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110
c.
it is based on assumptions which are no longer valid 
d.
although it is not perfect, it is the only economic forecasting tool available
10. «Going-out-on-a-limb tools» (11.65-66) are tools for
11. «This» (1.67) refers to __________________
SUBSISTENCE ALLOWANCE 
by Erich Fromm from The Sane Society, 1955
A hundred years ago it was a widely accepted belief that no one had responsibility for his neighbour. It
was assumed and scientifically «proved» by economists that the laws of society made it necessary to have a
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vast army of poor and jobless people in order to keep the economy going. Today, hardly anybody would
dare to voice this principle any longer. It is generally accepted that nobody should be excluded from the
wealth of the nation, either by the laws of nature, or by those of society. The rationalisations which were
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current a hundred years ago, that the poor owed their condition to their ignoranee, lack of responsibility —
briefly to their «sins»— are outdated. In all Western industrialized countries a system of insurance has been
introduced which guarantees everyone a minimum of subsistence in case of unemployment, sickness and
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old age. It is only one step further to postulate that, even if these conditions are not present, everyone has
the right to receive the means to subsist. Practically speaking, that would mean that every citizen can claim
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a sum — enough for the minimum of subsistence — even though he is not unemployed, sick or aged. He
can demand this sum if he has quit his job voluntarily, if he wants to prepare himself for another type of
work, or for any personal reason which prevents him from earning money, without falling under one of the
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categories of the existing insurance benefits, in short, he can claim this subsistence minimum without
having to have any «reason». It should be limited to a definite period of time, let us say two years, so as to
avoid the fostering of a neurotic attitude which refuses any kind of social obligations.
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This may sound like a fantastic proposal, but so would our insurance system have sounded to people a
hundred years ago. The main objection to such a scheme would be that if each person were entitled to
receive minimum support, people would not work. This assumption rests on the fallacy of the inherent
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laziness in human nature; actually, aside from neurotically lazy people, there would be very few who would
not want to earn more than the minimum, and would prefer to do nothing rather than work!
However, the suspicions against a system of guaranteed subsistence minimums are not unfounded from
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the standpoint of those who want to use ownership of capital for the purpose of forcing others to accept the
work conditions they offer. If nobody were forced to accept work in order not to starve, work would have to
be sufficiently interesting and attractive to induce one to accept it. Freedom of contract is possible only if
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both parties are free to accept and reject it; in the present capitalist system this is not the case.
But such a system would be not only the beginning of real freedom of contract between employers and
50  employees; it would also enhance tremendously the sphere of freedom of interpersonal relationship between
person and person in daily life.
SUBSISTENCE ALLOWANCE
Exercise
1. What aspect of the prevailing capitalist system was Fromm complaining about?
2. In what way would his proposal, if adopted, alleviate this problem?
3. Who does he see as the likely enemies of his proposal?
4. What does Fromm imply is one reason for the lack of freedom of interpersonal relationships between
persons in daily life?
IT'S ALL GREEK
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