How does one reconcile the advent of cryptocurrencies, proposals for Universal Basic Income, and another expensive CU employee buy-out? Perhaps the question is, how does one reconcile the economic lives of the technically inclined, the working poor, and the elite in today’s economy? All now require life-supports in our capitalist economic system as it gasps for breath in its late stages.
Cryptocurrencies are a financial tool to store wealth for those possessing monies presently unneeded and an income stream for those who are skilled in software development. For software engineers, cryptocurrencies are a get-rich-quick scheme that relies on ever-increasing prices of cryptocurrencies. For those trying to preserve their wealth, cryptocurrencies are an attempt to hedge inflation, maneuver with ease in global currency markets, and avoid taxes. It is debatable whether or not the world of cryptocurrencies provides a service or produces anything. The main “products” are virtual ledgers that record transactions and holdings using blockchain technology. The service it claims to provide is wealth preservation. For investors and computer programmers in this sphere, holding a job that produces something of value to society would entail wage labor, the very thing that is to be avoided because of its low pay and demand on one’s time.
Universal Basic Income (UBI), which has not been implemented, is a proposal to send a monthly stipend to social security number holders aged 18 and above in the United
States. Suggested amounts vary, but they hover around $1,000 per month. There is neither a work requirement nor means testing. It is sometimes referred to as “free money,” and like cryptocurrency, it involves the transfer of money without the exchange of either a product or a service. UBI is intended to supplement income, not replace it. This supplement could help finance goods and services for low-wage earners who struggle to afford basic necessities. However, it would serve another purpose: keeping wages low. If money were made available via a government-funded program, why would a private enterprise pay livable wages? Such a program, while not part of a capitalist utopia, could buy time for a capitalist economic system.
On July 1, the University of Colorado president Mark Kennedy resigned from his position after holding it for merely two years. Before his appointment to CU, Mr. Kennedy had an extensive career in business, politics, and higher education, which one could construe as confirmation of his membership in the elite class. From his background it appears that he has had to work his way into this class having started out as an accountant, earning an MBA from a public university, and rising through the ranks of corporate management. Although Mr. Kennedy will resign from his position, he has been granted a $1.3 million separation package. Compared to many golden parachutes, this amount is small, however it is being granted by a public university that is funded through tuition, tax dollars, and donations. Mr. Kennedy is not expected to work for this money, in fact he is being paid by taxpayers and students to not work. Like cryptocurrencies and UBI, Kennedy’s payout is a transfer of money without an exchange of either a product or a service.
Decades ago, Ronald Regan spoke of the need to leave capital in the hands of the wealthy via tax cuts, so it would “trickle down” in the form of new business creation. However, today’s reality is far different from this vision. Instead, we see the monied class purchasing cryptocurrencies to hoard their cash in computer ledgers, proposals such as UBI to placate millions of workers who have not seen real wage growth, and the elite vie for a limited number of positions, some of which actually pay one to stop working. Which of these three scenarios is an example from a functioning economic system? None. However, they are examples of the late stages of an economic system that allows a small percentage of its population to collect and control large shares of money and wealth, while the remainder may soon “eat cake” vis-a-vis UBI.
Until a more democratic workplace evolves that allows for fair pay structures and employee input on workplace decisions, we will continue to see the signs of these times play out in ways that untether fair monetary compensation from productive labor. How much longer these life-support measures for capitalism can keep the system alive is a question no one can answer, but all of us can take note of them and respond with a call for more fair wage and tax policies that hold the promise of a healthy economy.
Just Economics is written by members of the Economic Justice Collective of the Rocky Mountain Peace & Justice Center.
This opinion column does not necessarily reflect the views of Boulder Weekly.