Greece: Dreams Take Revenge

Paul Mason of Channel 4 is making a documentary about SYRIZA and Greek austerity. They need funding: donate here.

Shem Earwicker's Amateurish Politics

Shem Earwicker was in bed. He was savoring the victory he had just won that same day. "Mr. President." Feels better than "Your Highness," thought he. In bed, he was already brooding over the sugary sweet taste of freshly acquired power. What to do with it.

Shem was not fond of seriousness. He was a complete amateur. That was why he got elected. The people wanted an amateur. That is, people were fed up with the professionals. Shem thought that the right thing to do was to use his power in an amateurish way. In other words, Shem wanted to use his power to feel good. Because whatever that makes you feel good, must be good. He knew this from experience. He hated hangovers, and he also hated those moments when it dawned on him that perhaps his partner was faking it all night long. No, none of that for me, he thought. I want to feel good.

"I want to see the Deputy Chief," Shem announced the next day. The Deputy Chief entered. "You called me sir?"

"Yes," Shem said. "I want you to arrest all the executives and former executives of L****n B******s and A*G and G*****n S***s and all the rest. They should be detained and put on trial. The trial should be as short as possible. And then you can do whatever you like with them. Here is a formal order."

Shem handed the Deputy Chief a document with his signature.

"And remember to take note of the amount of money they will offer you as a bribe," Shem added. "Record all offers. Once they are arrested, I will match it up and pay you in full. This document is my word." And he handed the Deputy Chief another document with his signature.

Two days went by. The Deputy Chief managed to assemble a team of officers. They arrested the bankers and former bankers and one financial minister too. They arrested a few other people, including certain academics. All of this was done in the spirit of a carnival. However, it felt good. There was no hangover and no doubt of authenticity. People felt genuinely orgasmic. Shem was happy.

--

"Wow," he thought. "That really felt good."

Shem had just paid the Deputy Chief $1,000,000,000 of taxpayer money. The news went public. There was an outcry. Shem delivered a speech.

"He would have gotten the money anyways," Shem pointed out. Reason reigned. The crowd fell silent. "Better reward heroes than traitors." General applause. "In future, heroes will be rewarded." More applause. It was a good day.

--

"Come to think of it, I don't like controlling people. Controlling people takes time. It also creates enemies, and fears, because enemies create fears. Fear does not feel good. No, I just want people to mind their own business."

Shem announced that people are free to move into vacant houses and that people are free to go to whatever school they choose. People don't have to pay tuition because they were studying for their own good. Shem will take care of the teachers with taxpayer money.

"But we no longer have taxpayer money left, Mr. President," the Finance Minister said the next day.

"Oh well. Then just print some more money," said Shem. "Oh, and also make sure to destroy all records of previous financial transactions. I want a clean slate because I don't understand economics. It makes no difference, really. It'll get those couch potatoes off their couches and look at something other than their computer screens."

Brilliant idea, he thought. And the people loved it too. Shem was the first President to walk in the streets without bodyguards or SPs. This was recorded in the Guinness Book of Records.

--

"I just gave housing to 15 million citizens," Shem thought in bed. "That really feels good. I can die now."

But he did not die. He was not killed. He was not killed because all of his party members and ministers were beautiful and handsome and witty and popular. People didn't want to see them go. People are not resentful. That is, they do not resent those who appear on TV or on YouTube. If they do resent them occasionally, that can be taken care of. That is why the country has mass surveillance.

"That is creepy," Shem thought. "That is like peeking through the bathroom door when your partner's undressing. That is perverted." So he decided to destroy the surveillance apparatus. He destroyed it by giving a holiday to all national security employees. He then played with some drones and blew up the supercomputers. He then told the employees to go and teach the next generation how to play with computers.

--

"I don't like the idea of people getting paid more than me," Shem thought one day. "That just doesn't feel good."

He introduced a law that said that anybody caught earning more annual income than the President will be prosecuted and their income taken away.

"I get paid $150,000 this year," Shem thought. "A household of three should get paid $450,000 and no more. Stop complaining!"

Nobody complained. Those who were supposed to complain were already in jail. Shem fined them and took away their past earnings and used that money to reward the Deputy Chief. Since then, Shem was on good terms with the Deputy Chief. Perhaps they can go fishing tomorrow.

Eradicating Poverty - The Story So Far...

The number one priority of all modern states is the eradication of poverty.

Traditional systems for addressing poverty fail necessarily in a number of ways. All such systems can be sorted into two groups. Firstly, providing goods directly (social housing, food banks, clothes, books, etc.) or providing coupons (food stamps, medicare coupons, etc.) to those in poverty. The main problem here is that recipients cannot choose what they get, and so what they get might not meet their specific needs. Also, the fact that one cannot purchase one's goods, but rather is given directly by someone else, can be harmful psychologically and socially, i.e. can be stigmatizing. The second system is to give cash through an application procedure. There are two problems here too: first, the application may require documents which those in poverty are not able to acquire; also, the application process often has an element of arbitrariness, and moreover the reviewer has the power to probe into the privacy of the recipient; second, while those not in poverty receive their cash through work, those in poverty are singled out as those who receive cash without work, and this singling-out can again have deep psychological and social consequence for the recipient.

These problems are well-documented in multiple countries, so there is no need to go into the details of them. The main take-home point is that an effective system for eradicating poverty should include a way to distribute cash to the poor in a way that is not stigmatizing and does not single out the poor from the rest.

Given this constraint, the options for a viable social security system becomes quite limited. In fact, it seems as if the only viable option is a basic income system.

At a general level, there are roughly two criticisms commonly leveled against basic income as such. The first is that basic income will make people lazy, i.e. it will disincentivize work. The second is that the government simply does not have the money required to hand out basic income.

At this level of generality, neither criticism is to be taken too seriously, as there is ample evidence that basic income in principle does not disincentivize work, and that there is a way to design a sustainable taxation system as well as an optimal amount of basic income to make it work. However, no country in history has actually implemented a basic income system. This means that there is no empirical material to rely upon in order to make claims about the feasibility of implementing this system on a national scale. Therefore, the discussion tends to be based on simulations. Simulations require statistical data, and such data vary from country to country. Therefore, at this point, further, more detailed discussions on how to design a feasible basic income system becomes country-specific.

The take-home message is that basic income is feasible in principle, but there needs to be more detailed simulation at the national level before it can actually be put into practice.

Basic income is paid for by the state budget. Therefore, the state has an interest in keeping the supply of money under control in order to prevent inflation. This is because, if the supply of money dramatically increases, while state revenue stays more or less the same, then the value of the basic income becomes lower relative to the total money supply. In other words, inflation not controlled by the state can compromise the basic purpose of basic income, namely, the eradication of poverty by providing the means of subsistence to all citizens equally.

Therefore, in order to make the basic income system work, it becomes necessary for the state to also implement a monetary system which controls the money supply and prevents the kind of inflation that is mentioned above.

This is where the "Sovereign Money System" (SMS) enters the picture. A clean and concise blueprint of the SMS has recently been laid out by Frosti Sigurjónsson in this report.

How does the SMS keep the money supply under state control? According to Sigurjónsson, the problem with the currently predominant system is that the state is forced to bail out banks which are "too big to fail." This not only gives the big banks an unfair competitive advantage by allowing them to raise their interest rates recklessly, but it also incentivizes big banks to engage in reckless and predatory lending. In order to ensure fair competition, and in order to discourage reckless lending, the new monetary system needs to free the state from the implicit and unwritten obligation to bail out big banks.

The main purpose of a massive bail-out is to ensure that ordinary customers can withdraw their deposit money in cash. Therefore, the new money system needs to ensure that the banks always have enough cash in their reserves to cover the total amount of deposits in all deposit accounts. In other words, there needs to be not a fractional reserve system, but rather a 100% reserve system.

The SMS is just such a system. According to Sigurjónsson, the SMS divides all bank accounts into two types. The first is the Transaction Account. This is the account where all deposits are 100% guaranteed. Banks are expected to run these accounts by charging fees for various transactions. The second type is the Investment Account. Here, there is no guarantee of deposited money. Therefore, it will be the customers' and the banks' responsibility to ensure that the original deposit plus interest gets paid according to the agreements.

Next, the SMS requires that banks only use the money invested in the Investment Account for lending activities. In this way, the money in the Transaction Account becomes fully protected. If banks fail in their investments, either the customers lose their original deposits, or the bank goes bankrupt. In either case, the state has no need to bail out the bank in any way, since the cash in the Transaction Account is fully protected.

Finally, the power to create money is separated from the power to allocate money in the SMS. This means that, assuming that there is no corruption - a big assumption, but is also a necessary assumption for any constructive debate on alternative systems - neither the creators nor the allocators of money have the power to single-handedly inflate the economy for private gains. As mentioned, the big issue here is how to prevent corruption - a hand-shake between the creators and allocators of money is enough to trigger such an inflation. However, this is an issue which must be addressed regardless of which monetary system is in place, and so it is in a way irrelevant in this context.

An added bonus of the SMS is that all newly created money first becomes state revenue. This means that the state is in charge of distributing the newly created money. This is good news for a system like basic income. Also, the state does not have to pay interest on the newly created money that it acquires. An interest-free money means reduction in state expenditures. The reduced need to sell bonds (which are not interest-free) to generate state revenue means that it allows the state to spend more money in the real economy, whether this may be in the area of social security or in national security.

Basic income coupled with the Sovereign Money System is still insufficient for the eradication of poverty. This is because of the problem of affordable housing. Even if a citizen receives enough cash each month to survive, and even if inflation is under control, if the price of housing is too high, the basic income might become relatively valueless. Therefore, it becomes very important to think about how to manage real estate prices and to think of a new system for the buying and selling of real estate.

The first problem is the method of payment. Somebody needs to purchase a house in order for the house to be put into use. In order to purchase the house, the buyer typically needs to take out a loan. In the SMS, banks can only lend by putting either itself or the customer at risk. Is it sufficient that the bank assesses the risk and gives loans only to those who are most able to manage repayment? This is the first serious question to be addressed.

The second problem is how to control housing price. This applies both at the level of immediate purchase and at the level of secondary buying and selling, including renting. The higher the real estate price, the higher the amount of the loan required for the purchase of that property. This means that fewer customers are able to purchase that property, which reduces the chances of that property being put into productive use. Indeed, this is the very problem that permeates the United States with its 6 million + houses in foreclosure. How could the housing price be effectively regulated? The key here is to not rely on explicit state regulations - rather, the task is to design a system, similar to the SMS, which automatically disincentivzes the owners of real estate to recklessly pump up the price.

In addition to the problem of housing prices, another issue is how to fund business start-ups. This might be less of an issue compared to housing, since in the basic income system, citizens do not depend on the success of their private business enterprises for their survival. If citizens choose to run their businesses irresponsibly, it would be up to them to take responsibility for their failure. Nonetheless, since some business start-ups do require funding in the form of loans, there is the question of whether certain types of businesses might be perceived by the banks as being too risky and thus cannot be funded. In some cases, this is actually a good thing - risky businesses should not be too hastily funded. On the other hand, substantial reduction of commercial activity means reduction in tax revenue, which may escalate to the point where it no longer becomes possible for the state to hand out basic income. In addition, since thanks to basic income more citizens will be engaging in productive activity outside of the marketplace, there might not be a need to fund start-ups at all in order to encourage innovation which serves society. The issue here is therefore quite open and diverse, requiring careful thought.

This is the story so far concerning the blueprint for a state which adequately performs its duty to eradicate poverty and to protect the right to live of its citizens.

日本の貧困撲滅とベーシックインカム

日本で一番大きな社会問題は何かと言えば、「貧困」である。貧困とは、他の社会問題の根本原因であると同時に、他の社会問題から発生する問題でもある。ギリシアの現在の状況から、全く収束していない東日本大震災の被災者たちの復興、過労や失業、シングルマザー、詐欺など、すべて貧困が深く根をおろしている。そのため、「貧困とは何か。貧困とはどう乗り越えることができるのか」と考えることは、「社会を良くしていくためには何をすればよいのか」と考えることと同じである。

貧困に陥っている人を救うということは、貧困に陥る「かもしれない」という恐怖におびえて働く人々を救うことにもつながる。私もそのようにおびえつつ生きる人の一人である。そして、そのような救いがほしいと、いつも思う。

実際に貧困状態にいる者、貧困に陥るのが怖くて仕方がない者は、日本のセーフティーネットが機能していないということを嫌と言うほど実感している。そのため、貧困や貧困への恐怖を社会から抹消するためには、セーフティーネットを改善する必要がある。

どのような改善策がありうるのか？

実は、選択肢はかなり限られている。というのも、「お前は貧困者だ」という烙印を押す可能性のある方法はすべてダメだからだ。具体的には…

• 食事や居所などの現物給付
• お役所での申請と審査が必要な現金給付
• 医療券など、申請が必要なクーポン給付

以上はすべてうまくいかない。

残るは、「匿名の現金給付」である。申請や審査が不要であるために、堂々と給付を受けることができる。また、「審査不要」ということは、現行の生活保護などと比べ、働く意欲が出るということでもある。さらに、現金給付であるため、自分の選ぶ方法でお金を使うことができる。

ただし、これでもまだ問題がある。いくら匿名でも、「一部の人間」だけがもらうのでは、偏見や差別はなくならない。「なぜ私たちはこんなに一生懸命働いて、他の人のために納税しなければいけないのか」という、（倒錯した）不満を抱える人たちがたくさん出てくるに決まっているからだ。この「不満」は全く的外れで、論じるに値するようなものではないが、しかし「常識」として通用してしまっているのだから仕方がない。

よって、この困難を乗り越えるためには、「すべての人たちがもらう」形で現金を給付するしかないのだ。

足早にここまで考えて見ると、貧困や貧困への恐怖を失くすためのセーフティーネットが具体的にどういう風になるのか、可能性はかなり狭くなる。というより、一択に絞られるとすらいえるだろう。ベーシックインカムである。

ベーシックインカムについては、今年、原田泰氏の『ベーシックインカム―国家は貧困問題を解決できるか』という本が出ている。この本の第３章が優れている。「ベーシックインカム」と一口に言っても、給付額や予算編成などによって、色々な形がある。従来のベーシックインカム議論はどんぶり勘定なものが多かったが、原田氏はより細かく国家予算を分析している。

社会学者のみならず、政治家や活動家も、「ベーシックインカムか否か」といったレベルでの議論はおしまいにして、「具体的にやるとしたら、日本ではどのようなベーシックインカム制度が考えられるか」という問いへと歩を進めるべきだろう。原田氏の著作は、この問いに取り組むための具体的な出発点を与えてくれる。

Alexis Tsipras Speaks on Greek July 5th Referendum (English Subtitles)

Greek Prime Minister Tsipras Addressing the Greek People

(Video Courtesy of Alexis Tsipras' Channel on YouTube)

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During his speech, the Greek Prime Minister mentions how the opposition, i.e. the New Democracy, accuses SYRIZA of launching a "coup." Also, Tsipras mentions how others have mentioned of a "NO" leading to a "Grexit." Needless to say, neither is Tsipras' intention.

However, the same rhetoric pervades much of media coverage, including the coverage in Japan. For example, the July 2, 2015 edition of Japan's largest newspaper, Yomiuri Shimbum, states over and over again that SYRIZA is likely to exit the euro and the EU because of their failure to provide a viable solution. The Yomiuri Shimbum even printed a small diagram which outlines the possible future scenarios depending on whether the Greek people vote "YES" or "NO." According to this diagram, a "YES" will lead to Tsipras stepping down, the previous government being re-elected, and the "viable austerity measures" being further implemented, while a "NO" will (apparently) inevitably lead to a Grexit, a "default," and other unknown catastrophes. Furthermore, the same newspaper interviews Greek citizens withdrawing money from the bank accounts, and shows how confused and "against Tsipras" the Greek people are - while the newspaper fails to interview anyone who is against austerity measures. To top it all off, Yomiuri Shimbum blames Tsipras for the cap on cash withdrawals placed on Greek citizens. As Tsipras' speech makes it clear, the cap was not put in place by the Greek government.

In short, not only Yomiuri Shimbum, but almost all major Japanese newspapers are wrong on facts and are biased in their opinion polls.

As Tsipras notes in his speech, the Greek people really are being blackmailed from all sides. First, the media fail to not only define what a "viable solution" is, but even accuses SYRIZA for somehow being responsible for the crisis in the first place. Second, the media fail to mention exactly what the IMF, Merkel, and others are demanding of Greece, and why SYRIZA is rejecting some of their proposals. Thirdly, the ECB directly attacked the Greek people by placing a cap on how much money they can withdraw per day, and then made it appear as if this was Tsipras' decision.

Therefore, the average Greek citizen (who does not search online for accurate information but only relies on major news websites, newspapers, and television channels) experiences this crisis as follows: first, they are told that Tsipras' party is responsible. Second, they take a direct financial blow. Third, they are told that if they voted "YES" then they will get their money back and Tsipras will be removed from power.

Since this is the experience, it requires something of a heroic determination for such a citizen to vote "NO." It will require rational thought and accurate information. It will require seeing through exactly what the big media and the banks are doing to forge an emotional reaction amongst the Greek people. As of July 2, 2015, Tsipras' speech has less than 3,000 views. This is absolutely bizarre. I hope that at least those who have seen the speech in Greece are telling their friends and relatives what the referendum really is all about, and how they should not make a decision based on the negative sentiments that were forged by the creditors.