Book Review:

6    A Citizens’ Income

Clive Lord. John Carpenter, 2003 £8.99 ISBN 1 897766 87 4

This book sets out the case for the need for a ‘paradigm shift’ to gain support for the Citizens’ Income. Persuading people that basic needs should be met by the unconditional distribution to all of the income needed to meet them, while all else should be earned, is, Clive has found over some 25 years of promoting it, very hard to achieve. He describes his own realisation of it as a ‘paradigm shift’, and one which must be promoted before the case can be generally accepted.

He covers a wide range of issues, and relates CI to the Green Party and its prospects for success, and the book should give any newcomer to the idea of CI much food for thought.

He notes that the evidence from study of our nearest biological ‘cousins’, the chimpanzees and bonobos, shows that capacity for both murderous aggression and caring pacifism must exist as fundamental traits of human nature. He then compares the two extremes of human society as exemplified by the Rapanui (Easter Islanders), who exploited their environment in senseless competition for prestige, to its eventual destruction, and the Siane of New Guinea, who lived for centuries in harmony with their environment, sharing basic needs while exchanging ‘luxuries’ and ceremonial goods, until contacted by western ‘civilisation’.

‘The Tragedy of the Commons’, as described by Garret Hardin in 1968, is seen by Clive as the basic problem of both the Rapanui and modern society. The ‘Commons’ of this essay, of course, are not to be equated with the actual ‘commons’ which suffered enclosure for private gain in Britain; the unregulated exploitation only started after enclosure; and the extremes of unregulated exploitation now occur with ‘globalisation’, courtesy of the unregulated and de-regulating WTO!

Noting the slow past growth of human population, accelerating exponentially over recent centuries, he recognises the need for restraint of population growth as well as of consumption of resources and of pollution, but sees personal greed for consumption as the prime cause of growth.

He starts by noting the unreality of economists’ typical aim for “3% annual growth in the economy”, but uncritically equating that with growth of physical resource-use and pollution, without noting that their primary concern is for money-growth (see Gaian Democracy, reviewed in SustEc 11/3). He notes, however, that through most of the past, ‘Gaia’ has maintained a state of equilibrium, or restored it after any disturbance. While recognising as ‘arrant nonsense’ the claim of ‘conventional economic pundits’ that ‘demand must be kept up or we shall fall into a self-perpetuating recession …’, he fails to make the link with the nature of the current money system which makes this nonsense into a truism.

He writes: “Having regard to the Tragedy of the Commons, 'inward investment' is a mixed blessing, often capricious in its nature. A sustainable economy would instead aim for local self sufficiency. However, a rapid withdrawal would be problematic”, again overlooking the arguments for monetary reform, that any nation/community should be creating its own medium of exchange, and so should have no need of 'inward investment', which is only needed because of the nature of the current money system.

He quotes Derek Wall: “… a firm patents a new product and gains monopoly power, until the patent runs out, the firm is threatened and new research is fuelled. Survival occurs because firms research and develop new products, once again driving growth. The essential point to grasp is that in dealing with capitalism we are dealing with an evolutionary process. ... Capitalism, ... is by nature a form or method of economic change and not only never is but never can be stationary”. This is, of course, true — but again ignores the foundation of Capitalism on our debt-based money system, which provides its driving-force.

In writing that ‘A continuous stream of ecologically sound innovations may allow economic growth as conventionally measured to continue seamlessly into the indefinite future’, he fails to note that ‘economic growth as conventionally measured’ means essentially, growth of the money supply — needed to avoid its collapse!

In the brief Appendix 2, ‘ Monetary Reform: Two contrasting views within the Green Movement’, he claims that Jonathan Dixon, an accountant, “points out certain technical flaws in the case for reform”, but then ascribes to him various points that are not in dispute, and others which are misrepresentations of the reform proposals, together with Jonathan’s erroneous view that “The key to money creation over and above tokens valuable in themselves (or treated as if they were) lies in its 'double entry' nature: for every debit there is a credit somewhere, and vice versa”. He fails to see that, while this is true enough for book-entries and transfers within the banking system, it does not apply to money spent into circulation, or circulating as cash, and is irrelevant to the case for reform.

Failing to note the exponential growth of debt resulting from our debt-money system and its effect in driving desperate, destructive competition, involving massive persuasive advertising and extremes of wealth and poverty, he doubts that the monetary system ‘actually compels growth’, and inclines to blame ‘consumers’ for it.

While he is entirely right to see Citizens’ Incomes as a vital element in the move to an ecologically stable future, at least while we continue to use money, he fails to see that reform of the money system is, if anything, even more vital, imagining that CI alone could accomplish all that the reformers claim. By ignoring the effect of the interest accruing to the banks on virtually the whole of our money supply, and the fact that currently government borrows, not from its own Bank of England, but from the commercial banks, businesses and individuals, he claims that ‘in a steady state economy a Citizens' Income would be balanced by taxation, whereas during periods when growth could be justified as consistent with sustainability, the CI would be paid, but not matched in full by taxation. This would be 'money creation' as per the reform proposals, and yet quite consistent with Dixon's view. The difference is reduced to one of semantics: according to Dixon, this is the government going into debt, whatever 'spin' you put on it. However, Dixon also points out that cash is technically a debt owed by the Bank of England which can be ignored provided it stays in circulation permanently’— again confusing the issue!

— Brian Leslie