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Proposes a state job agency, guaranteed basic income, a state continuity agency and rationing function. This paper is for those involved with framing a systemic response to the current global pandemic as well as other risks, like IT attacks. We intend to provide a discussion basis to help government policy makers explore the options available in the adjacent possible. We offer it as a work in progress – and recognise that it is better to start immediately considering the long-term responses to, and lessons from, this pandemic.
Concept paper for Economic System Planning
Concept paper regarding the need for
economic system development in the
light of virus pandemic
This paper is being distributed to those involved with framing a
systemic response to the current global pandemic. We intend that
this report provides a discussion basis to help government policy
makers explore the options available in the adjacent possible. We
offer it as a work in progress and recognise that it is better to
start immediately considering the long-term responses to, and
lessons from, this pandemic.
We are looking forward to hearing from you
Stephen Hinton
Co-founder, Invest in Peace
Concept paper for Economic System Planning
The proposal aims at installing a basic, nation-based capability to resist challenges like pandemics. This capability
will preserve the essentials of the economic system through the crisis, will mobilize people to work in critical
functions and will directly help people and organisations in financial stress. It will also lay the foundations for the
transformation of the economy post-crisis to one which works with equality and within ecological boundaries. It is
not a solution that targets the whole economy. Rather it looks at maintaining a resilient core. It is neither based on
any particular school of thought nor economic theory, rather it is based on looking at the present system and seeing
what a few practical next steps might be.
The current crisis has shown there is a disconnect
between the way we organise production via private-
owned producers on one hand and the need for basic
services and employment on the other. It only takes a
drop in demand for companies to begin laying off
workers, starting a downturn spiral where those laid
off have no money to buy from the companies still
operating. And a lack of components from a virus
stricken-supplier can be enough to stop
production, halt sales and again land the company in
Private-run companies may function well in times of
economic stability, but under crisis they experience
internal stress and are unable to provide the goods
needed. Indeed, they are unable to offer jobs, which
are the cornerstone of the modern society.
The crisis has also highlighted an important role for
the nation-state: a duty of care to all living in the
To ensure continuity under crises and times of
economic depression core functionality is needed.
This proposal is for an adjacent possible” solution
that modifies elements of the current economy to
introduce a higher level of core stability.
Note that only the core of the economy is covered by
this proposal other parts of the economy can
continue or be addressed by other solutions.
The essential elements are represented in the
diagram above. What is new is:
1. A Basic Income Guarantee (BIG) that is
given to citizens without work and who are
working under the Job agency.
2. A Job Agency that employs all citizens
otherwise not gainfully employed. The job
Agency places them with core producers or
hires them out to other producers or even
charities, local authorities etc.
3. A Rationing Agency that works to keep
prices stable and prevent profiteering. The
rationing agency works on volumes of essential
services and goods and provides a volume
guarantee. That is to say it pays for unsold
product. As necessary, the Agency can
Concept paper for Economic System Planning
distribute goods and services free to all citizens
or to those who cannot pay for them.
4. A Continuity Agency that works in various
forms of Private-Public-Citizen Partnership to
provide capital and staff to core producers. If
core producers cannot pay staff then their
wages are covered by the BIG.
The continuity agency is also responsible for
the stewardship of key mineral and living
material resources, including stewardship
responsibilities as part of continuity
What is present in most economies today is:
Government: with a duty of care to see the
economy functions and citizens receive care
Core producers: these cover government-
run organisations like the health
service, Cooperatives as well as privately-
owned corporations, including banks. Core
producers includes foundations and charities.
Retail. Distribution of goods to citizens and
the source of VAT
Citizens, in this proposal they are all enrolled
in the Government Job Agency if not otherwise
Starting from the top of the diagram, the
Government funds the Basic Income Guarantee
which goes to citizens. These purchase goods from
Core Producers and participate in the Job Agency.
Core producers in turn get capital (if needed) from
the Continuity Agency, as well as planning support.
The Rationing Agency provides volumes and
purchase guarantee. The Job Agency provides staff
at zero cost if necessary.
The Rationing Agency makes sure volumes are
available, that citizens can only buy certain amounts
of them and that no-one profiteers by setting a fixed
If core producers can pay staff, this money goes back
to government to pay the BIG and volume
How it works
The Job Agency together with the Continuity
Agency ensure that there is always capacity in the
nation to provide basic needs. At the same time
citizens are always offered positions with
organisations, even with charities so they are able to
feel they are contributing to society.
The BIG ensures people can pay for the basics.
The Rationing Agency ensures there is enough for
all at prices that work for all.
Core producers are protected by the continuity
agency and rationing volumes as well as the
possibility to get sufficient and free staff. The
continuity agency will on the other hand ensure that
in return for the removal of risk the organisation will
have restricted capital outflow in terms of dividends.
The Continuity Agency ensures that natural
resources are available for core production and that
the living environment is regenerated to allow
further provision for future generations.
Identifying the desired outcome of a resilient
The main challenge is to provide basic needs for as
long as the crisis continues. Using the light shed by
the current CONVID-19 pandemic, we can start by
simply identifying the systemic desired outcomes
needed to achieve a society with a base resilience and
Stabilization of incomes where citizens have
enough to cover their basic needs
A flexible workforce that can be deployed
in, for example, health care, social care,
environmental damage control and even
employed in the transition to a more robust
and resilient society
Affordable housing
A stable financial system based on real
estate and financial assets
Ensuring continuity for firms and their
transition to the sustainable economy
Redress the lack of resilience that causes
the risk
A national boundary approach to provision
of the basics: production and rationing.
National borders present both challenges and
opportunities. As a nation-state, controlling borders
can help during quarantine if there is a pandemic.
Should the global supply-chains risk breaking down
the nation-state can organise a basic needs provision
within those boundaries. Each nation-state has its
own monetary system and Central Bank, also
something that needs national attention in times of
How does money flow in the core part of the
Money circulates in a functioning economy.
Therefore, money spent into the core system returns
via taxes and fees. Money flows (red lines in the
diagram) from Government via BIG to retailers to
producers and back to Government via VAT and
Some money flows directly to producers via
investment and sales volume guarantee
Why should producers want to enrol in the
core program?
The advantages to companies of enrolling are that
they can reduced their risk:
The products are part of the rationing program and
thereby guaranteed a market and guaranteed income
by the volume guarantee.
Concept paper for Economic System Planning
Does the program protect the environment
and mineral legacy?
The program ensures environmental protection and
indeed restoration as part of the Private Public
Collaboration with Core Producers.
How does the Continuity Agency decide on
which companies to support?
The diagram above shows the decision steps that the
Continuity Agency can take: identifying the potential
to be part of the core program and applying the
assurance and support mechanisms as needed.
Does the program mean that countries
isolate themselves from others?
Not really. Just because there is a core of activities
that are nation-focussed does not mean that
countries cut themselves off from each other. All
non-core activities will continue as far as possible
under the crisis.
We imagine that the core activities will include
agreements between countries to further strengthen
each other’s core operations.
The core economy program follows the concept of
mutualism. Where there are four main elements in a
society, each element acts to be of benefit (directly or
indirectly) to the benefit of the other three.
At least the actions of one element should not impact
negatively on the other.
In the case of a core economy, producers promote
healthy citizens and environment.
Society the collective, or government provides
some stabilizing measures to core producers.
Even citizens are able to support firms by, for
example, in times of stress apply to continue working
at their firms, supported by BIG, even if the firm has
laid them off unable to pay them wages. Employees
might want to stay to see the firm through the crisis
and be ready when it lifts.
Evaluating the efficacy of CAG- RAG-BIG- J
Australian Economist Bill Mitchell proposes an
eight-point evaluation scale for fiscal policies.
The tool uses a high-medium- low assessment
of the following categories
Speed of implementation: can the policy be
implemented in a timely fashion?
Labour Intensive: Will the policy create jobs?
Multiplier: will the policy put money in people’s
pockets that they can spend and grow the economy?
Spatial: to what extent does the policy cover all the
country or just parts?
Green: to what extend does the policy stimulate
green practices?
Supply chain: will the policy work to interrupt the
supply chain? For example, by creating demand for
goods that cannot be ramped up in production.
Equity: to what extent will the policy benefit all
equally or even improve equality?
Low corruptibility: to what extent does the policy
allow or obstruct corruption?
Concept paper for Economic System Planning
The chart above shows how together the four
elements provide a solution that is fairly fast to
implement, creates jobs, has a multiplier effect, and
thanks to the CAG, is green. The CAG also ensures a
supply chain adequate to provide the basis even
when the economy is under stress.
The Sustainable Development Goals call for an
end to hunger, homelessness and joblessness. This is
a beginning. Let us have that dialogue.
For more information:
The concept of money circulating in a functioning
economy (and not accumulating with a few
individuals) is described in Bathtub Economics.
The idea of having a core functionality springs from
the concept of the need to have sufficient real capital.
Having sufficient to live on lays a foundation for
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