Wednesday, August 1, 2012

A Letter to Deborah Orr


Dear Ms Orr,

I was very pleased to read your article of the 13 July 2012, Yes, banking’s a mess, but be part of the solution. Move your money!, and further encouraged by last week’s Now Cameron wants us to spend again. And borrow. Have we learned nothing? I don’t follow the newspapers as I used to, so cannot be sure how rare such articles are, but my impression is that the mainstream has yet to grasp this particular, all-important nettle as fully as it ought (I note The Economist, The Independent and The Financial Times have recently identified the money system as a systemic problem). The money system and its relationship with perpetual growth consumerism lies at the heart of today’s many problems, and urgently needs to be addressed. Thank you for addressing it.

I have been studying the money system and money itself for many years now, but am not writing to pound you with the details of that research. My hope in reaching out to you in this way, is that you might tackle a topic closely related to the money system and consumerism: basic guaranteed income. Basic guaranteed income was supported by Martin Luther King and is (was) proposed by various economists, including Milton Friedman. The idea is rare in that it both unites and divides across the political spectrum. It cuts to the heart of why we have an economy in the first place, what it means to earn a living, challenges the received and seldom questioned wisdom that money is wealth, yet somehow also measures wealth (value) accurately, and presents government with the tantalising (yet frightening) option of simplifying the entire tax code to ‘finance’ guaranteed income. Like no other idea I know, this one opens up a can of worms which never fails to excite debate – one we sorely need.

I’ve lived in Berlin for over a decade now, but only last year came to learn of Ralph Boes. Boes is a Berlin-based philosopher-writer who has taken on the might of the German state by challenging what he sees as the anti-constitutional Hartz IV system (unemployment benefit), which he equates with forced (meaningless) labour. The first line of the German constitution is “Human dignity shall be inviolable.” But if people claiming Hartz IV do not accept the work assigned to them by the state (often for 1€ an hour), however real an affront to their dignity, they are sanctioned, and can end up on the streets. Homelessness is on the rise in Germany. Boes himself is claiming Hartz IV benefits, and has written a Brandbrief (an open letter of defiant political intent, which I recently translated into English), which he personally handed to Angela Merkel (among others). His determination is to reject any paid work offered to him by the state on the grounds that he works full-time for no pay, campaigning across Germany for a basic guaranteed income. His action constitutes an overt and public attempt to invite sanctions. Over a year later, he has just received his first threat of sanctions (30% reduction in his benefits if he does not apply for a job in a call centre), but is still working full-time for no pay. He threatens to go on hunger strike if sanctioned and also to take the case to Karlsruhe (German Constitutional Court). My reading of the situation is that he has the state somewhat on the run, though if the state is to remain the biggest bully on the block, it is obliged to defeat this annoyance by hook or by crook.

How does this relate to the UK? You wrote another article some years ago challenging the patronising New Labour position that everyone can be successful, that with a little help and a push, every citizen can shine and be a useful contributor to the economy. Your article changed my way of thinking about the economy and economic activity (GDP activity), and is the other reason I am approaching you with this sprawling topic; I hope to find in you an open and serious listener, since you are obviously well aware of these fundamental questions, and are prepared to tackle them. In a similar vein to that earlier article, Boes talks eloquently about what he calls the “right to laziness”. Here is a quote from his Brandbrief:

“I hold sacred all work which springs from the earnest inner concern of a person
-          regardless of whether it is performed externally or internally
-          and regardless of whether or not it is “gainful”!”

Success cannot be objectively assessed, the path to it cannot be prescribed. People are only free to ‘fail’ and ‘succeed’ on their own terms and in terms of their personal development when they are free of existential angst, a freedom granted by a guaranteed income. Today, after many decades of breathless technological innovation, we simply do not need human labour as we once did. Can we let the primary consequence of this inescapable fact be that those humans not needed for the production of goods and services are treated by society as useless? Killing off the economically unnecessary (e.g. through war) – regardless of moral issues and to be extreme for a moment – would be no solution, since we only need a percentage of the population to be economically active. We already produce more than we can consume, and the unemployed have too little purchasing power. As if to exacerbate this well known capitalist challenge, we have a money system which forces perpetual economic growth on us, since it creates money almost exclusively as interest-bearing debt, as you highlighted in your article. This means that to pay off the interest owed – which is not created alongside the debt – on the debt-money created, more people have to take on more debt, forever. When people stop taking on new debt, defaults increase, the money supply consequently shrinks, and financial crises ensue. The money system we have today is thus in essence a Ponzi scheme: if it is not growing, it is collapsing. Perpetual growth is thus the impossible gold which backs this money system, an obviously untenable situation. We are seeing the terrible negative consequences of this across the planet today.

As sane people recognise, the economy cannot grow forever. And why should it? Where is it proven that of all things, economic activity is so vital, good and supernatural that it alone should grow forever? Why do politicians insist on economic growth? What’s wrong with non-economic activity, such as friendship, volunteer work, parenting, reading, strolling, musing, chatting, lazing, etc.? These things must shrink if the economy is to grow forever.

The pat answer is that economic growth creates jobs (though we now know jobless growth and jobless recovery are possible!). Why are jobs so important? Because they are more or less the only economic mechanism we have of equipping consumers with purchasing power, and also, sadly, the way many of us derive our sense of self-worth (I note suicides among over-55 males are on the rise). A basic guaranteed income flies in the face of this system of values, and says people should be freed by an unconditional income to contribute as they decide, not as money decides, not as The Market decides, not as The State decides. We shouldn’t have to earn money to live, we should be freed to live and contribute by a guaranteed income. To be against guaranteed income is thus to be for the idea that only economic activity (a.k.a. consumerism) is valuable, or that it has far more value than non-economic activity. In Boes’ view, we should not be compelled to earn the money we need to survive, doing work the world either does not need or is damaged by, in the name of something both impossible and destructive anyway: perpetual economic growth. Again, this situation is untenable.

A guaranteed income cannot mean the end of work. There is only work. This is an issue of definition. From a physical point of view, everything is always at work, including humans. Whether sleeping, holidaying, laughing, crying, digging, gardening, breastfeeding, fornicating, etc., we are always doing something. Even decay after death is work. Thus, no longer needing to work economically to survive cannot mean not having to work at all, nor can it mean not having to create a place in your community for yourself: to feel needed and valued by others requires work. Guaranteed income presents us with the cultural challenge of redefining work, utility, reward, success, value, etc. I consider that an enormous challenge, but one we are forced by circumstances to explore and take on.

Why should money and economic activity have such a death grip on our cultural sense of value and contribution, of what is possible, of what we can afford? If ever we needed to free ourselves of this grip, it is now, and to do so we need the help and work of people like you, Ms Orr. Ralph Boes’ efforts in Berlin against Hartz IV and to promote guaranteed income may be local to Berlin and Germany, but need global attention nevertheless, since the connotations of his work are relevant to us all. If we are to take on The Money Power (US President van Buren’s phrase) as you have and others are beginning to, we must be prepared to tackle our cultural relationship with value and utility too, since today both are almost exclusively defined by money.

I look forward to your reply.

Yours sincerely,
Toby Russell

P.S. Further reading, should this enormous topic indeed interest you: