I'd advocate for an experimental approach with smaller populations with different possible solutions, ratcheting them up as they are shown to be successful and sustainable.
I like your concave / convex image, thanks for that.
This would imply that our economic measurements are inaccurate if they don't account for the situations where people cooperate without exchanging money (for instance, raising a child.) Thus maximizing money flows in the current economy only maximizes cooperation where otherwise it would not happen, not cooperation in general, and you run the risk of optimizing for behaviors that people are actively against (and don't want to cooperate), while penalizing behaviors that people like (where they would cooperate for very little.)
You can end up paying people to fight each other, while failing to pay them to help each other.
I'm slowly working on an idea for an alternate cryptocurrency based on commemorating ordinary human moments (instead of CPU time as the source of scarcity).
A couple of articles on the project: http://www.wired.com/2014/07/document-coin/ http://thenewstack.io/why-art-could-become-currency-in-a-cry...
I can't think of many instances where someone would be paid enough to not raise their child, for example.
And if you could pay someone to do something they normally wouldn't wouldn't they be merely passively not for it and not actively against that thing?
"And if you could pay someone to do something they normally wouldn't wouldn't they be merely passively not for it and not actively against that thing?"
It doesn't matter. They might be actively against it, but if you pay them enough, they'll still do it. We -- as a society -- pay people to do things that nobody really wants to have happen except those who happen get paid to do it (like market cigarettes.) And there are things that everybody wants to have happen that almost nobody gets paid to do (like care for your family.)
We're potentially using our economy to create problems rather than solve them.
I need to think about this VERY HARD. I've never seen it put that way before.
He did a lot of work about what it means for a market to be efficient.
People forget the axioms that lead to market efficiency -- convexity being one of them.
>And one of the reasons that our technology is impeded and prevented from feeding the world properly is the failure of one of our networks. It's an information network and it's called money, about which we have the most unbelievable superstitions and psychological blocks...
>Now what happens then when you introduce technology into production? You produce enormous quantities of goods by technological methods but at the same time you put people out of work. You can say, "Oh but it always creates more jobs. There will always be more jobs." Yes, but lots of them will be futile jobs. They will be jobs making every kind of frippery and unnecessary contraption, and one will also at the same time have to beguile the public into feeling that they need and want these completely unnecessary things that aren't even beautiful. And therefore an enormous amount of nonsense employment and busy work, bureaucratic and otherwise, has to be created in order to keep people working, because we believe as good Protestants that the devil finds work for idle hands to do. But the basic principle of the whole thing has been completely overlooked, that the purpose of the machine is to make drudgery unnecessary. And if we don't allow it to achieve its purpose we live in a constant state of self-frustration.
>So then if a given manufacturer automates his plant and dismisses his labor force and they have to operate on a very much diminished income, (say some sort of dole), the manufacturer suddenly finds that the public does not have the wherewithal to buy his products. And therefore he has invested in this expensive automative machinery to no purpose. And therefore obviously the public has to be provided with the means of purchasing what the machines produce.
>People say, "That's not fair. Where's the money going to come from? Who's gonna pay for it?" The answer is the machine. The machine pays for it, because the machine works for the manufacturer and for the community. This is not saying you see that a...this is not the statist or communist idea that you expropriate the manufacture and say you can't own and run this factory anymore, it is owned by the government. It is only saying that the government or the people have to be responsible for issuing to themselves sufficient credit to circulate the goods they are producing and have to balance the measuring standard of money with the gross national product. That means that taxation is obsolete - completely obsolete. It ought to go the other way.
>Theobald points out that every individual should be assured of a minimum income. Now you see that absolutely horrifies most people. “Say all these wastrels, these people who are out of a job because they're really lazy see... ah giving them money?” Yeah, because otherwise the machines can't work. They come to a blockage.
>This was the situation of the Great Depression when here we were still, in a material sense, a very rich country, with plenty of fields and farms and mines and factories...everything going. But suddenly because of a psychological hang-up, because of a mysterious mumbo-jumbo about the economy, about the banking, we were all miserable and poor - starving in the midst of plenty. Just because of a psychological hang-up. And that hang-up is that money is real, and that people ought to suffer in order to get it. But the whole point of the machine is to relieve you of that suffering. It is ingenuity. You see we are psychologically back in the 17th century and technically in the 20th. And here comes the problem.
>So what we have to find out how to do is to change the psychological attitude to money and to wealth and further more to pleasure and further more to the nature of work.
-Alan Watts, Money Guilt and the Machine
http://www.scribd.com/doc/202207935/Alan-Watts-Money-Guilt-a...
That sounds like exactly the kind of situation where different states try different things, then the Federal government does something after it sees which ones worked. This approach has been something of a pattern for trying new things in the US.
But as decades pass, people seem to want to skip those first steps and jump right to the Federal level and refuse to budge if they cannot get the entire nation to make some leap or another with them.
That evolving 'Everybody or Nobody' attitude is killing one of the strengths of the US system.
The only problem with this is how this is impossible to scale to proper levels in the US.
This works great in smaller economies (like you're advocating) like Scandinavian countries where you have a much smaller population and it's easy to support a few million people. You also have to take into account the Scandinavian cultural norms as well.
When you have over 300 million? As we've seen in recent years, when you institute measures like this it actually creates more dependency and self reliance on the government - not something I would think you'd want to advocate on such a large scale.
Also, your concern is why I'd advocate for a small pop to large pop experimental approach.
I don't think government dependence is a prima facie bad thing. If we assume that people are mostly rational and can make decisions that are best for themselves the government dependence problem would work itself out. We have a problem with it, now, because it is in a persons best interest to step out of the zero sum and negative sum games that the poor are forced into for, sometimes, decades or lifetimes. But if we ensure people have just enough guaranteed assistance to not starve, go homeless, or die from lack of medical care we can ensure that the vast majority of transactions -- including trading one's time to create value for an employer -- are positive sum transactions. People will tend to make the most of that if we assume a basic level of self interest and rationality. Government assistance would be a steady state of mere survival while the market would offer positive growth and an improvement of one's condition.
Regarding population, when you have more people you get more money.
> You also have to take into account the Scandinavian cultural norms as well.
What are these Scandinavian cultural norms?
So the problem isn't one of scale, which is already huge. It's one of distribution.
Money on its own is not the solution. You can only grow an economy when people are building useful things of all kinds, doing useful things for each other, and creating new businesses.
The big problem in the US isn't capitalism as such, it's the fact that there's a layer of old and new money privilege accreted around Wall St and Washington. It's such a resource sink it has literally locked out most of the rest of the population.
It's a networking and patronage problem. The money is just a symptom.
If you're on the right side of the social firewall you can be a complete failure and still get jobs at C-suite and board level. (See recent examples from any number of tech companies - which are the obvious symptoms of a much bigger issue.)
Prosperity only happens when an economy rewards ability much more than it rewards the benefits of in-caste relationships.
This isn't even considered an issue in most descriptions of economics, but it's a huge influence at every level of business. And with the partial exception of the startup/accelerator/incubator scene, the current situation in the US has been a tragic brake on real growth.
The best you'll get from throwing money at people is temporarily less crime, starvation, and homelessness. Those are big wins on their own, but they're a bandaid and the improvement isn't really sustainable. For a growth-oriented economy, more is needed.
> So the problem isn't one of scale, which is already huge. It's one of distribution.
Ah, but those industries are concentrated interests. The individual value proposition is sufficient for people in these industries to lobby the government, because there's an enormous amount of wealth available to be transferred to a relatively small number of individuals.
On the other hand, the scenario you're proposing is that same enormous amount of wealth available to be transferred to an enormous number of individuals. The upside per individual is relatively small, and most individuals are better off spending their time and resources on things that can more directly improve their life (like going to work, getting an education, exercising, enjoying entertainment, etc.). Note that this isn't individuals making a mistake or being irrational. They're acting in their self-interest.
It's easy to say that "we" should just redistribute the subsidies on big industry to the entire population. But it is, as far as I can tell, not a remotely feasible goal.
Just thinking out loud about this, but could part of the fix for this be using a debt jubilee to reset debt after a set number of years?
EDIT: For anyone unfamiliar with debt jubilees:
http://theconversation.com/the-debt-jubilee-an-old-testament...
Safety will be more valuable than ever, so those with huge lump sums of existing Capital will have even more power. We could replace modern corporate finance with good old-fashioned robber-baron family-finance operations like Carnegie, Rockefeller, and Gould.
The ownership wouldn't transmit back to the government, it'd be converted into public property but with the option to renew ownership. Public property is not the same as government owned.
The idea is to get rid of accumulation of wealth beyond a single generation, i.e. in general you only own what you earned in your own lifetime (plus some extra from the generation that preceded you).
"The white man knows how to make everything, but he does not know how to distribute it." -Sitting Bull
The figures I've seen suggest that in the US, 50% of welfare beneficiaries are long-term dependents, but they have bouts of it, going in and out of welfare over the course of (on average) 12 years.
If you dig into specific programs, I think generally you find that programs fail because they aren't giving people enough resources to become self-sufficient, and are expecting results on too short a time frame.
I've yet to see a coherent argument for this claim.
> This works great in smaller economies (like you're advocating) like Scandinavian countries where you have a much smaller population and it's easy to support a few million people.
Why would this work better in a smaller economy? Why would it be easier for an economy of 30 million people to support N needy people than for an economy of 300 million people to support 10N?
> When you have over 300 million? As we've seen in recent years, when you institute measures like this it actually creates more dependency and self reliance on the government
How have we seen this? I don't see any evidence that "measures like this" have actually been instituted, much less that they have been instituted and observed to produce the results you suggest.
Of course, the problem is that almost everything it gets applied to can be decomposed neatly into, independently operated geographic regions - whether states, or counties or groups of such - if the scale becomes a challenge.
Arguably scale rather creates great opportunities. Subdivision coupled with looser coordination and knowledge exchange means systemic failure at the top of each system can be contained by leaning on the others. E.g. the UK National Health Service is split into many "trusts" and failing trusts are often either put under the control - temporarily or long term - of successful ones, or given more focused support from surrounding trusts to get back on track. Any number of trusts can be badly mismanaged without creating existential threats to the health service as a whole.
The larger the overall system, the more such trusts can be run at whatever the ideal scale is for optimizing system cost rather than having to scale them down to spread the risk; and the more such trusts, the easier it becomes to absorb individual failures without too big effects on surrounding ones.
Furthermore, none of them have more people than Germany (~80 million), the country where the modern welfare state was born (Bismark put in place the first welfare reforms as a means to try to stop the growth of the socialist groups that were becoming a threat to the political stability of Prussia; though while he gave with one hand, he outlawed dozens of them with the other).
Of course, even the Scandinavian countries subdivides provisioning of these services further, down to the county level for many types of services.
In other words: This is a problem that decomposes very nicely, and that scales up accordingly. Just threat it as a suitable number of independent systems. They still have the economies of scale to make it reasonably efficient. You have some added complications, but also the benefit of being able to study differences in the various implementations and copy the most effective practices. Scale is opportunity here, first and foremost, not a problem.
> You also have to take into account the Scandinavian cultural norms as well.
As a Scandinavian, I'm very curious about what Scandinavian cultural norms you believe makes this easier that isn't present elsewhere. Besides, it's not just Scandinavia that has a comprehensive welfare system. Most Western-European countries do.
> As we've seen in recent years, when you institute measures like this it actually creates more dependency and self reliance on the government
This is only a "problem" when you don't consider that the alternative is that these people starve, live in substandard housing or go without important medical care. Nobody wants people to be dependent on welfare, but I prefer "welfare dependence" to having people grow up destitute.
If/when there are jobs that pay enough, fine, put strict conditions in place to push people to take them or lose benefits. But when there aren't enough jobs, or the ones that are available doesn't cover housing or food nothing good is achieved by not providing support for the basics.
When discussing social services, it's also important to discuss borders, because of the real-or-imagined threat of people doing all their tax-paying years in one jurisdiction and all their benefit-drawing years in another.
The various US states have been dealing with tenuous internal boundaries for 200 years, and it has affected the evolution of their various tax/benefit systems.
In contrast, Germany--as part of the EU--has done the same for only about 20 years, and is even now poised to break/bend the agreement to deter an influx of migrants.
TLDR: It much easier to maintain a high-welfare state when you have strong border-controls or are geographically remote from waves of immigration.
Wait a minute.
1) It's not just Germany. The Schengen area inside and partly outside the EU is playing catch-up with the consequences of increased work migration. We can even say the whole EU has tried to come up with solutions since the Eastern European states joined.
2) Currently Germany is one of the few countries /not/ trying to deter migrants. That does not only apply to refugees but also migrants from South and East Europe. It's a couple of other countries bending rules here.
3) Stop conflating intra-EU migration with the refugees.
But yes, we have to be careful not to foster dependency.
I mean, can you imagine? Just...total horror. If only there was a word to describe this nightmarish dependence on government.
Wait, what's that? There is a word? Oh, right, civilization.
What you could have done was instead read it for what it is.
Um, ok.
More the point, negative forms of dependency are fostered by reducing people's options, not increasing them. If you're really worried about dependency (and not, say, maintaining a status quo that features a cheap, easily exploited, and largely disposable labor pool) worry less about making life's basic necessities a reward and more about the kind of society that can develop when basic security is a baseline.
This is obviously false when you consider the simple fact that there already exists a renewable surplus of food water and shelter in the US. There are more than 5 empty houses for every homeless person in the US. This is a distribution problem, not a production problem.