Why DDF policies are relevant

 

Every idea has its time.

Some eminent persons have recently lent weight to the need for three of the four pillars of DDF policy.

Johann Rupert, Chairman of Richemont, recently observed that he backs governments introducing universal basic income for all citizens to cope with the economic upheaval sweeping the world and that the new economy necessitates giving people time to ”re-skill” themselves see here. The relevant DDF policy is for a Basic Income Grant.

Former South African Finance Minister Pravin Gordhan speaking at a University of Johannesburg function, (see here) observed that while there were benefits and winners from globalisation, there were also downsides and losers, creating an instability and unpredictability that has forced “sheer misery” on millions across the globe, who march barefooted from one country to another while at the same time becoming victims of xenophobia and other forms of attack. He adds that all future global policy frameworks should include how to solve this inequality. He gave as examples of losers and what happens when they realise they are losing out, as the outcome of elections in the US, France and Brexit.

He further points out that we have to recontextualise what a social safety net means. We have to put in place, as societies, as economies, new kinds of social safety nets which will ensure that people who are not just poor but who are able, willing, educated, trained, but can’t get a job, can still receive an income.

He also said that “if rich people and big companies are evading or aggressively avoiding tax, or live in multiple jurisdictions as a result of which they pay pay tax nowhere at the end of the day, where is the fiscal capacity going to come from into the future?”

Relevant DDF policies are the Basic Income Grant, Total Economic Activity Levy or TEAL, and Sovereign Wealth Fund .

Adding his weight to the need for change is Finance Minister Malusi Gigaba who quotes the definition of radical economic transformation (see here) as changing the structure, ownership and institutions of our economy to include all South Africans in opportunity and wealth creation, particularly marginalised groups such as black people, women and youth but offers no viable means of achieving these goals.

Relevant DDF policies are the Basic Income Grant, Total Economic Activity Levy or TEAL, and Sovereign Wealth Fund.

On a more esoteric level, Andy Becket examines a philosophy called Acceleration, born of the ever increasing pace of change in the world. In his article Accelerationism, how a fringe philosophy predicted the future we live in, he observes that “the world is changing at dizzying speed – but for some thinkers, not fast enough”. He asks the question, “Is accelerationism a dangerous idea or does it speak to our troubled times?”

Observing that much of the world has got faster, “that working patterns, political cycles, everyday technologies, communication habits and devices, the redevelopment of cities, the acquisition and disposal of possessions – all of these have accelerated”. The development of the philosophy has gone through stages from the weird to the pragmatic (see the article Accelerationism ) and recent advocates, Nick Srnicek and Mark Fisher founded a new political philosophy derived from Accelerationism: “left accelerationism”.

Srnicek and Fisher’s book “Inventing the Future” 2015, argues for an economy based as far as possible on automation, with the jobs, working hours and wages lost replaced by a universal basic income. Sounds like something out of Science Fiction movie, but if you can get your head past the radical economic transformation which that implies and which Gigaba ostensibly wants, it becomes not just imminently doable but entirely unavoidable.

Again, relevant DDF policies are the Basic Income Grant Total Economic Activity Levy or TEAL and Sovereign Wealth Fund.

These are not the only voices in the debate around a basic income grant. Pilot applications are happening all over the world, from as close to home as Namibia to as far away as Finland. While these schemes are cautious and mostly aimed at supporting the elderly and unemployed, the DDF believe that we should not have a bunch of bureaucrats issuing judgement on their citizens as to who is and is not deserving, but that the BIG should be a universal right applicable to all of a nation’s citizens, irrespective of their health, wealth and the stage of their lives.

The DDF believe that the Basic Income Grant and the Sovereign Wealth Fund in tandem, at first funded by TEAL, will address many of the economic needs of South Africa. If you think of a BIG as being an investment in the demand side of the economy and TEAL as being an affordable and equitable means of funding both the fiscus and a BIG, then what at first appears fanciful becomes viable.

How is this significant for the DDF? It lends weight to the credibility of DDF policies that so much of the rest of the world is engaged in examining the viability of policies similar to those of the DDF. The DDF are not alone. We are not just an isolated band of extreme economic and social theorists. We are pragmatists seeking a working solution to the problems outlined by Johann Rupert, Pravin Gordhan, Malusi Gigaba, Andy Becket, Nick Srnicek, Mark Fisher and many others throughout the world. DDF policies need to be given serious consideration by anyone who is even just a little concerned for the future of South Africa and indeed the world.

While many are saying that yes we need a basic income grant, while agreeing with them, we have determined the means of funding a universal basic income grant through the application of TEAL. That makes the DDF feel just a little special and gives the DDF a sense that its time is coming.

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