Ask HN: Need advise on introducing a basic income

https://news.ycombinator.com/item?id=9865613

by halotrope • 11 years ago

10 25 11 years ago

news.ycombinator.com

I know this sounds a little far fetched but I would really like to introduce a basic income in germany. I would like that every citizen get about 1000€ per month, no questions asked. Since there is about 80M people in germany it would need 80B € per month to finance that. I would very much like to solve this problem with technology and dodge politics. Any Ideas?

loumf3• 11 years ago

You need the taxation power of a state to force rich people to pay for it. That's how basic income works -- everyone gets 1000€, but some people pay more than 1000€ in extra tax. The net is 0.

How to use technology to do this:

1. Make up a scheme where 70% get net positive income (make models, etc)

2. Make up persuasive material (interactive visualizations?)

3. Spread it

4. Harness the enthusiasm into actions

Ultimately use this to elect people who will pass it.

halotrope10• 11 years ago

Hi, thats frankly a good idea for introduction. However I think to make this work it would be unwise to tax the rich as they have de facto a lot of influence and would I would assume have the power to stop something like this. I have thought about baking something like a community tax directly into the currencies so that everyone would benefit for a very tiny fraction of the economic prosperity of a whole country e.g

dragonwriter5• 11 years ago

If you aren't disproportionately taxing the rich to fund it, and you are giving everyone the same amount of money, then you are either (in net) redistributing upward from the poor to the rich, or you are doing nothing.

escherize2• 11 years ago

Actually the net is less than zero, thanks to government inefficiencies. Usually the fact that it's less than zero-sum is swept aside and covered up by selling the future taxing power of the state via increasing the debt.

loumf3• 11 years ago

Most schemes have basic income replace other gov't programs as something far simpler to administrate -- so, it's probably net-positive.

partisan• 11 years ago

Sorry, I am not able to contribute a solution to your question. I don't think you can do this without politics being involved, otherwise you are asking everyone to participate instead of mandating that everyone does.

Doesn't basic income cause inflation? It ensures that everyone can have the basics, if they choose to use it that way, but will drive up prices on the basics because demand increases. Am I missing something?

halotrope10• 11 years ago

I have written a simulation where a tiny fraction of every financial transaction was distributed evenly over all members of the economic community. It did not change the outcomes for individuals all that much but nobody went bust anymore. I thought it would be potentially possible to do something with cryptocurrency as well.

dragonwriter5• 11 years ago

Doesn't basic income cause inflation?

Almost certainly.

It ensures that everyone can have the basics, if they choose to use it that way

Maybe, depending on the level its set at.

but will drive up prices on the basics because demand increases.

Sure.

Am I missing something?

Nothing explicit, though "causing inflation" may not be problematic depending on the levels. Certainly it causes price level increases in goods that are disproportionately in demand in the segment of the population receiving a net redistribution in income (assuming its tax-funded, that's not everybody.) But as long as the proportional increase in prices is less than the proportional increase in available funds among the net recipients, its still making things more affordable.

Whether that will be the case at any given level of BI depends on the productive capacity of the economy, and the behavior changes induced by BI. (That's one reason that any real BI probably needs to start lower and gradually scale up until the best sustainable point is found, and then gradually adjust for changing economic conditions -- overshooting significantly would be rather disruptive, from inflation and related effects, in the short term.)

halotrope10• 11 years ago

There where plans on taxing the stock exchanges and financial transactions. If this money would be taken and redistributed for a start it would not affect the purchasing power of any natural person.

dragonwriter5• 11 years ago

Since there is about 80M people in germany it would need 80B € per month to finance that. I would very much like to solve this problem with technology and dodge politics.

IF you want do it with technology and dodge politics, then you need to create an enterprise that generates 80 billion euro [0] in monthly revenue above what is necessary to maintain the enterprise, and then sends out the money.

Good luck coming up with the technological solution which provides nearly a trillion euro in annual profits, and can continue doing so (and growing with population and inflation) while distributing all that to the people of Germany.

[0] actually, more, because you need funding for the money distribution part, too.

halotrope10• 11 years ago

Thank you for your feedback. I have though of a lot of ways how it would not work out. This is why I am asking HN if someone would have a practical idea that might work. I always have the feeling that the people here are of much great creativity and intelligence than me.

2noame• 11 years ago

You'll likely find this valuable then if you haven't already read it:

http://www.unternimm-die-zukunft.de/media/medialibrary/2013/....

halotrope10• 11 years ago

Oh thank you! I did not. I did not read a whole lot about it to be fair. Wanted to preserve beginners mind about that. But will give this a spin.

drdeca• 11 years ago

You might be interested in the "circle" project some people are building on Ethereum, or perhaps a variant of it.

https://forum.ethereum.org/discussion/2228/circles-universal...

I think it might work better if trust was a number from 0 to 1 instead of a boolean, which would allow for different exchange rates, which would be useful if e.g. different sub economies formed separately with a different price for certain goods, so that the prices of the things with the different units aren't forced to change when the the two parts of the economy join into one.

I don't think I explained that well. To make a concrete example, suppose there are two collections of people/accounts, where each person/acc in a group trusts each other one in the same group (so that they can exchange their types of currencies automatically at a 1:1 rate). Suppose that in each of the two groups, there is a person who sells chicken drumsticks. If they are selling them at significantly different prices, then it seems there could be a problem if the two groups try to connect, because then one person could buy the currency in which the chicken costs less, buy the chicken, sell the chicken where it costs more, getting back more money, repeatedly, as an arbitrage thing. If it was just chicken this might not be a problem, as the two main chicken sellers would just settle on a common price for chicken, but if there were many types of goods, such that there was initially a source of arbitrage for every type of good produced in both communities, that seems like it would lead to problems.

A solution, I think, would be for when the two communities connect, by extending "trust", instead of establishing automatic 1:1 exchange, instead it could be made so that when a person trusts another person, they make it so that the other person can purchase up to a certain amount of their type of currency, at a cost of some amount that they choose of the trusted person's currency (an exchange rate).

In this case the exchange rates would be potentially asymetric, and there would be questions of "what is the cheapest exchange rate path to get personcurrency A from personcurrency B?"

and theres also possibilities of arbitrage in the trust trading of currency stuff, but the limit per time would probably reduce that I guess, and I think it would probably self correct (be EMH). IDK if that would be worse or better than with many types of goods and the exchange rate between currencies being forced to be 1:1, but I think it would probably be not as bad? I am not sure.

I'm fairly ignorant in this, but I thought the circles idea was interesting, and thought that a modification might be useful as described above. maybe.

halotrope10• 11 years ago

Oh thats interesting. From what I understand they solve the problem of initial distribution which would then not be dependant on something like state controlled registrations/id anymore. I will have a deeper look.

BjoernKW2• 11 years ago

I'm 100% with you on supporting the idea of a basic income. Not every problem can be solved by technology alone, though (in fact I'd say there are very few problems that can be solved by technology alone).

I think loumf's suggestion probably is the best way for harnessing technology to achieve a basic income but ultimately it will require political action and political support.

We're talking about a really huge amount of money and a tremendous change in most people's lives here. Even those who'd likely benefit from a basic income often are averse to it (if they know about the concept at all, that is) because it challenges both traditional capitalist and socialist views of how the world should work. So, convincing people really is the problem here. Creating persuasive visualizations and spreading those with the help of technology perhaps is your best bet at contributing your share.

You might want to talk to the people of the local Pirate Party about your ideas. The Pirate Party after all is the only noteworthy party in Germany which supports a basic income (though they admittedly have lost their way since the last elections and need to get their act together if they want to play any role at all again).

halotrope10• 11 years ago

You are probably right about needing politics at some point as well as the fact that convincing people is hard. For some reason it seems to be perceived as a flavour of communism which is framed very badly historically even if the idea in the form of a negative income tax for low earners originated in capitalist / libertarian circles. Regarding the pirate party I think their motives are noble and their use of technology for more openness and transparency is a good approach but ultimately the people in there seem to be involved with themselves and their affairs to an extend that makes it next to impossible to perceive them as an viable agent of change.

BjoernKW2• 11 years ago

but ultimately the people in there seem to be involved with themselves and their affairs to an extend that makes it next to impossible to perceive them as an viable agent of change

They're still the best option though. The other parties have by and large long since foregone wanting to shape the future for the better. They're mostly bureaucrats and administrators with a general lack of a positive vision.

It's no use complaining. If you want to bring about change you'll need to get involved yourself. Besides, the Pirate Party had some successes recently regarding copyright and freedom of panorama laws so to some extent they already are a viable agent of change.

Ask HN: Need advise on introducing a basic income

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