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.
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.
> 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.)
> 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.
Very much agreed. I don't go along with all of what Marx wrote but there are some insights in his work that are ignored by a lot of people because they have a knee-jerk reaction about anything or anyone related to "communism". If one does not agree with a school of thought, it is still childish to ignore or misrepresent its ideas.
> Marx was not 100% wrong, he was just wrong some very specific and important places.
Of course he wasn't 100% wrong. All modern developed countries have adopted some of his ideas, such as public schools and laws against child labor.
His notions of an Apocalyptic struggle between Labor and Management, his totalizing philosophy which seeks to explain all social conditions through one dialectic, and his refusal to admit that capitalist countries could adopt some of his ideas and stay capitalist, however, lead to some of the worst regimes in history, and we can't forget that.
Marx analysed quite correctly the era he lived in and the problem with capitalism. He was just wrong to think that this would never change.
For instance today may of us are the owners of our own means of production. You don't need your employer to buy you a machine and they can't just replace you without having lost the knowledge that you represent.
Marx didn't live in such a world and thus his premise wasn't universal enough.
Of course not. Marx was directly responsible for Communism because he laid the blueprints, and the USSR implemented them. Therefore, Marx is responsible for the USSR.
...lead to some of the worst regimes in history, and we can't forget that.
Yeah, because without his ideas, Russia would have turned into a well functioning capitalist democracy. The past 20 years have been pure bliss now that the burden of communism has been cast off- since there is now no way for power hungry leaders to control the nation.
> The past 20 years have been pure bliss now that the burden of communism has been cast off
The past 20 years were directly preceded by 70 years of the USSR. If modern race relations in the US can be blamed on slavery and Jim Crow, both of which have been dead for longer than the USSR has, then Russia's modern problems can be blamed on Marxism and Leninism.
Well yeah, you can blame it. Doesn't make it true. Of course a country can't magically be divorced from what happened 20 years ago, but the point behind my sarcasm was it is exceptionally naive to assume Russia's problems were caused solely because it was nominally communist.
> 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.
Do you have any objective arguments against this statement?
Class lines are not well-defined. A CEO may share certain interests with shareholders but their interests are not all identical. By using the frame of class you create a situation in which those without power pit themselves against those with power, and encourage those with power to reciprocate. That is a horrifically bad position for those without power to be in because you're de facto creating two teams where one of them has an insurmountable initial advantage.
The better strategy is to break the "classes" apart so that you can pit the different powerful interests against each other rather than uniting them against you. There is a subset of the wealthy who benefit from a basic income. The masses would do better to ally with that subset and combine their money with your votes to achieve the common goal, than to keep painting them as the enemy for long enough that they start fighting you too.
Class lines are not very defined, and never were, but at least for political analysis the exact boundaries do not matter much. What matters is the difference in influence between the main bodies of the classes.
And while thinking about Marx one needs to keep in mind, that Marx did analyse the mid 19th century economy. Your example of a CEO is actually a quite good one, since a CEO is controlling capital which he does not own, a arrangement that essentially did not exist in the middle of the 19th century. And I think that this split between capital control and ownership of capital is one of the most important theoretical difficulties in applying Marxist analysis to 21st century finance capitalism. The other problem is, that in the 19th century Labor movement the workers had a nuclear option: If the workers just refuse to work, they will be as broke and unemployed as the capitalist they refuse to work for.
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?
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!
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.
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.
Yes, the lobbying is advocating for corporatism, and it's done by capitalists. I'm not conflating the two; I'm saying that it's in the self-interest of an established capitalist to replace a free-market capitalist system by a corporatist one.
This is hardly a new or leftist idea; it's actually an obvious result of the incentives at play, and it's a fact that anarcho-capitalists have used as an argument for the elimination of the state (in order to eliminate lobbying).
You've given the textbook definition of corporatism, then say it is done by "the capitalists", therefore—I guess—corporatism = capitalism.
Isn't there something fundamentally different which is also called capitalism? Without any reference to who owns the means of production, where mutually voluntaristic exchange occurs in an unhampered market scenario we call this process capitalism as well.
Saying "the capitalists" is a lot like the us vs. them tactic of left vs. right or republicans vs. democrats. What is "an established capitalist"? Is that somehow different than a run of the mill capitalist? If you buy into the outmoded doctrine of profit seeking automatons as "capitalists", then your argument works. Competing theories of the firm have discovered the tendency toward revenue-maximization versus pure, blind monetary profit maximization.
Just because you recognize that utilizing a state's ability to assign perks to business is properly called corporatism as well doesn't mean that you aren't conflating this process of exploitation with genuine free-market capitalism.
You've given the textbook definition of corporatism, then say it is done by "the capitalists", therefore—I guess—corporatism = capitalism.
No, that conclusion is not what I'm claiming. I'm not saying that capitalism is the same as corporatism; I'm saying that capitalists (people who control the capital, not supporters of capitalism) have an incentive to change a capitalist system to a corporatist system.
Isn't there something fundamentally different which is also called capitalism? Without any reference to who owns the means of production, where mutually voluntaristic exchange occurs in an unhampered market scenario we call this process capitalism as well.
Capitalism necessarily entails ownership of capital; this is not to say that it's the same as corporatism.
There are people who defend markets without defending capitalism: these are usually called mutualists, and they're usually connoted with the left, though unlike state socialists, they defend a stateless society.
Saying "the capitalists" is a lot like the us vs. them tactic of left vs. right or republicans vs. democrats.
That depends on the intention, no? I wasn't judging them, I was stating a fact about the incentives that people who own capital are subject to. This doesn't mean that all capitalists are necessarily promoting corporatism; just that it's in their self-interest to do so.
And again, this is hardly a leftist position, it's (as I said) shared by people like Friedman, and it's one of the arguments in favor of anarcho-capitalism.
What is "an established capitalist"? Is that somehow different than a run of the mill capitalist?
It's what it says. There are established companies and startups, and there are established capitalists and young entrepreneurs trying to compete with them.
If you buy into the outmoded doctrine of profit seeking automatons as "capitalists", then your argument works. Competing theories of the firm have discovered the tendency toward revenue-maximization versus pure, blind monetary profit maximization.
Having state protection against competition helps with both. But again, this is not a judgment of individual capitalists, it's statement about the incentives they have. It doesn't mean they're all bound to lobby, they just have a incentive to do so.
Just because you recognize that utilizing a state's ability to assign perks to business is properly called corporatism as well doesn't mean that you aren't conflating this process of exploitation with genuine free-market capitalism.
My point is that economic systems are not immutable; a free market capitalists system can be replaced by a corporatist system, much like feudalism was replaced by the current system.
> There are people who defend markets without defending capitalism: these are usually called mutualists, and they're usually connoted with the left, though unlike state socialists, they defend a stateless society.
Markets only work if you have ownership. The problem with mutalism is really that the either have to let inequality happen, the diffrent entitys (some people think this will be firms, or villages or some other non-single human entity with a common intrest) who trade will end up unequal.
The question then is what mutalism really solves, if you dont want the inequality you would have to ridistribute again and with that destroy the insentive to act in the market.
In general I agree with your post, you are quite correct.
Just to show the meaning has changed, which people are sometimes loath to admit. My point is that equating 'Fascist corporatism' to what you define 'corporatism' to be is deeply dishonest, not that I'm accusing you of doing it.
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.
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.
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.
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".
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.
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.
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.
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.
When the word "leeches" is directed toward people at the "bottom", it makes me wonder what people think of when money is created out of thin air, lended to banks at ZIRP and who then lend to people at anything but, who then use such money (or credit) to buy goods (created by their peers) that people at the helm of such institutions like banks can also buy…
not to mention industries whose profits are generated solely on the basis of tariffs and subsidies (various areas of industrial farming: corn, sugar, etc)
Getting a bank (i.e. money printing) license is probably the hardest thing to do in the developed world. The guys/families who got them must be the best adopted to the complexities of the modern society.
How about long turn demographics? There are racial and religious minorities, that have 12+ children in an average family. A basic income may help them grow even faster, leading to inevitable huge changes in the society.
That population is going to grow with or without any help, based on the general trend of population growth worldwide. If we don't educate and give them a chance in our society, then we'll be facing a disenfranchised, volatile majority.
Also, I'm under the assumption that "leeches" basically just means poor people. I supposed if we had to be more specific, in America that means Hispanics. They are not exactly religious zealots, but are definitely making relatively larger families. That's just going to be the demographic reality in America.
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.
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.
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.
'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?
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.
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..
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.
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.
I keep hearing about social security collapsing without more children, but I don't see how adding more people helps unless they contribute some production. Having more kids that will, 30 years from now, wind up unemployed or doing some unproductive job (let's say dog psychologist) not only doesn't alleviate the burden, it even makes it worse. Is "dog psychologist" really useful to society?
If your choices are "30 years from now, I'll have to support myself" or "30 years from now, I'll have to support myself and 2 unemployed kids living with me", what do you pick?
I think the problem might solve itself anyway. What old people will need in the future (as they do now) are goods, services and care (they'll need food, shelter and medical care). Traditionally, kids provided these to their parents in their old age; who grows their own food anymore? With all the increase in automation we're seeing, old people need their kids less and less, if someone else gives them food and care anyway.
It's interesting that there's another HN article talking about the benefits of a four-month paternity leave - https://www.facebook.com/tstocky/posts/996111776858 I seem to remember that one of the reasons Europe has longer maternity and paternity leave is because of the need to increase birthrates post WWII.
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.
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?
"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.
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.
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?
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
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?
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.
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.
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.
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.
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?
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.
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.
I'm not suggesting the government's sole function is to print and hand out money and call it a day. There are other methods of taxation and spending (income tax over basic income amount, or directly spending money on infrastructure, for example) that could reign in an overly inflationary economy.
The current method of injection of money into the economy via debt is broken, benefits mostly banks, and requires that a percentage of people continually go bankrupt due to lack of available cash in the future.
Basic income is an alternative means of monetary expansion that would fix this.
Not that you have to inflate with basic income, you could simply redistribute wealth. But that requires people decide who takes how much from whom, and is ripe for favoritism. Inflating via basic income is the most egalitarian method I can think of.
> The current method of injection of money into the economy via debt is broken, benefits mostly banks, and requires that a percentage of people continually go bankrupt due to lack of available cash in the future.
Sorry where did you come up with this? The CB can buy any asset with newly created money, this includes bonds. How does this in any way require a percentage of people going bankrupt?
If you really belive that the amount of cash in the economy is bound to goverment dept and that leads to a lack of cash I would strongly suggest you pick up a book on montary theory because that makes absolutly no sence.
> Basic income is an alternative means of monetary expansion that would fix this.
Have you even read what I wrote?
> Not that you have to inflate with basic income, you could simply redistribute wealth. But that requires people decide who takes how much from whom, and is ripe for favoritism. Inflating via basic income is the most egalitarian method I can think of.
Again. Have you actually read why montary transmission is not done in a direct the people way? Its not like you came up with something new, the idea was around but its simply not workable because its a one way transmission. Its like you are saying that if a ship has to turn to the left its okay to have steering wheel that can never steer to the right. What happens if you steere to the left to much for a time, what if you have strong current from the right (witch in this analogy would mean for example a change in money demand).
If you really want BI, and to it in a natural way. Make one basic tax, flat or prgressiv does not really matter as long as it is one clear function and stop any exeption people can take (alternative is a consumtion tax that applies equally to everything), and set a number of BI you want to pay out.
Montary policy should just be conducted in the usual way to hit its target, your big error is to assume that if the central bank has a 2% inflation target it has to print money, look at australia they have relativly high inflation but the montary base is very low. The market ajusts to your target and if you have a credible target you dont actually have to print any money.
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.
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.
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.
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.
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.
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.
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.
So you understand my critique, and then proceed to bring up yet more unrelated subjects, referencing individuals at random who have nothing in common with the one we're discussing. I don't think you really understand my critique.
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.
I did not listen to all of it, but one of his main arguments is that as soon as the amount you get is bigger then the amount you would earn you stop earning. He talked about this for a long time.
But the hole point of BI (as I understand the concept) that it does not matter how much you work, or how much you earn. You just get BI and from there on just let people work, its not BI or work, probebly both.
There are different variations of the idea. Whether or not it is income-based is basically irrelevant. People will still stop working, because the marginal value of employment will plummet.
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.
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.
"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.
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.
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.
You seem to be conveniently ignoring the 5 other apple sellers in you hypothetical town, all who will gladly undercut your business. Or the fact that everyone in town now has a basic income, so starting a competing apple selling business is much less riskier, as they have the BI to fall back on if their venture fails.
More demand can raise prices, that is fair. But implementing a BI does not necessarily mean that we are getting rid of capitalism, a system that tends to keep the costs of goods close to the cost of production. Also, it's worth noting that BI would most likely replace current welfare systems, so the 'net' amount of money that is put back into the system would be smaller than you are probably expecting.
You seem to be confusing a basic income with minimum wage, which is a completely different thing. The apple sellers are also receiving the basic income, so whilst you are free to raise your prices, others will not, and you will lose out.
Did people like Milton Friedman and Friedrich Hayek, who were proponents of a basic income, overlook this basic point, or is it in fact you who "doesn't understand capitalism" and is "smoking crack" (your words).
(I don't mean to be hostile, but your tone really doesn't help your argument.)
No, stop pretending that labor supply is adjustable outside some narrow range. Wage earners at the bottom don't withdraw from the labor force in order to help those left in it earn a higher wage. They work for less, until a floor is reached. Then they work another job, driving wages down further, unless there are none, in which case they eat less. And when there are fewer jobs still, they subsist in other ways (charity, crime), or fail to subsist. Almost no one is moral enough to starve.
I agree that price is simply a measure of what the market will bear, but I don't see how a basic income results in exhausting the additional supply of disposable income through inflated prices.
To continue with your apple market example, you could try to charge $2 or more per apple, but pretty soon other people will realise that they can employ their own staff to run an orchard and deliver apples to the same market at a marginal cost far less than that, and competition will drive the market price back down.
With a basic income, people's basic needs would be met and any additional income earned would be a supplement. If they agree to work for $1 an hour picking apples, then that is the price the market will bear for that particular skill and the price for a single apple will be reflective of this.
A minimum wage on the other hand works in the opposite direction. If it is set to $50 an hour, then sure, the costs of apples, along with most other things, will skyrocket, but there will also be a huge amount of deadweight loss as people simply choose to forgo employing others for many skills in the first place.
"To continue with your apple market example, you could try to charge $2 or more per apple, but pretty soon other people will realise that they can employ their own staff to run an orchard and deliver apples to the same market at a marginal cost far less than that, and competition will drive the market price back down."
Unless I reinvent the market and brainwash you that my Apple is like no other and it's worth selling your kidney for it. This way I'll grow my Apple company to record high stock prices and I'll sue any other kind of vegetable sellers. You'll think you'll figure out a way to beat us in the end, but the truth is that pretty much everything (even the Jobs) will be ours eventually and everything you ever dreamed to afford will be ours to give.
I don't understand how you get to "dramatically increasing unemployment" at the end there.
Taking your apple-seller analogy, if you map that onto the labor market, then the apples are job-seekers, and when an apple is purchased, that's somebody getting a job. Unemployment is left-over apples that you don't sell.
I understand that with a bunch more money floating around, the price of your apples will increase. That's basic inflation. But what you're saying is that not only will the price increase, but it will increase so much that you will end up with a lot of leftover apples you can't sell.
But why? The price isn't set by magic, it's set by you. You'll make the most money if you can sell more or less all of your apples, so you'll set a price that results in people buying them all. That price will likely be higher than it would be in the world without a basic income, but you're still going to sell all of your apples. If you don't, you'll lower your price until you do.
I don't see why labor would be any different. Yes, prices (wages) probably get pushed up there. But where's the pressure to push prices up to the extent that a large number of people can't find jobs? Just like the apple-seller, people make more money when they set a price where they actually find work. If a lot of people are out of work at $X/hour, then those people will generally accept wages at $(X-1)/hour, or less, until they all manage to find jobs. The minimum wage puts a floor on this, but I don't see how the basic income does.
I can see an increase in voluntary joblessness, where people's labor can only produce a small amount of value, and they don't see the point in working for that small amount of value when they can stay at home and watch TV and survive on their basic income. But I don't see how there would be an increase in involuntary joblessness a.k.a. unemployment if you created a basic income and simultaneously did away with minimum wage.
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.
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.
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.
> 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.
I disagree with your first point if I understand it correctly. Even relatively right wing or libertarian economists like Tyler Cowen consider that the low hanging fruit for most businesses is now gone. There is a dearth of investment opportunities and the demand for labor especially at the low end is not there in the west.
Though I agree that there are people who can work but won't work, I think this is overestimated. This is a point of principle hardly worth arguing.
I'll take you up on your response to the expenditure of the poor ends up in the pockets of the rich.
The point is that the poor get "blamed" for needing this money. The market will allow the price of a piece of land with some bricks on it to increase due to demand. But clearly the market can't magically create land.
> Even relatively right wing or libertarian economists like Tyler Cowen consider that the low hanging fruit for most businesses is now gone.
Well Cowen is quite on his own with this possition and even he is arguing that it will pick up again. Read the last chapter of the great stagnation.
Also just having a economy that doesn't grow doens't really have anything to do with jobs. You can have full employment in a economy that is shrinking. The question is about laber market equillibrium, if wages ajust downwards eventually you will have full employment.
> The point is that the poor get "blamed" for needing this money. The market will allow the price of a piece of land with some bricks on it to increase due to demand. But clearly the market can't magically create land.
Well the market can creat land, but the market can creat any natural resource but that does not mean every resource becomes more expensive all the time.
If rents get bigger somebody will have the idea to nock down a small building and build a bigger one. Also the notion that there is a lack of land is strang, specially in america, there if tons of land that is very cheap its just not where most people would want to live.
The market can not creat land but it can creat living space.
Though I agree that there are people who can work but won't work, I think this is overestimated.
I think that people who feel that way generally overlook the role of housewives in society. I don't know if it's still current, but I recall a few years ago seeing estimates that ~10% of all women in America were unemployed, by choice, for reasons of home-making, or whatever the most politically correct alternative of 'housewifery' is (not trying to be inflammatory, I genuinely don't know).
As America has a slight gender bias towards females, that means that ~5% of the population is willfully unemployed. Unemployment is, what, 7% right now?
Also, yes, I'm well aware that employed does not negate underemployed, which is where I really feel that America is suffering right now, but we're just talking about employment figures.
I think you are misunderstanding. Nobody cares about voluntary unemployment, if people dont want to work and just live of some other source of income family, saving or something like that. There is no economic argument about that.
The problem is people that can work, but dont because the gain of working is not big enouth to overcome the lost of safty net payments.
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.
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".
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:
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.
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.
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.
My parents only had 2 children because they could only afford 2 children. If the US government rewarded my parents for having children, they would have the incentive to have more children. Technically it does (through taking advantage of the welfare system) but my parents are hard working immigrants and not freeloaders (not to be confused with people who are on short term welfare due to legitimate unforeseen events). They did not have more kids. Other people aren't so well behaved. Other people purposely have children so they can get welfare.
If the US funded planned parenthood more, legalized abortion in all 50 states (which women already want, see below), turn off welfare for pregnant women who cannot provide for their children but got pregnant anyway, and subsidized contraception to make it affordable beyond excuse, the kids of which you speak would not exist.
I know I sound like a cold android and YES you may call me an asshole but that's life, that's nature.
Every human has a right to reproduce but is responsible for taking care of their offspring. I am not responsible for funding YOUR children's existence. Civilized people already live this way:
"The biggest reasons why women have abortions are: that having a child would interfere with a woman’s education, work or ability to care for dependents (74%); that she could not afford a baby now (73%); and that she did not want to be a single mother or was having relationship problems (48%)." - http://www.guttmacher.org/pubs/journals/3711005.pdf
Morality is well and good, but in the real world we have to focus on what works. Finland works. Germany works. The United States doesn't work as well, and desperately needs to improve.
Moralizing sermons have never solved problems and never will; only actual reform work can do that. Why are you so opposed to getting your hands dirty with reforming our system?
Have you lived, worked, or interacted with people who have been on long term welfare? What works in other countries can't be transferred over and work here like people think they can. Reform? Sure! I'm all up for it. In fact check my comment history about 6 months back and you'll see that I'm actually the one that suggested paying people a minimum income for being peaceful, since 100 years from now most jobs will be automated and the unemployment rate will skyrocket to over 50%. I have since abandoned that plan after careful consideration that things don't work out the way we intelligent human calculators think they will. Adjusting numbers on paper doesn't take into account for primitive human behavior.
I know we here at Hacker News are entrepreneurs and are dead set on trying 100 new crazy ideas of which 99 will fail and cost investors hundreds of millions and 1 will succeed and exit, ipo, or fizzle out in 5 years. We're so crazy we even try ideas that have already failed 12 times over thinking we're going to do something different this time. Humanity doesn't change as much as you think. You can't take the human out of the human. And this plan for giving away money or housing or food (which has already been tried numerous times) is dead on delivery.
> Adjusting numbers on paper doesn't take into account for primitive human behavior.
No, but treating humans like humans gets us to behave like good humans. Even in our own country we've seen murder rates go down year by year, with few anomalies, as we've cleaned up things like child abuse and spousal abuse and so on.
Primitive human behavior used to include bear-baiting and beating children bloody for not being able to recite a Latin passage correctly. Is it any wonder that reducing that has lead to fewer people who have no real compassion?
> You can't take the human out of the human. And this plan for giving away money or housing or food (which has already been tried numerous times) is dead on delivery.
Except in all the countries where it's worked for decades, right? Is the Nordic Model a fantasy, then?
Denmark, Sweden, and Norway are genetically and ethnically homogeneous, making it easier and faster for the society to enforce social norms and standards. Japan and South Korea are as well. That's why that system works so well and those countries are so...well... civilized and developed. What works for a homogeneous country will not automatically work for a heterogeneous country like America. There are some fucked up people living here. You really don't get it because you haven't been here. Again, like I said in my first comment, you have a good heart and good intentions but you might think this way because you've been living in a nice walled garden away from shitty people.
The people of a country determine the majority of its success. Not just it's laws. People from different countries, people from different backgrounds have different levels of civility. It may be cultural (which can be changed) or it may be genetic (which cannot be changed unless weeded out genetically). This is why I'm saying what works in one country won't automatically work in another.
Few people I have the chance to listen about such maters actually know what they are talking about. I upvoted your strings of replies here.
I live in Romania and here we always have had all kinds of immigrants from all around us. Maybe there were inter-ethnic tensions but the environment was always civilized, and the minorities integrated themselves (mostly) as a part of society. ...well, with one notable exception - the gypsies. The rest of the Europe are blaming us for not putting enough efforts on their education and integration but they do not seem to have an idea who the gypsies are and that is especially irritating. There are all kind of... let's say "peculiar" people in this world with whom it is difficult to accomplish things, but many of us are not willing or prepared to acknowledge this.
> Denmark, Sweden, and Norway are genetically and ethnically homogeneous, making it easier and faster for the society to enforce social norms and standards.
I have absolutely no time for racism. BTW, I'm American, born and raised.
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.
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.
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.
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?
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.
Explain that to the wall street banks. If it is ok for the fed to give a trillion dollars printed out of thin air a year trying to pump liquidity into banks, why just not give these money to every US citizen instead. It comes to 3000$ per year per US citizen - yeah even the working citizens should get basic income if implemented properly.
It won't make anyone rich but it will go great lengths to give some security to the most vulnerable of people.
Not convinced it's driven by morality. Consider every video game you've played. It holds your attention, interest and effort when you work for your rewards. Then when you find an "infinite money" cheat code, you spend 30 minutes going nuts and then do something else, never to return to that game.
We're hardwired to have a produce/consume balance.
For a few reasons that would be nearly impossible for the US as-is to implement:
-The safety net is already established. Giving someone something from birth ingrains in them that "this is just the way it is" -- giving them nothing and then turning the switch on results in disaster (see: professional athletes, lotto winners, etc). A catch-22 situation. Perhaps not insurmountable over a long enough period.
-Very low corruption, which in my experience is a function of organizational size. When people think the cards are stacked against them, right or wrong, they tend to opt out. An org the size of the US will never be low-corruption, imo. The reward is too high, and the risk continues to be too low.
-(off topic to my original point) Spending+military. The Nordic model has an obscenely high tax burden (40-50%) which is straight-up untenable with a military spend like the US's. We also have, because of our vast geographic size, a number of infrastructure we have to dump tax money into.
edit to add: also, tax-paid ("free") education, so the barrier to producing is much lower. Think about it, you're born into a society that says "we're going to make sure you have enough to live, always. Go out and do your best", then nature is usually going to take over and you'll do your best at something useful/productive. Do the same in the US and 1/4 of those folks will be using their stipend to pay medical bills, 1/2 will be tapped out from education, and 1/4 will straight up opt-out. It could work, but it'd require reworking education, healthcare & the military. Never going to happen.
Isn't the Nordic model only used in only 4 countries? Denmark, Sweden, Finland, and Norway are also genetically and ethnically homogeneous and have a tiny fraction of the population of the USA.
You live there, it works for you, but you don't see the differences in our locations which is why you keep pushing it. See- https://news.ycombinator.com/item?id=6005734 Hey I'm glad it works and you can enjoy the benefits but what works in your country does not always transfer over to others. You haven't seen how welfare programs have affected the US and the types of people (and children) they've created.
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.
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...