Extreme Capitalism and the Case for a Guaranteed Income

Protesters with the Occupy Wall Street movement in New York, on Nov. 17, 2011. The protests reflected anger over the growing income gap and the global debt crisis. (Photo: Marcus Yam / The New York Times) Protesters with the Occupy Wall Street movement in New York, on November 17, 2011. The protests reflected anger over the growing income gap and the global debt crisis. (Photo: Marcus Yam / The New York Times)

To be a “winner” in capitalism requires an endless supply of disposable people. As inequality in the United States has widened, more and more Americans are dismissed as disposable “losers.” But there are policies that can reverse this pernicious trend, as Paul Buchheit shows in his new book, Disposable Americans: Extreme Capitalism and the Case for a Guaranteed Income. Order your copy today by making a donation to Truthout!

What is needed to bring justice to those people capitalism regards as disposable? Could a guaranteed national income be a start? Paul Buchheit tackles this question in his new book, DisposableAmericans: Extreme Capitalism and the Case for a Guaranteed Income. The following is a Truthout interview with Paul Buchheit.

Mark Karlin: Can you summarize your argument for a guaranteed national income?

Paul Buchheit: America has enjoyed over a half-century of productivity, during which we and our parents and grandparents all played a role, through our work efforts and our tax dollars. But the benefits have largely accrued to the relatively few people who know how to get rich by coordinating all the technological components, or by managing the money that derives from American innovation.

Meanwhile, our jobs have been disappearing. It might be argued that we’ve been here before, that similar concerns about the takeover of technology surfaced during the Industrial Revolution and the space race. But there are two clear differences now. First, in the past, technology created manufacturing jobs, white-collar jobs, higher-paying jobs. Now the growth areas are in food service, retail and personal care, while the only one of the 10 fastest-growing occupations that pays over $33,000 per year is nursing. Secondly, globalization has outsourced middle-income jobs, such as those in manufacturing, which is still shedding workers after the post-2008 recession. Because of globalization, jobs are being outsourced not only from rich to poor countries, but also from one developing nation to another, as, for example, from China to Vietnam.

We need the assurance that every American family receives a sufficient living income as compensation for the great productivity and unprecedented levels of wealth derived from decades of new technologies funded by our tax dollars. Ideally this would be done through new job creation. But short of that eventuality in our slowly adapting and politically inert society, a guaranteed income will become a necessity.

How would you respond to a right-wing firebrand who would counter that a guaranteed national income would incentivize people not to work?

There are too many examples that disprove that belief. And too much research that supports the workability of a guaranteed income.

Credible research overwhelmingly supports the concept. A World Bank analysis of 19 studies found that cash transfers have been demonstrated to improve education and health outcomes and alleviate poverty. Concerns about the use of cash transfers for alcohol and tobacco consumption are unfounded. An MIT/Harvard analysis of seven cash transfer trials found “no systematic evidence that cash transfer programs discourage work.” The Brooks World Poverty Institute found that money transfers to the poor are used primarily for basic needs. Basic incomes have been shown to lead to reductions in crime and inequality and malnutrition and infant mortality.

In the US, the Alaska Permanent Fund has thrived for 35 years, even with anti-socialist conservatives in power. Numerous Native-American communities have instituted guaranteed income programs, both in the form of shared benefits from casinos and as “land trusts,” which recognize the common ownership of natural resources. Notably, according to a Duke University analysis, the establishment of the Eastern Cherokee Indian Land Trust has resulted in fewer behavioral and emotional problems among the community’s children, relative to neighboring communities. In adulthood, recipients had less depression, anxiety and alcohol dependence.

Around the world, successes are many. A 2005 program in Britain added support to the argument that the reduction of poverty promotes family stability, rather than the other way around. A broader study of 18 European countries found “increasing employment commitment as social spending gets more generous” — in other words, dividend payments encourage people to work harder.

A program in Uganda followed young people who were given cash grants with twice the typical annual income, and, as summarized by the authors of a follow-up study, “The grants are typically invested and yield high returns … even among poor, unemployed and relatively uneducated women.” In Namibia, a two-year program yielded remarkable results, reducing poverty from 76 percent to 16 percent, child malnutrition from 42 percent to 10 percent, and school dropout rates from 40 percent to almost zero. A UNICEF-funded study in India recorded the same positive health effects, with particularly noticeable improvements among the disabled population. In Kenya, a cash transfer program led to increased spending on food, medical needs and education, with very little used for alcohol and tobacco, and with similar outcomes for both males and females.

What is there in capitalism that makes certain groups of people disposable?

There is little incentive in a profit-driven system to support the needs of average people. Charles Koch said, “I believe my business and nonprofit investments are much more beneficial to societal well-being than sending more money to Washington.” But large corporations have been spending their money on stock buybacks to enrich shareholders, while doing their utmost to minimize the taxes that are needed for education and infrastructure and housing and health research. Exxon, for example, had over half of its facilities in the US in 2016 but still found ways to claim substantial US losses against its massive profits.

Capitalists believe that the magic of the market will solve all the country’s problems. But what is the “invisible hand” incentive to take the place of FEMA [Federal Emergency Management Agency]? It was a very visible money-clutching hand after Hurricane Sandy, when private insurance companies manipulated the system to make hundreds of millions of dollars while devastated families got shortchanged on their policies. After home-destroying Oklahoma earthquakes in 2015, possibly caused by fracking, over 90 percent of claims were denied on the grounds that the quakes were human-made and not “acts of God,” while oil companies flipped the argument and called the earthquakes “natural disasters.” Where is the invisible hand for clean water? Entire cities get poisoned when companies seek shortcuts in the name of profits. And for healthy food, which should be a society-uniting human rights concern, but was preempted by Big Ag companies who pushed Congress to the anti-labeling DARK Act (Deny Americans the Right to Know).

Can you offer some examples of your concept of “Americide”?

Americide is the long-term, capitalist-driven killing off of the once-vibrant middle class of our society. Disparities in wealth and income have increasingly caused physical damage, both in the health of the American people and in the surge in violence in our poverty-stricken urban communities.

The most egregious example of Americide is our country’s treatment of African Americans. Black and white crime rates for drugs, weapons and assault are approximately the same, yet blacks are arrested for drug offenses at three times the rate of whites, and according to the Sentencing Project, more than 60 percent of US prisoners are minorities.

Over half of the Black college graduates of recent years were underemployed in 2013, working in occupations that typically do not require a four-year college degree. But it gets even worse. A 2003 Harvard/Chicago study found that job applicants were about 50 percent more likely to be called back if they had “white” names. Another study found that white job applicants with criminal records received more favorable treatment than Blacks without criminal records.

Almost half of Black kids are in poverty. Education is their best way out. Numerous studies have shown that with preschool, all children achieve more and earn more through adulthood, with the most disadvantaged benefiting the most. But Head Start was recently hit with the worst cutbacks in its history.

Many reputable studies have documented the link between financial stress and illness. Median Black household wealth went down by 33.7 percent from 2010 to 2013, while median white household wealth actually increased. Partly as a result, Black males are living over four years less than white males, and Black women are four times as likely to die from pregnancy-related causes as white women. It’s all part of the gradual, unyielding, insidious process of a privileged sector of America disposing of an unwanted part of itself.

What has “extreme capitalism’s” attitude toward workers been in the United States?

Nearly two-thirds of all working-age poor are actually working, but unable to earn a living wage, forcing them to rely on food stamps, which only provide about $5 a day per person for meals. One example [is] those who work for Walmart, which pays its employees so little that we taxpayers, in many cases, have to pay for the food stamps they need to survive.

Much of Congress vilifies the poor for so-called “laziness” while doing little to provide employment opportunities. In 2011, Senate Republicans killed a proposed $447 billion jobs bill that would have added about two million jobs to the economy. Congressional members filibustered Nancy Pelosi’s “Prevention of Outsourcing Act,” even as a million jobs were being outsourced; and they temporarily blocked the “Small Business Jobs Act.” In April 2013 only one member of Congress bothered to show up for a hearing on unemployment. When asked what he would do to bring jobs to Kentucky, Mitch McConnell responded, “That is not my job. It is the primary responsibility of the state Commerce Cabinet.”

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Disposable Americans: Extreme Capitalism and the Case for a Guaranteed Income

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These members of Congress, and others who apparently don’t study the facts, believe that Social Security is a government handout. But a better definition is “mandated retirement savings plan.” Americans have paid into the program all their working lives, it has been efficiently run for over half a century, and it remains far superior to the free-market alternative of the 401(k). Yet, Social Security still comes under fire by market-minded capitalists, even though its total cost is less than one-half the amount of tax avoidance by high-income Americans.

How do you feel corporate globalization has accelerated economic inequality?

As already noted, globalization has outsourced middle-income jobs, such as those in manufacturing, while low-income service-related jobs proliferate. Studies have found that the job loss from foreign import competition is not being replaced by jobs in other industries. The result, as described by The Economist, is a “bifurcation” of society into high-paying STEM jobs and low-paying jobs in food service, retail, personal care and health care.

More insidious is the betrayal of America by corporations that use the tax advantages of globalization to deprive our nation of the funding necessary for public education, infrastructure, housing and health research. Pfizer, for example, had nearly half of its sales in the US over the past three years, yet claimed losses in the US along with $50 billion in foreign profits. Despite being one of the top Fortune 500 firms in offshore tax hoarding, Pfizer CEO Ian Read complained that US taxes had his company fighting “with one hand tied behind our back.”

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