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Universal Basic Income

In a referendum on Sunday, Swiss voters rejected a proposal for a guaranteed annual income for everybody by an overwhelming 78%-22% majority. But the idea was not crazy, and it is not going to go away.

The Dutch city of Utrecht is developing a pilot project for a universal basic income that will launch in January 2017. The Finnish government is designing a trial to see whether giving low-income people a guaranteed basic income destroys their motivation to do any work at all, as critics allege. The idea is not going away because most “real” jobs are on the way out.

The old argument in defence of technological change – that it creates more new jobs than it destroys – no longer holds water. In the 1980s, 8 percent of new jobs created in the developed economies were in entirely new occupations, from call-centres to computer programmers. In the 1990s, only 4.4% of the new jobs involved newly invented occupations. In the 2000s, only half a percent did.

So full-time jobs with benefits have declined – only one-quarter of working-age Americans now have one – and the so-called “gigging economy” has not filled the gap. You may be able to stay afloat financially by doing a variety of “gigs” – low-paid, short-term, often part-time jobs – but you will never make ends meet, let alone get a mortgage..

Industrial jobs were the first to be destroyed by automation, but it soon moved on to the less demanding clerical jobs as well. As somebody said: “Every ATM contains the ghosts of three bank tellers.” And now it’s moving on to the kinds of jobs that it once seemed impossible to automate. Driving, for example.

The driverless vehicles that are now to be found meticulously observing the speed limit (and causing angry traffic jams behind them) on the roads of various major cities will soon be out of the experimental stage. At that point, the jobs of many millions of truck-drivers, bus-drivers and van-drivers will be in jeopardy.

Another huge chunk of the economy will start shedding jobs rapidly as online health monitoring and diagnosis take over the routine work of non-specialised health professionals. A similar fate awaits most mid-level jobs in the financial services sector, the retail sector and “management” in general.

The standard political response to this trend is to try desperately to create other jobs, even if they are poorly paid, almost pointless jobs, in order to keep people “in work” and off welfare. Unemployment is sees as a failure by both the government and the victim.

Yet this “problem” is actually a success story. Why would you see an economy that delivers excellent goods and services without requiring people to devote half their waking hours to work as a problem? The real problem is figuring out how to distribute the benefits of automation when people’s work is no longer needed.

And so to this relatively new idea: universal basic income. The core principle is that everybody gets a guaranteed income that is enough to live on, whether they are poor or rich, employed or not. They can earn as much more as they want, if they can find the work, but their basic needs are covered.

The actual amounts did not get mentioned in the Swiss referendum, but the people who proposed it were thinking in terms of a monthly income of $2,500 for every adult, and an additional sum of $625 a month for every child. It would replace the usual humiliating jumble of welfare payments with a single fixed sum for everybody, so it has appeal for the right wing as well as the left.

In the Swiss model (and in many others) the cost of a universal basic income is about 50% higher than current expenditure on welfare payments, so taxes would be higher. But so would incomes, including those of high earners, since even they are getting the same flat annual payment of $30,000 per adult.

As for the inevitable rise of the “gigging economy”, that then becomes just the way people top up their incomes in order to afford luxuries. If there is work available, then people would still want to do it – but if there is not, they would still have decent lives.

About half the remaining traditional full-time jobs in advanced economies will be eliminated by automation in the next 10-20 years, so this is an idea whose time has come. Then why did the Swiss reject it by a 4-to-1 majority? Mainly because their deal with the European Union means that they have relatively open borders.

Luzi Stamm, a member of parliament for the right-wing Swiss People’s Party, liked the idea in principal but opposed it in practice: “Theoretically, if Switzerland were an island, the answer is yes,” he told the BBC. “But with open borders, it’s a total impossibility…If you offered every individual [living here] a Swiss amount of money, you would have billions of people who would try to move into Switzerland.”

Well, tens of millions anyway. But the solution to that is to control the borders, not to abandon the whole idea. And it will be back.
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To shorten to 700 words, omit 2, 7 and 8. (“The Dutch…out”; and “Another…victim”)

Brexit: What If?

After months in which opinion polls showed a 6-10 percent lead for the “Remain” side in the referendum campaign on continued British membership of the European Union, the numbers have suddenly shifted in favour of “Leave”. The latest Guardian/ICM polls revealed that 52 percent of those polled favour Brexit (British exit from the EU), while only 48 percent want to stay in.

These numbers may even understate the probable outcome if the referendum were held today, and not in three weeks’ time (23 June). “Out” voters are typically older, whiter and less urban than the “In” supporters – and much more likely to vote on the day.

One “Remain” campaigner even fantasised about the ideal poster to motivate young pro-EU Brits to take the trouble of actually bothering to register and then vote. It would show an election queue of elderly, well-dressed white voters, all clearly unlikely to be around in 25 years’ time, and the tag-line would say: “Don’t Let These People Decide Your Future.” Needless to say, it will not decorate any actual walls.

So what if Brexit really does win the referendum? Even if the margin of victory is very small, the decision will in practice be irrevocable. And two things will certainly follow almost instantly.

One is the resignation of Prime Minister David Cameron, whose position will become impossible. It was he who promised a needless referendum three years ago, not in response to overwhelming popular demand but in a blundering attempt to placate the obsessively anti-EU right wing of his own Conservative Party. Then he led the campaign AGAINST Brexit – and lost it.

The other certainty is that Scotland will vote to remain in the EU, no matter how the rest of the United Kingdom votes, and will not let its wishes be overruled by the ROUK (as the rest of the country will doubtless come to be known). The Scottish National Party, fresh from an election victory at home, will call a second referendum on Scottish secession from the United Kingdom, and almost certainly win it.

After that, however, the glass gets darker. The new Conservative leader and prime minister would probably be Boris Johnson, Britain’s answer to Donald Trump. Perhaps no leader could negotiate a divorce settlement with the EU that protected Britain’s vital trade interests, but Johnson, at the head of a party mired in a civil war and with a working majority of only 18 seats in parliament, is least likely of all to achieve it.

Under article 50 of the Treaty of Lisbon, negotiations for the withdrawal of any EU member must be concluded within two years after the country in question says it intends to leave. The big issues would be continuing British duty-free access to the “single market” made up of the other 27 EU members – almost half of Britain’s exports go to EU countries – and continued free movement of labour across national borders

“It will be imperative to stop the Brexit contagion from gripping other countries,” said one EU official, so European negotiators will want to impose harsh terms on Britain in order to show other potential defectors that leaving is not cost-free. Since only 8 percent of EU exports go to Britain (and only two EU countries run a trade surplus with the UK), nobody will go out on a limb to preserve duty-free British access to the single market.

As for free movement of labour, ending it would require the expulsion of at least a million EU citizens currently working in the United Kingdom. Preserving it, on the other hand, would mean keeping the door open to uncontrolled immigration from other EU countries – but closing that door was a key promise of the Brexit campaign. This will not be a friendly divorce, and Britain’s negotiating position is not good.

Meawhile, Scotland would be having its own difficulties. A second referendum would certainly back independence from the UK, but it would not be easy for Scotland to retain (or rather, regain) its EU membership.

Legally, it would have to re-apply, and other EU members (notably Spain) that want to discourage parts of their own countries from seceding will have every reason to make things hard for the Scots. They could end up waiting outside the door for a long time.

As far as the rest of the world is concerned, Scotland would just be collateral damage, and the Rest of the UK would deserve and get very little sympathy when the divorce negotiations turn nasty. What will worry everybody else is the risk to the unity of the rest of the EU.

It is a bad time for Europe. Economic growth is low, unemployment and debt are high, and refugees are pouring in from the Middle East and Africa. Hard-right populist movements like the Front National in France and Alternative fuer Deutschland in Germany, anti-immigrant and anti-EU, are growing everywhere in Europe, and are already in power in Eastern European countries like Hungary and Poland.

The real fear is that the “Brexit contagion” will spread, and that other EU members will also acquire governments that just want out. That’s actually not a very high probability, but nobody wants the old pre-EU Europe back.
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To shorten to 725 words, omit paragraphs 3 and 8. (“One…walls”; and “Under…borders”)

Zika and the Olympics

In the past, the only excuse for cancelling the Olympic Games has been a world war
(Berlin 1916, Tokyo 1940, London 1944). But if this year’s Games had been scheduled for somewhere in West Africa two years ago, when the Ebola outbreak was nearing its peak, they would certainly have been called off. So should the Olympic Games scheduled to begin in Rio de Janeiro on 5 August be cancelled, moved or postponed?

The health risk in Brazil’s case is the Zika virus, transmitted by mosquito bites, which appeared in the country two years ago. It causes only a mild fever, if any at all, but it has been linked to a huge increase in the number of cases of microcephaly, in which babies are born with small, underdeveloped brains. Some die; most survive, but with moderate to severe learning difficulties.

The 4,700 cases of microcephaly in Brazil since last October (vs. 150 in all of 2014) suggest that the counntry has a big public health problem, but the Zika virus hardly compares with the Ebola virus, which kills half the people who become infected. Yet 152 health professionals from around the world have now signed an open letter demanding that the Brazil Olympics do not go ahead as scheduled.

The letter, addressed to the World Health Organisation (WHO) and the International Olympic Committee (IOC) and published on Friday, was initiated by Prof. Amir Attaran of the University of Ottawa. “Sports fans who are wealthy enough to visit Rio’s Games choose Zika’s risks for themselves,” he said, “but when some of them return home infected, their fellow citizens bear the risk too.”

The WHO and the IOC immediately rejected his proposal, the former pointing out that the Olympic visitors, expected to number between 350,000 and 500,000, are only a small fraction of the 6 million visitors to Brazil each year – and and that 9 million Brazilians, potentially already carrying the Zika virus, travel abroad each year. Why focus specifically on the Olympics?

Because, says Dr. Attaran, the Olympic athletes and tourists will include many people from countries whose citizens would not normally visit Rio. Some of those countries have poor public health services and warm climates, but are still Zika-free: “It cannot possibly help to send a half-million travelers into Rio from places that would not normally have strong travel connections with Rio and therefore set up new dissemination channels.”

Ah, says WHO, but there should be relatively few mosquitoes in Rio in August, which is mid-winter in Brazil. Yes, but dengue fever, which is transmitted by the same mosquitoes, is up this year, says Attaran.

Federal troops are spraying for mosquitoes, and neighborhood health inspectors have been tasked with eliminating standing bodies of water where they are known to breed, says the government. Do you really believe that the Brazilian government is capable of eradicating mosquitoes in Rio even temporarily?, asks anyone who has ever had contact with Brazilian bureaucracy. So the argument goes, back and forth, and it’s getting ugly.

Prof. Attaran has even publicly accused the WHO of defending the IOC because the two organisations have officially been in partnership since 2010: “It is ignorant and arrogant for the WHO to march hand-in-hand with the IOC.” And there is a lot of money on the table.

The Brazilian government is spending $10 billion on the Olympics and there’s another $3 billion at risk in various media and service contracts, very little of which will be covered by insurance if the Games are cancelled. So much of the insistence that all will be well is certainly driven by concern about the money that would be lost.

The risk of spreading the Zika virus to some countries that would probably not otherwise get it until much later is real and relevant, because work is underway on a vaccine and a year or two could make a big difference. But let’s be realistic: the Rio Olympics cannot be moved in the time that remains and will not be cancelled or postponed. So what should be done?

Dr. Lawrence Gostin, director of the O’Neill Institute for National and Global Health Law at Georgetown University, has the answer: “What is urgently needed is for the international community, led by the WHO, to declare an all-out war on the mosquito population in Rio.” A concerted, well-funded effort under close international supervision could reduce that population to near zero, at least for the time that the Olympics last.

That has not yet happened, mainly because it would be humiliating for Brazil to admit that it cannot do it on its own. Given the internal political crisis raging in the country, it will be hard to find a senior politician in Brasilia with the guts to ask for that kind of help. But it’s time to go looking for one.
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To shorten to 725 words, omit paragraphs 7 and 8. (“Ah…ugly”)

Why Are the Islamists Still Attacking the West?

Because most people think of Islamic State, al-Qaeda and their ilk as being crazies motivated solely by hatred, they are not puzzled by recent terrorist attacks on the West like those in Paris, Brussels and Los Angeles. Like the villains in comic books, the terrorists are simply evil, and no further explanation is needed. But in the real world, being violent and fanatical does not make you stupid.

The small group of Arab Islamists who started fighting the American invasion of Iraq in 2003 were by 2014 the rulers of a new country of some five million people that they call Islamic State, which suggests that they are clever people who pursue rational strategies. And yet they go on backing terrorist attacks in the West, which no longer seems like a rational strategy.

It was a perfectly sensible strategy once. By the year 2000 the Islamist revolutionaries of the Arab world were close to despair. They had been trying to overthrow the dictators and kings who ruled the Arab countries for a quarter-century, and there was blood all over the walls – around 300,000 Arabs were killed in the struggles between the Islamists and the regimes in 1975-2000 – but they had not managed to overthrow a single regime.

Their main strategy was always terrorism, simply because they lacked the resources for anything more ambitious. In theory their terrorist attacks should have driven the regimes into extreme repression, which (again in theory) should have alienated the population and driven them into the arms of the revolutionaries. Then the people, led by the Islamists and united in their wrath, would rise up and drive the oppressors from power.

The Islamists had a few early successes – the seizure of the Grand Mosque in Mecca in 1979, the assassination of Egyptian president Anwar Sadat in 1981 – but their strategy did not work. The Arab regimes did indeed become more oppressive, but the revolutionaries did not get mass support. Their doctrines were too weird, and their behaviour too extreme. So by the late 1990s the Islamists were looking for a different strategy.

It was Osama bin Laden, the founder of Al-Qaeda, who came up with a new strategy: attack the West. The ultimate goal was still to come to power in the Arab world, but rather than revolution in the streets the Islamists would now win power by leading a successful guerilla resistance movement against an invasion by infidel foreigners.

Bin Laden had hit on this strategy because he had fought in Afghanistan as a volunteer, and that was exactly how the game played out there. The Russians invaded in 1979; Islamist extremists took over the resistance movement; after a long and bloody war the Russians went home in 1989; and the Afghan Islamists (the Taliban) then took power because they were the heroes who had driven the infidel foreigners out.

To relive this triumph required getting some other infidel army to invade a Muslim country, and the obvious choice was the United States. Al-Qaeda’s 9/11 attacks in New York and Washington in 2001 gave Americans the necessary motivation, and two US invasions followed in rapid succession, in Afghanistan and Iraq.

The mass-casualty terrorist attacks against Western targets continued for a long time (Madrid, Bali, London, etc.), presumably in order to give Western countries a reason to keep their troops in the Middle East. But the attacks gradually diminished as Al-Qaeda’s fighters in Iraq came closer to their goal of creating their own state: that would clearly be easier to do if most of the Western troops had already gone home.

The creation of Islamic State and the proclamation of the “Caliphate” in 2014 was the culmination of this long struggle, and it should have ended Islamist terror attacks on the West. Now they have a real state, they are seeking to expand in Syria and Iraq by military force, and the last thing they need is Western troops around to make matters more difficult. So why didn’t the attacks on Western countries stop?

The only plausible explanation is the great split in the Islamist movement in 2014, when Islamic State broke away from Al-Qaeda. Since then there has been a ferocious competition between them both for recruits, and for the loyalty of Islamist organisations across the Muslim world. (The main Islamist organisations in both Egypt and Nigeria have switched their allegiance from Al-Qaeda to Islamic State in the past two years).

In this competition, the best and cheapest way of showing that your organisation is tougher, more dedicated, more efficient than the other lot is to kill Westerners in spectacular terrorist attacks. So, for example, Al-Qaeda sponsored the “Charlie Hebdo” attack in Paris in February, 2015, and Islamic State replied with the much bigger attack in Paris last November.

There is no strategic cost in these attacks, since Western and Russian forces are already bombing both Islamic State and Al-Qaeda’s local franchise in Syria, the Nusra Front. The material cost of the attacks is negligible: neither organisation is devoting even one percent of its resources to them. So they will continue for a while, and the West will just have to deal with them as they occur.
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To shorten to 725 words, omit paragraphs 4 and 5. (“Their main…strategy”)