Someone who has been associated with the Citizen's Income group won a prize in an essay writing contest lately. This was in the "graduate" category of the competition held by the progressive economics forum. This won him $1000.

The Progressive Economics forum is to be found at http://www.progressive-economics.ca/. It is a very useful source of information about the state of discussion of progressive economics. It is occasionally a source of good articles for Citizen's Income newsletter.

So, we must congratulate Richard on his success before we begin picking his paper apart. It is good to keep getting the idea of a Guaranteed Income back out there, countering the endless effort to push it off the agenda. Richard has avoided associating GAI with any really bad ideas that would totally discredit it; regressive taxes for example.

The trouble with debates about political economy is that the same bad ideas seem to be regenerated in new forms as fast as they can be refuted. The key to not letting good ideas like GAI be contaminated with them is to have a broader knowledge of other socially regenerative concepts. This is Richard's problem and the reason why I am going to have to write an essay myself sometime soon, when I get the time.

I have been thinking about it and planning it for awhile. I do not want to get into directly arguing against Richard and other people writing about GAI who are making similar mistakes. They have the right basic idea, but they have some gaps in their vision.

They have not examined and discarded some ideas coming from monetarism. Monetarism, or financialism, is the idea that the economy is about money instead of actual, physical things. People who have not fully overthrown this in their minds commit fallacies such as perpetual "growth" or "storing" of wealth.

Most errors people make when discussing guaranteed income plans revolve around funding them. Richard is no exception. Funding fallacies are of two basic types; people want to tax something, usually a "resource", or they want to create some sort of fund, or both.

Either of these two ways of funding a basic income will eventually ruin an economy. A little knowledge of certain classic economic principles, and of economic history, which the monetary masters of the world would like everyone to completely forget about, are needed.

Underlying these fallacies is a reluctance to confront the real cause of insufficient government revenues. That is the failure to take on wealth acquisitors and force them to return their gains to society. The acquisitors are quite happy to encourage people to dream up ways of paying for a minimal government without imposing any taxes on them.

Now, suppose that a national or local government somewhere had a pile of resources that was in demand at the time. It decided to use the revenues to fund a basic income. It could pay the revenues directly to the people.

The people use the money in order to live, but it accumulates with the acquisitors. As well, in doing this they become dependent on the continued extraction of the "resource". It becomes cheaper to import everything from elsewhere than to make it locally. There is no incentive to develop any export industry.

What happens to such a place when the resource runs out or becomes unsalable has been shown many times in history. The people who accumulated the wealth from the resource are not around to fund the recovery.

But some countries believe they are wiser than that. They will put the revenues into a fund that will pay a basic income when the resource revenues stop coming. This means they are going to loan money to somebody and charge interest.

The basic problem with the loan making business is that there is always more money to be loaned out than there are good investments. Also, it is hard to compete with loan makers who do not have to sell a resource or make a product in order to obtain the money with which to make loans. They can issue any amount of money they want, collect interest and write off their losses, because they control a government and its money issuing function.

We have seen examples of this world wide in the past two years. The Alaska, Norway, and Ireland funds which Richard praises have all lost money in the global recession, and will lose more in the next and subsequent downturns. There is not the slightest chance any of them will ever be in a position to fund a real Guaranteed Income.

Another problem with using resource revenues to fund government programs is the waste and depletion of resources, and environmental destruction. We must stop altogether digging up poison and burning it as fuel. We must use all other resources with the greatest efficiency. Making critical government programs dependent on resource revenues creates the most perverse incentives imaginable.

It is puzzling why Richard buys into the resource taxes idea when he is so clearly aware of the real cause of government revenue insufficiency. He advocates closing all tax loopholes and sharply reducing the defence budget. This alone would provide all the money to do everything Canada needs to do as a society.

Richard understands the concept of progressive and regressive taxation. One of the more obnoxious of the fallacies which right wing extremists are trying to legitimate by patching it into the guaranteed income concept is the flat tax. If everyone from minimum wage earners to billionaires pays the same tax rate, there will be no money for a basic income or much of anything else.

Yet he buys into one very obnoxious form of regressive tax which is being pushed, the carbon tax. He is silent about sales taxes. These are regressive taxes in which people with lower incomes pay far more, because they must spend a much higher proportion of their income.

A final concern about Richard is his support for the elitist idea of private education. This is a perfect example of a solution looking for a problem and even creating the problem. Very few people have any problem with public education; they just want it funded properly and they want better control over it through their school boards. They want their kids to go to school in their own neighborhoods.

Richard needs to become acquainted with the struggles of local communities such as Queen's Plate Drive in Toronto. There, the amalgamated school board threw the neighborhood's children out of their neighborhood school in order to lease it to a private school, a snob school. They are being bussed to far away schools while their parents fight to get their school back.

As for home schooling, this is an idea that comes up again and again. What it comes down to is that the home schooling parents usually want to indoctrinate rather than educate their children. Again and again, it is shown that home schooled children do not get a better education.

All ideas are not equal. If one is going to study and advocate for a concept as intensely political as a guaranteed income, one must have a well developed critical faculty. This is often not demonstrated by such advocates, even ones with academic training. The goods must be examined, not just for where it comes from but for where it goes, before being bought.

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