Machine Money and People Money
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Now if you judge by the numbers, it's not really a success: high unemployment and low people satisfaction... plus even higher expectations about "the State". Administration is huge, costs a lot, and imposes a very rigid barrier between people and "the State": it's a country of bureaucrats. Employers and businesses are designated as "ennemies" in peoples minds, and the USA represents the ultimate Boss in the game.
In addition to RSA, France has every social benefits you can imagine... because RSA can't adjust to each situation: disabled? single mother? 6 kids? tough job?
So if you want to imagine your country with UBI, study France first. Then ask yourself if you'd like your country to be even more like France than France itself. A country where equality is the buzz word, and Liberty is totally absent of every speech.
I made the decision to leave this country because what I have in mind for my life is not 5 kids with no job... I want to work, to innovate, to create value for people, and France was making it much harder to achieve. But they have RSA and strikes. Their choice.
I do understand it sounds romantic to an american, just like USSR always sounded romantic to french people.
> I want to work, to innovate, to create value for people, and France was making it much harder to achieve. But they have RSA and strikes. Their choice.
I want to work too. Just not have a job :). Creating value for people is not equal to having a job or a company, and while most of the value is indeed created this way, I'd also wager that most jobs and companies are not really creating any value. I'd like to avoid participation in bullshit economy to the extent possible.
> I do understand it sounds romantic to an american, just like USSR always sounded romantic to french people.
Yeah, USSR sounded romantic to a lot of Western intellectuals during the entire XX century, up until the late stages of Cold War[0][1]. That said, for me - and I guess for many others - UBI is not like Soviet Union. UBI is like United Federation of Planets.
[0] - http://slatestarcodex.com/2015/08/11/book-review-chronicles-...
[1] - Though the socialist revolutions didn't start out of the blue; the sentiment came in big part from continued abuse inflicted on workers by capital owners, and you can probably thank those events for having sane working conditions today. All the safety nets we enjoy (and try to destroy) today were paid for in blood by our great-{n} grandparents.
Then who is paying them?
Unless they are being payed by the government, they are obviously creating value for someone (their customers).
If the government gets involved, it's a different story; you have to pay for all government services whether you like them or not, and then the government (which doesn't efficiently respond to market demands) pays for a lot of things that aren't really worth as much to anyone as they cost, but the government buys them anyway because it's someone else's money.
I believe that quite a lot[0] jobs and companies do not create value for society, nor that they do create any value that is needed for anything else than perpetuating the market corner they're in. This is the kind of value that I personally care about.
Take marketing, which is my go-to example of industry that's increasingly a "loopy" kind. A lot of money goes into companies trying to outmarket one another, fighting over the same pool of customers. This here is a negative feedback loop that eats up increasing amount of resources for zero gain for the participants. Money for this often comes from marginal temporary gains (i.e. a company manages to sell more widgets before their competitors cancel out their marketing) and borrowing. The industry is big, so that the feedback loop is subdivided into many links forming a chain, one type of company doing work for another. Think about the graphic design studios that do work for on-line and off-line advertising. Their work is valuable to their direct customers (companies that run advertising for other companies), even though the whole value chain loops around and create little value outside of itself.
(Now add to that a lot of new adtech companies playing support roles, for which the business model is bullshiting their clients into believing their solutions actually make marketing more effective...)
The thing is, if most of the advertising industry suddenly disappeared, the world would not be worse off in any way except lots of people who suddenly found themselves unemployed. That kind of points out that a lot of those jobs were of the bullshit kind - a loops within the market that contribute nothing to society except providing employment.
Maybe in a perfect, efficient free market with no information asymmetry and spherical cows, such things would not be possible. But in real world, market is inefficient, and those inefficiencies is what lets such "loops" exist and grow.
[0] - I initially wrote "most", but I might be undercounting the amount of small businesses that support local communities; those are companies/jobs providing real value to a limited, local market, and there's probably very many of them.
So most of us create "value for people".
"Value for society" is perhaps "meaning"?
Baking bread has value, and no meaning: people pay for it, but it won't change the world -> it's a bad job, per your definition
People pay for bread to avoid cooking it themselves, and for the pleasure of delicious bread... Giving pleasure is getting closer to meaning, but it's an intrinsic feeling: only the baker can feel it, because made his bread with love.
But delicious bread is more expensive: maybe even "meaning" has a price... I think the "value" you're looking for, which is meaning, can be found in almost any job. A marketer can find meaning in a clever/funny ad instead of a phony one.
So don't expect to "find" meaning in a job, but add meaning to your job instead... and it will add value too ;-)
This is only true provided that a free and fair market exists.
Large corporations are often able to exact monopoly rents through a combination of outright monopolization of key resources or capital, favorable / gameable regulations, and by acquiring competition or substitutes, just to name a few strategies.
This means that you and/or your employer might not be adding value at all, but could actually be destroying value, just like any other sufficiently-ineffective bureaucracy.
I'm not sure that a concept drawn from explicitly utopian science fiction, whose creator also believed (for example) that workplace interpersonal conflict would cease to exist some time in the next three or four hundred years, is the best principle on which to attempt to develop a coherent real-world theory of economics or government.
Personally, I like to have this ideal that tells me people can get better every day, that we can make the world brighter for the future generation than we found it ourselves - than to keep looking at the real past and use its worst parts to excuse and justify perpetuation of wrong or evil behaviour. The latter is exactly what we're doing when we're saying "UBI smells too much like Soviet Union, so let's keep people working increasingly pointless jobs, hoping the Market will solve things before they all blow up in our faces".
France is a very bad example of UBI. I see it as a society where everyone expects their rights, but no one sees anything as their duties. People see all public (as in owned by the society) assets as responsibility of someone else, not themselves. In other words, it is a terrible place to implement UBI.
It is the worst type of selfishness: instead of "everyone should take care of themselves" it is "someone should be forced to take care of others, but not me". It is easy to see how that leads to the very bad Nash equilibrium of the tragedy of the commons.
Is that a product of the social support system, or is the social support system a product of that?
That being said, there is a lot that worked in the French system, specially around making maternity economically sustainable: France has one of the highest fertility rates in the developed world, while maintaining a high female workforce participation rate. This should be copied by other countries, specially ones (such as Germany) facing a population crisis.
I agree on your point about innovation, I see France as a country far too worried about protecting its past: every tradition is sacrosanct and protected by law. When you protect the past, you outlaw the future.
As for maternity, it has to be seen if population growth is better than prosperity for happiness. The Swiss are at the other extreme: prosperity and aging population... yet they are the happiest in the world.
I'm not advocating for the French model (I do advocate the Swiss model), but to dissect it and try to adopt what works, ignoring what doesn't.
Of course, sometimes they're two sides of the same coin, so you can't have the cake and eat it too.
IMHO the largest problem humanity will face in the next 100 years might be decreased fertility rates. Unless our robot overlords solve that first.
Today we barely have the labor and productivity to assist the elderly, imagine if the situation worsens dramatically.
Sure, there's always the chance that AI and robotics and singularity will change everything and scarcity will be over and so one, but we shouldn't bet our chips on that.
We barely have the labor and productivity to assist the elderly for the same reason we barely have the labor and productivity to fix potholes on my street, or keep human waste out of a San Francisco alley (All while we sit at 7% unemployment.) We don't care to.
Compared to the problems of overpopulation, this doesn't even register as a crisis.
You're missing out on the dependency ratio. Take the Euro area, for example, today, for every 2 people in work age, there is 1 person being sustained (youth or pensioners), by 2060, for every 4 people in work age, 3 will have to be sustained, an increase of 50%, and it will be far more expensive than today, due to health care costs for the elderly.
Work age population will fall from 335M people today to 300M in 2060, while elderly will increase from 90M to 150M and youths will stay roughly the same.
So 35M fewer people paying taxes, and 60M more people needing support.
There are more empty homes in America then there are homeless people, but that doesn't mean that the richest country in the world cannot afford to have a roof over its head.
This is not even considering the easy way out, which is more immigration.
Not by much, and it's still not enough to renew generations.
France: 2.01
UK: 1.90
US: 1.88
Switzerland: 1.52
Germany: 1.38
Replacement rate for industrialized countries: ~2.1
Tragedy of the commons in the classical sense does not have a Nash equilibrium, because an actor can always chose to consume the extra unit of resources to benefit themselves more.
This lack of equilibrium is precisely why it's called a tragedy, because it inevitably leads to the over-exploitation (usually destruction) of the common good.
a) Use more resources: +1 for them, -1.5 for everyone else b) Use same resources: +0.5 for them, +0 for everyone else
There is only one Nash equilibrium: (a,a) with payout (-0.5,-0.5).
Repeat it again and again without cooperation and you have the tragedy of the commons.
Nash equilibrium isn't about a repeating game reaching equilibrium over time, but about the decisions multiple agents face in one specific round.
That outcome cannot be NE by your own given inputs, since both actors can improve their outcomes by switching to a different strategy.
The payout matrix is:
(-0.5, -0.5) (+1, -1)
(-1, +1) (+0.5, +0.5)
As you can see, from the [a,a] option, no agent can improve their situation by UNILATERALLY changing. In the case of [a,b], [b,a] and [b,b], one (or both) of the agents can always improve their own payout by switching from b to a.
So there's only one Nash equilibrium, at [a,a].
This is also a reason why it can be safer for a while to stay unemployed with no revenue than to work a low pay part time job.
Having plenty of kids might be the closest to a guaranteed financial help, except you actualy have plenty of kids and it's a workload and life style that you have to bare, and you still need to stay below a revenue limit.
I think not working in France requires a special set of skillset in itself. You need to be OK with a low cost life, stay away from any official and decently paid job, navigate the administration to find the right niche for you, and follow up with all the changes to stay in the sweet spot.
People with those skills will thrive in France, but most people are better off working and that's what they do.
Of them, about 1/4 receive it as a supplement to their low wage job.
Yes, the bureaucracy is daunting... and I don't pretend it's a life I'd like. I'm just saying it looks a lot like UBI and doesn't lead to prosperity nor happiness.
[1] http://www.lefigaro.fr/economie/le-scan-eco/dessous-chiffres...
For instance, I could say:
" In 2013, child poverty reached record high levels in the U.S., with 16.7 million children living in food insecure households. Many of the neighborhoods these children live in lack basic produce and nutritious food. 47 million Americans depend on food banks, more than 30% above 2007 levels." (https://en.wikipedia.org/wiki/Poverty_in_the_United_States)
That doesn't sounds like prosperity or happiness..
And I didn't say these statistics say anything about prosperity or happiness, but look higher in the thread: France has all sorts of UBI-like social benefits, and it doesn't bring happiness nor prosperity (that's what I wrote).
It seems to me that if you want to talk about happiness or prosperity, you have to compare it to other ways of organizing society (other countries), in other case, it's meaningless.
Actually France is the "other way of organizing society" (having something that looks a lot like Basic Income, see higher in the thread), and most other countries are "the baseline"... In this context, we observe no clear benefits (high unemployment, almost no growth).
Last time I checked (2 years ago), they were spending 12000€ annually for each and every homeless in France, which is great... Except they are still homeless, when this amount is similar to minimum wage (enough to NOT be homeless, and that's without social benefits). This money was basically wasted and didn't fix any problem.
So the point of heavy social programs is: people aren't happier, and in the end feel entitled to benefits... even when it downs the economy and employment.
If it involves daunting bureaucracy, and how much you get depends on how little other income you have, such that only the less than 10% at the bottom of the income distribution qualify, it doesn't look a lot (or even at all) like a UBI.
RSA is a minimum income -- a kind of means-tested benefit of the type UBI is offered as an alternative to -- not something that looks at all like a UBI. The difference is that RSA has a 1:1 loss of benefits with additional income up to the RSA threshold (at which point the benefit is zero.)
UBI has no loss of benefits with additional income, which means that -- unlike a RSA-like minimum income -- additional income for someone earning less than the UBI benefit amount provides additional utility, while with a minimum income it does not. This is one of the problems with incentive and ability to improve one's own condition that is inherent to means-tested social benefit programs (and also a driver of bureaucracy in such programs) that UBI aims to address.
The actual number is 2.53M families receiving RSA, with no soecific details on how many people by family (from the agency POV, the number of people actually doesn't matter much. They are taxed as an entity and receive RSA under the same conditions)
But both RSA and UBI need dirigisme. UBI is definitely a form of central planning, with a very wide reach, to shape the society, the people.
So UBI will never come with less dirigisme, but with more of it.
Disabled people will need more help than a fit 22yo guy for instance. Social benefits are individualized: UBI can't be the same for everyone and erase existing social benefits.
Also, governments HATE destroying public jobs ;-)
UBI probably for some extended time into the future would require some other social benefits, but to say that it requires "all" other social benefits is simply wrong. It wouldn't take a very high level of UBI to completely displace the need for existing General Assistance programs in the US, it would take a higher level to replace SNAP and TANF.
Give people a UBI/healthcare cushion to fall back on, and then employers hire/fire people at will. Eliminate the minimum wage. Create a vicious job market with zero protections (other than safety, of course) that is geared entirely towards efficiency.
This will work out ok because a minimum wage will then occur naturally, because people will be able to make free decisions about whether it's worth it for them to work or not.
The real goal of UBI ought to be to collapse every other form of social welfare under its umbrella. Give people the basic resources they need to live: money and health insurance. After that, the name of the game is economic efficiency and productivity.
You have no choice to maintain some of the other social welfare programs since not everyone can live off just UBI (unless it's really high).
You are shooting yourselves and the economy in the leg if you give everybody a UBI. People need to be given incentives to become more productive and that's the only right path in the world's prosperity. One day when automation reaches that state of the art form, everybody will have lots of food, energy and shelter not because they are GIVEN for free, but because they are PRODUCED almost for free - because of technology and competition.
We can reach that state if we focus our efforts in those essential areas and the government can help by providing incentives and (maybe) cheaper credit to the venture funds in those areas.
P.S. I have been raised in a post-commie country in a poor family and have gone through the path of breaking out of poverty. I have received lots of "free" stuff and welfare along the way, both for nothing and for the promise of educating myself. The first is dead wrong, the second is the deal breaker to me.
UBI is totalitarian BS.
This problem can be viewed from a different angle: not to make the state a distributor of UBI collected from taxes, but to empower each community to own the resources necessary to generate their income and be essentially self-reliant. So there would be no need for help from the state.
As robots become available to do the work currently done by humans, each community / city / country will have to develop and operate its own fleet. So the profits should not be concentrated in the Google of the robotics era, but distributed to everyone by empowering them to be self reliant. 3D printing and renewable energy are going to be important for achieving self reliance.
UBI isn't a income ceiling, its an income supplement. If the UBI is too low, than those without outside income will be poor, but someone will be rich.
> This problem can be viewed from a different angle: not to make the state a distributor of UBI collected from taxes, but to empower each community to own the resources necessary to generate their income and be essentially self-reliant. So there would be no need for help from the state.
How is the "community" that owns resources distinct from the state or an administrative subdivision thereof?
(I'm ambivalent on UBI)
Australians talk about the "tall poppy syndrome" -- that there is an Australian cultural tendency to cut down anyone who has been very successful.
In developing economies in general you often have a lot of people who have just gotten out of absolute poverty -- in a few generations their descendants may think differently, but they are often grateful enough that they can feed themselves and advancement beyond that is a pretty distant concern.
Then there is the Japanese proverb that "the nail which sticks out will be hammered down" -- the meaning is nuanced but is meant to convey that envy is an outcome of success and caution people against being ambitious or nonconformist.
These are all reasons why UBI might encourage some people not to work. And while these lines of thinking may be stronger in certain cultures than others, inevitably there will be some people thinking like this in any culture. Those people probably just won't work.
I don't think the UBI would provide all of that; instead it would be a means to avoid destitution (e.g. starvation, homelessness, unmet medical needs etc.) in the present. For all the luxuries that most of the middle-class hopes to achieve (luxury car, nice house, investments, vacations abroad etc) you would need more money than UBI.
Of course, since labor doesn't own said machines, they didn't exactly reap the benefits.
Nowadays, "comfortable middle class lifestyle" means a 40 hour work week, and gets you a nice 4+ bedroom house with hot and cold running water, two indoor toilets, heating and air conditioning, 2+ motor vehicles, bigass television, internet, mobile phone, nice clothes, as much food as you can eat, and spare money and leisure to go on regular holidays. "Poverty" (for most of the world) is about on par with "middle class" 300 years ago. Working lots of hours, usually enough to eat, usually warm enough.
In a hundred years, "poverty" will probably mean "only has enough compute power allocated to simulate one virtual environment at a time", whereas "comfortable middle class" will be having your own actual cloud palace with stadium-sized holodeck.
A UBI that is economically viable, even internally in a developed country, in the near term would struggle to replace more than some subset of existing poverty support programs with something with less perverse incentives (particularly, by reducing the disincentive to additional income -- and the incentive for any additional income to be "off the books" income -- for those on the poverty support programs.)
We're a long way from anything like being able to support a "comfortable middle class life" (even if by that, you actually mean something like a middle income lifestyle in a typical developed nation, which is more working class than middle class.)
> In developing economies in general you often have a lot of people who have just gotten out of absolute poverty -- in a few generations their descendants may think differently, but they are often grateful enough that they can feed themselves and advancement beyond that is a pretty distant concern.
Even in developed nations, it will be a few generations before a UBI that can supply "a comfortably middle class life" would be viable.
Awesome to know that. We have same thing in Poland. Not sure if there's any proverb or a saying. There was a joke that in hell you don't need to watch a boiling tar cauldron full of Poles. If any of them tries to get away others will hold him down.
I guess that's a human thing then. Funny that USA doesn't have that.
The only idea I can think of that expresses same sentiment in USA culture is keying someone's car. Not exploitation. Just general malice with only being better of as the reason for it.
In a society where being too ambitious is frowned upon (and if you live in America, it might sound crazy, but there are plenty of these), if you live in a neighborhood where everyone is on UBI, why would anyone get a job?
That is the issue. With increased automation, we don't need people to become more productive. We just need people to continue being consumers of all of the crap that we keep producing for super cheap. And this is the case in most developed countries.
Think of the amount of bullshit jobs that we keep around just for the sake of justifying one's worth as a productive member of society. Think of all of the "me-too" apps that we see for every closed platform. Think of all of the overpriced espresso you pay at the hipster cafe to some barista that might be $100k in debt for their French Literature B.A, and dreams of becoming a journalist writing for $150 a piece to HuffPo.
None of these people are actually needed by the system, except for their capacity to consume. UBI can be a solution for it. If it actually becomes universal and it is used to replace the broken means-tested welfare methods, I'm all for it.
It is already bad that people are getting 4 year degrees and ending up in an useless job. The vicious, even worse part is that it still manages to extract $100k+ out of them in the process.
Advertising share of gdp is at ~2%. Healthcare share is ~20% and rising. And from my experience as a non- It worker, most of the jobs deal with useful stuff (however inefficiently they do so).
Also, it's not so much about GDP per industry, but perhaps if you have the GDP per capita at different industries, we could take a look at what kind of jobs are being created and that actually needed.
Ask anyone who works in healthcare: the portion of their work that is growing is mostly "bullshit". Insurance companies and other payers like Medicaid are constantly innovating in new techniques for delaying and denying payment. It isn't clear how much of that is just a feedback loop, as providers hire more admin staff to deal with billing and then feel pressure to increase billing to pay for that staff, in response to which payers feel more pressure to deny payment, but there's definitely a lot of "bullshit" going on.
Everytime someone says that I look around at the cracks in the sidewalk, the mold in the walls of my house, the empty lots and single family homes in one neighborhood and the OD'ing junkies in the next neighborhood, and I think, if there's less work that needs to be done, then why isn't anyone doing all this work that DOES need doing?
What you are describing is not a problem of lack of manpower, or productivity. It is socio-political. If it was in the interest of the status quo to actually fix all of these issues in the developing and developed world, then rest assured you'd get a machine that could clean and repair infrastructure in no-time.
Why is getting welfare for the promising of educating yourself a deal breaker for you?
This brings my thoughts to the second and more important aspect of the labor market. Recently there was an article here about Spain and how it had 5 million unemployed people and still the economy lacked the needed workers. And what's the response of the socialists there? Give more welfare to the people. That's just not adequate. They are hoping that the people will educate themselves but let's just see how that would develop and just few percent of them will study and fill in the labor gap. Governments should seek and demand from the people to study in exchange for that welfare money.
Last point may be only that education is highly correlated with the income and breaking out of poverty, but that's something we all know. And besides education, what else can welfare do to help you find a job?
P.S. I hope I am not the only one who is totally disregarding the claim that automation will eat out all the jobs. There has been written so much about this and we all know the problem is not there is less business to do nowadays, the problem is is harder to find the qualified workers.
I don't think that's even remotely true, because even if the financial incentive is removed that doesn't mean there's no incentive. Rich people still do productive things.
The incentive doesn't have to be money. Incentives such as of respect, good will, or fame could work just as well as money as a way of motivating people. Once society is productive enough that the cost of goods is essentially zero we'll find other ways of proving status to one another.
"It's interesting that rich need to be incentivized by profit, while poor need to be incentivized by existential threat of losing their job."
Unfortunately, your comment is exactly this line of thinking. But you're wrong - with UBI, people who want to get something will still have to pay somebody else to do it. That's why people will still work - because it will pay off.
Air is even more important than food, but (outside of a few science fiction stories) no one worries about people becoming lazy because air is free.
Anyway, I should point out, though, UBI would probably make higher middle class (the people who have job, but don't have to worry about unemployment) a little worse off - they would have to pay people having low-paying jobs a little more, because the existential threat is gone. That's a good thing, IMHO. Although it makes the GP comment a little more nonsensical - UBI is actually against the interest of the higher middle class professionals.
Rent, medical insurance and taxes — these are the bulk of poor person's worries (tax breaks etc? When you are hustling 18 hours per day, you don't have time to do the shitload of paperwork it requires. And if you were relatively well the previous year, then suddenly lost the means of income, but got the tax bill from that previous year — well, tough luck.)
In no way UBI is going to challenge that.
> An estimated 14.0 percent of American households were food insecure at least some time during the year in 2014, meaning they lacked access to enough food for an active, healthy life for all household members. The change from 14.3 percent in 2013 was not statistically significant. The prevalence of very low food security was unchanged at 5.6 percent.
> Economic Research Report No. (ERR-194) 43 pp, September 2015
http://www.ers.usda.gov/publications/err-economic-research-r...
"Low food security (old label=Food insecurity without hunger): reports of reduced quality, variety, or desirability of diet. Little or no indication of reduced food intake."
http://www.ers.usda.gov/topics/food-nutrition-assistance/foo...
That's not the same as starving. At all.
Their definition of "very low food security" is:
"Reports of multiple indications of disrupted eating patterns and reduced food intake."
WTF does "disrupted eating patterns and reduced food intake" mean? Missing breakfast because you're late? Dieting? Impossible to say.
In any case, very, very few people starve to death in the United States (barring medical conditions like anorexia, metabolism disorders, etc.).
There are more creative ways to combat this problem. For example, restructuring the recruitment process, offering jobs instead of UBI since all of a sudden there is an abundance of capital or introducing legislations
If we're so interested in incentivizing people to become more productive, why not outlaw income from land and capital to force the idle rich back into productive work instead of allowing them (and their descendants) to live off "free stuff"?
Why? If class is simply a de facto consequence of the fact that not everyone is exactly the same (God forbid), why should we try to stamp it out? There's nothing wrong with being different. The only thing I would object to is an artificial class system that keeps people down. Enforced substantive equality (everyone must be exactly the same!) keeps people down just as much as any caste system.
Equality doesn't mean everybody must be exactly the same. Perhaps you should read some basic material about the topic before offering your opinion.
Perhaps instead of just disagreeing and then intimating that I don't know what I'm talking about, you could give a counter-argument.
You think poor folks are trash and deserve the terrible treatment inflicted upon them by capitalist economic institutions. I don't, and think everybody deserves compassion and decency.
Wow, that's exactly what I said! Great summary.
>I don't, and think everybody deserves compassion and decency.
How generous and upstanding of you.
You still haven't said anything besides "you are wrong and mean".
My claim is that enforced substantive equality keeps people down as much as enforced stratification. Address that.
Also, re-reading your original response, it sounds like you don't know what substantive equality means. Perhaps you should "read some basic material", as you say.
Except class is (mostly) hereditary.
Maybe, but you haven't given us any reason to believe that, especially not:
> People need to be given incentives to become more productive
...since that is one of the primary reasons for people advocating displacing means-tested social benefit programs (which negate returns for additional outside income within some range) with UBI (which does not.)
Unfortunately, the biggest and most typically debilitating costs are housing and health care. The former requires land and synchronization of other services (transportation, firefighters, law enforcement) and is a very hard and complex problem to solve. The latter is extremely human-intensive, both for physical labor, subject area expertise, and interpersonal skills (only the right diagnosis matters). It would take revolutionary advances in machine learning and robotics for health care costs to fall to the degrees of food and personal entertainment.
The other part I would add is that as living standards broadly increase, people expect more out of their purchases, both personally and societally. We expect that all buildings will comply with fire codes, which add cost. We want quality food without pumping animals full of antibiotics or chickens rolling around in each other's feces, which is more expensive when society deems "humane" conditions to be necessary.
I have argued here and elsewhere - to little agreement - that instead of establishing basic income, we should incentivize extreme cost reduction. However, I am still fully in support of universal state services, such as guaranteed health care, since nobody chooses to get sick and a sick populace that is either untreated or submerged in medical debt is a drag on all of society's potential.
People will always want more, but at the very least we can set a floor on the provision of basic necessities.
UBI doesn't remove all incentives. People will still want a nice car. People will still want a bigger house.
Right now the "incentive" is that you will be destitute and homeless if you can't keep a job. I find that incredibly cruel.
A few points I take issue with:
1) Like Keynes before him, O'Reilly misses the point that the majority of the world's population doesn't participate in open, free, or global markets. They are permitted limited access to local markets by oligarchs, who rarely grant that access out of benevolence, and maintain enough military and police power to revoke it if necessary. This is probably the single biggest reason that poor countries stay poor. Technology hasn't solved this problem because it's political. The article doesn't consider it.
2) Tim thinks that more automation is going to change the world. And of course it has already changed the developed world and will change it even more. But in much of the world, the labor of many people can be had for very very cheap. When you can hire an unlimited number of people for a few dollars a day, which in many developing economies is easy, there is little incentive to automate. In fact there is a disincentive -- you would rather keep everyone working because unemployment leads to unrest. So subsistence economies, developing countries with big rural and agricultural economies plus a big workforce -- they are not automating and have no interest in doing so. The pace at which these places change will remain slow.
3) The article touches on our great struggle ahead to overcome climate change -- as these articles written by humanity's great thinkers always do nowadays. But as the economies under these oligarchs develop, how will we convince them to do climate-friendly things when it would increase the price they pay for energy and slow their rate of growth? Climate studies alone won't do it -- some combination of political pressure and the direct economic impact of climate change might, but they will fight it hard.
All this is not really a refutation of the article, which makes plenty of valid points -- but it also makes these rosy predictions about the whole world being rich and automated in two generations' time, which makes sense if you're talking to tech heads all day, but totally ignores the non-tech realities that dictate the lives of most of humanity. The future is not evenly distributed, and the future future will probably be even more uneven.
More like: branded 'creativity' is a way to create artificial scarcity through market segmentation, to create goods that don't easily compete with each other. That's why people can drink 'artisanal coffee' for $5/cup and a Dunkin Donuts for $1/cup and not feel ripped off even if one store is next to another.
To take this at face value and to think about "Creativity money" is to be completely ignorant about the human labor in creating things that are "not Creative". That Dunkin Donuts coffee, your underwear, a television, a utilitarian tool, anything in the 'basics' were all made with some amalgamation of human labor and machines/tools.
So sure, machines get cheaper, human labor doesn't. So everything is a mix of things that get cheaper and and things that don't. "Creativity" has nothing to do with a human vs. machine money issue and just muddles the conversation.
Anecdata: Most of the artists I know hate the word.
Not surprising, since most of the "creative" work has nothing to do with creativity. You don't have much room for creative expression when you're paid to paint UIs or make magazine layouts or make cheap landscapes for sale.
The artists I know say that creativity doesn't pay the bills; it's something they'd love to do, but struggle to have time/means for.
Meanwhile everyone around me coding is listening to streaming music at $0.000003 per minute not imagining that one day their intellectual property might be similarly valued....
The chief economic problem we face today, disempowering the middle class [0] and keeping them working full-bore, is the creation of rent. UBI seems like a solution because it proposes to alleviate some of this rent - but in an urban area (in-demand housing), housing rent [1] will just increase to eat up the UBI. This will further cement the divide between urban rat racers and rural poverty.
What we need is sound money - an end to this 45-year policy of forcing inflation. In a sane technological economy, the price of goods and services should trend decreasing - after all, price is the metric by which an economy optimizes. Technology has become so powerful that the decreases are still somewhat occurring for many things, leaving anything that can be financialized (and thus used to conjure new money) shooting through the roof to keep the average increasing.
If the middle class actually had a place to save [2], their marginal utility for each dollar would drop and they would gain negotiating power (liquid savings creates runway), letting them naturally demand higher compensation or lower working hours.
[0] The term is a bit overused, but for a good reason - sustainability. Only a few can ever be upper class, by definition. And the lower class does not see their own situation as desirable.
[1] Including both money directly paid to landlords, as well as rent payed to banks based on valuations only constrained by said rent.
[2] As opposed to be fleeced by the Wall St bubble casino over passive "investments".
It should be possible for everyone at any age to aquire every skill.
This utopian place was called the "USSR". And all was rosy and shiny there.
I won't comment on the origins of this perception, or its accuracy. I'll just say I sure do hope it turns out to be correct.
The real solution to inequality is to introduce a tax on capital holdings. The more assets are owned by an entity in terms of total dollar value, the higher the tax bracket should be.
You could have 0% tax per year for asset holdings below $1 million and the % would progressively increase to 100% tax for companies with a capital worth of $10 trillion or above. That would make sure that corporations don't get too big and will encourage people to invest their money in smaller companies.
This would also encourage large corporations to break themselves up into smaller parts (to avoid taxes) - But that will be a good thing, there will be more CEO/executive jobs available and it would be more interesting for investors since they will now be able to be more selective about which specific parts of a previously huge corporation you want to invest in and stock price would move independenty.
Extremely wealthy individuals (billionaires) will be incentivized to give away large parts of their wealth to charity in order to reduce their taxes down and bring their asset holdings to an equilibrium.
This policy needs to be enforced globally (E.g. a UN resolution/international treaty) to avoid flight of capital.
But I think even with flight of capital factored in, countries that enforce this tax will be much better off economically due to the massive inefficiencies of large corporations.
For example, say you keep n^.9, then a 40% pay increase will be a 36% increase after tax. No worries about what tax brackets you may be in or be about to enter.
This way the 'tax percentage' naturally converges from 0% for people who earn little, to 100% for people who earn a lot. While still basically letting everyone have asymptoticly all their money.
Hell, even paying n(1-1/logn) would make more sense than what we have now.
> This policy needs to be enforced globally (E.g. a UN resolution/international treaty) to avoid flight of capital.
The UN does not have the mandate to impose tax laws on independent nations.
If it did, you have to re-write the entire legal framework countries to deal with pensions, trusts etc. Oh, and that's before you find interesting new kinds of charities being set up in various domiciles with different laws for qualification... So we now need to impose our version of those laws too.
Basically your solution is to have a global dictatorship where everyone does what you say, which is for their own good anyway - because your vision of what is right and proper is the only valid one. We're going to impose these laws and we're going to back it up with this Gun borrowed from the UN. Democratic governments controlling their own tax laws? Psssh. Sod that eh? And since we have this power, let's get everyone on the same page in some other important things. Police powers, information gathering and sharing, biometrics, so on and so forth. It's for the best right?
>But I think even with flight of capital factored in, countries that enforce this tax will be much better off economically due to the massive inefficiencies of large corporations.
What inefficiencies are these? All you've now done is move all the money off shore, and agreed to collect less tax because the subsidiary in your country has no assets to tax. They're all leased. No profits are made due to IP costs going to offshore companies (or a million subsidiaries or some other soln that doesn't involve paying stupid tax rates).
Machine Money, compared to Universal Basic Income, will require lot of government regulation regarding classification of what is produced by machines and humans and at what cost. Although I am sure, figuring all this out will create a lot of jobs.
https://medium.com/basic-income/why-milton-friedman-supporte...
Most people are shocked to hear that Friedman held these views.
With human nature, UBI is never going to work, it is just over-glorified welfare.