Basic Income AMA Series: I am Peter Barnes, author of Who Owns the Sky?, Capitalism 3.0, and my latest book With Liberty and Dividends For All. I think we should auction a declining number of carbon pollution permits and use the revenue to pay equ...

Thanks everyone. Gotta go now.

Dividends for all! Spread the word. www.dividendsforall.org

I guess a simple question: what is the problem we want to solve?

If the problem is the inequality where some people go hungry as others buy super yachts, then why would the super rich buy into this solution? wouldn't they just say 'no' - it's not their problem.

If the problem is potential uprisings by majority of people because they are unfairly treated, then wouldn't super rich hire armies to protect themselves instead of giving up more of their money on taxes? I mention this solution, because I believe that's the approach people take in poor countries - rather than distribute wealth, the wealthy simply protect themselves from the poor.

Why is basic income a better solution for those who will be putting up the bill? I ask, because we have to sell the idea to them to make it work.

Could you explain the problem and the solution as you would to a 0.1 percenter?

I would say that there are three problems — three fundamental flaws in capitalism that must be fixed — and that even a 0.1 percenter would benefit from fixing them: (1) the decline of our middle class; (2) the destabilization of ecosystems; and (3) insufficient demand in our economy. The rich won't do well if the middle class revolts, if climate change spirals out of control, or if our economy remains stagnant.

Fortunately, common wealth dividends would fix all three flaws simultaneously. ANd do so with market mechanisms rather than government regulation or redistribution.

Is there a chance republicans could accept a solution like you're suggesting?

Yes. The Alaska Permanent Fund was started by a Republican governor (Jay Hammond) and supported by all subsequent Republican governors, including Sarah Palin. In fact, Palin boosted the dividend by $1,200 in 2008!

There's nothing in my plan that contravenes conservative principles — no tax, no bigger government, no redistribution. Once set up, the dividends would be market-based. The revenue would come from user fees paid for value received. The dividends would be legitimate property income, not welfare.

How can we peacefully install a system that distributes income (some, not all) equally, given that our government is run by the rich? I can't claim it will be easy. It will require a movement and a crisis. The crisis will come for sure — the question is, can we build a movement. Remember that Social Security was peacefully created in 1935 thanks to a great depression and many popular movements.

When you say equal dividends for all, could you elaborate?

Check out the web site www.dividendsforall.org.

Could you provide some details please of potential plans you currently favor? Like for example, how much of a tax on carbon and other forms of pollution in the U.S. to fund how large of a basic income for citizens?

Also, when it comes to the potential for taxing pollution globally to fund a global citizen's income, how do you feel we can best go about doing that on a global basis?

I don't propose a tax on carbon; I propose an upstream supply limit, with all permits auctioned. The price of the permits would be set by supply and demand. As the supply declines, the price will rise. See the bill recently introduced by Rep. Chris Van Hollen.

With something like the Van Hollen bill in place, charging for carbon pollution could generate up to $1,000 per person per year. (Not at first, but eventually.)

More revenue could flow from our monetary infrastructure, our copyright and patent systems and our electromagnetic airwaves. My assumption is that, once a dividend system is in place, popular support will push the revenue upward. I think that, over time, we could get to $5,000 per person per year, if the political will is there.

As for a global citizen's income: I don't see that. I see it happening nationally, or regionally (as in the EU).

Hi, could you please elaborate why can't you see it posible for a global citizen's income? Thanks!

Well, I just don't think the institutional infrastructure is there, or that rich countries will want to shift part of their wealth to poorer ones.

Do you view the proposals in "With Liberty and Dividends For All" as a complete solution, or as the 1st step in a series of steps needed to reach a solution? If we give the people dividends, what is the next step after that?

There is no complete solution. Common wealth dividends are the single biggest thing we could do to fix capitalism, however. They'd tilt our economy towards more equality, less destruction of nature, and steady prosperity through continuously refreshed consumer purchasing power.

The environmental benefit of a basic income depends on how the revenue is raised. If it's raised from a broad VAT, there's little or no environmental benefit. If it's raised by making polluters pay, the benefit could be large — it will depend on how much we charge polluters. THe nice thing is that the more we charge polluters, the higher the dividends will be. This creates a large constituency for high pollution fees.

Thanks. It wasn't exactly what I was looking for, as this could be done regardless of basic income, but it does provide a general way to link the two issues.

(I was looking more at a discussion on whether an unconditional basic income would lead to a more sustainable lifestyle by the general populace.)

There's that too.

Wouldn't it just be easier for producers, especially ones that pollute a substantial amount, to just simply increase prices and move the tax downstream to the consumer? The only real way for that to work would be a government instituted price cap, which seems like an incredibly bad idea. Governments are very bad at running efficiently, as can be seen in any comparison of public vs private institutions. So, how would you propose these taxes be enforced without having end users being the payers of said tax?

First, I don't buy that private institutions are always more efficient than public or non-profit ones — just compare Canada's health insurance system with America's. As to your main point, though, the end users WOULD pay the cost of carbon pollution — that's not only unavoidable, it's also desirable because we want end users to use less. But, on the flip side, most end users — the smaller ones — would get back more in dividends than they pay in higher prices.

As a Canadian, I can certainly speak to the ups and downs of public healthcare. While I love our dirt cheap basic coverage (or free in some provinces), I certainly wouldn't call our system efficient. However, that's a conversation for another day.

The same argument still applies to issuing permits. If we use petroleum as our example, you're simply restricting supply artificially, causing a rise in price for the consumer. Would this reduce usage? No, not really. Because people don't run their vehicles unless they have somewhere to be, and companies don't use their machinery unless they are making something. Petroleum isn't a "want" so much as a "need" which means that demand isn't going to drop significantly unless some kind of alternative energy source comes along. Even then, you have to remember that there are millions of cars in North America alone, and virtually all of them run on gasoline. Even if electric cars came out today with a reasonable battery life, most people can't or won't ditch their old internal combustion engine vehicles; not to mention that a lot of places still burn coal for electricity, which simply shifts the externalities of transportation to someone else, rather than eliminating them.

So now we have a situation where the market supply for petroleum is restricted, the demand has gone done marginally if at all, and so prices for gas, and therefore all industries (from usage in manufacturing and transport), have increased. How on earth would these dividend payments be able to cover that kind of price increase? You've simply increased the price across the board, and forced inflation. Not to mention, as an oil company, wouldn't it just be cheaper to import oil from elsewhere, rather than paying ridiculous taxes domestically, therefore decreasing the number of employed people and tax paying corporations?

You are right that selling fewer permits would restrict the supply of gasoline as well as raise its price. This would force people to share rides, take public transit, travel less, drive smaller cars, etc. This can and must happen. That is the whole point.

But as it happens, dividends will rise and those who conserve the most will come out ahead. That's part of the solution, too.

PS: Oil imports would need permits too.

My question is - will you be answering any questions?

He posted not very long ago and it takes time to craft out meaningful substance filled answers. Give the man a minute!

Also it seems like he can't figure out the reply function. Someone help the man out!

I just figured it out. Thanks!

Can we auction off your stuff and share the proceeds? Can we have your income and split that up? Isn't this just a grab for other peoples stuff hidden behind fancy words? Aren't you just profiting from the poor by encouraging laziness?

Carbon emissions have very significant negative externalities which are difficult to solve with market mechanisms. Government intervention to discourage carbon emissions increases efficiency. I don't see any comparison between the right to emit carbon and income that has been worked for - the right to emit carbon is not "stuff" that any company owns. Who does own the sky?

I agree that carbon emissions have significant negative externalities, but think there's a lot that market mechanisms can do both to reduce these externalities and make sure they're paid for. (No externalization without compensation!)

As to who should be compensated, the answer is: not private corporations, not government, but the owners of the sky, i.e. all of us equally.