A suggestion to revive an old policy:
The EAS was launched in 1981. At the time unemployment was hurtling towards three million, and a shocking 30pc of young people had no jobs. The Specials’ Ghost Town was a great song but it also topped the charts that summer because it reflected the bleak prospects most of its audience faced.
The EAS paid anyone who signed up £40 a week, about £160 in today’s money, for a year. They had to be unemployed, and they needed £1,000 in savings or loans. But that was about it. True, you had to submit a business plan, but didn’t need to get your idea approved. There were no committees monitoring your performance. There was nothing to repay, and the support wasn’t scaled back if the business made money. You could just go off and try something out, with some free money to help you along the way.
There is Richard Layard’s great point to consider:
If you pay people to be inactive, there will be more inactivity. So you should pay them instead for being active – for either working or training to improve their employability.
If unemployment is going to be high you might indeed usefully pay people to go and do something rather than the unemployment restriction of you must do nothing in order to gain your dole.
As to the what is being usefully done it’s to explore the universe of things that can possibly be done and see how they match up with what people want to have done. The last time around, that EAS, led to the establishment of Viz. Who knew that what the country really needed was a scabrously foul-mouthed comic? But it did.
The truly important part of the scheme being that no one did pick between ideas before they were funded. It was a true exploration of that envelope of possibilities, not solely of the much smaller set of those approved of - or even understood - by the bureaucracy.
One more point to make. The worse we think the situation is then the more this makes sense. Say that you are insistent that coronavirus changes everything - as the opinion pages of many newspapers are indeed insisting. Or that inequality does, or resource exhaustion, or climate change or whatever is leading to that same conclusion, all must change. So, all must change then. And if all must change then we need to explore all of the universe of possibilities available to us before the selection of those that do take over.
This being exactly the thing that entrepreneurs within a market economy do better than any other system.
If we’ve got to subsidise those unemployed we might as well get them doing something useful for the society as a whole. The more the insistence that change must happen then the more insistent we should be that the subsidy is to explore the changes available.
The worse you think the situation is therefore the more you should be supporting the idea of paying people a couple of hundred pounds a week to go off and have a go. Undirected by the bureaucracy, of course.