10 percent of all national income is paid out to the 1 percent as capital income. Why not give it to all as a universal basic income?
by Matt Bruenig
The new issue of Jacobin is out now. To mark its release, we’re offering discounted introductory subscriptions.
- 5.09k
The universal basic income — a cash payment made to every individual in the country — has been critiqued recently by some commentators. Among other things, these writers dislike the fact that a UBI would deliver individuals income in a way that is divorced from working. Such an income arrangement would, it is argued, lead to meaninglessness, social dysfunction, and resentment.
One obvious problem with this analysis is that passive income — income divorced from work — already exists. It is called capital income. It flows out to various individuals in society in the form of interest, rents, and dividends. According to Piketty, Saez, and Zucman (PSZ), around 30 percent of all the income produced in the nation is paid out as capital income.
If passive income is so destructive, then you would think that centuries of dedicating one-third of national income to it would have burned society to the ground by now.
Tithing to the 1 Percent
In 2015, according to PSZ, the richest 1 percent of people in America received 20.2 percent of all the income in the nation. Ten points of that 20.2 percent came from equity income, net interest, housing rents, and the capital component of mixed income. Which is to say, 10 percent of all national income is paid out to the 1 percent as capital income. Let me reiterate: one in ten dollars of income produced in this country is paid out to the richest 1 percent without them having to work for it.
Even if you exclude the capital component of mixed income (since it is connected to work even if the income is not from labor) and housing rents (since these are imputed to homeowners rather than paid to them as cash), that still means that, from equity income and interest alone, the top 1 percent receives 7.5 percent of the national income without having to work for it. Put another way: the average person in the top 1 percent receives a UBI equal to 7.5 times the average income in the country.
If passive income is so destructive, then the income situation of the 1 percent surely is a national emergency! Where does the 1 percent get its meaning with all of that free cash flowing in?
Capital Income for All
The fact is that capitalist societies already dedicate a large portion of their economic outputs to paying out money to people who have not worked for it. The UBI does not invent passive income. It merely doles it out evenly to everyone in society, rather than in very concentrated amounts to the richest people in society.
The idea of capturing the 30 percent of national income that flows passively to capital every year and handing it out to everyone in society in equal chunks has been around since at least Oskar Lange wrote about it in the early parts of the last century. This is, to me, the best way to do a UBI, both practically and ideologically. Don’t tax labor to give money out to UBI “loafers.” Instead, snag society’s capital income, which is already paid out to people without regard to whether they work, and pay it out to everyone.
This might seem like a fantastical idea to some, but this is exactly how the Alaska Permanent Fund and the Permanent Fund Dividend works. Through the Permanent Fund, the state of Alaska owns a lot of capital assets. Those assets deliver annual capital income flows to the state, which are then parceled out in equal amounts to the citizens of Alaska through the Permanent Fund Dividend.
A national UBI would work very similarly. The US federal government would employ various strategies (mandatory share issuances, wealth taxes, counter-cyclical asset purchases, etc.) to build up a big wealth fund that owns capital assets. Those capital assets would deliver returns. And then the returns would be parceled out as a social dividend.
If you have a problem with this, but not the current arrangement where capital income is paid out in huge sums to small fractions of our society, then your issue is not really with passive income. It can’t be.
Celebrate the new issue of Jacobin, “The Party We Need,” with a discounted subscription.
If you like this article, please subscribe or donate.
The Rich Already Have A UBI
- Thread starter CHL
- Start date
Dr. Sebi Jr.
Trust Me
They should go to the clinic then.
Your clinic, doctor? Do you treat this condition?
ADevilYouKhow
Rhyme Reason
The only cure for Affluenza is FMJs.
Thats also called PROFIT from invesments in stock,bonds,real estate...its the primary reason why those activities were undertaken in the first place...Now is it fair that a guy can make millions off a few clicks on a trading website than a coal miner will make all their life..of course not...but life isnt meant to be fairIf as a society we want to help the coal miner the right way to do it is NOT to pick the pockets of the hedge fund manager and give him stolen cash but rather to clear the obstacles in the way so the coal miner can eventually run a hedge fund if he has the ambition to do so.
exactly...in other words "steal" from one to give to another...No country on earth has "redistributed" itself into wealth ever...in fact the opposite tends to happen
Yeah that fund is from the states vast oil and mineral wealth thats not a luxury that every state has..Alaska is the richest state in terms of mineral wealth and they have a fairly small population of something like 700k peopleThat fund pays out like $2k/year....and even that seems to cause problems with binge drinking and drugs when its issued...
Overall i still think its a good thing to share the spoils instead of all of it ending in the state coffers...but its just not a viable plan for the whole nation IMO
Profound
Profound
The goal of every society should be fairness
I get the feeling UBI is an effort by communists to rebrand themselves.
Also, that article is beyond stupid. People had to buy the right/take risks to get those dividends, capital gains, etc. It's not the same as UBI which is simply money for existing.
Also, that article is beyond stupid. People had to buy the right/take risks to get those dividends, capital gains, etc. It's not the same as UBI which is simply money for existing.
Article has a bullshyt premise. UBI and interest off your investments isn't the same thing. I could be a silent partner in a company making bank, that's not UBI.
ADevilYouKhow
Rhyme Reason
Profound
https://www.vice.com/en_uk/article/why-the-fukk-is-crocodile-dundee-still-our-highest-grossing-film
F word may lead to 404 error
I'm in tears
Last edited:
lets have a little input from our favorite nose candy loving philosopher