Universal Basic Income Video Yanis Varoufakis

Universal Basic Income (UBI) Video - Yanis Varoufakis

Translation of Yanis Varoufakis on UBI

Ladies and gentlemen organisers thank you so much for the warm welcome it's wonderful to be here because basic income is a necessity I'm going to actually argue that this is not a question of whether we like it or not it will be a major part of any attempt to civilise capitalism as capitalism is going through a spasm caused by its own generation of technologies that undermine itself to put it simply in the 20th century we had the stabilisation and civilisation of capitalism through the rise of social democracy New Deal in the United States the social democratic social market developments in Europe unfortunately this social democratic New Deal paradigm is finished and it can not be revived I shall make some comments on this but first let me let's just remind let us remind ourselves of what the Social Democratic New Deal transition tradition is all about it's about two things firstly redistribution of income within waged labor a kind of insurance for the working class the working class insuring the working class take for instance the National Insurance contribution scheme in Britain after the Second World War unemployment insurance in the United States working wage labourers effectively providing insurance payments to those out of a job same with health provision pensions those working today providing for the pensions of those who have stopped working so insurance and redistribution within the working class to put it very bluntly the second dimension of course is redistribution between capital and labor between the rents and labor this takes the form of minimum wages that are negotiated by the state it's also a process of collective bargaining usually usually triangular involving trades unions employers and the state and of course taxation transfers through the taxation system now this sort of democratic tradition I made a very big statement a moment ago didn't die is dead in the water and it is dead in the water or dying in the water for two reasons for reasons that have to do with two earthquakes that have hit our societies on both sides of the Atlantic one is the process of finite financialisation which created a huge wedge between capital labor it created the new form of capital financialised capital that essentially depleted the energy of both labor and industrial capital and this inexorable financialisation drive had its comeuppance in 2008 at ever since you remember after 1991 socialism died with the collapse of the Soviet Union and then after 2008 capitalism died we have a new regime now I call it a bankruptocracy  it's ruled by the bankrupt banks the more bankrupt bank the greatest capacity to mobilise and usurp economic rents an economic value from the rest of society including industrial capital and labor the problem with bankruptocracy the fact that for six years now we have a cynical massive transfer of wealth of income of value from production towards the financialised financial sector that remains insolvent in reality despite this cynical transfer the problem with this is that it is created two things firstly deflationary forces ask anyone working in the Central Bank of Switzerland today or in the Buddhist Bank on the European Central Bank or the Bank of Japan or the Bank of England or fed they can't sleep at night because of the the fact that about half of the global economy now is languishing in negative interest rate urge and this is a reflection of the collapse of the Social Democratic New Deal bargain contract social contract if you want of the 20th century and that collapse happened in 2008 the world after 2008 cannot be understood anymore in terms that made sense before 2008 just like the world after 1929 could not be made sense of in terms that make sense in the Gold Exchange standard era prior to 1929 the second reason actually with the deflationary process we have now what the first plank of the social democratic tradition is that in the water because the working class can no longer ensure itself it's stagnant wages the fact that youngsters are caught up in a dual labour market and they find it very difficult I'm not talking about Switzerland of course now but I'm talking about the rest of the developed world Switzerland successful only because it's only one of them and nobody else can be like Switzerland but that's another discussion you can have it later if you want the fact that means that the first plank the insurance amongst wage labourers is simply not possible because wage wages have stagnated such an extent that it is impossible for the working class to insure itself and the second plank the redistribution between capital and labor is becoming increasingly impossible for two reasons first the politics that has become quite toxic just look at what's happening the negotiations between Greece and the troika within the European Union at the moment in the United States where you've got a Congress between the White House and a White House vetoing the Congress this the distribution between capital and labor that was part and parcel of the New Deal and social democracy required political governance Europe and the United States are uncover noble as we big utterly completely uncovered and so that's the first test quake the second earthquake has to do this is nothing new I'm sure it has been discussed already this day I caught glimpses of this discussion let me put it very bluntly in science fiction terms their eyes are the machines artificial intelligence will consume very very soon so ready during it all a repetitive routine work or algorithmic work is going to be replaced especially the moment machines pass the Turing test and it is impossible for you and I to understand when we speak to somebody on the phone whether we're speaking to a machine or to a human person once we have that we're going to have a massive displacement effect which for the first time in human history in capitalist history is going to overwhelm the creation effect more job destruction than job creation because remember that the bankruptocracy that I have referred to came at the tail end of a thirty-year period of replacement of manufacturing jobs in the developing world with low-wage repetitive work employment rates for instance in Britain since the previous speaker comes from Britain employment rates are quite high in Britain and the quite high in the United States but the bulk of those jobs that were created to read to replace the jobs that were lost after 2008 after1975 and 1983 low waged routine jobs the ones that will be culled immediately the moment artificial intelligence overcomes the Turing test and we are facing a major issue there and to link it with what I was saying before this displacement is going to reinforce the deflationary processes that keep our central bankers awake at night because it will eliminate a significant measure of aggregate demand it will create an even greater level of income inequality and primarily disparity between savings and investment and this disparity between savings and investment will force the price of money the rate of interest even below the current low low levels so this is why I'm saying that basic income is going to be an essential part a necessary part of any attempt to stabilise society and to civilise it I don't need to do a define basic income let me just say that the straddle we are going to have to carry hearts and minds will be an ethical one and an ethical one that doesn't simply spring out of a position from the haves but also from a position from the have-nots from Social Democrats from leftists from those who whose own sense of dignity response against naturally the idea of something for nothing this is why it's important to Couchbase income as what it is it is the idea that and allow me to narrate it in broad terms we are going to overturn the current narrative on life under capitalism the current narrative the dominant paradigm is what that we have private production of wealth which is then appropriated by the state for social purposes in reality our wealth production is collective it is social and it is only then privately appropriated unless we make this shift in the narrative we are not going to be able to succeed to convince even those who will benefit from basic income that it is worthwhile striking for it take an iPhone and pick it open it what do you find in it you find a variety of technologies each one of them was created by some government grant none of them was produced by Apple nothing of them was produced by Google none of them were produced we by facebook they were all produced by can some government grant this is what I'm saying about this why I'm referring to the collective production of wealth which is then privately appropriated if you start thinking of it that way then it's very easy to start thinking of basic income as a dividend a dividend that goes to the collective that was responsible for collectively producing the wealth and the gadgets and the product and the markets because this false separation illusory separation between the market and the state needs to be dissolved there would have been no markets if there were no states there would have been no capitalism if there was not a state there will be no Apple no Google if there was no state and similarly there would be no state if there were no private entrepreneurs there would be no state is there were no private firms we need to dissolve this false division and we have to attack the narrative head on basic income is about giving money to the undeserving it is about giving money to the rich it is about giving money to the surfers the beach bums the ones that we dislike the ones that we would not like to be our children and who if they were our children we will we will be scolding them so we must not sidetrack beside track by simply talking about good people getting money that they deserve we should talk about undeserving people that get money courtesy of the fact that they are members of a society that is collectively producing wealth and then we on top of this we need to add the narrative of stabilisation think about it in Europe today in the United States they basically income would really help central bankers go to sleep at night it will be counter deflationary it will be a unique defence against the slow-burning recessionary impact of 2008 now there are decent arguments against basic income that we must not avoid somebody may say to you yes but theory the rich do not need a basic income a basic income well sure but they don't all they don't need to have the first ten thousand Swiss francs that they make being tax exempt either and nobody is worried about that surely we hear being said it's better to target the money that society has on those who are deserving well yes but you have to think of the other side of the story too to separate the deserving from the undeserving you need a bureaucracy whose purpose is to do that that bureaucracy tends to replicate itself bureaucrats love to reproduce themselves and to reproduce their power of our society and to do so by creating a stigma attached to those whom they considered to be undeserving it is very similar to psychiatry the moment you introduce psychiatry remember Michel Foucault and the story about the madhouse you create a narrative of reason and reason you create a power structure the person who has the certificate to be the Seiken psychiatrist decides who is sane and who has the right to to be free citizen the other argument which I think is also one that needs to be confronted is that people should have a right to a job not a right to basic income and the two should be promoting work not sloth well I think that there are two points here that need to be made but firstly nothing stops us as a society from essentially those who are idle why should we have them starve I know that if my kids were idle I would be censoring them but I will not be throwing them out of the house secondly and more importantly the right to turn down a job is essential for a well-functioning labour market and for a civilised society and have the right a genuine right to turn down a job you must have an alternative an outside option because desperate people will accept to do desperate things I had somebody here today earlier talking about a cleaner whose job is not respected whose name is not known I have a story to tell you about that I've worked in a number of universities and I remember in the old days wet cleaners had worked for the University and they were like my boss in the department you know they would come into my office and I will they would know about my family that would know about my wife they would know about me that would tell me off they would say that what it's 8 o clock and I got your wife what are you doing yeah and they had a sense of belonging to an institution and being institutionally important and then what happened we subcontracted all the labor to firms that hire by night people that are faceless who turned over all the time were paid less who are not institutionally connected to the place whether this is the University the National Gallery in London and so on and so forth and there is but why did this process spin out of control it did because the cleaners had no arts outside option no right to say no to the subcontracted contract now just so that we do not face only the negative arguments let me just before I conclude and we open this up to discussion let me mention what I think an essential aspects from a social perspective not just from a macroeconomic perspective it is important to state the macro economic case for basically income for stabilising the financial markets investment overall aggregate demand but there are others at the level of the micro and the sociological social democracy put forward the idea of a social safety net remember that well we need to counter this nets are very good for catching you when you're falling but when you're caught in them it's sometimes very difficult to get out of them it's sometimes very easy to be trumped think of basic Ingham as a foundation not a net a floor on which to stand solidly and to be able to reach for the sky exploitation libertarian economists political economist political theories politicians who claim that Liberty is their driving force define League Liberty on in a negative sense in the sense of the absence of constraints of volunteerism if you've said yes to some contract that contract must by definition be a free contract therefore it must be some act of free will well it's not the Mafia loves to give us options that we can't refuse to make us offers we can't refuse the fact that we say yes to them doesn't mean that they were chosen freely the fact that the Greek government accepted the terms last summer of the troika does not mean that it was a voluntary transaction to have a free contract to have a contract that is signed by both sides representing and exuding the freedom of both sides each side must have a capacity to say no I said that before I'm saying this once more in a sense in the sense freedom in action requires a basic income finally again beyond the macroeconomic a basic game will allow for creative work to replace the kind of routine algorithmic work which is anyway being displaced by artificial intelligence so if we want to ameliorate for the ill effects of capitalism undermining itself through producing gadgets that itself cannot survive then we need to create a system whereby society stakes a claim to the returns to aggregate capital and this claim becomes an income stream that goes to everyone I don't see why my children and your children have a right to a trust fund why Paris Hilton has a right to try a trust fund when nobody else does or very few people do think of basic income as a trust fund for all our children to be financed by dividends from our aggregate capital which was after all created collectively thank you.

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