Universal Citizen’s Dividend and role of ECB


#1

ii. We are calling for a new fund that would guarantee a Universal Citizens’ Divided (UCD) to be paid to every European citizen. The UCD would accumulate in a European Citizens’ Fund, which contains (i) assets purchased by central banks, as part of their quantitative easing programs, (ii) a percentage of capital stock from every initial public offering (IPO), (iii) revenues from intellectual property rights and other common knowledge monopolies. The UCD is entirely citizen-based and granted independently of welfare payments, unemployment insurance and other benefits.

I fully agree with the spirit of this proposal however there is more this Universal Dividend could do. As it stands, the proposal only distribute the long term profits from the common wealth, but it could also be used for stimulating short term spending and stabilize economic shocks. For example, in addition to redistributing long-term profits from asset purchases (QE), the ECB could also use the UCD to stimulate consumption demand in the short term instead of doing QE (which works very indirectly and inefficiently in my view). In other words, I’m suggesting the UCD could be used as a transmission mechanism for the ECB’s monetary policy, which would be very useful when there is a risk of recession/deflation or when inflation is too low and interest rates are already below zero.

I would propose amending the proposal like this:

We are calling for a new fund that would guarantee a Universal Citizens’ Divided (UCD) to be paid to every European citizen. The UCD would accumulate in a European Citizens’ Fund, which contains (i) assets purchased by central banks, as part of their quantitative easing programs, (ii) a percentage of capital stock from every initial public offering (IPO), (iii) revenues from intellectual property rights and other common knowledge monopolies. When facing a risk of deflation, the European Central Bank may augment the fund through money creation in order to temporarily boost the level of the UCD. The UCD is entirely citizen-based and granted independently of welfare payments, unemployment insurance and other benefits.


#2

See my comment in your other thread:


#3

This point contains 3 important elements. I think we can do by each point better when we use an alternative apporach.

Element 1:
An Euopean Citizens Fund buy / finance only a (small) part of the assets
With this European cooperative peoples bank (ecpb) we can buy / finance all assets.

Element 2:
With Euopean Citizens Fund we buy / nationalize Facebook, Google, intelectual property etc. or make a public alternative for this. Or we use a new kind of tax at the income of this assets to be able to give people dvidend. With European transaction tax / stop using VAT and labor tax we use a new kind of tax at all business income and give people a dividend in the form of stop using VAT and labortax.

Element 3:
The assets held by the Euopean Citizens Fund create profit by charging users of goods and services made by these assets to high prices. And give this profit away to people in a form of dividend.
With the European cooperative peoples bank (ecpb) we reduce the exess profit to (almost) zero and give people a dividend in the form a about 5% of GDP less interst kost per year (situation in The Netherlands, for the rest of Europe I don’t know how much this is).


#4

As to the Universal Citizen’s Dividend:
The citizen is the “shareholder” of an entity called “State”; and through his/her contributions in taxes is one of its financial sources. The only other sources of finance to the State is debt or coining (which has some side effects). Therefore, any “dividend” paid must be funded by debt or higher taxes.
Unless there is something much more complex to it than stated in the draft program? in which case it should be more fully explained, since in the current formulation it reads like pure populism.


#5

What do you mean “higher taxes”? The dividend is a redistribution of paid taxes. Not necessarily higher taxes. Alltough the argument is pretty strong (GINI) that a stronger entity called state where every citizen has one share leads to more security and social justice - and on that basis happiness and economic strength (prosperity). And state debt is a pretty ingenious invention - as long as the state just creates the debt without obligations to money lenders, they are really not necessary.

What I find fascinating is your analogy, really. Serves as a really good mental walking stick.


#6

Which means it is excessive taxes collected in the first place. That is why I contend that it is pure populism along the same line of “lower taxes” without saying which part of services will be affected by such cut in resources.


#7

The Universal Dividend is NOT financed through taxes like UBI. That´s one of the Major differences between the concepts.


#8

If you read the original definition of basic income written (in 1986!!) by the Basic Income Earth Network, you will see that nothing defines UBI as financed through taxes:

A basic income is a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement.

As a matter of fact, I know quite a few UBI activists including me who think UBI should be financed through other means than taxations.

SO if you want to be precise on terminology, you should say that Diem25’s UCD proposal falls into a subcategory of basic income proposals out there. This may sound like a trivial subtility but this actually means there is really no need for Diem25 to oppose the UCD to basic income except if you think it’s a good idea to alienate the basic income community against DIEM.


#9

If UBI is not financed from taxation how will it be financed? I’m puzzled.


#10

I know that the idea si to finance it through a fund that receives its income from a share in listed companies, like a sovereign fund. However, since any such shareholdings must either be bought (which is not the idea) or taken from whoever owned that share before, in the end it is a tax. Name it as you wish. We can agree on a redistribution scheme, we can agree on a basic income etc but not recognizing that it requires a tax is smoke in the eyes. Selling a social security as a universal dividend is like selling snake oil; say we fight for “no one left behind” and I am with you. Say “Universal dividend” and I am not.