Universal Income Systems:

Towards Sustainable Pathways to Economic Compliance 
With International Human Rights Laws e.g. Free Education, 
Equal Access Health System, and the Abolition of Poverty
 

Table Of Contents

Click coloured bullets next to topics to see sub headings and access hyperlinks

Introduction

Purpose of this Section.

The purpose of this page on Economics is as follows:

1. To help develop an understanding of how wealth and income is distributed through society: who has it, who doesn't, and what responsibility, if any, do people have in the equitable distribution of this income.
2. Provide models of Universal Income Proposals and/or illustrative summaries of the principles involved.
3. To better understand the dynamics between economics and human rights.
4. To help develop a better understanding of the hidden cash flows through society, how they work, the harm that they cause, and the necessity for their remediation.
5. It is hoped that after a careful study of what is being reiterated on this web page that no one will feel a need to ask how can we afford a UI; but rather, how can we afford not to have one?
6. Almost all of the existing compliant UI proposals are in "book" form at this point in time. As we grow with more and better resources we will upload these books and booklets online.
7. Please note, this page focuses strongly on present income distribution policies. It is not the intention to offend but rather to illuminate. However the mere content itself is very sensitive to many people and it is almost impossible not to offend somebody. We extend our apologies to you if we have done so. Please inform us if you have a better way of expressing an idea that you might have found offensive. This Trust does not view any individual (s) or group (s) as being exclusively responsible for the actions for the state of affairs of an entire society. A society is the sum total of what each and every individual brings to it. There is no one to blame, but if there has to be, it must rest exclusively with whoever wishes to so. The question, therefore, isn't who do we blame; but rather, how are we going to resolve these issues, or do we simply pass our problems on to our children.  Thank you.
8. A note on slide shows: this site is presently housed on a site that does not have full functionality for advanced web graphics. We will have a mirror site set up soon to meet these needs.

Distribution of Wealth and Income

A Short Global Summary

``The Human Development Report 1998 & 1999''  issued by the United Nations Development Program reveals that the "assets of the three top billionaires" in the world "are [worth] more than the combined GNP of all least developed countries and their 600 million people". 225 of the world's richest billionaires have a combined wealth equal to the poorest 47 percent of humankind. Equally concerning is that "The world's 200 richest people more than doubled their net worth in the four years to 1998, to more than $1 trillion". At the geometric rate suggested by these figures, it won't be very many years before the entire planet becomes "private property". According to The Human Development Report, one-third of the planet’s population is living on less than a dollar a day. The number of people earning that amount is growing and approximately 50% of the planet’s population is living on less than two dollars a day.

Wealth and Income Distribution in Aotearoa NZ click here to see older slide show

Updated July 2005 slide show extended unanimated version

Updated July 2005 Powershow extended animated version

Powerpoint viewer direct download

[To see the animated powershow you will need to download the free powerpoint viewer above if you do not have the "Powerpoint" programme on your computer. After clicking the slide show link allow about 3 minutes for the show to load into your sytem memory. after which it will play very fast. Have your sound turned on. To navigate the power show, for best results, go to the top menu of your browser when it opens and select "Browse", at the bottom of the resulting drop down menu, select "Full screen". Pressing on the slide with your mouse advances the slide. Right clicking on the screen or selecting "Browse" from the menu will also give you a navigation menu to select specific slides of your choice. 

For the extended unanimated versions you will need to have javascript enabled on your browser.]

The following is quoted from Crime and Deviance by Greg Newbold
Aucklund University Press, Oxford University Press Walton Street, 
Oxford 1992.

"Alongside the explosion in unemployment, and paralleling inflation, the total personal capital of New Zealanders grew from about $45 billion in 1980/81 to $85 billion in 1987/88 (Income Distribution Group, 1990: 92). In 1971, the top 3 per cent of the population owned just over 20 per cent of the wealth (Crothers, cited in Pearson and Thorns, 1983: 75). In 1989, 9.5 per cent of the nation's wealth was concentrated in the hands of the richest 0.3 per cent, and the top 3 per cent held 37 per cent of it (Income Distribution Group, 1990: 105)." Projecting the pattern of these figures to the year 2010, (i.e. approximately a 100% increase in wealth/assets for every twenty years) we have, roughly, 75% of the nation's wealth controlled by 3% of the population. If these figures are accurate, in twenty years time, without intervention, the entire country’s wealth will be owned by 3% of the population..

From the above it is clear that the same pattern of global wealth distribution is evident here in Aotearoa NZ as well. 

To further understand where the income is, as opposed to just the wealth/assets, previously mentioned, and how the necessary income for a UI  could be generated, it is  is useful to look at the present income distribution model for our present economic system in NZ.

Above is the 1991 Income figures as cited by the World Bank study on the Distribution of Income or Consumption. This Study is formatted in Adobe PDF, you will need an Adobe Acrobat Reader in order to download the file. It is freely available from the Adobe site (Get Acrobat Reader). If you read the study you will note that rather than dividing the population in quintiles or equal fifths, the divisions used here, were decidedly based on the rather stark natural divisions that occurred based on the distribution of income itself. The thin blue layer at the bottom, representing the lowest 20% of the population or 500,000 people only receives 2.7% of the nation's personal income. They are bringing home less than $5,000 gross a year. (Contrary to popular misconceptions, they are not all unemployed children as a perusal of the Table below will indicate from the 1996 census. Even though the 1996 census is from an earlier year there is still much that can be learned from it. It was a very comprehensive statistic gathering and publishing year to which the Universal Income Trust was privileged to also aquire the statistical averages for the different categories of people that wasn't published with the study.)

It is also clear from the above graph, that the low-income earners are not the people that are collecting all of the "so-called" taxpayers money; but rather, it is the high-income people representing the top +20% of the population such as Government officials, and CEO's that have their hands in the proverbial "money jar". Further, those that are deciding the issues concerning income distribution are also those representing the highest income brackets and are predictably enacting laws and policies that garnish their own bank accounts. Government officials are really the employees of the public and as far as MP's are concerned, they are "unskilled labourers". There is no education or skill requirement for their jobs that exceeds that of a person on a "Work for the Dole" scheme. Therefore, there is no logical reason as to why MP salaries can exceed $100,000 a year and at the same time 50% of the population, who are also skilled and educated should be working at a minimum wage that is below international human rights standards (See slide show on income distribution). A legal minimum wage level should be such that one person's income is enough to provide for a household. Most importantly, NZ no longer has a real unemployment benefit, rather, people are compelled to have to work at the "Dole" level for semiskilled and in some cases skilled jobs. See poverty page for more details.

Taxation Systems: Who Really Pays? (older  slide show presentation)

Updated July 2005 slide show extended unanimated version

Updated July 2005 Powershow  extended animated version

Powerpoint viewer direct download

[To see the animated powershow you will need to download the free powerpoint viewer above if you do not have the "Powerpoint" programme on your computer. After clicking the slide show link allow about 3 minutes for the show to load into your sytem memory. after which it will play very fast. Have your sound turned on. To navigate the power show, for best results, go to the top menu of your browser when it opens and select "Browse", at the bottom of the resulting drop down menu, select "Full screen". Pressing on the slide with your mouse advances the slide. Right clicking on the screen or selecting "Browse" from the menu will also give you a navigation menu to select specific slides of your choice. 

For the extended unanimated versions you will need to have javascript enabled on your browser.]

The presentation illustrates the principle that systems such as rates, user-pays, and resource taxes on public domain assets actually have the net effect of lower income earners subsidising or "paying" anyone of a higher income than themselves to use the same publicly owned asset or resource. The "actual cost" of a public domain asset, such as education, should be calculated as a "percentage" of one's income not a market "flat rate" as we are presently using. We all own an equal percentage of the public domain. We derive our income from the use of the public domain (i.e. businesses use of country's  roads, water, legal system, treasury, and educated population to work for their companies, and so forth. These are all owned and paid for by the public.). As we all own an equal percentage of the public domain, the actual cost of the public domain is expressed as an equal percentage of our resources or income. As such, the actual cost of education then, is the amount that after everyone pays an "equal percentage" of their income or wealth in the form of a tax, the education system is free for everyone to use. If after taxes we don't have enough for everyone's education, then we need to raise the tax rate or improve the efficiency of the education's system's use of funds. Further, by employing a user-pay system as we have now, a lower income earner of $10,000.00 a year pays approximately a 1000% more for education or a public resource than a person from a $100,000.00 category. Effectively this means that not only is the $100,000 a year person getting a free education, the actual cost of education being a higher percentage of his/her income, but they are actually getting paid or making a profit by going to school at the expense of lower income earners.

The above situation is also true for using resource taxes as a "substitute" for income tax which has been put forward by many groups in NZ. In effect resource taxes actually subsidise the wealthy such that they are "paid" to use polluting forms of resources--which of course defeats the whole purpose of the tax--since their income increases by paying a significantly less percentage of their income than the rest of society. Further, if we use carbon tax as an example of an Eco-tax--cars being a major contributor--we find that most people who are driving, especially low-income earners representing 51% of the population, are having to string multiple low-paying jobs together to "make ends meet". Because they are at "base level survival" stage, they do not have a choice of where they work or if they will work. Most are already carpooling when possible out of economic necessity. Therefore taxing the average person will not reduce carbon counts; but rather, increase the disparity of income between rich and poor and despair for the lower 50% of New Zealand society. The ideas of eco-taxes were valid proposals made by economists for more socialised and non-stratified economies where people had or have real choices about various forms of high-income employment. This is not the case for NZ. The purpose of the income generated from eco type taxes is not as a means for lowering the tax rate; but rather, to subsidise research or funding alternatives to the negative consequences resulting from what it is they are taxing. I.e. revenue from carbon tax should be earmarked for research and development of alternative energies or transportation systems. Finally, if a resource tax were misappropriated for the purpose of lowering the income tax rate, society would then be funding its essential services such as health and education via monies derived from socially or environmentally undesirable industries. These same industries whose members would now be paying a lower income tax rate, and probably passing all the additional costs on to the addicted or entrapped consumer as well, would have even more power and influence over society since it is the income derived from their industries that would be funding the government's essential services: such as health and education. In sum, a better recommendation would be to implement a universal income as a precursor to any form of eco-tax type system such as carbon taxes whereby people can have a choice not to pollute by changing locations of employment, and also have the time and resources to participate in the decision making processes that affect their lives and environment. For a more a more complete proposal on what to do about pollution see environment page.

Higher income tax does not mean lower incomes for everyone. From 1982 to 1996 the tax rate on average was cut almost in half. In 1982 the tax rate was 66% for upper incomes and 48% for median incomes. In 1996 it was 33% and 24% respectively. The "average personal gross income" for males dropped from  $32,300 in 1982, to $30,200 in 1996, their "average disposable income" remained unchanged at $22,500 (Statistics NZ). However, a short perusal of Srikanta Chatterjee's excellent paper on income distribution "Sharing the National Cake in Post Reform New Zealand: Inequality Trends in Terms of Income Sources" reveals that the top 10% and 5% of NZ population's income sky rocketed.

It can also be seen from this slideshow in combination with the funding principle slide show (below) and the 1996 census data that financial poverty will not be alleviated by education or jobs. Education although important for everyone, is not the issue, it is the cost: see above. As for jobs the census data reveals that a high percentage of low-income earners already have jobs. Further, most of them also represent the majority of the volunteer workers of Aotearoa, without which our present society would not be functioning at all. This unfortunately, is not measured in the census. Since 1998, we have the "work for the dole" schemes, which means there are no unemployed people in NZ, just more under-paid workers. From the "Funding" slide show it was revealed that it would take close to $18,000.00 per person on top of their existing incomes to elevate the average low-income earner to a reasonable standard of living. As a result of low-income earners having to "pay the bill" for other's prosperity, they have gone in debt, lost property, and so forth. They have never given legal "informed consent" to have their money and resources taken away to fund other's unbridled prosperity. On the contrary, they in conjunction with the majority of NZ's population unanimously voted for a new electoral system, as well as voiced and written their descent against selling and privatising their public assets. As such their money and property have been taken away from them unjustly, and they should not have to go into servitude the rest of their lives to work back from those who took that which was not theirs. As the statistics show, giving low-income earners a couple of extra dollars to raise their existing income, actually mocks the hardships they are facing.

If we are to develop economic policies that are compliant with the International Bill of Human Rights and that can lead us to a sustainable future, we are going to have to re-examine one of the great sacred-cows of the decade: taxation and income distribution. The longer we wait the more difficult the situation becomes. As responsible citizens desiring to live in a peaceful and sustainable egalitarian system, we all have a moral and legal responsibility to address these injustices to the best of our capabilities.

A UI Funding Example

A UI Funding Principle older slide show

Updated July 2005 slide show extended unanimated version

Updated July 2005 Powershow animated version

Powerpoint viewer direct download

[To see the animated powershow you will need to download the free powerpoint viewer above if you do not have the "Powerpoint" programme on your computer. After clicking the slide show link allow about 3 minutes for the show to load into your sytem memory. after which it will play very fast. Have your sound turned on. To navigate the power show, for best results, go to the top menu of your browser when it opens and select "Browse", at the bottom of the resulting drop down menu, select "Full screen". Pressing on the slide with your mouse advances the slide. Right clicking on the screen or selecting "Browse" from the menu will also give you a navigation menu to select specific slides of your choice. 

For the extended unanimated versions you will need to have javascript enabled on your browser.]

Universal Income systems have been supported by Nobel Prize winning economists from both sides of the political left\right spectrum including: Jan Tinbergen (major contributor to the development of modern macro-economic theory and an original founder of the European Basic Income Network: BIEN.), James Meade, James Tobin (left wing economist author of the "Tobin Tax"-- a transactional type tax on multi-national corporations), and even right-wing monetarist guru Milton Friedman.

The sample model presented in the slide show, using census statistics for Aotearoa NZ, illustrates the principles underlying one method for deriving a UI: income tax. It is not a full economic proposal with all of its financial nuances and adjustments.  It simply demonstrates the potential distributive function of income tax (or other taxes that are based on percentages of income, such as wealth or financial transaction taxes). It shows how such taxes can be used to generate personal incomes--a UI--and achieve economic compliance with human rights laws.  Present dogma suggests that income tax is "bad", "unfair", "obsolete" or "a burden to the tax paying public".  It is only so when it is not distributed fairly in accordance with these laws. The choice of using a flat tax type model is for illustrative purposes only. A flat tax is easier to visualise due to its simplicity. It shows that even under a flat tax type system which is one of the harsher tax models that could be used--especially with the great income disparities that exist right now in NZ--it is still affordable. It would be at the same taxation levels that were in place during the 50 years when NZ had full-employment. The universal income Trust, however, does not advocate it over any other system.

The Green Line Of Sustainability 

Click here to see Slide Show.

This chart will help you evaluate where political parties are in terms of human rights and economics: true left/right politics. You can plot where they are on this chart by the following:

The green line or white line of sustainability

The "green line of sustainability" is the threshold of economic compliance with international human rights laws.

This is the point where the actual cost of public resources are paid for equally by all members of a society such that all people can freely use them and have the time and resources to participate in the decisions making processes that will shape the society in which people most want to live.

Columns and the vertical axis

The columns going from left to right represent degrees of human rights freedom. The light vertical line, and to its right (i.e. 50% to 100%), represent the degrees of democratic freedom necessary for people as individuals to effectively engage in the decision making processes that will effect their lives and determine the society in which they most want to live.

The columns left of the light vertical line (0% to 40%) represent the degrees that others can control one's decision making against one's will, thereby, violating one's right of "self-determination".

Rows and the horizontal axis

The rows, from bottom to top are the percentages of one's income or resources that are required to pay for the maintenance of public domain assets. (See " Taxation systems: who really pays?" .)

Synopsis of some of the more popular UI Funding Models

There are as many different types of funding proposals for UI systems as there are people writing them. They extend back to some of the earliest written records of human history and have also been recorded and kept alive through oral tradition and practices from a vast array of indigenous cultures encompassing the entire planet (see Background for more information). It is well beyond the scope and purpose of this presentation to attempt to list them all on this website. The focus is to emphasise models that have the following:

1. Practical application for the current situation in NZ. 

2. Helps bring about economic compliance with the International Bill of Human Rights. 

Models for consideration should, ideally, be those that are as least intrusive as possible in affecting the existing social economic structure while still achieving the full requirements set out by the parameters of a UI system: the International Bill of Human Rights. It follows that the more dramatic the changes that are required by a society to undertake to fulfil those objectives, the higher the probability of administrative mishaps and incidences of people’s incomes temporarily not being adjusted properly. It also follows that if dramatic structural changes are sought and desired by the people--which they most certainly have the right to make and should have the options to consider them--that a recommendation would be to have it implemented as transparently as possible and adhering to the following minimal guidelines:

Taxing unearned income

US economist Ph.D. Robert Schutz, proposes funding a UI by taxing unearned income--inheritance, rent, and interest. The basis for determining an approximate amount of unearned income available for a society is to divide the GNP by the population. For 1998 the NZ statistics follow ( See Statistics NZ note GNP is referred to as GNI in this yearbook) the GNP=$91,408,000,000 and the population taken from below=2,786,223. This when divided out would equal approximately $32,807 a year per working age person, added on to their existing income. This of course would lead to a radical change in how our existing system works, but never the less it is well within compliance to the law and human rights standards. People may also react negatively to to the concept of taxing inheritance; however, under this system, multiplying $32,807 a year over a thirty year period would mean that every person in Aotearoa NZ would receive a million dollar inheritance. Very few people, percentage wise, are receiving inheritances of that amount in NZ today.This of course would lead to a radical change in how our existing system works, but never-the-less it is well within compliance to the law and human rights standards.

Flat tax model

Another model is a flat tax as proposed by Herbert A. Simon who was a university professor at Carnegie Mellon University and recipient of the Nobel prize in economic sciences in 1978:

Access to the social capital-a major source of differences in income, between and within societies-is in large part the product of externalities: membership in a particular society, and interaction with other members of that society under practices that commonly give preferred access to particular members. How large are these externalities, which must be regarded as owned jointly by members of the whole society? When we compare the poorest with the richest nations, it is hard to conclude that social capital can produce less than about 90 percent of income in wealthy societies like those of the United States or North-western Europe. On moral grounds, then, we could argue for a flat income tax of 90 percent to return that wealth to its real owners. In the United States, even a flat tax of 70 percent would support all governmental programs (about half the total tax) and allow payment, with the remainder, of a patrimony of about $8,000 per annum per inhabitant, or $25,000 for a family of three. This would generously leave with the original recipients of the income about three times what, according to my rough guess, they had earned.

A more moderate proposal that would keep the existing system "as is" but would place a minimum wage income on top of everyone's existing income is that offered by the Unconditional Universal Income action group utilising NZ economic historian Keith Rankin's model for a political party’s request. This would use a 48% flat tax with a second tier buffer similar to the Irish model proposed by CORI to which the Irish government has recently released a Green Paper. (See " UI funding Example above" This ignores all of the adjustments in the income and the general economic breakdown. It focuses strictly on the principle attempting to help a layperson understand and conceptualise what is happening with a UI system in a flat tax context.)

Negative income tax

Another model is the negative income tax system. For Aotearoa NZ this would be a fairly simple model by comparison to implement since the structures are largely already in place. It would operate fairly closely to the Manitoba Canadian Mincome research model. (See Appendix 3:" A Guaranteed Annual Income? from Mincome to the Millennium" on page119-129; by Derek Hum and Wayne Simpson they are professors of economics at the University of Manitoba. Hum was the research director of Mincome, Canada’s guaranteed annual income experiment and graciously allowed his article to be printed in Universal Income for a Sustainable Future by Patrick Danahey available from the Universal Income Trust and in libraries around the country.) The existing unemployment benefit would be raised to a minimum wage standard such that one person’s income is enough to raise a household. It would be abated similarly as the unemployment benefit is now, based on the earnings of other additional income. In short no one would ever fall below a minimum-waged level income. If you lose a job or your income falls to a certain level you would unconditionally be subsidised.

Stakeholder allowance

Then there is the recent stakeholder allowance proposed by two American economists, Anne L. Alstott and Bruce Ackerman that would pay everyone a large lump sum of approximately $100,000 to invest at the age of eighteen payable back out of one's estate when that person dies.

Credit models

There are also the credit models similar to what C.H. Douglas proposed back in the 1930s with the Social Credit movement. Much of the tax burden of their National Dividend would be shifted to credit.

Other systems

Other proposals include money creation schemes as advocated by the French Basic Income Movement (See  Ph.D. Marie-Louise Duboin's models.). Other taxation models include transactional taxes, resource taxes based on percentages of income or wealth, progressive taxation, and land taxes based on improved value of land. A Universal Income can be derived from one or a combination of any or all the presented models.

Methods for funding a Global UI System 

R.Buckminster Fuller's Model

In 1981, renowned inventor, architect, engineer, mathematician and cosmologist with 47 honorary doctorates, Buckminster Fuller, PhD--a major Universal Income advocate at the global level--stated that there were four billion billionaires on our planet, and that "the planet earth’s four billion billionaires have not been yet notified of their good fortune." Why people are not receiving their share of the wealth is because of "obsolete power structures of all kinds" and that these "exploitative systems are organized only to take bias advantage of all scarcities." The eminent

...geologist Francois de Chadenedes wrote for me a scenario of the technology of nature's producing petroleum which disclosed that the amount of energy employed by nature’s heat and pressure for the amount of time required to produce each gallon of petroleum, if paid for at the rate at which the public utilities now charge retail customers for electricity, must cost over a million dollars a gallon. Combine that information with the discovery that approximately 60 per of the employed in [western countries] are working at tasks that are not producing any life support.

Why would all the people not continually buy all kinds of expensive things? Answer... because they will want to travel around the world, and they will quickly discover that while you can't take it with you into the next world, you also can't take it with you around this world. They will each discover for themselves that the greatest luxury in the world is to be able to live unencumbered while able to get any information you want in split seconds and any desirable environmental condition you want in a day. 

In sum, we are looking at a future globally in which only 40% or less of the people will be required in the work force. Therefore, for those working these jobs it will more than likely become an unpaid privilege similar to sports where athletes try out for these positions for the honour and pleasure of doing it. Traditional waged work or employment should ultimately become a thing of the past and be replaced by work being performed for its actual intrinsic value and worth rather than the secondary reinforcement of the rewards and punishments of wages (see problems of the token economy). Others will learn to enjoy life, expand their educational/creative/developmental horizons, and learn how to contribute in the the most effective ways that they can with the ever expanding resources available to them to create the best possible environment in which they most would like to live.

Tobin Tax

During the Second Semester of 1999, the Brazilian National Congress set up a Special Commission to Study Social Inequalities and Proposals for Eradicating Poverty. In December 1999, the Commission unanimously approved the following conclusion: "that the Brazilian government should endeavour, in the relevant multilateral forums, to bring about international mechanisms, such as the James Tobin Tax on International Financial Transactions, so as to guarantee, in all nations, the establishment of a basic income as a citizen's right to all inhabitants of the Earth." (The full report was published as Comissão mista especial destinada a estudiar as causas estructurais e conjunturais das desigualdades sociais e apresentar soluçoes legislativas para erradicar a probreza e marginalização e reduzir as desigualdades sociais e regionais, Relatório final, Brasilia: Congresso Nacional, 1999, 130p.)

The civilising forces of History seems to be moving in a direction that will place some form of regulational control on multinational businesses as a way of facilitating a transition towards the establishment of an international universal income for all. Afterwards it seems more than likely that people will move towards a final goal of an international universal income model such as one that places money on an energy standard leading to a cooperative sharing of the planets resources as described by Ph.D R. Buckminster Fuller as a means of developing a sustainable future for all life kind. 

Conclusion 

Conclusion: issues and additional benefits of a UI system

In addition to all the advantages offered by a UI system as presented throughout this website and elsewhere; UI systems will also have the general effect of revitalising the national economy, such that more people will have money to purchase goods and services. This in turn will increase productivity, sales and profits. The purchasing power of the dollar will also increase. A dollar's value increases each time it exchanges hands and purchases something. The dollar will exchange hands more often and purchase more goods than it does now since more people will have more money to spend. In our existing economy the bulk of the wealth is contolled by the wealthy few. They tend to put much of their incomes into banks in order to "live off the interests" putting only a small percentage of the dollar back into the economy to exchange hands and purchase goods and services. In short in a UI economy businesses will flourish as well as good paying jobs for all who want and need them.

Finally, a common question asked about universal income systems is whether they would be infationary, i.e. if everyone has money won't the prices rise?

The answer is probably a bit, but no more than it did during NZ's most economically successful years when it had full-employment, from 1939 until the first part of the 1980's. During that time one person's income was sufficient to raise a household, businesses prospered, and free education as well as health services were available to all. A universal income restores full-employment without having the wasted energy and resources allocated to trying to maintain jobs for jobs sake: an inefficient means to distribute income. During those early years NZ needed those jobs in order to develop its infrastructure. The infrastructure is here now, technology is replacing the need for having the full population of people working full-time in the traditional workforce. In the 1990's the great cry of the multinational business consultants hired by the right winged governments of that time was to cut spending to lower the inflation rate: the prices. A major reason for all this bother was to lower the prices of NZ's assets to its lowest possible level so that they could be sold as cheaply as possible to private individuals and corporations. The actual effects of who is most effected by inflation can best be answered by Federal Reserve chairman Alan Greenspan:

We are obviously all hurt by inflation. Everybody is hurt by inflation. If you really wanted to examine who percentage-wise is hurt the most in their incomes, it is the Wall Street brokers. I mean their incomes have gone down the most.

ALAN GREENSPAN, chairman of the Council of Economic Advisers, at a conference on inflation, Washington, D.C., September 19, 1974.—Report of the Health, Education, and Welfare, Income Security, Social Services Conference on Inflation, pp. 804–5 (1974).

A final note, many people in New Zealand have been made to feel ashamed of the achievements of their 50 year social welfare state that was initiated by the Goverment of Michael Joseph Savage. The belief was that the government was there to care for all people, create an egalitarian country that would work together and share the wealth together, and that all people are to be valued as equals. The government and the economy was there to serve the interests and well being of everyone. It recognised the most basic facts of life. That we all need each other and if we want to live together peacefully we all need to treat each other with dignity and respect, not just in words but in deed. The word welfare now has a negative connotation meaning great debt and handouts from those who do to those who do not. 

The reality is that during those years most of the debts accrued were internal debts. In other words the country was in debted to itself. Many busineses go in debt to themselves all the time. This is generally viewed as healthy since all you are doing is volunteering your services to yourself (see 11) showing commitment and dedication. It doesn't look necessarily great on paper but there is no one there placing demands or threatening debt collection retributions. The exception was during the Muldoon era which were the first real flirtations with the "liberalised market" agendas that were picked up again at the end of the 1980's and carried through to the present. The debts accrued through these periods were primarily external or to other countries.This means that those countries can start to exert influence over national political and economic agendas of Aotearoa NZ as this country is beholding to them. 

The second issue concering the mistaken belief that there is such a thing as "those who work paying those who do not" have been adequately covered throughout this website see article on Nobel Laureate Herbert Simon, Ph.D. R.Buckminster Fuller,FAQ page, and the Poverty page--showing that the poor are and always have been working. In addition society needs to recognise the contributions of unpaid and volunteer work without which a civilised society would not even exist. Adults caring for and raising children is essential work that develops the actual wealth of a nation. People caring for other people and the natural environment is essential work that is necessary for the survival of the species and life in general on this planet. The intellectual contributions freely offered to the public domain--open source technolgies and so forth--are a principal source for ideas, resources, and research that are used by businesses around the world to make billions of dollars. The list goes on indefinitely. The fact is that nothing is created in a vacuum, and no one individual or group of people exclusively creates anything. For example, people who may write a book do not create the paper, the trees from which it was made. They didn't create the alphabet that they used to write the ideas, nor did they invent the language that they are using to communcate to others, nor did they create their own bodies that they use to write with, and so on ad infinitum. We are a part of a dynamic, our children are a part of that same dynamic. If we want a sustainable, peaceful, future we will need an economic system that nurtures the inclusiveness of the whole dynamic--empowering all--and not just the delusionary personal or group interests of a few. Universal Income Systems are grounded in this understanding.

A vagrant complained to the rich doctor about the size of his bill. "But, Mr. lowly," said the doctor, "You must remember that I made eleven visits to your street corner for you." "YES," said the Vagrant, "BUT YOU SEEM TO BE FORGETTING THAT I INFECTED THE WHOLE NEIGHBOURHOOD FOR YOU BY HAVING TO LIVE LIKE THIS."

Traditional:Taken from an old teaching tale.

Appendix

Personal Income by Labour Force, 
Financial Status, and Sex: for Aotearoa NZ

(From Statistics New Zealand: special thanks to Steve Kendall and Andrew McLaren of Statistics NZ for the Average Incomes in Column One and the Financial Surveys used to Cross Check Data)