Diverse Funding Approaches
Introduction
Examples of Ways to Fund Development
Proposals
A BASIC INCOME FOR ALL PEOPLE AND A MARSHALL PLAN FINANCING SUSTAINABLE DEVELOPMENT FOR ALL PEOPLE
FOR OUR WORLD
AND A MARSHALL PLAN FOR THE EARTH
Old economic approaches are making way for new ones to meet the needs of a sustainable and safe global world.
Different methods of funding target different sets of problems.
For example a tax on consumer goods, discourages excessive consumerism and with it targets the depletion of natural resources and pollution
We invite you in this section to look at the plus, minus and interesting points of each method of funding to help discern how best each one can be applied.
How to do this:
Through a basic income: Many already receive a basic income which can be spent on individual development. For instance, old-age pensions and compensation for those unable to work are often financed from income taxes. The US State of Alaska provides all residents with a basic income funded by oil revenue: all are part-owners of the rich oil reserves. Brazil contributes funds for the development of the poorest provided that they send their children to school and/or have them inoculated.
Issuing tradable permits to citizens world-wide as a way to combat both Climate Change and Poverty. This method provides each person with a quota of energy for their use. This is like a basic income. Those not needing their full quota can sell a part to those seeking to use more. This is a way for countries to more easily meet the targets set by Kyoto or other international agreements.
Taxation: Universities, research institutes, and interested citizens have developed diverse creative methods of financing individual development by reshuffling existing tax systems; some discourage undesirable behaviours by replacing or supplementing existing ones with “polluter pays”, “consumption” or “currency exchange” (Tobin) taxes. Others suggest one equal basic income for all, so that the costs of administrating a country’s complex tax system can be greatly decreased and the money saved through a skeletal bureacracy can be used to help to finance the basic income.
Microfinancing: The Grameen Bank which provides small loans to microenterpreneurs, including beggars, has won Muhammad Yunis the Nobel Peace Prize; Trickle Up provides micro-grants to the very poorest. The micro financing is distributed via local NGOs.
Barter. The Local Exchange Trading System (LETSystem) is in use in communities world-wide. Time sharing is a form of barter used also in New York, whereby people exchange services: e.g one hour of gardening for one hour of tutoring or psychological counseling. In each case, there is a central form of accounting whereby each participant is listed both with regard to products and services offered and needs, so that whoever participates in a barter, pays to or receives points (called variously, Green Dollars, Stars, Noppes, etc.) from the system as a whole. There are plans to further develop the LETSystem into a global system.
Alternative currencies have been suggested to deal with a range of problems at the local level. Here is an example which has drawn comments by a number of Leaders (Part 3):
A Supplementary Global Economy: The late Dutchman Pieter Kooistra with the endorsement of Nobel Prize Winner Jan Tinbergen outlines how a global barter system can be used to finance a Supplementary Global Economy which would leave all existing economies in tact.
This would be financed by a hard virtual (or giro) currency with as collateral the extra marketable goods and services which emerge when the unmet needs for goods and services globally are linked with unmet need for additional markets. The extra currency can be divided equally among all to provide them with a basic income
This Supplementary Global Economy would address both material and spiritual poverty as well as a gamut of associated challenges by exclusively permitting trade in sustainable goods and services (as agreed upon with the input of citizens world-wide).
A BASIC INCOME FOR ALL PEOPLE AND A MARSHALL PLAN FOR OUR WORLD
Pieter Kooistra
A basic income for all people, only to be spent on goods and services for personal and community development. Financed by a Supplementary Global Economy.
Brief Summary
A very brief summary of the approach: Each person receives $250 worth in goods and/or services annually only for sustainable personal and community development (so no weapons, etc.). Soon, the poorest become more productive and developing economies begin to flourish. The wealthy only have access to non-material services. Here over-consumption makes way for sustainable lifestyles as business ads, capitalising on the new market, focus on sustainable goods and services.
Financing
Using computers to link people worldwide, a Supplementary Global Economy is created to link unmet needs for goods and services with the unmet need for new markets. The resulting extra marketable goods and services form the collateral for a new hard global currency. Through global linking there would be an estimated 7% increase in world production. This would form the collateral for the new global currency, which provides each person with $250 when it is divided equally among all.
Link to full description
Form.doc - Pieter Kooistra
FINANCING SUSTAINABLE DEVELOPMENT FOR ALL PEOPLE AND A MARSHALL PLAN FOR THE EARTH
Lisinka Ulatowska and Emile van Essen
Unleashing the potential in each human being without harm to people or planet
Summary
If all people were to receive goods and services to the value of US $ 250 each that can only be used for sustainable personal and community development, hunger, poverty and disease would rapidly decrease, productive and decent jobs be generated, women and the informal sector could be integrated into mainstream economies and important sources of conflict and terrorism would disappear.
Financing
The need for funding is summarized in table 1 (See the Form.doc) and has several levels to support this development: 12 year Global Organization $ 2 billion, per 2% of poorest population $ 34 billion per year, so 10% needs 170 billion, and for the total population 2.214 billion due to higher distribution costs in developed countries. After five to seven years, financial support is not anymore needed because of generated self- support, extra production, and tax revenues.
Link to full description
Form.doc - Lisinka Ulatowska and Emile van Essen
CONSUMPTION TAX
by the Institute for Entrepreneurship, University of Karlsruhe, Germany,
inspired by Goetz Werner
All current taxes (e. g. income tax and corporate taxes) are paid from money received for products, i. e. ultimately from consumers. It is more transparent to have it as one single and plain consumption tax (i.e. as a value added tax, VAT)
Brief Summary
There are two possible approaches. a) All social welfare is summarized into one basic income for every citizen and/or b) VAT is increased, the proceeds being used to pay a basic income. All other transfer payments and salaries can be reduced by the amount of the basic income. Resulting reduced costs for corporations and public services will lead (if and as competition is intact) to reduced net prices. These are the base for increasing VAT. The gross prices remain stable. The basic income can gradually increase, salaries and all other taxes can gradually decrease so can net prices (and so on).
Implementation
They must agree on the form of taxation, be it a type of Value Added Tax; or on combining social benefits into one basic income payment and lowering salaries by the equivalent amount
Link to full description
Goetz Werner Approach
Link to supplementary information
Goetz Werner page summary German
GLOBAL BASIC INCOME
by the Global Basic Income Foundation
Brief Summary
A Global Basic Income is a system which guarantees all people in all countries the means to satisfy their basic needs: clean water, food, clothing, housing, primary health care and education. This system should include everyone, without conditions. It should be global, because the increasingly global economic competition necessitates a social and environmental framework at the global level to prevent a ‘race to the bottom’ between companies and countries. Poverty eradication is a shared responsibility of humanity.
The GBI Foundation investigates different possibilities for introducing a global social security system that includes everyone. One possibility is a truly global system in which the United Nations has the task and responsibility to collect the funds and to distribute the Global Basic Income (GBI) to all people. Another possibility is that at the global level only the basic principles and outlines of a basic income guarantee for all people are agreed upon, whereas the actual responsibility for implementing this agreement is in the hands of national governments. Many different types of GBI are imaginable with different mixtures of global universalism and national autonomy.
Financing
For financing there are also different (combinations of) options. Currently we propose and explore three different possibilities:
1. All participating member states of the UN contribute the same percentage of their GDP to a global fund from which the GBI is paid to everyone. Countries are free to decide themselves what kind of taxes or premiums or other methods they use to raise the money.
2. Global taxes. A variety of global taxes are possible. Our first choice would be taxes on the ‘global commons’, i.e. natural resources that can be seen as belonging to humanity, such as the atmosphere or the oceans. Taxes on these global commons help to preserve them and if the are used for financing a basic income, they will give all people a share in the wealth of the global commons. A few of the most suggested options are taxes on air fuel, CO2 emissions and fish quota.
Link to full description
Form.doc by Global Basic Income Foundation
SOCIOECONOMIC DEMOCRACY
by Robley E. George
Brief Summary
Socioeconomic Democracy provides a comprehensive, just, realizable, freedom-enhancing, environment-respecting, democratic means of accomplishing not only the modest, though presently doubtful, Millennium Development Goals, but also simultaneously resolving or reducing a large number of other very real and crucial planetary problems, any of which could easily preclude realization of all well-intentioned MDGs.
Socioeconomic Democracy is a practical socioeconomic system wherein there exist both some form of Universally Guaranteed Personal Income and some form of Maximum Allowable Personal Wealth limit, with both the lower bound on personal poverty and the upper bound on personal wealth set democratically by all participants of society.
Financing
Both necessary funds and economic incentive to accomplish the MDGs derives from the democratically set maximum allowable personal wealth limit.
Link to full description
Form.doc by Robley E. George