Good article, it's nice to see someone not only provide some actual analysis, but also be clear with their assumptions and welcome critique.
The author does kindly gives us permission to critique as long as we accept his model - a very naive device with zero academic or economic justification.
Expert opinions certainly beat naive code.
This is not to say that code cannot be valuable, but the justification for this code does not even begin to touch upon real macroeconomic issues.
One of the possible concerns of a basic income is rampant inflation - it's clear that the author has not even considered this.
Peer-reviewed economic models would have to justify their model assumptions in a more robust way, including empirical data where appropriate. I'm not an expert but I expect this is a good place to start: http://www.journals.elsevier.com/economic-modelling/
All models use simplified assumptions and questionably appropriate techniques, I agree - that is practically the definition of 'model'. However, a useful model should justify those assumptions and techniques using current research-level knowledge, and/or show how the model applies successfully to reality.
I see this model to be as useful to economic discussion as saying "the world is flat, plus or minus 5 degrees". It ignores all current work in the field.
If you just say "oh the world is so complicated and I like basic income because maybe it will reduce the # of prisoners and reduce income inequality", I have no idea what you believe will actually happen or why, and you probably don't either. For a great example of this, take a look at this post: https://news.ycombinator.com/item?id=6725282
However, I am opinionated enough to have an opinion:
- I believe that basic income allows people to invest in themselves through education or simply taking small risks without the constant and desperate need to either work or degradingly grovel to the state to pay for their basic upkeep. This would allow people the option of taking entrepreneurial risks which are generally available only to the upper-middle- and rich-classes. I do not believe that everyone would take any such opportunity but I believe we should seek to give this type of opportunity to everyone, and a basic income seems a fair way of doing that.
- I believe that basic income would create an economic shock in any country that implemented it universally, the consequences of which are not immediately obvious, may cause difficulties perhaps including rent-seeking behaviour from certain sectors and gross inflation of necessities. I believe that the unknown consequences make implementation politically difficult, but that the eventual outcome would be good for society as a whole.
Can you add these to your model?
I don't know what your second bullet point is talking about - unlike a mathematical model, your words are unclear.
Given that, I would argue that my words are a better model for reality than mathematics :)
> you probably want to alter that until it describes your beliefs rather than mine.
Exactly. You are just stating your beliefs. The fact that you have stated them in a faux-mathematical way doesn't make them any more sensible or coherent.
Did you figure that out from the part of the blog post where I explicitly said "the involvement of numbers does not make an argument empirically correct..."?
The math simply makes my assumptions obvious and my reasoning clear. That's all it is meant to do. And again, if you believe my assumptions are not sensible, replace them with your own and rerun the model.
After you do that, I won't be confused about what you believe.
And again, I won't be doing that because I think representing the situation as a naive, untestable model adds zero value to any debate about Basic Income. I don't believe that what I said was especially hard to understand for someone who had an interest, and you could have asked me to clarify any point you wanted.
If this model is supposed to represent the total of your beliefs about Basic Income, then it's not clear to me that you have considered the issue at all.
The part where you say "I’m more interested in Monte Carlo than in politics" makes this explicitly clear.