Hi Nouriel,



Did globalization cause Brexit?



Yes it did -- but the other half of the equation is the democratic deficit in Brussels.



Which, due to that democratic deficit there, allowed all sorts of problems to flourish that in a more profound and more intentful democracy would have been handled in the normal course of governance.



Low ambition in the 'democracy department' of the EU is responsible for porous EU borders, excessively high immigration loads for some EU nations, high unemployment, higher crime / ghettoization (check Sweden's experience for one example, though they tried mightily to avoid it) offshoring of jobs, and so much more.



Yes, I agree, globalization is a net gain to the global economies, and to national economies. Unchecked globalization *has* caused a host of ills -- that so far, haven't been addressed.



From the Swiss referendum result in 2014, to Brexit in 2016, to ghettos in Sweden of all places(!) higher crime, job losses, etc... It's quite a long list.



And the unelected mandarins in Brussels were too busy counting their money to take notice.



In case they missed the message, it's this; You Can't Feed a Family with GDP.



What needs to happen now, is that the bottom-two economic quintiles need to become empowered by government policies.



Two-fifths of the population of the UK and other EU nations (but my example will centre on the UK) need the following policies ASAP:



1) Every citizen that earns less than 25,000 euros per year, should no longer be required to pay income tax.



That will add disposable income by the exact amount that they presently pay in taxes.



It would protect millions of Britons from severe economic hardship and lower the pressure on welfare rolls -- at relatively low cost to the Chancellor of the Exchequer.



Once Britain leaves the EU, the amount could simply switch to 25,000 pounds, annually. (A bit of an upgrade for them)



2) Annual transit passes, free of charge, to those who report earnings of less than 25,000 annually.



In those tax brackets, the difference between having the ability to go out and look for work, or not, is the price of a bus ticket or subway ticket. (Yes, really)



And then, what to do if they actually land a job? Until their first paycheque, they can't afford to travel back and forth to their new job.



It creates a terrible dilemma for people in those sorts of situations.



3) Free medical and dental coverage, and free doctor-approved prescriptions for those who report under 25,000/yr on their income tax forms.



Yes, that sounds expensive. However, taxpayers are paying for all of that and more now!



Emergency room visits (which are extremely costly) for everything from medical problems, to abscessed teeth, to patients that can't afford their life-saving medications, etc, are FAR MORE EXPENSIVE to the nation, than are basic and free med, dental, prescriptions coverage for people in those tax brackets.



Not to mention days lost (and jobs lost) due to illness that people in those tax brackets can't afford to properly address.



In any detailed study of productivity in the United States, a telling stat is always found by diligent researchers -- and that is, productivity would increase 18% from its current level simply by having (an entity, like a corporation, or any level of government, or an NGO) pay for the under $25,000 workers to have free universal healthcare, free dental care, and free prescriptions.



Yes, it matters to productivity that much.



By fully covering these people, wait times in Hospitals are drastically reduced, emergency room budgets fall, days lost due to illness falls dramatically, and jobs lost due to longer-term illness than corporations usually tolerate, falls dramatically.



Free basic medical, dental and prescription coverage for those in the under 25,000 tax bracket becomes a *net gain* for the nation -- as compared to the present status quo.



And it's a big net gain.

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If all three proposals were enacted in the UK; Instead of 2/5ths of the population being negatively affected by globalization and being permanently angry about it, fully half of them would be able to see modest economic success, health improvements, employment prospects, and general quality of life improvements...



...Leaving only 1/5th of the population to be concerned about. And only an economic boom -- or a Guaranteed Basic Income (GBI) that replaces welfare and other social programme spending (of approx. 1000 euros per month) is going to solve the problems of the very bottom economic quintile.



And let's not forget, their problems are our problems -- because those poor, disillusioned, and angry citizens tend to engage in more property crime and assaults, therefore, they require more per capita policing, court time, incarceration, and medical treatment -- and society pays for all that.



The bonus for corporations and the government is an 18% increase to the existing productivity stat which will help the corporate bottom line and improve national GDP.

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It's a mistake to simply pay them all a Guaranteed Basic Income, however. A country cannot afford to pay 2/5ths of it's citizens a GBI.



But by lowering the income tax burden, the medical burden and by lowering the transportation costs for 1/5th of the population, that particular economic quintile won't need the GBI...



...Leaving only the bottom economic quintile needing GBI, in addition to the three other benefits noted above.



Not only is that affordable, it's a net gain for a country.



It would be a great thing to see the UK be the first nation to address the inequality caused by (an otherwise great) globalization economy, to see productivity increase, to lower societal costs, to see more employed/employable workers, and to see healthier citizens.



And voters would tend to re-elect incumbent politicians, instead of anger ruling their voting decisions.



Thank you, Nouriel, for tackling this topic, and for setting an important conversation in motion.



As always, very best regards, JBS