In response to an FT article by Ed Luce on 29th May 2016, entitled ‘The mystery of weak US productivity’
“Everywhere the world is speeding up except, that is, in the productivity numbers. This year, for the first time in more than 30 years, US productivity growth will almost certainly turn negative following a decade of sharp slowdown…
…the remedy: a universal basic income. UBI has several plus points. It draws support from all parts of the ideological spectrum: libertarian and socialist alike. It would replace today’s messy overlap of benefits and do away with the humiliation of proving your eligibility to federal bureaucrats. Most important of all, however, it would buy a measure of social peace. Today’s stagnation may be temporary or lasting. We have no way of telling. Common sense dictates we must act as though it is here to stay”
This article is 11 paragraphs of fluff about low productivity, followed by the point of the exercise: Mr. Luce is shilling for more central planning, on behalf of governments who think the answer to the failure of government meddling is always more government meddling. Meanwhile, there is no analysis of the effects of ten years of failed monetary policy.
It comes at a time when status quo politicians around the world are frightened of being turfed out on their ears. There have been 7 of them huddled in a whinge session this week in Japan. They will do what governments have done since LBJ created 'guns and butter' to pay for the Vietnam War and the 'Great Society' - offer up programs to 'bribe' people into voting for them.
The irony of the least productive elements of society having a 'productivity solution' for the rest of us, escapes them - as it apparently does the journalists who faithfully promote their latest plans with no critical analysis. Let's see now - cashless society, negative rates, basic income = governments with their fingers in every nook and cranny of the economy - what could possibly go wrong? As long as the US does the right thing and elects Hillary Clinton to carry on the fine work, everything will be fine - isn't that right Mr. Luce?
If you seriously want to advocate UBI Mr. Luce, offer some analysis of its effects on the economy, but more importantly the relationship between the state and the individual.