Helicopter Money – a disastrous Basic Income

Throughout 43 years of passionately advocating the Citizens’ Basic Income, I have been aware of how horribly wrong it could go . That possibility now seems more likely than it did.

The Basic Income movement has begun to gain considerable traction of late, but it is still focussed entirely on redistribution, less inequality and the poverty trap. I agree with every word, but I appear to remain unique in suggesting that an even more important reason for it is to make a steady state economy – a recession – acceptable for whole populations. I helped to found the UK Green Party, intended as a political force to prevent over-exploitation of the Earth. The Basic Income would enable new incentives and taxes to be introduced which would encourage sustainable purchasing habits, and discourage dangerous forms of economic activity. Such rules would cause hardship if introduced without a Basic Income, and so be politically unacceptable. But if all the Basic income achieves is to allow the poor to spend money confiscated from the rich, welcome as that would be, the hopes pinned on the Paris agreement last December are illusory. But at least the Basic Income movement is not bent on accelerating the race to environmental destruction.

We all live in ‘silos’ nowadays. I have seen no mention in Basic income literature of how closely it resembles ‘Helicopter Money’. This will of course not actually be dropped from the skies. It might get washed down drains. It will more sensibly be paid electronically directly into everybody’s bank account. Apart from taking it for granted that everyone has a bank account, the only difference between a Basic Income and Helicopter Money is that the former normally assumes individual recipients, whereas the latter will be given to households.

But those advocating helicopter money appear to be equally oblivious of how close they are to an idea which has been around since 1798. The reason is that they have a very different purpose. The Basic income movement is merely complacent about the risks which ‘Paris’ is supposed to have addressed. The purpose of helicopter money is the exact opposite of mine – it is to re-start economic growth.

Quantative Easing has two problems, how to bring it to an end, and as it went only to the banks it got spent on assets, inflating their value unnaturally. Both problems were foreseeable, but the economic downturn  had to be rescued if the flaws in the financial system were not to be exposed, so the can had to be kicked down the road. It is now hoped that H money will rescue the situation.

In an article in the FT in August 2015 Martin Wolf discussed the world wide economic sluggishness, due largely to the slow-down of the Chinese economy. Mr. Wolf suggests at least a part of the answer is to persuade the Chinese to consume more. The Financial Times has a general narrative about the need to boost consumerism. Of course it also has also has a less conspicuous narrative about climate change, but the two do not interact.

How can the Basic income be used for diametrically opposite purposes? Its importance from my ‘no dependency on growth ’ perspective is that it does ensure that everyone has some income. Economic activity can never fall below a certain basic level. As long as the economy is under-performing, it does not need balancing by taxation. So far, I am in complete agreement with the helicopterists. [I have added the following comment in response to a  comment received since publication: ‘Helicopter money’ is only envisaged as a one off economic kick start, whereas a Basic Income would be a permanent feature, normally balanced by taxation except when the economy was underperforming. However, many economic commentators doubt whether ‘one off’ will turn out to be realistic, so an apparent difference may disappear in practice.]

But the helicopterists are not interested in limiting activity on environmental grounds. As long as the aim is growth, not combined with ecological fiscal rules, the risk is that payments to the general public, whatever their name, will bring rip-roaring ecological destruction nearer.

Three movements, so near and yet so far, the Basic Income movement, the helicopterists, and me. Not the Green Party, which is a bit hazy about a steady state economy these days. It is a pity we all live in separate silos.

5 responses to “Helicopter Money – a disastrous Basic Income

  1. You are not alone! From when I joined – a few years after you – I have consistently promoted the same view of the Basic Income – and related it also to the need to cure of the debt-based money system we need also to apply.

  2. Pingback: Could our #RegionalDemocracy trial a Citizens’ Income? | We Share The Same Skies·

    • I have only just spotted this on my blog. I remain as passionate as ever about the need for the Basic income, but there is a dange of something very similar being used irresponsibly.

  3. Pingback: European MPs Call on the ECB to Consider Helicopter Money·

    • A couple of comments from way back have just surfaced because Joe, my social media guru, has been helping me.
      I thought I had already answered this one on helicopter money. Brifly,although they are almost identical, helicoperists and Basicincomes appear to be unaware of eachother because they have different purposes: helis just want to kick-start growth, Basics just want a fair distribution. MY third purpose is to make a steady state economy (aw shucks, they will call it a recession, which it will be, anyway) thinkable for whole populations. The answer to your question is in there, somewhere.

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