10:  Letter from Barcelona

Keith Wilde October 14, 2004

Dear ER,

I took a busman’s holiday recently,  when an intended sight-seeing visit to  the Pyrenees turned into attendance at a  conference on economic policy in  Barcelona. The Basic Income European  Network was holding its 10th conference (after twenty years of existence) as  part of a larger event called Dialogue on  Human Rights, Emerging Needs and New  Commitments organized by the Catalonian  Institute of Human Rights, with a heavy  involvement by UNESCO. I had been  alerted to the existence of this movement six or seven years ago by Sally  Lerner (University of Waterloo), and  since UNESCO events always treat  important subjects with high quality  presentations, I stopped in to find out  more of what Basic Income is about.

The plenary sessions were interesting  and vital, but tended to treat the issue  only in its moral and sociological  aspects. I selected from the program  two of the parallel sessions that seemed  to be the only ones to address economic feasibility and financial techniques for achieving the BI goal, which  is stated as a payment made by the  state, as a right of citizenship to every  full member or resident of a society,  even if he or she does not work, or is  unwilling to accept a job if offered, and  irrespective of whether he or she is rich  or poor, in other words, irrespective of  other possible sources of income and  domestic arrangements.

On the way to the session breakout  rooms I stopped to look over the BI  literature table to get a better idea of  scope and focus. There was not a lot,  but the quality seemed good and I  purchased one monograph and a  compendium of past papers prepared  by members of the Network. I will pass  along my evaluations when I have had  time to read them more carefully. My  cursory examination reinforced the view  obtained from printed program and  plenaries that economics and finance  have not been well represented in BI  discussion. After having sat through  two sessions titled “Innovative and  Sustainable Financing for Basic Income,” I asked why, after twenty years,  did this topic have such a tentative feel,  as if it were only now getting under- way? The moderator passed my question to one of the speakers who he said  had been present from the beginning.  Yoland Bresson answered by observing  that those who came together in the  founding of BIEN were mainly sociologists, political scientists and moral  philosophers, and that they had never  sparked much interest among economists.

I think that Bresson’s confirmation of  my superficial observation is still  surprising to the man-in-the-street, as it  most definitely would have been to  adults of 30-plus years ago, but given  that BIEN is only twenty years old,  maybe it isn’t. It is consistent with my  discovery exactly one year ago that the  professional literature of public policy  and administration does not touch the  subject matter of monetary and financial policy. (I had this observation  confirmed by a political science professor with a strong personal interest in  economic policy and a sociologist who  has spent a career surveying all the  literature that bears on public policy as  it is affected by technological, environ- mental and social change. Monetary and  financial policy are in the domain of  economics, and other social science  specialties leave it alone.)

And it bears on your opening question  in the September ER of “why so many  unanswered, and indeed unasked,  questions are leading the world where it  does not choose to go.” I wonder if  you saw the essay by Lewis Lapham,  “Tentacles of Rage: The Republican  Propaganda Mill, A Brief History” in  the September Harper’s magazine? It  goes a long way toward the explanation,  providing the background to an emergent effort to influence the thinking of  academic economists that I observed as  a graduate student in the US almost  forty years ago, and which apparently  succeeded. In brief, money power  bought the academy and converted it to  a propaganda machine. Since observing  those early efforts in the sixties, I have  watched from the inside as government  authority, will and muscle to regulate  money and financial power in the  public interest have been progressively  stripped away. Today, it is rare to find  an economist who makes empirical  investigation of the institutional structures that check and shape the behavior  of individuals and groups (corporations)  as they express their private drive for  more money and power.

One of them who does showed up at  the BIEN conference and provided one  of the most useful presentations. Myron  Frankman of McGill University argued  that there is plenty of money at the top  of the world’s income distribution to  provide $1,000 per year to everyone on  the planet, and that this abundance is  even more striking when wealth distribution is brought into the picture.

Much of his paper is devoted to  problems of measuring and comparing  incomes, within and among countries, a  difficulty that is only compounded w.r.t.  wealth. Available data nonetheless  justify his figure of $1,000 per person/ year and more accurate measurement  could only make it higher, in his  considered opinion. He notes with  regret that most of the effort expended  on this kind of measurement is focused  on the poor, in spite of Susan George’s  warning of 30 years ago that in order to  help the poor, one should study the  rich. This is especially important and  difficult because the rich are so successful in keeping their wealth and  incomes hidden from view. Frankman’s  paper can be viewed at http:// mjfbien10.pdf.

I enjoyed a few conversations with  Myron over lunch and dinner, and he  affirmed the observations above about  the decline among economists of  interest in empirical study of market  structures and related institutional  frameworks from a regulatory, public  policy perspective. He said that when  himself and colleagues of his generation  retire, there will be virtually none left.  Content of the mainstream economics  literature today, and hence of university  instruction, is so focused on modeling  the behavior of “free” markets (do they  portend equilibrium or chaos?) that  economics departments are driven to  hiring new professors straight from  graduate programs in mathematics. The  implied emphasis on deductive reasoning at the expense of empirical  research can only reinforce economist  jokes like the men in a lifeboat with  only canned provisions and no can  opener–the economist’s solution is  “assume a can opener.”

From the literature table and the  sessions I attended, I observe that when  Basic Income authors do get into the  domain of economics and finance they  lean toward the traditions initiated by  the likes of Henry George, Veblen, and  C.H. Douglas. I heard two presentations in this vein, both focused on the  unearned income associated with site  values (land) and other essentially public  or collective resources that have been  seized as private property by robber  barons of the past or present. As do  several other BI authors, these speakers  poured scorn on the slogan popularized  by economists of the past 35 years that  “there’s no such thing as a free lunch.”  The essence of rent as explained in the  textbooks of neoclassical price theory  that I studied and taught from is that it  is unearned income – a payment for  which the owner has done nothing but  to collect it.

Jeffrey Smith of the Geonomy Society  of Portland, OR gave a cautiously  positive answer to the question “Can  Rents Fund an Extra Income for  Everyone,” and Charles Bazlinton, a  British surveyor and author of The Free  Lunch (the monograph I purchased and  will review) cautioned against implementing a Basic Income without a  deliberate system for taxing land values  along with it.

Coincidentally, while attending the  conference I was corresponding  frequently by e-mail with another  author who is a prolific contributor to  this line of thinking – empiricist and  institutional. Michael Hudson is Distinguished Research Professor of Economics, University of Missouri at  Kansas City, and he says it is one of the  few departments that has not been  completely taken over by the post- Keynesian, Chicago-led fad of monetarism in the neoclassical resurgence.  (See the Lapham article mentioned  above for added flavor.) Hudson has a  book in preparation which addresses  your observation about “so many  unanswered, and indeed unasked,  questions leading the world where it  does not choose to go.” In reviewing  drafts of his Introduction I can see the  struggle entailed in assembling information that is publicly available (if one  chooses to look) and then to present it  in a way that gives a fundamentally  different concept of the world than the  one that is driven by the doctrinal  fixation of the age–in this case the  neoclassical, monetarist resurgence that  is assisting finance and property power  to reverse 800 years of progressively  democratic policies. (A generous sample  of his writings is available at

The situation of contemporary economic thought seems to be reflected in  an appreciation of Jacques Derrida that  appeared in the New York Times on  October 14. A close professional friend  wrote that The guiding insight of  deconstruction is that every structure – be it literary, psychological, social,  economic, political or religious – that  organizes our experience is constituted  and maintained through acts of exclusion. In the process of creating some- thing, something else inevitably gets left  out. These exclusive structures can  become repressive – and that repression  comes with consequences. [W]hat is  repressed does not disappear but always  returns to unsettle every construction,  no matter how secure it seems…. Mr.  Derrida understood all too well the  danger of beliefs and ideologies that  divide the world into diametrical  opposites: good or evil, for us or  against us. He showed how these  repressive structures, which grew  directly out of the Western intellectual  and cultural tradition, threatened to  return with devastating consequences.  Mr. Derrida does argue that transparent  truth and absolute values elude our  grasp. [I]t is necessary to recognize the  unavoidable limitations and inherent  contradictions in the ideas and norms  that guide our actions, and do so in a  way that keeps them open to constant  questioning and continual revision.  There can be no ethical action without  critical reflection.

A distinctly novel approach to financing  Basic Income was provided by a  youthful Australian engineer who  pointed out that all the non-human  energy that is currently used to do the  world’s work could be generated in a  space one-quarter the size of South  Australia using available solar collection  technology. The value of this opportunity would go a long way toward  providing a universal income supplement. Further exposition of this idea  (adapted from the late Buckminster  Fuller) and some of its limitations is  provided in the an upcoming review of  Cosmic Accounting that I wrote as a letter  to the author.

Keith Wilde

-- from Economic Reform, November 2004

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