Basic income vs. Capitalism

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2013/07/basic-income-vs-capitalism.html

by rwmj • 13 years ago

96 150 13 years ago

stumblingandmumbling.typepad.com

I wonder what we'd all pay to have garbage hauled away if we didn't have a ready supply of ex-convicts for whom this was one of the higher paying jobs available to them?

davmre• 13 years ago

Garbage pickup is one of the many jobs that will probably be obseleted by self-driving trucks. So, at least in the medium-term future, we'll likely pay less than we currently do.

fnordfnordfnord5• 13 years ago

Right, and I could make a living manufacturing those machines if it weren't for slave labor.

drblast3• 13 years ago

That's a really good question. There are all manner of dirty jobs that people only do because they have no other option except starve or steal. How that differs qualitatively from slavery is beyond me, but I do get the feeling that we aren't paying the "real price" for these services simply because we have plenty of ex-cons in the U.S. and seem happy to keep making more.

But aside from that issue, I think a basic income is the only truly fair way to operate a fiat currency. We know a few things for sure, and one of them seems to be that a small amount of inflation is good for an economy.

One way to inflate is to print money, and the way we do distribute "new money" in the form of debt is essentially a regressive tax. Much fairer would be to give everyone the same amount in cash form.

This system would be so simple it would prevent a lot of the abuses and favoritism of the current system. Imagine if the inflation rate were fixed; say a 2-3% increase in money supply each year, guaranteed, distributed equally among all citizens. It's really hard to game a system like that.

And that's probably also why it's not being seriously discussed in political circles. What's the advantage to politicians?

Forget "capitalists," this kind of thing is the worst nightmare for everyone who is currently a winner in the current system. If I were to propose to devalue EVERYONE's wealth by 2-3% a year so that I can distribute an equal amount to everyone, I could expect a huge fight from anyone with any accumulated wealth.

But as for me, I can't think of a more fair and humane way to operate a system of money.

dllthomas• 13 years ago

Inflation isn't based solely on M0.

mtrimpe• 13 years ago

For what it's worth; this comment should be at the top of this story.

nickik10• 13 years ago

People would still do those dirty jobs, those jobs would just have to over a higher overall payout then just BI. Services that are largly based on low skilled laber would probebly be more expensive.

But aside from that issue, I think a basic income is the only truly fair way to operate a fiat currency. We know a few things for sure, and one of them seems to be that a small amount of inflation is good for an economy.

It is not clear that a small amount of inflation is good for the economy. Also alternative montary transiation mechanism are not really unfair in any meaningful way. Also inflation is driven by expected montary growth, if the central bank has a credible target the would have to do very little or nothing to reach that goal.

You can not fiance any goverment programm by montary expention. Exept when you increase the speed of expantion but thats a bad idea.

Also giving money directly to people as a montary mechanism has a huge flaw, if you overshoot your targed you can not go back easly. The Central Bank buys and sells bonds/stocks instead of dropping money from airplanes because the must have a way to get money out of the system again. You could of course do that by equally taking from everybody bank account but that is not something goverment should have the power to do.

Also having 2/3% inflation does absolutly not mean that everybodys wealth is now 2/3% less.

I would really, really suggest to to first understand some montary theory befor you come up with your own montary system, its harder then you might think.

hooande2• 13 years ago

In reality garbage men make more money than any basic income would pay. The misconception is that a BI would cause no one to work because they were too busy driving ferrais and eating cuisine with their government money. But we're talking about a basic income here. Any job that pays more than the minimum will make someone seem wealthy when compared to the average person. Any one with a job, even a janitor, would have more money to throw around than most people.

Ex-cons in particular will be in a much better situation as far as we're concerned. There's no constant stress of being expected to find a job in a society that doesn't want to hire them. More importantly, there's less incentive to steal from one of us if criminals have an easy backup plan. People won't have to fake disability or become welfare mothers either, saving society a lot of money.

There are always unintended consequences, but 100% of them aren't bad. A BI will save a lot of money just by eliminating some of the perverse incentives of the current system. It won't necessarily destroy the work incentive either. As the OP pointed out, we'd get a situation where the only people who apply for a job are people who really want them. A government income doesn't destroy natural talent, interest or ability. We could end up putting ourselves into a situation where jobs are things people enjoy moreso than we do today.

_delirium• 13 years ago

One only need look at Germany to refute the strange claim that a basic income would cause nobody to work. It is basically impossible to fall out of the lowest bracket of the German welfare system (~€350/mo for a childless single person, higher if you have kids), and yet Germany has high labor-force participation.

There is probably some level of income at which it would be true. If Germans got €5,000/mo, labor-force participation might be lower. But that is not what people are advocating.

steveklabnik2• 13 years ago

I will say that 'vs' isn't strictly needed here; no reason the means of production can't be privately owned while BI is implemented.

Now, that would put a bit of hurt into the reserve army of labor, as the article mentions...

blake8086• 13 years ago

I suspect that basic income is a stable equilibrium given a "one person, one vote"-type of democratic system.

It's in each person's best interests to vote for more wealth redistribution if they're below the average, and there will always be more people below the average than above.

Further, it's in each politician's interest to both promise and deliver such a thing, as it helps them win first and following elections.

stdbrouw2• 13 years ago

But it's also very easy to convince virtually anyone that they're a part of the hardworking middle class that's keeping this country afloat, as opposed to those leeches that would use their basic income to hang around and do nothing.

runawaybottle2• 13 years ago

What middle class? The fact that we're discussing an across the board baseline income is indicative of the state of the "middleclass". What a disaster, hate to be so melodramatic.

Those leeches are the least of our worries.

brownbat• 13 years ago

capitalists, who want a large labour supply...

Even Friedman argued for the NIT, noting it was less paternalistic than food stamps or other benefits to simply let the poor allocate their money however they see fit (and simple transfers would likely lead to lower administrative costs).

But this implicit line that there's a secret cabal of "capitalists" all persuaded by some idea that they never publicly proselytize, but all coordinate action in order to pursue... it sounds a bit conspiratorial. Cribbing lines from marxist economic theory, it's going to alienate half your audience or more, and immediately make the argument deeply partisan, when it needn't be.

I mean, believe that line or not, but I think the argument is stronger without falling down the rabbit hole of pretending to know what "the capitalists" are up to.

yk2• 13 years ago

But this implicit line that there's a secret cabal of "capitalists" all persuaded by some idea that they never publicly proselytize, [...]

The way the Marxist argument for class interest works, is that there does not need to be a secret cabal. To discuss this in the context of basic income (BI): Some capitalists, that is some owners of capital, depend on cheap unskilled labor. Each of them concludes independently, that a BI is against his own interests, since it would reduce the incentive to take unpleasant jobs and force them to pay their workers more.

Or more generally, some people have similar interests, not because they conspire, but because they are in a similar socio-economic situation. And this socio-economic situation generates class interests. ( Marx then goes on to argue, that the capitalist class can more easily leverage its interests, and therefore the workers need class conscious to counter this leverage.)

derleth14• 13 years ago

Marx then goes on to argue, that the capitalist class can more easily leverage its interests, and therefore the workers need class conscious to counter this leverage.

And anyone who disagrees with Marx on hearing his ideas is suffering from False Consciousness and needs to be Re-Educated, perhaps in a Camp somewhere.

woah• 13 years ago

Thanks for the clear explanation. It annoys me when people assume that any observation of aligned interests is an allegation of conspiracy.

Daishiman• 13 years ago

There's no necessity for a conspiracy; it's in all self-interested capitalists (the majority of them) to have a large supply of labor. Collusion towards those interests is quite implicit, especially if you have political parties that stand for those values quite openly.

calibraxis• 13 years ago

Adam Smith got away with it in Wealth of Nations: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

And in his Lectures on Jurisprudence: "Till there be property there can be no government, the very end of which is to secure wealth, and to defend the rich from the poor."

It's not a secret cabal of capitalists. It's capitalists acting as they're incentivized (or perhaps fail and be replaced by those who will). Wouldn't we naturally observe institutional forces in feudalism, the former USSR, chattel slavery, etc; and be astonished by people living in those societies not seeing the obvious?

wavefunction• 13 years ago

There are plenty of folks who like to say they love Adam Smith but have either never read his works or seem to conveniently gloss over his very real problems with privilege and inequalities.

I really love him and Hume though, what amazing thinkers and especially ahead of their times!

icebraining3• 13 years ago

Don't confuse capitalists (those who control the capital) with supporters of capitalism like Friedman.

Capitalists do lots of things that go against what Friedman et all defended. Lobbying for governmental privileges and self-serving regulation is a common example.

praxeologist2• 13 years ago

That lobbying is corporatism, not capitalism. It's frustrating to attempt to talk to leftists because they conflate the two constantly.

As an anarcho-capitalist libertarian I don't advocate a guaranteed minimum income however I think it would be preferable, given whatever amount of government intervention in the economy, to have one since it would somewhat insulate the poor from the rest of the intervention.

nickik10• 13 years ago

I agree. I am a very strong pretty strongly free market and I think the Basic Income is generally a good concept, atm its not a politicly viable option to have no social wellfair system so it might be that the basic income is the best.

Also note that Friedman wanted the NIT as a transition system and then throw it away.

rokhayakebe2• 13 years ago

Let me rearrange it for you.

there's secret cabal of "capitalists" all persuaded by some idea that they never publicly proselytize, but all coordinate action in order to pursue... it is not conspiratorial, but it is implicit.

Indeed, this is a code, similarly to how you don't have to tell your best friend not to hit on your ex, yet. You know it, s/he knows it. Just because it isn't said, does not mean, it is not well understood.

od2m2• 13 years ago

So sick of non-economists advocating economic policy which they don't understand.

Welfare programs of any type are only viable when the ratio of payers to payee's is high. They're desirable at this level. However, entitling every citizen to money which for he does not have to work for exposes the government to UNLIMITED liability as humans are free to create more humans at any time they choose. We cannot expand the GDP any time we would like, in fact paying people not to work removes the excess value of their labor from the GDP (assuming there was a job for them).

When you total up Social Security, Medicare and Medicaid debts the United States is completely broke. Something on the order of 100 trillion dollars of future liabilities. We can't even afford our modest socialism we have now.

TLDR? The numbers don't work.

fleitz• 13 years ago

'basic income' or 'negative income tax' is an idea supported by Milton Friedman, who is generally regarded as a knowledgable economist of the Chicago school and a critic of many aspects of the Keynesian welfare state. You may know Milton Friedman from such economic ideas as 'fiat currency' which has been the dominant monetary policy globally for the last 40 years.

Since non-economists should not be critiquing economic policy according to you, may I ask what your credentials are in this field?

http://en.wikipedia.org/wiki/Negative_income_tax

nickik10• 13 years ago

NIT and BI are to diffrent things but with simular spirit. Make it rule based, simple to administer and most importently keep to the principle, if you work you get more money.

argonaut• 13 years ago

Uhh.... fiat currency is not monetary policy. You meant monetarism, which has most certainly not been the dominant monetary policy for the last 40 years. It's been influential, yes. There have been periods of time in which it has been in vogue, yes, but you certainly cannot call it the dominant monetary policy globally for the last 40 years..

stdbrouw2• 13 years ago

So basic income might work given current levels of employment and GDP et cetera, but it might not work in other cases. And what might happen in those other cases is really bad: unlimited liability. Got it. But why should that be the end of the conversation? Sounds more like a challenge that might have an answer or it might not. Saying "it can't work" doesn't really help.

mike_herrera• 13 years ago

Why must the basic income payout be held constant?

I would advocate adjusting the payout on a regular basis. Ensure that the program neither massively hoards assets or runs more than minor deficits.

hudibras• 13 years ago

$100 trillion! Wow, what a big number!

But completely meaningless unless you give a timeframe for the future liabilities. How long do you expect the United States to last for? Twenty years? 100 years? 1,000 years?

od2m2• 13 years ago

An unfunded liability is money you've promised to pay and don't have, I.E. debt.

http://online.wsj.com/article/SB1000142412788732335320457812...

hooande2• 13 years ago

There's no need for a basic income to be set so high that it subsidizes infinite children. If the BI for a family of four was $25,000 in today's money for example, any more children than two would be as financially uncomfortable as it is today.

The key to basic income is to make the amount paid enough to live, but not to live well. The more basic the income becomes, the less incentive it creates not to work. In addition we have more people who want jobs than there are jobs available in our current economy. We can tweak the numbers without wrecking the whole system.

TulliusCicero• 13 years ago

You have it backwards. Most industrialized countries are below the replacement rate even with current monetary incentives (e.g. tax breaks) to have children. Kids are an enormous financial burden to parents, and financially they benefit the wider society, not the parents. Assuming you don't want social security (or its equivalents) collapsing, you want to incentivize having children at least to the replacement rate.

williamcotton• 13 years ago

High birth rates mean more youth to contribute to the working population to deal with the ever increasing number of retirees, a sort of policy that Japan could benefit from! What if people on basic income got more money as they got older?

ahomescu12• 13 years ago

One problem I read about is that a lot of Japanese young men aren't working, just sitting around at home all day (living with their parents). Not only are they not contributing to society, they're actually living off their parents. This comes from a recent HN discussion: https://news.ycombinator.com/item?id=5993441

straight_talk5• 13 years ago

IMHO GDP, dollars, etc. have nothing to do with this problem. Currently there is a huge overproduction of food, clothes, shoes, etc. for the US citizen. All that huge ads industry is only there to force people to eat more, throw out their perfectly good clothes, shoes, cars, phones, etc. because of fashion. It's no problem really to meat the needs of additional people in case a basic income produces those.

fnordfnordfnord5• 13 years ago

Social Security isn't welfare. We pay wages (FICA) into that. It's just like hiring a rather crappy financial advisor.

exit• 13 years ago

So sick of non-economists advocating economic policy which they don't understand.

tell us about your credentials as an economist

seoguru• 13 years ago

The United States is not broke and cannot go broke unless we foolishly decide to. Please read: http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf or spend 2 hours to watch: http://www.youtube.com/watch?v=ba8XdDqZ-Jg

"we're broke" thinking is what causes the http://www.lostoutputclock.com/ to keep on turning, and that lost output is the health and welfare of our citizens.

Austerity mindset has had catastrophic results in Europe, and it starts with the assertion that "we're broke" or "we can't afford it", both of which are completely untrue as far as the U.S. is concerned.

mwc• 13 years ago

The New Zealand Treasury has conducted a preliminary assessment of a guaranteed minimum income (GMI) in New Zealand[1]. It's worth a read.

It's conclusions were broadly:

* To be cost neutral, it would require a significant increase in taxation rates (to a flat tax of ~45% - 50%).

* Although the Gini coefficient is improved, those who currently receive government support would likely receive less under a GMI scheme, which may have the effect of distributing more money away from those most in need.

A brief discussion of the "broad ranging" effects on efficiency and economic growth is also included.

[1] http://igps.victoria.ac.nz/WelfareWorkingGroup/Downloads/Wor...

DanielBMarkham3• 13 years ago

Hmmm. I am beginning to believe any author who writes essays with the word "capitalism" in it neither understands capitalism or is able to work with the concept in the abstract. Usually it's just regurgitated Marxist leftovers.

And let's see what we have: "A BI breaks with a fundamental principle of the welfare state. This, wrote Beveridge in 1942, is "to make and keep men fit for service.*" One function of the welfare state is to ensure that capital gets a big supply of labour, by making eligibity for unemployment benefit conditional upon seeking work. BI, however, breaks this principle.In its pure form, it allows folk to laze on the beach all day."

Okey dokey now. The welfare state is a product of the voters, not the result of one particular report in the 1940s in the United Kingdom. I can quite assure you that the voters were not interested in "providing labour to capital". They were interested in being compassionate to their fellow man, just as they were in the States. The welfare state is a lot bigger than wartime England. If anything, the modern welfare nation has its roots in the late Victorian period, as large groups of people realized that they were being significantly mistreated by the system.

This is an important point, because if you miss it you miss the rest of it. The social safety net, as most voters understand it, is to provide a lift up to those in need, and some sort of permanent assistance to those who are incapable of leaving their present circumstances. This means that any welfare state has as its primary mission the determination of the difference between those who are temporarily downtrodden and those who will not work, either because of physical or attitudinal reasons. Voters feel differently about these different groups of people. Therefore the policies towards them are different.

"capitalists, who want a large labour supply" -- no, capitalists want to trade stuff. Sometimes, like in the 1800s, this required a large labour supply busy as beavers in the sweat shop making widgets. Sometimes nowadays it might involve really expensive robots and 5 laborers. Or 3 web programmers and some space on AWS. These old ideas of capital and labor are dead. Please let them rest in peace without digging them up so often.

Minimum wages and basic income policies all do the same thing -- raise the floor at which most folks can enter into productive trade with others. This raises prices and increases unemployment. These kinds of ideas sound great. Who wouldn't want $25 per hour wages and guaranteed income for all? But all you'd end up with is $15 hamburgers and $34 gasoline. You don't do anything but raise the table stakes for people, like certain homeless, just don't want to participate in society. It increases poverty and suffering. Counter-intuitively, it does not make things better.

People need to pay special attention to those ideas which produce an emotional gut-feeling of "hell yeah! Why haven't we done that?" There's usually a really good reason that does not involve economic theories from the 1890s.

edderly3• 13 years ago

I'm fairly happy that the author as a former investment banker and a current journalist for the Investors Chronicle understands capitalism pretty well.

I've read Chris Dillow's blog for a long time. If you scratch away the Marxist sheen, which some people will find toxic at first glance, he has a few basic themes which are pretty hard to argue with:

Modern capitalism has failed to keep everyone employed. It may have helped countries out of poverty but there remains a persistent and growing underclass.

Most subsidies to the poor end up directly in the pockets of the rich. i.e. rent accounts for 50% of the income of people on welfare.

The poor are statistically less happy i.e. Frank Gallagher maybe pissed up all the time and maybe happy, but most people are not.

The stability of corporate entities is overestimated. Most companies have the life expectation of a forty year old man.

Managerialism is a failure, and an unhealthy obsession of the modern left.

Whether you agree with the Marxism bits or not he is generally an interesting read.

DanielBMarkham3• 13 years ago

Thank you for an introduction to the author. I'll look for some more of his work.

I try to be very careful about bashing things on HN -- it's too easy, and everybody does it. If I implied the author was somehow generally incompetent, I apologize.

He's just smoking crack here. Whatever his merits as a columnist and journalist, in my opinion he's out of his depth on this topic. I also appreciate your providing his credentials. Since my comment was on this essay and not on him, it doesn't make sense to respond to that information in one way or another. The last thing I want is to start some kind of discussion on Dillow the person. My remarks were entirely about the concepts and structure of his argument in this one essay (along with an observation about the use of the word "capitalism" in general) I found the material off-handedly shallow, ill-conceived, and not very well thought-out.

nickik10• 13 years ago

Modern capitalism has failed to keep everyone employed.

Im not sure how you would know that. Depends on your defintion of "modern capitalism". If it is how current western states work then sure not everybody is employed. I would however argue that in a system without minimum wage, wellfair, unemployment insurance, retraining programmes ... unvoluntary unemployment would be very, very low.

Now note, Im not making a value jugment here.

Most subsidies to the poor end up directly in the pockets of the rich. i.e. rent accounts for 50% of the income of people on welfare.

Well, of course it does. Do you imagen a underground economy of poor people or something. Most money is spend on things owned by large cooperations, walmarkt, mcdonalds and simular.

The poor are statistically less happy i.e. Frank Gallagher maybe pissed up all the time and maybe happy, but most people are not.

It depends on who you ask. There is quite a bit of research but it all has the fundmental problem of measuring happyness. Asking people if they are happy does not really make sence when you think about culture or signaling. So yes there is research that suggests there is a general positive corrulation with wealth and happyness but there is also research that suggest that after some level of wealth you stop getting happier. Some research suggest its only importend how rich people you interactive with are.

The stability of corporate entities is overestimated. Most companies have the life expectation of a forty year old man.

Yes.

Managerialism is a failure, and an unhealthy obsession of the modern left.

Agree. There are much more fundamental problems in the economy then wages of managers for example.

Volpe• 13 years ago

These old ideas of capital and labor are dead. Please let them rest in peace without digging them up so often.

I'm pretty sure China's GDP disagrees with this premise. A lot of stuff needs to be manufactured, constructed, etc - i.e. manual labor.

Please stop pretending software is the only industry in existence.

mikeash2• 13 years ago

"Minimum wages and basic income policies all do the same thing -- raise the floor at which most folks can enter into productive trade with others."

Can you elaborate on this? Because it looks to me (only minimally educated in economics) that minimum wage and basic income work in completely opposite directions here.

With a minimum wage, a person may be willing to do some work for $X, and another person may be willing to hire him to do that work for $X, but the law prevents them from entering into an agreement to actually do it. Thus, anyone not able to produce at least as much value as the minimum wage simply does not work at all.

With a basic income, you no longer need a minimum wage. If a person is willing to work for a penny an hour, let him. The floor drops, not rises, because people can engage in very poorly-paid work if need be, and still be able to survive. A person whose labor is only worth $2/hour won't have a job today, but could very well have a job in a system with a basic income.

Did I miss something?

noonespecial• 13 years ago

Well said, but I'd like to add that he is then also capable of working for himself at less than a "living wage", for reasons like "higher purpose" (charity), expected future returns (ie startups), or simple enjoyment.

This sounds like a huge win for mankind in general. It seems like it would be extremely difficult to get there from here, but if software and robots do indeed have the capacity edge out traditional scarcity, it looks like we should start planning the trip.

straight_talk5• 13 years ago

Very interesting thoughts. IMHO the basic income will have the opposite effect. A business may currently be able to find a loo cleaning employee for $X/h, but with a basic income that rate will go to say $5X/h.

DanielBMarkham3• 13 years ago

I believe you missed pricing pressure.

If I'm selling apples, I'm selling them at whatever the market can bear. Beats me what that is. I label the price 1-for-a-dollar, and they sell out. So tomorrow I charge $2. And so on. There is no certain "price" -- price is something that's determined by the reaction of the buyers to the offers the sellers make.

That's the way it is with everything: food, rent, insurance, car repairs, drugs, services, and so forth. Everything is negotiable, and it's all dynamically determined. So if everybody in town now has an extra 10K -- or even if the poor people now have a lot more free cash, then my apple pricing experiment will yield a higher result. So I'll charge more. I'm not trying to screw over anybody, that's just the way pricing works.

The only thing you get with giving everybody a new floor for the amount of cash they have is a new floor for how much the cheapest items cost.

This is tricky to see at 5-10K, because our minds don't take into account the thousands of tiny transactions each person makes in a year and the very small amount of difference it would make with each one. So just pretend that it's 100K, or 500K. What would happen?

And that's just pricing pressure for purchasing. The same pressure would exist for employment, dramatically increasing unemployment.

It just doesn't do anything, except cause economic chaos, make all the dollar figures higher for everything, and increase unemployment. And punish those folks who don't want to participate in society. That's not a lot to be proud of.

ThomPete6• 13 years ago

You only have to look to Denmark to see this in action. And mind you we don't actually have a national minimum wage. Instead it is negotiated between employer and the unions. The unions have historically been strong.

Basically you end up with a lot of people unemployable because they don't have the necessary skills needed and thus are not worth the salary for even entry level jobs.

As society requires more and more skilled people the bar is raised and the number of people who are unable to land a job because of inadequate skills are rising.

Add to that that automation is an even bigger competitor than China and you have all the ingredients for an explosive cocktail of demise.

rwmj• 13 years ago

The author makes no secret of being a Marxist. Just read a few of his other postings.

rogerthis• 13 years ago

AFAIK, the biggest experiment in Basic Income is happening in Brazil. Come and ask us in 2030 how it did go. Today, all I can say is it serves the politicians in power to keep their power. People who receive state BI seldom vote different, afraid of losing the benefit.

emiliobumachar• 13 years ago

What's happening in Brazil is not BI because it's not for everyone. Recipients have to prove they are poor enough (at least state that they are)

gw4• 13 years ago

Murray Rothbard called this "probably the single most disasterous economic idea ever invented". He spoke on this topic during a speech on Milton Friedman. It's worth a listen.

http://www.youtube.com/watch?v=AenYS193mSI&t=10m34s

mikeyouse• 13 years ago

I'm all for differing viewpoints, but prospective watchers should know that Murray Rothbard considered Adam Smith an anti-capitalist proto-Marxist. He also had some very 'interesting' views on women's liberation, race, homosexuality, slavery, etc. etc.

gw4• 13 years ago

Really an odd way to show you are for differing viewpoints, to inoculate "prospective watchers" by opening the floodgates to a host of disparate subjects that have nothing to do with the topic at hand, all the while winking and nudging that he is a bigot regarding said subjects.

nickik10• 13 years ago

I actually am a AnCap like Rothbard (not like him but simular in some ways) and I disagree with him.

He does not actually make a good arguments about BI, he has some basic wellfair principly and talkes about them, without actually going into the exact idea of a BI.

He makes some general statments about wellfair and a particular implmentation of wellfair. Also he makes a typical error that he makes all the time, he compares to some optimal system and not to the current system.

I really dislike that Rothbard is the Anarcho Capitalist that is best known.

gw4• 13 years ago

He did speak specifically about BI. I'm not sure what you're talking about.

michaelochurch• 13 years ago

Here's how I see the BI debate. The argument made against it is that it would generate a class of parasites at the bottom of society.

We, right now, have a permanent parasite class at the top of society and that's worse. They can treat labor like shit because labor has no other option, and this surplus generated by desperation makes those at the top extraordinarily rich.

BI is the only solution I can come up with that makes sure labor is respected.

However, any BI program should be tied to per capita GDP. Thus, if it actually does have a negative effect on society (which I doubt it will) the payments drop and reverse that effect.

johnohara• 13 years ago

Last week Breitbart threw a number of 144,000,000 as the current number of working adults in the United States. It sounded about right.

Let's use 150,000,000 instead and pay them a basic income of $20,800 per yr ($400 per wk, $10 per hr). That's $3.120T with a "T", just south of scheduled 2013 U.S. federal expenditures of $3.803T -- with a $900B deficit.

A BI would double federal expenditures. Honestly, how likely is it for a guaranteed basic income to pass both houses of Congress and be signed by the POTUS in the next 5, 10, or 25 years?

MartinCron• 13 years ago

Wouldn't basic income replace many of the means-tested assistance programs? There's cost savings not being accounted for.

rattray• 13 years ago

That's a pretty unfair straw man. One of the most oft-cited "points" of BI is the savings related to cutting tax breaks and social programs. I'm not well-versed with the numbers, but I've heard these are pretty high.

In addition, "higher taxes for those with above-middle-class incomes" to balance out the expenditure is an almost universally quoted corollary of BI. Citing the cost of BI without the obviously necessary offsets isn't constructive.

Millennium• 13 years ago

Not double, actually, because part of the point of a basic income is to replace much of what we currently think of as welfare. For example, Social Security as we know it could simply vanish, its function completely replaced by the basic income. In theory, salaries for government employees of all types could also be reduced by an amount equal to the basic income, leading to no change in take-home pay but saving money within the programs which employ them.

Nevertheless, as you point out, it would necessarily represent a massive expansion in federal spending: on the order of 50% or more.

pyoung2• 13 years ago

An alternative implementation, mentioned elsewhere in the thread, would be a negative income tax (NIT). This would work by establishing a 'baseline' wage, and if someone is below that baseline, they are subject to a negative tax (i.e. they receive money from the government). This would probably be a much cheaper method of establishing a BI, as only those with low or no wages would receive the benefit, but would also allow for massive reductions in welfare programs. Something to consider.

erikpukinskis• 13 years ago

Could it be a sliding scale? So, if you're not working you get $20k, but if you can earn $5k you get $19k, etc? That way getting a job is financially incentivized, but the government doesn't need to support people who are perfectly capable of earning $70k on their own.

kephra3• 13 years ago

I'm a programmer. My job is to free people from work, for more then 35 years. An unconditional/basic/universal income or negative tax would allow those people to enjoy the freedom I provided for them, while unemployment is a shame in current system.

Its interesting to notice that those who promote a basic income here in Germany are hardcore liberals/libertarians, while conservatives, socialists, unions, communists here still follow the puritanic thinking that "Arbeit macht Frei".

rokhayakebe2• 13 years ago

Your job was never intended to free people from work. It was simply to do what people did, faster, more accurately, and many times over.

If your code was slower and more expensive than someone doing the work manually, you would doing another job.

I think.

kephra3• 13 years ago

My current focus is on machine learning for industrial application. 15 years ago my main focus was the paperless office. And before that common office automation.

Its true, that not every coder is freeing people from work.

But in average we destroy stupid jobs, and replace them with smart machines. Those jobs will never come back. The only kind of work that will be left are social work, that is currently badly payed.

The result is that there will less demand for work, the wages will sink to the botton, nobody would be able to buy things, and capitalism will destroy itself.

The only way to avoid a communist slave state is an universal income.

kenster072• 13 years ago

This is just describes another transitional point in human history. In any given year, we can produce the same output with less labor. As this effect compounds, take this pattern to its extreme -- producing all the output the world could ever need with virtually no human labor. In such a scenario, what is the meaning of a wage? What does it mean for a person to produce "value?" How would humanity, whose genome has been shaped under the chisel of scarcity, adapt to a system where such a thing did not exist?

In this thought experiment, I believe it becomes evident that the laws of economics, as we understand them, are NOT timeless. Modern economics has gone on a tangent, creating a system of analysis and theory that only works for this microcosm in our existence. It is only as our economy approaches the scenario described above that the true laws of human economics can become evident.

userulluipeste4• 13 years ago

Not every part of human labor/involvement will be totally replaced (if your imagination needs a hint, think about the oldest occupation if the world). There are services that rely on human interaction and as the world evolves the demand for such specific social-involved activities will continuously diversify itself. I also think that the access to the limited resources (think of space if nothing else) will always maintain in a way or another a scarcity-based system.

kenster072• 13 years ago

You never know.

I think the frailty of the human ego is more likely to manufacture scarcity than anything else.

ChrisNorstrom8• 13 years ago

Why doesn't this article discuss the repercussions of such a plan?

These ideas of "helping everyone and feeling good" fail to understand human behavior. Basic income would reek havoc on the real estate market as people (of the trashy uncivilized variety) would try to move into nice neighborhoods with their new funds that they didn't work for and earn and "fuck up the neighborhood" basically.(This already occurs with section 8 housing) Another consequence is that rent and housing would rise substantially.

The price of a home isn't just determined by the value of the home itself but by the highest price the local market can afford to pay. People who are not in real estate don't understand this.

The flawed assumption to this plan is that all or most poor people are poor because they just haven't been given enough chances or nice things. This emotional ideology usually belongs to young collage students who have never worked with the public and seen the real asshole-ery and primitive baboon-ism of humanity and believe everyone is a nice person. Or adults who grew up in their parent's nice neighborhood miles away from reality. I know you're going to think I'm the biggest most evil asshole in the world but after working with the public (everyone in my family does) NOT a cool startup in a collage town I have to tell you the truth: Quite a few poor people (not all of course) are poor for a reason. Sitting down and talking with them will usually give away these reasons immediately. They don't bring value, they can't hold jobs because they have poor impulse control, they're short term decision makers, they don't want to educate or better themselves, they're hyper-sexual, were born with a lower IQ, they can't commit to jobs they do have, they smoke pot like crazy. Basically they don't have nice things for a reason. And every time you try to give them nice things they ruin them and don't appreciate them.

I used to be one of those "help everyone and make the world happy and good feelings and gosh I just wish we could all hold hands". I have completely left that ideology as it's a fantasy. A lie. These smart intellectual folks with ideas on how to help the poor completely forget to include the above mentioned human problems. All they see is numbers and an equation and they want to balance it all out on the table. But it never works like that in real life.

I know during this recession a lot of people who deserve nice things have had them taken away, but any attempts to correct this through government, welfare, and basic income is just going to go in the wrong hands.

There are devastating repercussions for paying people to do nothing or giving people something they haven't earned. Let's stop chasing pipe-dreams because they "sound nice".

http://en.wikipedia.org/wiki/Pruitt%E2%80%93Igoe

arg01• 13 years ago

What's your alternative? Put them in prison and pay more than the basic income cost or leave them free with no support or way to earn a living except by being a menace to society? Something else entirely?

ChrisNorstrom8• 13 years ago

Pay them to work on something. Either creating something, starting a business, or hell, sharpening pencils or even moving dirt back and forth between two holes. Money must be earned. Not given.

kephra3• 13 years ago

Those people you describe have no place in the job market. Their only value is to consume. Give them free money, so that they consume WoW, THC, beer and the like. Someone has to consume our overproduction.

But, I'm living in an area the US would call a project. Most of my neighbors are unemployed. Not because they are lazy bums, but because there are no jobs for those who are over 50, or are uneducated, or are single moms, or ... And there are no jobs that would pay a living wage. So its easier/better for them to stay unemployed, and earn unemployment money.

The people you describe are only a small fraction of the unemployed masses.

ChrisNorstrom8• 13 years ago

"are uneducated, or are single moms"

When another human being drops out of FREE high school and sleeps around and gets pregnant you want me to reward them for that? When you subsidize people's bad decisions you will get more bad decisions. When you give a safety net for purposely being stupid you will get more of it.

You want me to pay for someone else to do nothing with their life. Think about that for a moment.

wayne_h• 13 years ago

'Basic income'? Lets start with 'Basic grading'

Currently students earn grades A-F. From now on we should have a 'basic grade', all students will be given a 'D' - a basic passing grade. You get your 'D' even if you don't even go to class. and since don't go to school well we might as well just give them the diplomas too...

I would like to see the idealistic college students and professors apply this concept to their real world and see how it works out...

The idiocy of this becomes obvious in this context.

felipeko• 13 years ago

You're missing the reward for those who get higher grades.

If students with higher grades got better food, chair and transport (that's what happens in basic income), you would probably see some students trying their best.

userulluipeste4• 13 years ago

Off-topic: I always wondered why there is A-F instead of A-Z. In your order of ideas it is explainable - everyone gets a "G" by default (for "F" one should at least be present) therefore all the rest are left out.

On-topic: If you make "D" the default, when the reality sets in, the new valuable scale becomes A-C (nobody will care or consider one's graded studies if those were "completed" on D "pass" grades). The same is with free money - the amount of pension money will shortly become meaningless because of inflation.

summerdown2• 13 years ago

I think your philosophy is leading your opinions rather than the evidence. In those places where basic income has been trialled, it seems to work. For example:

http://www.bignam.org/BIG_pilot.html

Key findings:

contributed to a significant reduction of crime.

reduced the dependency of women on men for their survival.

The criticism that the BIG is leading to increasing alcoholism is not supported by empirical evidence.

... Note that I am not suggesting that a basic income is guaranteed to work, just that it is worth looking into. Further experiments will reveal the truth, not prejudices about the poor.

Put in other words, what we need is policy based on evidence, not opinion.

EGreg• 13 years ago

Actually BI is gradually coming in the form of social safety nets for everyone. Once we disrupt college education with courses anyone can study at home at their own pace from the best professors, lots more people will be able to educate themselves for the new economy.

That said, there will be a growing unemployed class, and many are are already perpetually on government subsidized programs such as housing, etc. The question of whether this is worse than a negative tax is unclear.

What IS clear is that capitalists will want people to remain consumers, even as they automate everything. So redistributing money to them by taxing the machines is inevitable. The real question for me is, what will happen to all the restless, disaffected people whose services are no longer required, and whose blogs are rarely read? Especially men.

http://magarshak.com/blog/?p=97

Basic income vs. Capitalism

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