Comment by scarmig | Hacker News Reader

Comment by scarmig | Hacker News Reader

Parent Full thread

"basic income guarantee has been in practice for 50 years in almost every communist state around Russia, my Poland included"

This type of statement betrays a total lack of understanding of what a basic income guarantee even is. Plenty of deeply anti-communist thinkers--including probably the most effective one in history--have supported a basic income.

Why did your native Poland fall far short of its productive potential? As you yourself say, it wasn't for lack of money: it was because the things people wanted to consume were not being produced.

The root cause of that was broken capital markets: special interests (or foreign special interests, in the case of Poland) captured political control of the economic resources of Poland and used non-market decision making to allocate capital. If people who completely deprioritize popular standard of living control capital, then, yes, unsurprisingly other things--military, party functionaries, foreign invaders--will end up getting their demand met.

Also: "Because life ain't fair, it never will be unless we live in utopia where everyone is good and there is no evil. So why not try it? Because there was a guy who wrote it all down. His name was Marks. And you know who used his theories in practice? Lenin. And you know what happened next? The Red Revolution."

It's abundantly clear that, for all his faults, you don't even have a passing acquaintance with Marx. He's wrong on virtually everything, but you're not even wrong.

I can't comment on your reply because it lacks any argument against my post. Tell me where I'm wrong. But what I can tell you is that if you give $1,000 per month to every adult in US without any requirement, then: 1) you might as well not give any money to anybody, because relatively no ones wealth will change 2) at first everybody will be able to buy the essential stuff, food etc. but then 3) you will end up with inflation, because free money will create more demand, which in turn will result in smaller supply (relatively to demand) and higher prices, and cheaper dollar - in the end these $1,000 after a couple of months will buy you only $500 worth of goods (end game is that these $1,000 will be worthless after some period) 4) you will be spending $3bn per month on this, out of thin air, effectively pumping cash into the system, decreasing dollar value even more

To some extent this already has been tried in the US in the form of cheap mortgage credit to the poor. Thousands of dollars were given to people who defaulted and never paid back. Look where it got us…

Your points are inconsistent with each other: first you claim that no one's pattern of consumption will be affected, but then you move to claiming that the prices of basic goods will change. Those two things cannot both be true: which would you like me to address?

Overall, your main flaw is that you're considering the economy an entirely static thing. But as the demand for basic goods increases, it creates new business opportunities for both incumbents and potential entrants into the market. Capital seeks out profits, and relatively more capital would flow into the provision of basic goods. That's what prevents the basic income from dissipating into worthlessness.

Not at all, not static. I'm just saying you cannot give people free money and not take that money from somewhere else. FED has been doing this, the quantitative easing, for some time now, but it's not feasible in the long run. Wealth is created, not given.

"I'm just saying you cannot give people free money and not take that money from somewhere else"

No-one is saying that you should. A theoretical BIG would be funded by the money that is currently spent on inefficient and mismanaged state welfare. It's money that is already being spent, used in a different way.

1) you might as well not give any money to anybody, because relatively no ones wealth will change

Blatantly untrue -- under basic income poor people will see their relative purchasing power increase, and rich people will see theirs decrease.

3) you will end up with inflation, because free money will create more demand, which in turn will result in smaller supply (relatively to demand) and higher prices

Or maybe supply will go up? You know we have an unemployment problem, right? More demand is exactly what America wants right now. It creates business and employment opportunities.

in the end these $1,000 after a couple of months will buy you only $500 worth of goods (end game is that these $1,000 will be worthless after some period)

Obviously basic income would be pegged to GDP, hence pegged to inflation. This is a non-argument.

1) If I have $0 and you have $100 and we both get $1000, you are still $100 richer than me. Also, if you say that purchasing power of the rich decreases, you are admitting to inflation. If I have $10,000 and can buy 20 laptops, but after the $0 guy gets $1000 he of course feels better, he can now buy 1 laptop - however I can only buy 10 laptops now. The value of the dollar dropped by half :/ that's what you are saying?

And about pegging, if you say you increase the payout according to increasing inflation, then wow, you now have a hyperinflation (that's when prices go up 100% in a matter of days, each week).

Think of it like USA Inc. with every citizen a shareholder entitled to dividends from GDP. It is not free money.

Also, your economics is pants. Giving $1000 to everyone is going to make a lot more difference to someone eating out of dumpsters than it is to Bill Gates. And it isn't about rescuing people by giving them a lump sum and expecting that things will be fine, it is just about giving people enough time for reflection that more of them have a chance to sort their shit out. Life is hard and people are disorganised bastards, if we try and make it a bit easier for people we might get more done.

It will make a lot more difference to those who are wealthy as well. But not in a good way.

USA Inc. with every citizen as shareholder would work like this: I earn $100K/y, my neighbour just $0/y. I pay $20K in taxes, he pays none. We both get $12K/y from BIG. For me it's a dividend. For my neighbour it's free money. So what's my incentive to work? Screw this, I quit. Now, USA Inc. get's $0/y from both of us. For 4 months we still get the cash, from the surplus. But that runs out, and now we both get $0 and are jobless.

BIG will only work if there are more people who work than those who don't work. Making things easier for people never actually helped them. Those who succeeded had to go through hard work.

"So what's my incentive to work? Screw this, I quit"

Your incentive to work is that you earn $100k instead of $12k. I certainly wouldn't quit my job if it means that much of an income hit. This is actually a real situation for me - I could quit my job tomorrow and get more than $12k in benefits, but I won't.

Good point. But what if you earned $20k? The problem here is, you would have to go straight from $0 to at least $24k to have incentive to work. Anything less is just not worth the hassle, if you get $12k for nothing. And that creates a problem - how people are going to go up the career ladder, if at the starting point they want so much?

Interns? Work for nothing/benefits/nonmonetary compensation/experience?

(I'm not agreeing or disagreeing with the premise, just brainstorming)

Even a minimum wage job would double your income. That is plenty of incentive to work.

Making things easier for people never actually helped them.

You'd lose a lot of people as a lifeguard.

I'd rather teach them how to swim when they are young.

Then, in addition to my previous comment, especially at a pool for the elderly.

Reply on news.ycombinator.com