Jun 26, 2013

Unconditional Basic Income: Karl Marx would have been happy with this.

1. The theory of Communism may be summed up in one sentence: Abolish all private property. 
2. From each according to his ability, to each according to his needs.
Karl Marx
The quotes above have two fundamental ideas: the acquisition of centralized property and the distribution of value to individuals.

In simplified terms, history has shown that Karl Marx did not foresee how the value of centralized properties would be distributed. Officials, whether communist or democratic, are still individuals. Officials controlling centralized properties behave like private owners if they are not properly regulated. 

An unconditional basic income, or a citizen-ownership dividend, completes the work for Karl Marx. Who is able to determine the needs of each citizen? The practical answer is nobody and no system. The practical distribution method is the unconditional approach where everyone gets an equal share of the values from "state" properties. In effect, this forms the "classless society" that Karl Marx expects to occur. The laws for a basic income / citizen dividend form the required regulations on how officials are to do the acquisition and distribution. The laws should be constitutional laws that need a referendum to change. For example, in Alaska, the law requires a certain percentage of oil revenue to go into the Alaska Permanent Fund, and mandates the distribution of investment returns from the fund to Alaskans.

Abolishing all private properties is not the correct method. In fact, a state can unlock the value of state properties by selling to private owners. Ideally, it should be a "short" lease so that state properties are not lost forever leading to a future where the state has zero property. A well controlled disposal of state properties can lead to the accumulation of much revenue to support a basic income or citizen dividend. This is seen in the case of Alaska and also of Mongolia.

We can visualize income from two sources: citizen-ownership and individual. Citizen-ownership income from state properties provides an at least livable basic income for a "classless society" since such income is distributed equally to everyone. Income from individual effort can enhance individual wealth. A "classless society" can exists harmoniously with individual effort and private property.

What we see in current democracies is that the state has confiscated all the citizen-ownership dividend. Individuals are forced to rely on only their individual income, resulting in poverty for large segments of the population.

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