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Comment by hamiltonians | Hacker News Reader

I wonder if this can apply to basic income?

Do you know how much money the government allocates? I think there is no evidence for the thesis and massive amounts of evidence against it. The concept of a failed state is one where the government has failed leaving the population to allocate their money as they see fit. Generally they don’t work out too well.

I’m not saying basic income doesn’t work, I’m just saying this isn’t the reason it might work.

I do think planned economies generally fail though - capitalism (meaning the process of letting individual agents decide on resource allocation) is a very powerful tool for optimizing something, and trying to centralize that decision making requires way more processing power. There’s just a huge amount of parallelizability here that you miss out on by having the government try to do allocation.

Don’t take this as me saying unregulated capitalism works even a little bit, you definitely need someone in charge of operating that tool or you end up in our current mess.

The core problem here is not processing power but information: often a central planner just doesn't know what people want or need, and can't realistically get that knowledge out of their brains without using something like a price system. To make this intuitive, consider a farmer with unpleasantly acidic soil. In a centrally planned economy, that farmer had better hope that the central planners know about the local soil conditions and allocated some lime for adjusting the pH. In a less planned economy, it'll be in stock at a local store because farmers in the area buy it frequently.

Central planning attempts did lead to some useful research though; the decentralized planning that enables, say, grocery stores is based on this.

(Some of this was invented by Soviet mathematicians like Leonod Khachiyan, whose children now do useful(?) things like run ironic post-Marxist NYC podcasts.)

> people can allocate money better than governments

(Full disclosure: we live in Europe) and my OH - who earns way more than I do - has been moaning about her taxes and deductions since, well, forever.

However in the last few years - and as an entire family - we have hit the state healthcare system pretty hard, including every single member of the family, for a whole variety of reasons. Trips to the ER, accidents, stays in hospital, operations, you name it.

Got some more somewhat frustrating news this morning from our family doctor meaning yet more appointments at the hospital, this time for two more family members, including - but not limited to - an MRI and a gastroscopy.

I was pretty down on the way home from the doctor, but on the plus side, there's basically no cost to us at all for all this additional medical care, other than from having paid the contributions to the state up-front through the taxation system.

Q: You'd prefer to roll the dice that you'll stay healthy?

> Q: You'd prefer to roll the dice that you'll stay healthy?

not op but I think that in order to have a BI that works you would need to have a functioning single payer health care system like the NHS has. The poor people would still spend the money and the money trickles back up into the wealthy but there is a velocity of the money that the rich don't have that poorer people do have because it's spent in the community immediately instead of ticking up in some wealthy person's bank account accruing interest.

> ... no cost to us at all for all this additional medical care, other than from having paid the contributions to the state up-front through the taxation system.

This is a contradictory statement. Either it is no cost to you, or you paid up-front.

I wish you the very best.

> This is a contradictory statement. Either it is no cost to you, or you paid up-front.

Perhaps I wasn't quite explicit enough: no additional cost to us, after a condition is diagnosed...

I'm sure there are people who are happy to pay as they go. This is fine, right up until the moment when you roll the dice and discover it isn't.

> people can allocate money better than governments

Maybe for quotidian expenses. But absolutely not for many long term expenses and risks.

My New Zealand government is pretty good at allocating money for common infrastructure and for people’s long-term costs (retirement, healthcare, benefit of education). Most infrastructure wouldn’t happen if we could avoid paying for it as individuals - fairly provable by comparing between countries that have good and poor infrastructure. We all see how much taxation costs us, but too many people deny/unsee the value of the massive benefits we all accrue.

The other aspect that governments can do is to manage risk and insurance, for rare events, which in my experience most people are extremely poor at planning for. When my city Christchurch was hit in 2010 by a devastating earthquake, everyone has the opportunity to see the value of the infrastructure that they lost (destroyed/damaged), and the opportunity to see the value of belonging to a society that fixes our infrastructure.

Also taxation shares the costs between the financial winners and the losers. We tax those that have benefited financially from belonging to a healthy society (people don’t “make” money, their society provides them with their opportunity and the safety to enjoy their gains), and we pay those that screw up (poorly paid job) or have bad luck (lose the genetic lottery, illness etcetera). This is easy to see: take someone who is well off (made themselves) and move them with nothing to a shitty country and see if they rebound: most people would not do well. Cue foreigners with degrees driving taxis.

It worked because it was a surprise, one-off project.

Start doing it predictably and large scale and it might end up worse than what governments do.

What is a government made up of? Hamsters?

When we talk about UBI, we have to ask, where does the money come from?

The answer likely involves inflation, maybe deficit spending. An answer like that makes UBI unsustainable.

If it were to be implemented, I think we’d want that money to largely come from increased taxes on corporations that have seen increased profits resulting from factors such as automation and offshoring.

Do those profits actually exist in real (inflation-adjusted) terms and not nominal ones?

Europe uses a VAT for this. You probably want that, because it’s the most effective tax at raising revenue, although compliance is a pain and Americans would hate it.

It doesn’t necessarily mean that, it just means taxes and interest rates need to balance it out. It’s useful as a countercyclical stabilizer.

I’d suggest to go one step further to advanced income. Government guarantees advanced income for everyone, why stop at basic, are you not generous enough?

Consider that this isn't a random person, but someone which $10k didn't move the needle very much(which is why she gave it away). Even the selection process wasn't random, probably if you're interested in TED talks and on Twitter, you're different enough from an average person in terms of your interests and means.

I think "10k not moving the needle" dramatically depends on your perspective - not sure the food bank that got one working laptop vs using mismatched sheets of paper would agree. Definitely massive donations preferable, but small amounts can be useful - it feels a little privileged to think they cannot.

I meant specifically about moving the author's needle, trying to explain her willingness to give it away, and how it isn't a great exemplar for UBI since she is not an average person. I wasn't talking about those she provided grants to - definitely, to some, $10k can be a life changing amount. There are people who never earn $10k over the course of their lives.

From the author's bio and article, it appears she is involved in venture capital, angel investing, and gets surprise tax bills which amount to more than the average English person earns in a year. That's probably the kind of person who can part with $10k without much hand wringing. Having said that, I do think the author is commendable in giving it away, because for a ton of people just like her, I believe they would just take the money and do something much more selfish with it.

Have you looked at who you are replying to?

Yes, I saw the username, but I've also been on the internet long enough to know that anyone can register a username. Especially since it is a new account, and doesn't really have a post history outside of this thread. Odds are it is the author, but then again you never know.

Does the author of the blog post being the GP of this post change anything I said?

> but someone which $10k didn't move the needle very much

Assuming she gave it away because she is “well off” is just not nice. The journalist I know was poorly paid for a stressful job - the internet has vastly changed the economics of the industry - in fact they lost their job because their is no money in it any more.

I would guess that the writer is a reciprocation type of person: that feels uncomfortable to be just given things. One lady I knew from the UK had it so ingrained that when given a slice of cake, she had to give us something in return. I also see the same thing a lot in New Zealand culture.

There is also a pride aspect. I literally cannot give money to my friends that could really do with it, even though $20 is disposable for me and is really not for them. Social obligation and status signalling make cash really difficult. Oddly enough people often accept gifts of my time and indirect costs, without reciprocation. For example I can spend time and petrol chopping firewood and they will accept the firewood for free, even though it would economically cost me far less to just buy some firewood for them however that would not be acceptable!

Edit: Also she is living in East London which is stereotyped to be relatively poor. The 2021 figures I could find were Waltham Forest (part of Walthamstow) average salary for female £31.6k/year, compared with £27.5k/year for workers in North East England (a poor part of the UK). London is way more expensive to live, so she is relatively worse off at a guess. My stereotype of female journalists is that they are doing it for their beliefs, not for the money (those that chase money go to the dark side).

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