Book Review: Money for Everyone

A Citizen’s Income Convincingly Argued

In ‘Money for Everyone’, Malcolm Torry delivers a blockbuster argument in favour of a Citizen’s Income to wholly or partially replace current benefits. His book is well-researched, well-informed, well-written, and is articulate and readable. His main argument is that, given widespread acceptance of a benefits scheme of some sort, then a Citizen’s Income is by far the best option. Specifically it avoids the disincentives of very high marginal deduction rates of current benefits which create the familiar unemployment and poverty traps. According to Torry, a Citizen’s Income would incentivise employment, training, new business formation, women’s participation rates, and can even reduce teenage pregnancy in Namibia. It is socially cohesive. It is less expensive administratively, less intrusive into the private detail of people’s lives, and less distorting of the markets for labour, goods and services. The Iain Duncan Smith / Steve Webb universal credit comes close, but is based on households rather than individuals as a Citizen’s Income would be, and is therefore deficient.

Torry’s very thorough presentation is worthy of the LSE tradition to which it belongs, established by major figures such as Richard Titmuss whom he frequently quotes. It offers a substantial social commentary. The excellent essay on poverty in chapter 11 is a classic case. Torry works as a vicar in London, and so has widespread awareness and understanding of the life situation of people with lower income struggling with a range of adversity, and this gives him great insight into the effect of benefits systems in the population. His deep study of the benefit system itself enables him to offer a uniquely powerful synthesis. The strength and extent of his argument for a Citizen’s Income appears to render it uncontentious. It is only civil servants whose jobs may be at risk who stand in the way, together with inertia in the political system.

The weak point is the lack of attention to economics, since herein lies one of the most powerful objective arguments for a Citizen’s Income. Only on page 122 does Torry mention the economic argument for a Citizen’s Income, where he presents Stewart Lansley’s argument that ‘income inequality reduces productivity’, so that wages and therefore consumption reduce, leading to the current crisis that only greater equality can resolve. This ignores an alternative powerful economic argument that the crisis has been driven by technology increasing productivity, reducing the wage and consumption element of output, raising output GDP above disposable consumer income, which has been corrected with unsustainable credit. According to this argument, the technology led wage reduction is inevitable and inexorable. Only a Citizen’s Income can replace consumer credit in order to raise consumption to match output GDP. In this model the Citizen’s Income would need to be spent rather than saved, perhaps by being distributed on stored value cards with the value expiring over time. It needs however an alternative theory of money i.e. that money is virtual and its distribution only has to respect output GDP and not be supported by gold reserves or government debt. This removes the need for Torry’s argument on the affordability of Citizen’s Income – it is output GDP which makes it affordable. These arguments would add considerably to Torry’s case. They also dismiss current deficit reduction and austerity policies as the nonsense they are.

* Geoff Crocker is a professional economist writing on technology at and on basic income at His recent book ‘Basic Income and Sovereign Money – the alternative to economic crisis and austerity policy’ was recommended by Martin Wolf in the FT 2020 summer reading list.

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  • “It needs however an alternative theory of money i.e. that money is virtual and its distribution only has to respect output GDP and not be supported by gold reserves or government debt.”

    I like the way you buried the highly controversial statement in the middle of a highly technical, long, final, paragraph. Why not entitle your piece “In favour of money printing”, as that’s a much more significant policy change then a citizen’s basic income.

    I’m in favour of the idea of a citizen’s basic income (although dubious that the economic fundamentals exist for it), but it’s never going to happen until you can make arguments in favour based on orthodox, rather than extremely hererodox, economic theory.

  • “It needs however an alternative theory of money i.e. that money is virtual and its distribution only has to respect output GDP and not be supported by gold reserves or government debt. This removes the need for Torry’s argument on the affordability of Citizen’s Income – it is output GDP which makes it affordable”

    Can you please give us an example using 2013 figures for GDP, population etc of (roughly), how much virtual money per month, could be placed in each adult citizens ‘spend card’?

  • Agreed. I’m also in favour of Basic Income, and would rather that we kept the post author’s ideas separate from those in the book. Introducing people to one unusual idea at a time is usually a good idea!

  • Also, I don’t think we need to worry about Citizen’s Income being spent – people with low levels of income tend to spend all of it, they have little choice in the matter.

  • Bill le Breton 13th Jan '14 - 12:36pm

    Tristan, you only have to put Geoff’s name into the LDV search box and all his excellent and consistent pieces come up. Similarly if you put his name into a search engine.

    Thanks for pointer to this work, Geoff.

  • How do you avoid disincentives to work with this system? And what do you do if people choose not to? Rather than talking about some abstract theories, how would it work in practice? And if this citizens’ income is available to all, how do we stop large numbers of people moving to the UK from poorer countries to take it up?

  • Thanks Geoff. I’ve copied n pasted from that link.
    — start of paste link ————-
    1. Fund the income gap by a citizen income. My rough calculation of the amount of citizen income which would have been needed to fund the income gap each year is:
    year 2005 2006 2007
    Citizens income £bn 25.4 21.3 44.8

    2. Do not count this as deficit spending added to cumulating government debt, but simply write it off each year.
    3. Distribute it on smartcards with the value expiring at the end of the year to encourage the income to be spent.
    4. Target lower income groups.
    — end of paste link ——–
    I’m not an economist, so you will have to correct my homework here please?
    ~ For 2007 the available citizens income seems to be £44.8 billion.
    ~The adult population that year would have been about 42 million (Adults)
    ~ I’m not clear if you are saying ALL adults get the CI or just lower income groups?
    However if ALL adults (in 2007) got the CI, the calc is:
    44.8 billion / 42 million which is £1066 per year or
    £88 per month? (in 2007)
    Is this about right, and if not then can you please correct?

  • It’s a great idea and would work in practice. However, the orange bookers won’t go for it – it would give too much choice and control to workers. They would actually be in a position of saying to an employer ‘I’ve had enough of you, I can afford to take 6 months to find a new job because of my basic income. stuff you’. At present of course such a worker can’t do this, the jobcentre would sanction him or her for leaving the job they hate. How could real liberals be against this? It’s about freedom and choice, it’s about giving people control over their lives against the authotarian strcutures of our society.

  • Aren’t we effectively trying to do the same thing anyway with Universal Credit?

    The problem is, at what rate and with what conditions should there be attached?

    “See the graphs he supplies in the text.”

    I would like you, as reviewer to give me some examples of how it works, rather than me having to shell out £25 to buy it.

    If our Citizen’s Income provides a decent level of support, what is to stop people from poorer countries moving here to take it up?

    I don’t see this as providing any concrete answers to the problems at the heart of the benefits debate in this countr, e.g. who is entitled, what do we do if someone isn’t entitled, how do we pay for benefits, how do we avoid people making themselves poor through negative lifestyle choices incentivised by benefits (e.g. having extra children)?

  • RC – ‘I don’t see this as providing any concrete answers to the problems at the heart of the benefits debate in this countr, e.g. who is entitled, what do we do if someone isn’t entitled, how do we pay for benefits, how do we avoid people making themselves poor through negative lifestyle choices incentivised by benefits (e.g. having extra children)?’

    A universal basic income is universal. You could make it open to everyone who has British citizen or who lives in the UK or both. It could be paid for via a system whereby if you received it throughout your life when you die a large amount of your estate goes to the government much larger than the current IHT. Or we could just charge the rich more in taxes. There are many way’s to do these things, I think the important point is do you agree with the basic principle of a universal income? If so, there is something to discuss. If not then it does not matter how clever the above answers to the problems you pose are, you will never come around to it. So do you agree with the principle of a universal basic income? If not, why not?

  • Geoff. Whilst my previous comment of 1.02pm awaits moderation, let me put something to you whilst we still have the momentum of the thread?

    Just suppose ?

    I’ve just found a property that I would like to buy in Poland.
    It is on the market, priced at £62,217. If I put up cash of £7,217 and get a mortgage of £55,000, at today’s rates it would cost me mortgage payments of about £290 per month, or about £115 per month interest only.

    Just a couple of questions :
    1. Could I use my Citizens Income (+ a top up form my earnings), to make mortgage payments for buying my house in Poland?
    2. If all EU countries adopted the Citizens Income policy, could I not ( by reviewing each year ), migrate to the EU country with the greatest GDP, and thus the greatest Citizens Income, and then use my ‘CI spend card’, to send the money back to a Polish mortgage company, to buy my house in Poland?

  • The main arguments I’ve seen against a citizens income is the disincentive to work, the cost and people from poorer countries coming and claiming it. I’m not an economist so I may be missing a trick here but would the below not work?

    Disincentive to work – Make the income enough to cover the very basics (Food/Fuel/Shelter). If you want a 52 inch TV that’s fine but unless you have additional income it’s going to mean you don’t eat for a week.

    Cost – Everyone who can vote in natioanl elections are eligible and all other benefits/person la tax credits abolished (except disability benefits), so minimal administrative cost. Additionally if the citizens income is £X then the first 2x£X should be taxed at 50%. (All income after 2x£X to be taxed as now) . This also helps to reduce disincentives to work. You will never be poorer in work than out of work.

    Benefit tourism – The income goes hand in hand with being a UK citizen. It should be restricted to those people eligible to vote in UK national elections. (Not sure how that will stack with EU obligation though). Besides, as the level is subsistance only any tourist would still need a job for anything more and would still be paying 50% tax on the first 2x£X they earn.

    What am I missing?

  • @ Geoff – Excellent post, I haven’t ready Torry’s book but it certainly sounds worth ordering.

    Your idea of the declining value of money placed on a card is certainly an interesting one. I don’t know whether you’ve read much by Miles Kimball from the University of Michigan, who’s particularly interested in electronic money. The idea of a negative interest rate (when necessary) on a basic income cash-card chimes with some of his work quite well, and could be a useful monetary policy tool as well as an effective welfare program.

  • Eddie Sammon 13th Jan '14 - 3:27pm

    This theory that creating new money is the key to prosperity is a scam. I am very disappointed that LDV continues to publish this stuff.

  • Maybe it is a “scam”, Eddie, and maybe it isn’t, but either way, why would you want LDV to allow only one point of view to be expressed? For one thing, you’d lose all the fun you have railing at these awful terrible horrible ideas (don’t pretend: you know it’s what keeps you coming back here); and for another, if LDV starts enforcing some sort of ideological orthodoxy, you might find yourself getting the short end.

  • I think David-1 is right. LDV ought to be a rough and tumble, ‘market place’ of ideas and policy thoughts.
    Once ideas exit the LDV machine, having been through the wash n spin cycle, it becomes clear which ideas have merit, which are scams, and which are born of fairy dust. And, as each time Citizens Income appears, but never bears close scrutiny, we can safely say that it is little more than fairy dust, born from an academia meme.
    Keep that £24.95 in your pocket and spend it on something useful.

  • Eddie Sammon 13th Jan '14 - 6:17pm

    David, I love ideological debates, but there is a difference between opinion and lies. If I see any more attempts to make money from these false theories then I’ll be contacting the police.

  • David Allen 13th Jan '14 - 7:10pm

    Eddie, I don’t think bullsh*t is a criminal offence, I’m afraid!

  • David Allen 13th Jan '14 - 7:18pm

    If you “avoid the disincentive of high marginal deduction rates” by paying out much more money to the moderately poor, then you have to get that money back from somewhere else. IDS is doing it by clobbering the disabled and levying the bedroom tax. His cure is worse than the disease.

    Citizens Income looks just like Universal Credit, only a bit more complex and a bit more utopian. Universal Credit is proving too complicated for Government IT. Are we really going to take seriously a system which takes all the problems of UC and makes them worse?

  • @Geoff
    You presented this article for discussion, and have on several other occasions before, tried to fly this notion. The article looks increasingly like any other scam, where some snake oil salesman asks, “Buy this book on ~ How to make a Million from Fairy Dust”
    If you are as up to speed on this Citizens Income as you think you are, then you should be able to reply to the very real and simple questions that I posed above. Why should I have to lay out £24.95? Your refusal to answer my questions above tells me clearly that you can’t support the idea, and your theories do not tally with the real world.
    If I am wrong, let’s have less of the verbal shell games and subterfuge, and, answer my questions above. Let’s see exactly how your ‘Virtual Money’, ideas survive in The Real World.
    And that challenge goes out to any others that think Geoff’s Citizen Income is the way forward. I think you know who you are…Bill ?
    Stop asking for £24.95 cash up front. Defend the idea, or ditch it.

  • @ Geoff Crocker

    “RC, the aim of any book review is to encourage you to buy the book!”

    If you haven’t explained clearly some of the key ideas in the book, why should I want to buy it?

    This whole idea has as many holes in it as a Swiss cheese and you can’t even use it to make a fondue!

  • Bill le Breton 14th Jan '14 - 12:48pm

    John D, until quite recently Citizens Income was Party Policy. The last time I had any contact with David Laws he told me he was still warm to the idea. The problem is housing costs and varying rent levels around the country.

    The ‘great’ Sam Brittan for instance has been an enthusiast for many years. Not known for his lies and scams.

    Geoff’s tutor is right: too few people understand ‘money’, as is obvious from a number of contributors here, whose economics seems not to have caught up with either New Keynesian Economics or Market Monetarism

    Of course anyone is free to argue against them, but they are not ‘lies’ or ‘scams’. Nor the views of cranks. They are mainstream. And combinations of their policies are at the heart of monetary policy conducted by the Fed in the US, the Bank of Japan, the Bank of England and, it looks as if ‘at last’, the ECB.

    For a top class revue of issues around central banking by one of the most influential central bankers, Mark Carney, our Quad’s choice as Governor of the Bank of England, is available in his paper on CB Guidance given as Governor of the Bank of Canada here

    For Professor Scott Sumner’s clearest explanation of his recommendations here

    And finally, probably the finest and most influential central banker and voice on monetary policy Lars E.O. Svensson publishes here:

    None of these people are ‘selling anything, so I can’t see why people don’t make a mug of tea and do some reading about policy in the year 2014 – rather than continuing to show their considerable learning from 1974.

  • @Bill le Breton
    I notice you also, refuse to answer the questions I posed above in relation to Citizens Income? And that is because you too, are stumped for a cogent answer, when it comes to CI application in the real world.
    It’s cheap and easy for you to use the same technique as Geoff to put down all of us ‘lightweights’, who simply don’t understand money. What the ‘lightweights’ are saying to you and Geoff, is that we don’t need to waste money by buying a book, when the very idea is clearly daft from the outset.
    You have the opportunity to prove the idea here and now, with answers to my earlier questions, and show that it will work in real world applications.?
    Practical examples please?

  • @ Bill & Geoff
    And that quoting of famous names and ‘learned scholars’, doesn’t wash with me. Let’s not forget that Isaac Newton lost his fortune in the Tulip Mania scam. And lord knows how many ‘learned fellows’ fell for Bernie Madoff’s ‘lets all get rich from thin air’, scam?
    Citizens Income is another of those ‘looks good on paper’ scams that have clearly taken in many people of intelligence.

  • @ Geoff Crocker

    I don’t think I’ve been especially impolite. Not on this thread at least. And Caron makes sure I don’t stray too far in that direction anyway.

    What I don’t see is that anyone has resolved all the fundamental problems presented by the practicalities of how you administer such a policy in the messy real world, from funding to incentivising negative choices and eligibility.

    @ Bill le Breton
    “I can’t see why people don’t make a mug of tea and do some reading about policy in the year 2014 – rather than continuing to show their considerable learning from 1974.”

    Ahem, 1989 actually. Which is still a long time ago, but the fundamental principles of economic thought have not been rewritten since then. And I still don’t see the virtues of NGDP targeting when you can’t control the split between inflation and output growth. An NGDP growth target of 4% per annum could be consistent with either virtuous growth of 3% real GDP and 1% inflation or rampaging stagflation, with a 4% contraction in GDP and 8% price inflation.

  • In the ping pong debate with regard to Citizens Income, there seems to be a sub-text here, in that, intelligent people can’t possibly be duped, by theories that look ‘doable’.
    You can buy, or borrow from the library, any number of books that set out show Zero Point Energy, and ‘N’ Machines, which claim to give an output of energy, greater than the energy put into the machine. A huge number of very intelligent and learned scientists, have wasted time on those scams also.
    I can only guess why it is, but it is as though sometimes, otherwise intelligent people ‘want to believe’, and this desire makes them throw away the magnifying glass of scrutiny, ignoring and dismissing anything that does not fit the theory.
    Citizens Income is clearly in this camp of looks good on paper, But

  • Eddie Sammon 14th Jan '14 - 9:32pm

    Right, I’m taking legal action.

  • Bill le Breton 15th Jan '14 - 12:10pm

    RC, but you write as if no-one of any substance in the world considers it viable or potentially necessary.

    Here is the present Governor of the Bank of England, just over a year ago when Governor of the Bank of Canada:

    “From our perspective, thresholds exhaust the guidance options available to a central bank operating under flexible inflation targeting.

    “If yet further stimulus were required, the policy framework itself would likely have to be changed.19 For example, adopting a nominal GDP (NGDP)-level target could in many respects be more powerful than employing thresholds under flexible inflation targeting. This is because doing so would add “history dependence” to monetary policy. Under NGDP targeting, bygones are not bygones and the central bank is compelled to make up for past misses on the path of nominal GDP (Chart 4).

    “Bank of Canada research shows that, under normal circumstances, the gains from better exploiting the expectations channel through a history-dependent framework are likely to be modest, and may be further diluted if key conditions are not met. Most notably, people must generally understand what the central bank is doing – an admittedly high bar.20

    “However, when policy rates are stuck at the zero lower bound, there could be a more favourable case for NGDP targeting. The exceptional nature of the situation, and the magnitude of the gaps involved, could make such a policy more credible and easier to understand.21

    “Of course, the benefits of such a regime change would have to be weighed carefully against the effectiveness of other unconventional monetary policy measures under the proven, flexible inflation-targeting framework.”

    If he were concerned by your argument, would he not have listed them? Would he even have dedicated 5 or so paragraphs to its consideration?

  • Eddie Sammon 15th Jan '14 - 12:45pm

    Here’s Martin Weale of the Monetary Policy Committee rubbishing NGDP as a magic money tree:

    Interestingly, he is the first person I have seen raise my main criticism of NGDP targeting, which is people on fixed incomes:

    ” if we were to have faster inflation in the way you describe we would be hearing quite a lot from people on fixed incomes and we would probably also see the market drive up yields on government debt which could be something that would pose a burden for the taxpayer even if inflation did eventually come down.”

    The fact the Social Liberal Forum nearly voted for this filled me with fright, something I made very clear at the time.

  • I’m very much with Geoff Crocker on citizens’ income. For those who don’t want to shell out for Torry’s book, Frances Coppola offers an intriguing insight into when a version was used in Britain – Pitt the Younger tried to write it into national legislation – and why it eventually failed (for extraneous reasons).

    Also well worth reading is another piece (link lifted from the comments to the above) discussing a 1970s experiment in Manitoba where a ‘basic income’ scheme dramatically improved outcomes across a range of measures such as education and health. What’s not to like?

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