equal earning opportunity and spread income inequality. As the need for labor decreases and the power and leverage of productive capital increases, the gap between labor workers and capital owners will increase, which will result in turmoil and upheaval, if not revolution.
A new system that would ensure equal opportunity for every child, woman, and man to acquire productive capital with the earnings of capital and broaden its ownership universally does not require people to be any better than they presently are, but it does enable our society to leverage both greed and generosity in a way that honestly recognizes and harnesses productive capital as the factor that exponentially produces the wealth in a technologically advanced society.
Kelso wrote: “In the distribution of social power, whether it be political power or economic power, all things are relative. The essence of economic democracy lies in the elimination of differences of earning power resulting from denial of equality of economic opportunity, particularly equal access to capital credit. Differences of economic status resulting from differences in advantages taken and uses made of differences based on inequality of economic opportunity, particularly those that give access to capital credit to the already capitalized and deny it to the non- or under-capitalized, are flagrant violations of the constitutional rights of citizens in a democracy.”
What needs to be our focus is to adjust the opportunity to produce, not the redistribution of income after it is produced. It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.
The fundamental challenge to be solved is how do we reinvent and redesign our economic institutions to keep pace with job destroying and labor worth devaluing technological innovation and invention so not all of the benefits of owning FUTURE productive capacity accrues to today’s wealthy 10 percent ownership class, and ownership is broadened so that EVERY American earns income through full-earning stock ownership dividends so they can afford to purchase the products and services produced by the economy.
None of this is new from a macro-economic viewpoint as productive capital is increasingly the source of the world’s economic growth. The role of physical productive capital is to do ever more of the work of producing more products and services, which produces income to its owners. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role. Over the past century there has been an ever-accelerating shift to productive capital — which reflects tectonic shifts in the technologies of production. The mixture of labor worker input and capital worker input has been rapidly changing at an exponential rate of increase for over 235 years in step with the Industrial Revolution (starting in 1776) and had even been changing long before that with man’s discovery of the first tools, but at a much slower rate. Up until the close of the nineteenth century, the United States remained a working democracy, with the production of products and services dependent on labor worker input. When the American Industrial Revolution began and subsequent technological advance amplified the productive power of non-human capital, plutocratic finance channeled its ownership into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.
People invented tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive — the core function of technological invention. Kelso attributed most changes in the productive capacity of the world since the beginning of the Industrial Revolution to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital, in Kelso’s terms, does not “enhance” labor productivity (labor’s ability to produce economic goods). In fact, the opposite is true. It makes many forms of labor unnecessary. Because of this undeniable fact, Kelso asserted that, “free-market forces no longer establish the ‘value’ of labor. Instead, the price of labor is artificially elevated by government through minimum wage legislation, overtime laws, and collective bargaining legislation or by government employment and government subsidization of private employment solely to increase consumer income.”
A National Right To Capital Ownership Bill that restores the American dream should be advocated by the progressive movement, which addresses the reality of Americans facing job opportunity deterioration and labor worth devaluation due to tectonic shifts in the technologies of production and competitive globalization of production.
There is a solution, which will result in double-digit economic growth and simultaneously broaden private, individual ownership so that EVERY American’s income significantly grows, providing the means to support themselves and their families with an affluent lifestyle. The Just Third Way Master Plan for America’s future is published at http://foreconomicjustice.org/?p=5797.
The solution is obvious but our leaders, academia, conventional economist and the media are oblivious to the necessity to broaden ownership in the new capital formation of the future simultaneously with the growth of the economy, which then becomes self-propelled as increasingly more Americans accumulate ownership shares and earn a new source of dividend income derived from their capital ownership in the “machines” that are replacing them or devaluing their labor value.
The solution will require the reform of the Federal Reserve Bank to create new owners of future productive capital investment in viable businesses simultaneously with the growth of the economy. The solution to broadening private, individual ownership of America’s future capital wealth requires that the Federal Reserve stop monetizing unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, and begin creating an asset-backed currency that could enable every man, woman and child to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income using insured, “pure” interest-free capital credit, repayable out of the future earnings of the investments. Essentially, we need to implement financial mechanisms that empower EVERY American to acquire productive capital with the self-financing earnings of capital, instead of leaving them to acquire, as best as they can, with their earnings as labor workers and the pledge of past savings as security collateral to protect against investment failure.
Policies need to insert American citizens into the low or no-interest investment money loop to enable non- and under-capitalized Americans, including the working class and poor, to build wealth and become “customers with money.” The proposed Capital Homestead Act would produce this result.
As for addressing the problem that not everyone has equal financial management skills and a knowledgable basis to choose what viable business capital expansion projects to invest in and subsequently manage their growing wealth-creating, income-producing capital asset portfolio, solutions should include education, professional asset management services as well as producers ownership unions to manage asset accounts for their members. But this is a subject for another article.
Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm.
Support Monetary Justice at http://capitalhomestead.org/page/monetary-justice.
See the article “Economic Democracy And Binary Economics: Solutions For A Troubled Nation and Economy” at http://www.foreconomicjustice.org/?p=11.
See the article “The Absent Conversation: Who Should Own America?” published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/who-should-own-america_b_2040592.html and by OpEd News at http://www.opednews.com/articles/THE-Absent-Conversation–by-Gary-Reber-130429-498.html
Also see “The Path To Eradicating Poverty In America” at http://www.huffingtonpost.com/gary-reber/the-path-to-eradicating-p_b_3017072.html and “The Path To Sustainable Economic Growth” at http://www.huffingtonpost.com/gary-reber/sustainable-economic-growth_b_3141721.html. And also “Second Income Plan” at http://www.huffingtonpost.com/gary-reber/second-income-plan_b_3625319.html
Also see the article entitled “The Solution To America’s Economic Decline” at http://www.foreconomicjustice.org/9206/financing-future…economic-decline and “Education Is Critical To Our Future Societal Development” at http://www.foreconomicjustice.org/?p=9058. And also “Achieving The Green Economy” at http://foreconomicjustice.org/?p=9082.
Also see “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at http://www.foreconomicjustice.org/9206/financing-future…economic-decline and “The Income Solution To Slow Private Sector Job Growth” at http://www.foreconomicjustice.org/9872/the-income-solut…ector-job-growth.
