Why NEF Stands For Not Economics Frankly

It is Giles Wilkes we have to thank for the description of the new economics foundation as not economics frankly. Something well proven in their latest report on the idea of a Universal Basic Income. Their answer being that it won’t work because it will be too expensive.

That’s not, of course, the reason why they say this. That rather comes from their funders. For the report is funded by Public Services International – the trade union for trade unions for public employees. And what need will we have for an army of public servants to administer the welfare state if that state consists of checks being sent out for people to buy their own stuff with?

Quite, we can see why Public Services International would be against the idea of an effective and liberal welfare state. It’s not only Big Oil that buys research reports you know.

But, it’s all too expensive:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] A study published this week sheds doubt on ambitious claims made for universal basic income (UBI), the scheme that would give everyone regular, unconditional cash payments that are enough to live on. Its advocates claim it would help to reduce poverty, narrow inequalities and tackle the effects of automation on jobs and income. Research conducted for Public Services International, a global trade union federation, reviewed for the first time 16 practical projects that have tested different ways of distributing regular cash payments to individuals across a range of poor, middle-income and rich countries, as well as copious literature on the topic. It could find no evidence to suggest that such a scheme could be sustained for all individuals in any country in the short, medium or longer term – or that this approach could achieve lasting improvements in wellbeing or equality. The research confirms the importance of generous, non-stigmatising income support, but everything turns on how much money is paid, under what conditions and with what consequences for the welfare system as a whole. [/perfectpullquote]

This is an article by Anna Coote. Which means that you’ve gotta love that “a study published” because the lead author of that study is Anna Coote.

But why is it that it will be too expensive to work? As you know, we’re sad types around here. We not only read reports being mentioned, we read the footnotes and then the reports mentioned in those footnotes. So, the report is here. And what we want to know is what income is it that is being talked about to make it so expensive?

They’ve used the International Labour Office, ILO, definition of what it should be. Which is the poverty level. Which is in this report.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]National poverty lines are constructed in different ways, and are not entirely comparable. For
countries that have more than one poverty line, the calculations are based on the higher poverty line,
as it reflects not only food needs, but takes into account other basic necessities. Where poverty lines
are available for urban and rural areas, but not a national poverty line, the calculations are based on
the poverty line applied to urban areas is not available, but separate poverty lines for urban and rural
areas, the former has been used. Where there is no official poverty line, the calculations are based on
a relative poverty line of 50 per cent of median equivalent disposable income (applied to forty
high-income countries. For more details, see Annexes II and III.[/perfectpullquote]

Hmm:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]United Kingdom GBR High income Europe and Central Asia 17.6 8,804 Relative 29,008 30.3 27.7[/perfectpullquote]

Every adult on the country – note, not household, adult – gets £9,000 a year in UBI. Actually, every adult and child does in the costing 30% of GDP scenario.

Yes, a UBI of that sort of sum will be expensive because they’ve forgotten that “basic” has a meaning. They’re using it to mean enough to live on not in poverty by our relative poverty definition. Which ain’t the point at all. We currently spend some 22% of GDP upon the welfare state so if we abolish all of that (Yippee!) we can afford something more modest, around the £6,000 a year level. Which is what is actually proposed, something around the Old Age Pension for all.

But, you know, never mind all of that. The nef has been bought and paid for to prove that a UBI won’t work. Gotta keep employing all those bureaucrats after all.