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Why not have a guaranteed annual income?

Written by Alain Pilote on Thursday, 01 March 2001. Posted in Dividends, Social Credit

On December 9, 2000, the National Post reported that Canada's Prime Minister Jean Chrétien was "considering the creation of a cradle-to-grave guaranteed annual income program", and was preparing to assemble a high-level committee to determine the feasibility of this program. However, three days later, Chrétien hastened to deny this rumor, saying that he did not know where journalists had dug up this idea, and that there was no question of his government implanting such a program.

Mr. Chrétien missed a very good opportunity to find his place in history, and to leave a legacy of lasting significance, he who is trying to make his mark as one of the greatest Canadian prime ministers: the implementation of a guaranteed annual income to each citizen would have been, by far, the most useful and appreciated program for the Cariadian population, since it is, so far, the closest thing to the national dividend that is promoted by the Social Crediters of the "Michael" Journal.

There is even no need for new committees to study the question, since all the studies have already been made, and they all came to the conclusion that giving a guaranteed annual income to all was feasible. Four Nobel price winners in economics, including Milton Friedman, have already pronounced themselves in favor of such a program.

In November, 1985, the Macdonald Commission (created by Prime Minister Trudeau a few years earlier) had released its three-volume, 1,100-page report, which recommended three major changes:

1. Free trade with the U.S.A.;

2. A shift in tax policy toward consumption; and

3. A guaranteed annual income.

The Mulroney Government went on to implement the first two recommendations (with the North American Free Trade Agreement and the Goods and Services Tax), but did not implement a guaranteed annual income, which would have certainly done much more good to the Canadians than free trade and the GST.

Some people will say that giving such a dividend would make people idle; that is to say, knowing they would receive a guaranteed annual income, people would no longer want to work. To this, the Social Crediters say that, on the contrary, with a guaranteed dividend, there would be a flowering of creative activities, people being then placed in a position where they could take part in the type of activity which appeals to them, for which they are suited.

This stand was confirmed by a study of the Science Council of Canada, as reported by Canadian Press in the newspapers of July 31, 1991: "The fears that a guaranteed annual income to each Canadian family would harm the will of the people to work are groundless, say Derek Hum and Wayne Simpson, the two researchers who signed the document."

The technological era

The idea of a guaranteed annual income is not unknown to the Liberals. Columnist Richard Daigneault wrote in the Janaury 4, 1985 issue of the Quebec City "Le Soleil" newspaper: "A certain number of Liberals believe that the guaranteed annual income — a minimum income to which every citizen would be entitled — is the system of tomorrow. According to Mr. Armand Bannister, chairman of the Reform Committee of the Liberal Party of Canada, the issue of unemployment, for occurrence, can no longer be seen in the light of the past, in the viewpoint of the thirties. The setting up of modern technology in all levels of production and commercial activity will create unemployment. Can we continue claiming that each citizen, man and woman, is entitled to a job? Mr. Bannister says that it is an unrealizable hope in the context of the technological era."

In June 1990, Paul Martin, who was then a candidate for the leadership of the Liberal Party of Canada, promised that if he was elected Prime Minister of Canada, he would hasten to set up a guaranteed annual income system for every citizen. In 1982, John Farina, a professor in the faculty of social works at the Wilfrid Laurier University, in Waterloo, Ont., said: "Man invented machines so that man would not have to work, and we've succeeded to the point of one-and-a-half million unemployed. But instead of cheering about it, we're in despair. To me, this is sheer raging idiocy."

Because of technology, men are no longer needed, and thousands of workers are laid off every week. U.S. Steel Co., the largest American steel producer, had 120,000 employees in 1980. Ten years later, it had only 20,000 employees, but the total output was the same as in 1980. (Quoted by Jeremy Rifkin in his book "The End of Work," published in 1995.)

More efficient than welfare

Welfare recipients become an easy target for bashing because their benefits are paid by the taxes of those who work. And sometimes, wage-earners, especially among the middle class, show discontent, not without reason, for it turns out that some people on welfare are better off than they who have to work "by the sweat of their brows", as they say.

Well, the Social Credit dividend would be infinitely better than the present welfare system, which presently requires a lot of inquiries to know who is eligible and who is not. Contrary to welfare, it would not be financed by the taxpayers' money, but by new money, created without interest by the Bank of Canada. Moreover, this dividend would be given to every citizen, whether he is employed or not. Those who are employed would therefore not be penalized, since they would receive the dividend plus their wages. Wage-earners could no longer accuse those who don't work of having unfair privileges, since they would also receive the same privileges, in addition to their wages.

Eliminate inquiries

Even within the limits of the present financial system, it would already be possible to give an appreciable sum of money to every citizen, by merging all the present social programs, and eliminating the means tests, inquiries, and civil servants that are attached to them. On December 14, 2000, Mario Dumont, leader of the ADQ (Quebec's Democratic Action) in the Quebec Parliament, presented a bill to give a guaranteed annual income to every citizen of that province. In front of the refusal of Jean Chrétien to establish such a program nation-wide, Dumont invited the Parti Quebecois government, which is always at odds with the Federal Government, to set the example and apply such a program province-wide.

According to Dumont, an overhaul of all the social programs, and their replacement by a guaranteed income, would reduce the administrative costs. "The costs for managing the present programs are very high because it takes a lot of people to check the exceptions and standards," Dumont said, adding that it is sometimes more profitable for a welfare recipient to refuse the job he is offered. A guaranteed income would be added to the sums any citizen would earn.

Our ideas are gaining ground

In 1999, well-known Quebec trade union leader Michel Chartrand and sociologist Michel Bernard also wrote the "Manifesto for a Basic Income", which repeats most of the arguments used by the "Michael" Journal. Louis Even said that the Social Crediters of the "Michael" Journal will obtain the final victory when all the news media and other pressure groups will repeat our ideas. Let us not give up; this is what is happening with the dividend, for more and more people are realizing its logic and relevance. The formula we propose is complete: besides the dividend, there is also the creation of interest-free money by the nation, and a compensated discount to prevent any inflation of prices. Long live "Michael" and all of its apostles!

About the Author

Alain Pilote

Alain Pilote

Alain Pilote has been the editor of the English edition of MICHAEL for several years. Twice a year we organize a week of study of the social doctrine of the Church and its application and Mr. Pilote is the instructor during these sessions.


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