Universal Basic Income: Right to Capital | APT

Universal Basic Income – The Right to Capital

The single most important policy change needed in the United States of America – as well as globally – has to do with economics. Even in a world where we’ve all learned how to love ourselves and one another, the current economic system will continue to drive personal and institutional oppression. In fact, we can trace a significant number of mental health crises, family struggles, domestic violence, addictions and crime back to the broken economic system. The United States as an institution will likely achieve far greater success by adopting a strategic plan, intentionally reviewing and realigning its programs and services, and aligning the election system with the mission, core beliefs, guiding principles and values outlined in the Declaration of Independence and the United States Constitution. But even with these significant and important changes, the United States will likely continue to be limited in its success until we make changes to the economic system. Poverty, homelessness and mass indebtedness are likely to continue without some adjustments. And as important for the United States itself, significant deficits and unmanageable debt are also likely to continue.

How It Works

The Universal Basic Income Right to Capital Model would provide every American at the age of 18 with 2.5 million dollars. Americans could elect to receive the first $1.5 million in monthly payments of $2,500.00, in annual payments of $30,000.00, in ten-year allotments of $300,000.00 at the ages of 18, 28, 38, 48, and 58, or in a lump-sum, single payment of $1.5 million at any time. At the age of 68, the official age of retirement, Americans would receive a second allotment of $1,000,000.00. In exchange, the federal government would eliminate certain other safety net programs, so that Americans could manage their own financial affairs, and just as importantly, those with certain disabilities or non-traditional work-styles would be afforded opportunities to participate in the economy in ways not currently provided by the “market-based” income structure.

Background

The economic system adopted by the United States is intended to provide us with a system that enables us to meet our basic needs and personal life goals though the fair and equitable exchange of goods and services. Though often thought of in terms of “capitalism” or “socialism”, the United States doesn’t use a single model. While the system is primarily based on capitalist philosophies, the economic system is guided by other underlying principles, such as the need to be equal and equitable, and to uphold American values, such as freedom of association, the right to participate in private agreements and the right to private property, among others. The underlying capitalist principles allow for “socialist” based principles as well. For example, municipalities and local governments can always establish public ownership of enterprises, businesses and other endeavors if they choose.

While some might argue for more significant reforms, by and large the United States economic system is on the right track, particularly when it comes to safeguarding certain freedoms, including the right to be wealthy. The challenge is that it doesn’t work completely. In fact, it hasn’t worked completely for the last two hundred and forty-some years.

Today, the national debt far exceeds the national debt of other governments. Yet, on any given night, there are upwards of five hundred thousand to one million homeless individuals, youth and families in the United States, and more than thirty million Americans are without access to adequate or affordable health care. It’s been reported most Americans are just one paycheck away from financial disaster, and many Americans are concerned, rightfully so, about the future of Social Security and our other safety-net programs. There are millions of people with skills and talents who can’t afford to meet their basic needs because their abilities and contributions are not valued the same in the “market”, and the United States budget has an unavoidable deficit necessary to fill in the gaps with social programs. Despite the calls for a balanced budget, the United States simply cannot cut these programs because the economic system isn’t able to provide for everyone.

The unfortunate reality is simple. Most Americans, unless they have inherited money from their families, or have won the lottery, must start out in debt. Even if they get a job at the age of eighteen right out of high school, Americans must first be indebted to an employer or lender before they can make ends meet. It’s almost like being forced to play in a poker game with life or death consequences, and not being given any chips. Rather than securing our rights to life, liberty and the pursuit of happiness, the economic system has the tendency to promote exploitation, coercion and manipulation.

But despite all of these criticisms, the United States economic system is actually designed to promote as much individual freedom as possible. Essentially, it’s just missing an important piece: the right to capital. To see this more clearly, we need to analyze the economic system free from any major misconceptions.

Specifically, many Americans believe our economic system is “backed by something” or that the money “comes from somewhere”. This is because in the past it was true. But what many Americans don’t know is that the United States, along with other countries, abandoned backed-money for “fiat currency” back in the 1970’s. Fiat currency basically means the economic system is governed and backed by policies rather than physical goods, like gold or silver. Simply put, the money is not coming from anywhere; It’s just generated by how we implement the system.

Analyzing the Economic System

The economic system in the United States has a simple design.

Individuals are able to meet their basic needs and participate in the economy by selling labor, goods, products or services. They earn capital (money) in exchange for their labor, goods, products or services, and are able to purchase their basic needs as a result. In addition, those who wish to earn more or purchase more can exchange more labor, goods, products or services. In this sense, capital is distributed by individuals, businesses, organizations, groups.

If an individual is unable to earn capital to meet their basic needs, the United States provides programs and services to address these. In order to provide these services, the United States imposes taxes, fees and strict regulations to determine if, when and how an individual can receive funds from the public trust. This currently includes programs such as food assistance, housing assistance, social security retirement and disability benefits, and health insurance. To ensure individuals are able to participate in the system, the United States imposes some regulations, including minimum wage, nondiscrimination laws and worker’s compensation insurance.

In matters of public interest, the United States also imposes environmental regulations to ensure the goods, products and services produced by individuals or institutions do not impact the water, air and food chain. In addition, the United States imposes some regulation in matters of interest rates for lending purposes, as well as industry regulations designed to protect customer health and safety, individual rights and choices.

When we looked at the United States as an institution, we talked about the importance of mission, core beliefs, guiding principles and values. The economic system has these things as well. Essentially, the economic system is based on the following set of guiding principles:

Individuals should be provided their basic needs by their families or by state governments until they reach the age of 18.
Individuals have the right to engage in commerce, and to sell their labor, goods, products or services in line with environmental, workplace safety and industry standards pertaining to customer health and safety, and individual rights and choices.
Individuals have the right to form institutions to collectively sell or provide goods, products and services in line with environmental, workplace safety and industry standards pertaining to customer health and safety, and individual rights and choices.
When individuals participate in institutions as laborers, individuals have the right to minimum wage, family/medical leave, safe workplace conditions, and overtime pay if they engage in hourly work above 40 hours per week.
Individuals and institutions have the right to set the value of their labor, goods, products or services.
The value of labor, goods, products or services should be guided by supply (availability of something) and demand (the request or need for something); Certain items required for basic living, such as food, water and utilities, may require subsidies from the United States or state governments to maintain affordability.
Individuals and the United States will benefit from individuals and institutions that compete amongst themselves to produce the highest quality labor, goods, products or services; Innovation will be spurred by competition; and
Oppressive business practices, poor labor relations and low-quality products and services will be eliminated from the market by individuals choosing not to participate or exchange with that business (otherwise known as “the Invisible Hand”). In order to ensure this, the United States will monitor fraudulent practices, and prevent institutions from becoming too large or monopolizing a specific industry.

In order to work, the system needs individuals willing to invest or exchange capital; individuals and institutions to provide labor opportunities, goods, services and products; and a system of regulations (as noted above). The system is expanded by the use of interest rates, inflation and lending institutions. Some key milestones of success for the system include number of jobs, number of unemployed, interest rates and number of borrowers.

Going Deeper

Sociologists and economists of the past have provided the basic mission on which the United States economy is founded, “to determine who gets how much of what and how”. However, the purpose is antithetical to the mission of the United States as it directly conflicts with the core beliefs, guiding principles and values first articulated in the Declaration of Independence. Institutions, including the United States, are erected and granted their powers by the consent of the individuals. The mission of the economic system seems to present the belief individuals must earn their ability to meet their basic needs by somehow obtaining capital from other individuals, groups, businesses, organizations, or even the government itself.

The mission itself presents the basis for keeping individuals dependent or co-dependent, in most cases, either by submitting to the will of businesses, groups and institutions or to the United States as an institution. This type of mission encourages either severe competition, submission or oppressive tactics in order for individuals and institutions to survive. As such, we need to revise the mission of the economic system. An example of a revised mission is here:

“The mission of the United States economic system is to empower individuals to be secure in their ability to meet basic needs and exercise their fundamental rights to life, liberty and the pursuit of happiness by ensuring each individual is afforded equitable capital to participate in commerce, opportunities for those who wish to achieve greater success by their own determination, and providing appropriate regulations to that end.”

While a mission revision is critical, perhaps the most pressing issue is a missing component of the system. One of the key elements in the economic system is the belief that supply and demand should play a role in determining who gets how much of what. A glimpse at other systems can help determine whether or not this belief can be realized with the system the way it is. In the United States, it has been reported there are up to five times the number of vacancies (or more) than there are homeless individuals and families. This means there is both supply and demand for housing. What’s missing is the individual capital needed for the exchange to occur.

Of course, the United States’ mission, vision, core beliefs, guiding principles and values encompass the notion each individual has the inherent right to life, liberty and the pursuit of happiness. Yet, in order to even begin to exercise these rights, most Americans are expected to forfeit them to some degree by working for others. There is no practical or equitable systemic transition between meeting basic needs from families (or the United States or state governments), and then meeting basic needs from selling labor, goods, or products or services. For example, where would one live between leaving home and their first paycheck? In addition, the economic system often forces people into positions they might not otherwise choose. Some people may wish to be parents, some may wish to be warehouse workers, business owners, artists, doctors, teachers, stock loaders, lawyers, dishwashers, bus drivers, dentists, social workers and more. However, the economic system often deprives people of exploration or pursuit of their true passions because they do not have the capital to both explore their dreams and meet their immediate basic needs. As a result, the intended “Invisible Hand” function of the United States economy is unable to operate because many Americans are required to participate in businesses and jobs not necessarily because they want to, but because they can see no other choice or practical means by which to meet their immediate basic needs.

This is where the foundational missing component is exposed. Individuals are subjected to the capitalist system without any “capital” of their own. As such, they are required to submit to another individual or institution to earn capital to meet their basic needs. Without basic needs being met, individuals are continuously susceptible to oppression, manipulation, coercion and exploitation. The United States’ mission, vision, core beliefs, guiding principles and values assert all individuals are equal in their rights to life, liberty and the pursuit of happiness, yet each individual has varying abilities, ideas, talents and goals based on their own unique body, mind and soul. The system without the missing component is equal, but not equitable, meaning it cannot and does not work for everyone. Without the addition of the missing component the challenges are likely to continue.

The Right to Capital in Detail

Each individual, upon reaching the age of 18, would be entitled to individual capital in the amount of $2,500,000.00. Individuals would have the option to receive their capital in a way that best meets their own needs:

$2,500.00 per month;
$30,000 per year;
$300,000 at the ages of 18, 28, 38, 48 and 58;
A lump sum payment of $1,500,000.00; or
Some combination of monthly, annual or other periodic payments.

The official age of retirement in the United States would be 68. Individuals would receive a one-time capital addition in the amount of $1,000,000 upon reaching the age of 68, or could structure disbursement in some way that best meets their needs. In addition, to safeguard against catastrophic personal financial errors or mishaps, an individual who spends their entire pre-retirement capital before the age of 68, and who needs to access their retirement capital before the age of 68, could do so by receiving a monthly stipend based on a life expectancy of 105. For example, a person who made this request at the age of 21 would receive a monthly stipend of $992.00 using the following equation:

105 years old – 21 years = 84 years

84 years x 12 months = 1,008 months

$1,000,000.00 / 1,008 months = $992.00

Of course, it should be noted, no other financial assistance would be made available from the United States. Housing vouchers, food stamps, Social Security and other financial assistance would ultimately be replaced by the guaranteed right to capital allotment. Self-discipline, financial management and economic education would coincide with gaining the right the capital. But adding the right to capital in the United States’ economic system would produce important and immediate results:

Individuals would be presented with more complete options to exercise their individual rights and secure their basic needs;
The economy’s assets would be derived from individuals rather than the United States (i.e. no more bank or industry bailouts);
The United States could more comprehensively review the structure and necessity of its programs and services, particularly welfare and assistance programs, and pay off debts;
There would be continuous influx of income into the economic system;
Americans would gain greater independence, financial security and stability, and the “Invisible Hand” would more likely influence labor relations, goods, products and services;
Individuals who may currently be unable to invest in new ventures and innovations would be provided the opportunity to do so;
The United States would be more likely to benefit from the contributions of innovation from new individuals;
Immediate alleviation of debt, homelessness and poverty would be achievable;
Businesses and organizations could rely on a more stable economy with the continued influx of capital into the system;
Aging adults, people with disabilities, and others with limited or fixed incomes in the current system would now be able to participate more fully throughout their lifespan; and
Many, many others. The opportunities are endless.

The United States Economic Policy Framework in Full

Here, we want to see the United States’ economic policy framework repeated in full with the mission revision and the right to capital added:

The mission of the United States economy is to empower individuals to be secure in their ability to meet basic needs and exercise their fundamental rights to life, liberty and the pursuit of happiness by ensuring each individual is afforded equitable capital to participate in commerce, opportunities for those who wish to achieve greater success by their own determination, and providing appropriate regulations to that end.

Individuals are able to meet their basic needs, be secure in their rights, and pursue individual goals by receiving initial capital to participate in the economic system. Individuals may each earn additional capital, if desired, by reselling labor, goods, products or services. Capital is distributed by individuals primarily, and exchanged through institutions. To ensure individuals are able to participate in the system, the United States imposes some regulations, including minimum wage and nondiscrimination laws. In matters of public interest, the United States also imposes environmental regulations to ensure the goods, products and services produced by individuals or institutions do not impact the water, air and food chain. In addition, the United States imposes some regulation in matters of interest rates for lending purposes, as well as industry regulations designed to protect costumer health and safety, individual rights and choices.

The system is based on a set of basic core beliefs, guiding principles and values.

Individuals should be provided their basic needs by their families or by state governments until they reach the age of 18.
Individuals are each entitled to receive, upon reaching the age of 18, individual capital in the amount of $1,500,000.00. Individuals can choose to receive this payment in the way that best meet their needs:
-Monthly payments in the amount of $2,500.00;
– Annual payments in the amount of $30,000.00:
– Periodic payments in the amount of $300,000 at the ages of 18, 28, 38, 48 and 58; or
– A lump sum payment of $1,500,000;
The age of retirement in the United States is recognized at age 68, and individuals receive an additional allotment of $1,000,000.00 upon reaching the age of 68.
Individuals have the right to engage in commerce, and to sell their labor, goods, products or services in line with environmental, workplace safety and industry standards pertaining to customer health and safety, and individual rights and choices.
Individuals have the right to form institutions to collectively sell or provide goods, products and services in line with environmental, workplace safety and industry standards pertaining to customer health and safety, and individual rights and choices.
When individuals participate in institutions as laborers, individuals have the right to minimum wage, family/medical leave, safe workplace conditions, and overtime pay if they engage in hourly work above 40 hours per week.
Individuals and institutions have the right to set the value of their labor, goods, products or services.
The value of labor, goods, products or services should be guided by supply (availability of something) and demand (the request or need for something); Certain items required for basic living, such as food, water and utilities, may require subsidies from the United States or state governments to maintain affordability.
Individuals and the United States will benefit from individuals and institutions that compete amongst themselves to produce the highest quality labor, goods, products or services; Innovation will be spurred by competition.
Oppressive business practices, poor labor relations and low-quality products and services will be eliminated from the market by individuals choosing not to participate or exchange with that business (otherwise known as “the Invisible Hand”); In order to ensure this, the United States will monitor fraudulent practices, and prevent institutions from becoming too large or monopolizing a specific industry.
Individuals are universally entitled to the individual capital as described. The United States would prohibit any law, penalty or fine reducing the individual capital.

In order to work, the system needs: individuals willing to invest or exchange capital; individuals and institutions to provide labor opportunities, goods, services and products; and a system of regulations (as noted above). The system is expanded by influx from the individual capital component, lending between individuals and institutions, as well as investments from individuals and institutions.

More Rationale

For many people, the idea of individual capital can be scary. Afterall, where would it come from? But the reality is the economic system is just a set of rules and guidelines we developed ourselves. In short, we made it up. But the system isn’t working for all of us. In fact, it’s destroying the lives of millions of individuals and families, with the most vulnerable populations suffering the worst, including those who have been disenfranchised, seniors and aging adults, people with disabilities and people with a mental health diagnosis. Many of us are also on the verge of destitution with a single missed pay check being able to push us over the edge. What’s even more astonishing is the impact our system has on those who have worked their entire lives only to become disabled later in life, or who have lost their jobs or retirement security. Those Americans know more than others that our current safety net requires a great deal of sacrifice, and often presents barriers to ever being able to gain economic and financial independence again once government intervention occurs. The bottom line is the right to capital doesn’t have to come from anywhere. It would be established as a basic right, and the addition of new wealth into the United States economic system. We can add the individual capital component to our economic system simply because we choose to.

In addition, the introduction of the right capital would have several important outcomes. First, it would establish a foundational means of trade and exchange for all adults in the United States which they could independently direct towards their own housing, food, shelter, health care, education, raising a family, retirement and entertainment. Secondly, it would alleviate the burden of financial security from the United States which can ill afford to address the current gaps either. This system could single-handedly lay the foundations to eliminate homelessness, secure retirement for aging adults, reduce the national deficit, and so much more. What’s even more, when states and other programs do ask for taxes and money for programs, Americans can more readily make decisions about what taxes are needed and what can realistically be achieved. In fact, taxes may even be able to be lowered in many cases.

And it can’t be stressed enough. The right to capital doesn’t have to come from anywhere. It doesn’t need to be at the expense of higher taxes on the rich, or a redistribution of wealth. It is the introduction of new wealth – The basic right to capital for all Americans.

It’s likely to result in better workplace conditions, better retirement planning, better health and well-being, and more specifically, opportunities for Americans to truly be free. Small businesses, larger investments and even new sole proprietorships are likely to emerge.

More importantly, Americans would be able to make better choices about which businesses to be involved with, how much to pay, and many other decisions, such as salary requirements. The guarantee to capital is an important piece of eliminating exploitation from the current system as well.

Given the history of the United States though, it’s important for the establishment of the right to capital to be safeguarded at all costs. There may be attempts to apply restrictions or eligibility requirements. But the fact is, in the United States, capital is what empowers us to meet our basic needs, purchase food, buy products, and so much more. Establishing the right to capital must come with safeguards that prevent any type of restrictions or eligibility requirements, including those most often brought forth in the name of “safety”, for punishment of “crimes” or for any other reason.

Addressing Myths & Facts:

There may be those who are concerned or fearful about these types of changes, and it’s important to address fallacies head on. Particularly when it comes to a revision in the economic system.

Myth: The proposed economic revision is a form of socialism.
Fact: The right to capital is actually a more pure form of capitalism in that it ensures the individual holds the most power, and is able to meet his/her needs while also pursuing greater interests and goals.
Myth: This is a form of welfare.
Fact: This economic system is likely to alleviate the need for several welfare programs, many of which have led to national debt, and some of which (such as Social Security), are unlikely to remain viable for the “posterity” of the American people.
Myth: This could negatively impact business.
Fact: This economic system revision would ensure continuous income and investment in the economy, and provides a guaranteed potential for new and innovative businesses. In fact, this is likely to encourage and realize the full potential of the “Invisible Hand”, whereas institutions will be encouraged to come up with more innovative solutions, better customer service and higher quality products. For the first time, Americans will have a greater and more realistic choice.
Myth: Americans already have a choice and free will.
Fact: Many Americans are forced to choose between equally important basic needs, such as caring for their families, pursuing educational goals and working at jobs that do not provide paid time off or sick leave. Choice and free will based on “false options” is not true free will. This economic revision will provide the first opportunity for many, if not most, Americans to truly be able to exercise many of their inherent rights.
Myth: Many Americans might not choose to work.
Fact: Many Americans enjoy working and contributing in ways that are meaningful to them, and some people may simply find themselves in different jobs. In addition, economic security is important to the mental and physical health and well-being of individuals. It’s likely many individuals would engage in commerce and the economic system in new ways.
Myth: This could create a barrage of competition for businesses and institutions.
Fact: Yes, it could. For the first time, many Americans could choose to become investors, start their own businesses, pay off debts, ask for a raise, or continue to excel in their current positions. But at the same time, this right to capital would establish a continued influx of capital into the economy which would benefit all businesses.
Myth: This system could create opportunities for exploitation.
Fact: The current economic system is not only susceptible to exploitation, it encourages exploitation in many cases. This is found in business and in the United States itself. In fact, many laws, regulations and policies (costly at that) are required to keep the system in line. The new system would automatically disincentivize exploitative practices and harmful or criminal activity, and would likely encourage new forms of healthy cooperation among individuals and institutions.
Myth: The United States will have to tax the rich to distribute this money.
Fact: The United States is allowed, through its sovereignty, to use whatever economic system it wants to. The Right to Capital is an addition of wealth to the system, not a redistribution of current wealth.
Myth: This could harm trade with other nations who don’t use this system.
Fact: This system would likely encourage other nations to develop similar systems and encourage more fair and equitable business practices and global economics. Moreover, if other nations institute the right to capital, it would provide greater opportunities for trade and exchange. Specifically, Americans could find themselves with the opportunity to increase their customer base overseas. It’s in the United States’ own best interest for other nations to adopt the Right to Capital as well.

So, How Do We Get It In Place?

Executive Order: The Right to Capital

This order would declare poverty, homelessness and economic instability and insecurity a national emergency, and it would declare individual capital a fundamental right necessary to participating in the American economic system. This order would establish the Right to Capital as presented in the preceding pages. Further, it would direct the Social Security Administration to prepare for the implementation of the Right to Capital by establishing a training and education program available to all Americans notifying them of their rights to capital, their responsibilities, and how to avoid exploitation, coercion and manipulation. The order would also codify eligibility as an American Citizen who has reached the age of 18.

In addition, this order would instruct the Department of Commerce to recommend guidelines for preventing rampant inflation, to include ideas such as a recommended moratorium on price increases above 10% in the first three-years of implementation, or other such measures necessary to achieve the intended goals of this initiative. It would instruct the Department of Commerce to present these recommendations to the President, Congress and the American public. In order to ensure these funds are used to generate economic stability and growth, at the least, it would be recommended these funds, if not spent during an individual’s lifetime, be taxed at 100%, and placed into the United States’ general fund (this would not apply to the rest of the individual’s estate, however).

Congressional Proposal: The American Right to Capital Act

This proposal would ask Congress to enact legislation enshrining the Right to Capital as presented and prohibit the local, state and federal governments from enacting legislation that could impact eligibility or access of the guaranteed capital for any reason, including criminal activity. Further, this proposal would enshrine accountability measures for the Right to Capital by requiring a 3-year report on progress of economic indicators, such as the elimination of poverty, homelessness and the creation of jobs, access to education and health care, and general market stability. Finally, this proposal would require a 5-year report on the success and outcomes of the Right to Capital, and allow for recommendations on the reduction or removal of certain entitlement programs that can be alleviated from the federal government’s program slate due to individual financial freedom. This act would declare access to capital a fundamental human right and necessity. It would ensure no future president could limit eligibility for capital access for any reason, without Congressional approval.

Outcomes:

The anticipated outcomes of these efforts include (among many others):

0% unemployment rate;
Increased job opportunities;
0% poverty rate;
0% homelessness;
100% guaranteed retirement security for all Americans;
Reduction in federal and state spending in certain areas;
Increased participation in the economy;
Increased ability for Americans to pay off personal debts or to remain debt-free;
Decreased dependence on banks and financial institutions, as well as state and federal agencies; and
Increased sense of financial security, stability, equality and equity for all Americans.