Finance Universal Basic Income via Partial Public Ownership of All Capital says Yanis Varoufakis

Excerpts from Varoufakis’ op-ed, “A Tax on Robots”?

“Ever since the emergence of industrial capitalism, we have been terrible at differentiating between property and capital, and thus between wealth, rent, and profits. This is why a wealth tax is so difficult to design. The conceptual problem of differentiating between Nexus and the harvester ‘he’ operates would make it impossible to agree on how a robot tax should work.

“But why make life under capitalism more complicated than it already is? There is an alternative to a robot tax that is easy to implement and simple to justify: a universal basic dividend (UBD), financed from the returns on all capital.

“Imagine that a fixed portion of new equity issues (IPOs) goes into a public trust that, in turn, generates an income stream from which a UBD is paid. Effectively, society becomes a shareholder in every corporation, and the dividends are distributed evenly to all citizens.

“To the extent that automation improves productivity and corporate profitability, the whole of society would begin to share the benefits. No new tax, no complications in the tax code, and no effect on the existing funding of the welfare state. Indeed, as higher profits and their automatic redistribution via the UBD boosted incomes, more funds would become available for the welfare state. Coupled with stronger labor rights and a decent living wage, the ideal of shared prosperity would receive a new lease on life.

“The first two industrial revolutions were built on machines produced by great inventors in glorified barns and bought by cunning entrepreneurs who demanded property rights over the income stream ‘their’ machines generated. Today’s technological revolution is marked by the increasing socialization of the production of capital. A practical response would be to socialize the property rights over the large income streams capital is now generating.

“In short, forget about taxing either Nexus or Luke. Instead, place a portion of Luke’s equity in the farm in a public trust, which then provides a universal payment to everyone. In addition, we must legislate to improve the wages and conditions of every human still in employment, while our taxes provide Ken unemployment benefits, a guaranteed paid job in his community, or retraining.”