He just suggested a basic income for everybody.
I just wanted to point this out in case people missed it when skimming.
I just wanted to point this out in case people missed it when skimming.
i'm also not sure it's the right approach, but i haven't heard any better ideas yet.
with basic income, you run the risk that the receivers spend it on shiny objects (especially in an economy like ours with rampant consumerism) instead of things that benefit them and their families long-term.
of course, what constitutes "essential services" can be the subject of a lengthy debate.
If we believe in the market's ability to efficiently find the path forward, identifying "essential services", even if it were possible, is wasteful at best and more likely counter-productive over time.
Twenty years ago we'd have locked in home phone service and missed internet. 10 years ago we might have locked in cell service, but missed mobile data. We'd have propped up "bad" products, at massive profits for the benefactors, for years beyond their relevance, instead of allowing the market to evaluate and react to changing conditions.
And while we might agree that it's logically possible for efficient and effective government to correct mistakes like those, the "money is speech" reality in the US gives such outsized power to lobbying interests that even an optimist has to rate effective "steering" of any definition of "essential services" as "unlikely".
Never mind the basic question of whether it's at all desirable to force a youth from an underprivileged family to "buy" government-guaranteed education, instead of allowing him to spend even a fraction of the equivalent on a laptop, smartphone and developer tools -- or a 3d printer and amazon hosting services. Or even allowing him to look outside the box of lobbiest-approved education providers, and allowing him to "spend" his assistance on developer conferences or workshops or online learning or just moving to another town that has a better local program.
Would some people inevitably spend a guaranteed income poorly? Of course they would. They also sell food stamps for cash -- at 50% of their face value -- to make their bad decisions regardless of what we might prefer.
It isn't worth the cost to try to enforce "essential services" spending at the micro level. It's too rich a target for corporate lobbyists to define approved services at the macro level. And at the economic level, there's little reason to believe it will give us better outcomes.
However, markets fail when there is a misalignment of incentives and/or lack of information/education. I view the government's job primarily as aligning people's incentives with the desired long-term direction.
In India (where I'm from), there have been decades of dole-outs for the poor (especially farmers), but it has failed to create any long-term economic benefits for those communities. On the other hand, education (both for the farmers and their children) has been far more effective in uplifting people out of poverty.
I realize that the average American is more educated and has better access to information that the average Indian farmer. But still, you can be assured that some of that "basic income" will be going into a slot machine.
Perhaps the solution is a basic income with some restrictions / incentives around how to spend it?
Another aspect is simplicity of administration. Providing some restrictions is a bit paternalistic, though I wouldn't dismiss it out of hand: for me the biggest issue would be how you can implement that with a minimum of cost, administrative overhead, and opportunities for corruption. And there's a bunch of areas that'd result in vindictive political debate. Sure, slot machines and vodka might be things we'd agree to restrict. But liberal arts MA programs? For-profit colleges? MLM schemes? Online class certificates via Coursera? Internet connectivity? Reddit gold? Gym memberships?
If you doubt that this kind of item by item trench warfare is what would happen, just look at the furor in the USA over something as obviously {good,bad} as providing {cost-effective,immoral} birth control to the insured.
I have difficulty imagining a system where the government picks and chooses what's good and what's bad for people to use that's not rife with corruption, sclerotic from past decisions and bureaucratic rules, and easy to use for the actual citizen it's intended to enable. The value recovered from preventing "bad spending" would almost certainly be outweighed by the cost of policing the billions of purchases that happen every day.
I suspect that as real-time data-gathering becomes cheaper and more prevalent, the costs of policing will become trivial. That's certainly some years away though.
When you actually conduct the experiment -- a randomized controlled trial where you give some poor people cash and others in-kind services, the cash group outperforms.
http://www.npr.org/blogs/money/2013/10/25/240590433/what-hap...
http://freakonomics.com/2013/06/04/should-we-all-just-give-c...
http://freakonomics.com/2013/09/26/would-a-big-bucket-of-cas...
http://freakonomics.com/2013/11/27/fighting-poverty-with-act...
http://poverty-action.org/project/0522
I'm glad I could help Google That For You.
When you actually conduct the experiment -- a randomized controlled trial where you give some poor people cash and others in-kind services, the cash group outperforms.
None of the above links appear to support it. Please let me know if I'm mistaken, otherwise please do provide a relevant citation. Like many others here, I'm genuinely interested in learning about such a study.
https://decorrespondent.nl/541/why-we-should-give-free-money...
The problem is, what is a shiny object?
For me it might be going to grad school without a care in the world how I'll feed my kids.
For another it might be a car. Well, that's OK, car sales are imploding on a decade or so scale.
For another, housing. Anytime housing goes up thats trumpeted as an inherent good. It isn't, of course. But no one will say that in public.
Usually "wasted money" is just whatever someone doesn't personally like, its not actually bad. The problem with central planning, including of what everyone will have to invest in, is lack of flexibility.
Personally I believe that a UBI is the way forward for the very simple fact that it always pay off to work and it will remove a huge control system and free those people to do better things with their lives than controlling other people.
That said, I'm all for either or a combination of approaches. Anything to catch the US up with the rest of the developed world socially.
One of the benefits of a basic income is that it serves as a really effective wealth redistribution program. It is partly a social safety net, but it's also something that can potentially give the economy as a whole a boost thanks to a lot of spending on the bottom (as opposed to income hoarding at the top).
I'm not sure I agree with those positions. I think I lack enough knowledge of economics to form a good opinion. I have definitely seen both of those arguments made in support of a simple basic income, however.
What about countries in Europe that have that, and yet aren't doing great?
Progressive tax on incomes >$1,000,000. This won't slow anyone down except the ultra-wealthy.
As of 2009, it's 236,883 people. That's less than 1 in a thousand. With more income in a single year than most people in the U.S. earn in a lifetime, they'll certainly still be much more than quite comfortable.
Part of the problem when you start talking about massive tax bills is that the higher the tax, the higher the return on investment from avoiding it. So if you can pay an accountant $500,000 to set up a bunch of shell corporations and trusts as legal tax shelters that will save you $5,000,000, you'll do it in a heartbeat.
Add in Citizens United to the mix and you can see where this is going. If it's suddenly a great return on investment to lobby Congress to introduce a tax loophole, people will do it. The entire premise of modern corporate finance is that if you don't like what a company is doing with your investment, you are free to cash out your investment and invest in something else. That doesn't work with governments; but it doesn't prevent people from trying to apply the same attitudes.
What do you think happens to anybody, let alone people who are really rich when you continually increase their taxes? They stop spending, they start hiding their money, they it send it to foreign countries, they will find ways around the taxes you're trying to levy against them.
It doesn't matter who you tax, they're going to try and avoid paying taxes regardless. People have this notion that since they're super wealthy, they have money to burn - which is hardly the case. Most people making over $1 million per year live a lifestyle that's congruent to the money they're making. You think those people are thinking , "Aye, it's only 10K more to the governmnet, no big deal?", right?. Hardly. They want to hold onto their money just as much as the next guy.
"Trickle down" is fucking bullshit.
I didn't know Sam had any particular expertise in economics something that confounds people with pretty deep intellectual understanding and academics. That have been observing things for many many years. It's a black art.
And I tend to pass on anything that starts to mention facts and figures which can be made to achieve any point you want.
I did note that it ended with this of course:
"I think the path from our troubles will involve finding a way for economic growth to continue." Obviously a rising tide lifts all boats. But finding "a good lawyer" (to go all cliche here) is the problem.
> In addition to thinking about new sorts of jobs to replace lost jobs that aren’t coming back, we should probably think about things like a basic income.
So not necessary "basic income", and certainly for everyone. The reality is that many of the emerging economies are better (as in "cheaper") able to fulfill low-skill/high-labor positions, and not everyone will be able to transition into higher skill jobs.
The only real hope for natives is high skill service jobs perhaps ER doctor.
What happens when we have too many unfunded liabilities and the government runs out of money and all the millions of people who suddenly depend on government from everything from medical care, income, employment, and other forms of support?
All you have to do is take a good, hard look at countries like Greece and Argentina for examples to see what happens when countries go bankrupt.
All my Liberal friends conveniently forget that Bill Clinton took millions off of welfare and brought them out of poverty. Not from relying on government, but through incentives and job training.
Interesting to note that this was a bipartisan bill, introduced by a Republican, and heavily endorsed by Clinton himself. And yes, it went through two veto's before getting signed.
http://en.wikipedia.org/wiki/Personal_Responsibility_and_Wor...
There is a saying in Argentina that we should stop stealing for at least two years [and the country will flourish].
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Imagine if we could run the entire world economy with only 5% of the workers. Pandemonium? No, it has already happened before. Agriculture was the whole economy, the rest was rounding error. Virtually all workers worked in agriculture. Now we produce all that and much more with something less than 5% of the workforce.
Having no more work to do necessarily means that everybody already has everything they want. It's not a meaningful risk.
Most of already do work so esoteric that our ancestors wouldn't possibly believe you could base a real economy around it. Yet here we are. Our descendants will do things that similarly boggle us.
In the 19th century, for instance, there was a class of physical laborers whose numbers in the USA reached the tens of millions. But as technology--particular the combustion engine and fossil fuel refining--took off, they became surplus unusable labor that literally was more valuable being turned into glue, or letting them starve to death.
Yeah, horses.
"But it's different this time! Horses aren't people!" you say. Sure, things are always different. But you're burying the actual argument into the assumptions you're making: that people are infinitely moldable and infinitely trainable, and every person is capable of creating value in modern economies.
It's not some logical contradiction for "people want more stuff" and for "the most useless, marginal workers can't provide value by participating in the economy" to both be true. Dismissing the second idea requires a bit more than a pat answer.
Even excluding government policies like a minimum wage and required healthcare benefits, lots of people are simply too expensive to employ. Anytime you hire someone, it adds administrative costs. It adds management costs. And the more marginal the worker, the more they need to be managed and administered. At some point any value they could hypothetically provide is outweighed by the cost of employing and managing them and the risk that something they do could expose you to substantial costs, and it's simply cheaper to replace that labor with capital.
In a capital rich environment, and in economies where complex organizations can fail catastrophically because of a single node failure, it's simply far too risky to employ a certain class of people. We already do that with many of criminal backgrounds, the physically disabled, and people with substantially reduced mental capabilities. New technology has simply expanded that unemployable class to include lots of people who just don't have much going for them, at least in terms of providing economic value that's legible to corporations and the State.
So where's the big negative fallout? If the set of unemployable people has been growing for centuries, where is the mass starvation and misery? How can it be possible that the 20th century -- well into the process you describe -- saw a burgeoning middle class in the West, and then later a burgeoning middle class in Asia?
Clearly the benefits of productivity growth have been bigger than the overhead required to support the people who cannot contribute.
I'm not arguing that everybody is infinitely retrainable. I think the biggest problem we face is several generations of existing people with completely obsolete mindsets, who are too old to relearn.
Your whole argument is written in terms of employment at a job. But that's precisely part of the mindset that is obsolete. The idea that "getting a job" is the best option for most people is historically recent and already dying. There are plenty of other ways to organize an economy, and there's plenty of historical precedent for the idea that common people can successfully operate far more independently than they do under the industrial model. In a capital rich environment, you teach people to be capitalists, and let a million independent experiments blooms.
The alternative is you keep teaching people to defer to the boss, and the boss evolves into the Lord, and we go back to serfdom. That could happen too.
Assumptions about what "average people" are capable of need to be judged against the system that's training those people. Our present system was consciously designed to make them into good industrial widgets. But the malleability of children is absurdly high, and from directly experience I see no reason you couldn't turn nearly all of them into creative capitalists.
Your other points I'm in broad agreement with. More and more of the economy will shift from hierarchical, institution-oriented "jobs" to something more freeform. This effectively amounts to shifting management and monitoring costs to the individual instead of the organization, which I think makes loads of sense and is a practice that'll end up outcompeting others. I don't think the average worker will end up screwed in the next ten or thirty years. I'd expect that a surprisingly large number of them will be working in autonomous jobs outside of corporate environments.
But many of those new freeform activities will be marginal, and many of them will involve barter as compensation or even be wholly uncompensated.
So, I'm not so sanguine about the bottom 20%: even if we do manage to revamp our education system to deal with contemporary economic problems better (a huge, giant if that'd take decades to implement), it'll take time to replace the whole workforce (40 years!), and there will always be students who end up performing significantly below average. Retraining programs of older workers haven't shown exceptionally promising results, either.
One of the things I like a lot about the Basic Income is that it provides a way for those displaced workers to experiment with new ways of work without the vigilant eye of the State trying to shove them into legible, easily-taxed, and controlled corporate employment.
If I had a fatal disease with no known cure, I want a system that makes whoever finds the cure filthy rich. That's my best chance at survival. If anything, I want a system with even more profit motive.
Hint: Most, if not all, the additional money gets eaten up by newly created bureaucracy.
You can't save every life - no one is immortal. And in the decision of what care to give to which people, money will always be one factor. This is probably amplified in non-life-threatening situations since personal trainers and nutritional consultants will probably not be covered by collective health plans.
How about "guaranteed job training?" That way, if you wish to pursue a career that does not require a post-secondary degree, you can prepare yourself for that career just as well as the white collar worked who spends four years studying post-modern poetry.
N.B.: I have degrees in philosophy and writing, so I'm criticizing the study of the liberal arts.
In a world of dysgenic fertility, this is guaranteed[1].
[1] http://charltonteaching.blogspot.com/2014/06/dysgenics-is-mo...