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The Flaws In "Basic Income for Everyone"
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
Proponents claim Basic Income can be paid by redirecting existing welfare programs, but a quick review reveals this as nonsense.
Finland made the news recently by proposing a pilot program of guaranteed income for all, also known as Universal Basic Income: Desperate Finland Set To Unleash Helicopter Money Drop To All Citizens.
The goal is two-fold: by providing every household with a minimum income, regardless of what other income the individuals might earn, the program does two things: it provides everyone enough money to get by and it removes the disincentive to work inherent in the conventional welfare model: in the current model, recipients who earn money lose their benefits, leaving them no better off if their earnings are modest.
The Finnish proposal offers a basic income of around $850 to $900 per month, roughly $10,000 per year.
Proponents of Universal Basic Income (UBI) see it as the only solution to automation's replacement of human labor, a topic I discuss in depth in my new book A Radically Beneficial World: Automation, Technology and Creating Jobs for All.
Advocates of guaranteed income for all claim the program can be paid for by two mechanisms: taxing the owners of robots and software who are presumed to be banking enormous profits off automation and by cutting existing social welfare programs that Universal Basic Income replaces.
As podcast host KMO and I discuss in The Search for Scarcity, this proposed funding doesn't stand up to the most rudimentary analysis. Here's why:
1. Profits and payrolls both fall as automation replaces human labor. It's easy to understand why if we consider what happens to Company A's profits and payrolls when it replaces huge swaths of its labor force with robotics and software/AI.
Its head-count and payroll expenses immediately decline, of course, but so do its profits: as robots and software become cheaper, what's to stop Company A's global competitors from buying the same robots and software?
The reality is the tools of automation are commodities, rapidly falling in cost and available everywhere. The scarcity value of these tools is effectively near-zero, and as economist Michael Spence pointed out, profits and value only flow to what's scarce.
As Erik Brynjolfsson, Andrew McAfee, and Michael Spence explain in their 2014 article New World Order: Labor, Capital, and Ideas in the Power Law Economy, capital and labor have very little scarcity value: both are in over-supply. This is why capital earns effectively near-zero return, and why the value of conventional labor is declining.
Automation, capital, labor and everything that can be commoditized globally has near-zero scarcity value, and hence near-zero profitability. As automation eliminates jobs, it also slashes profits. rather than boost profits as Basic Income proponents anticipate, automation reduces profits along with payrolls.
Thus the more realistic projection is for record corporate profits to return to their historical average of around 5%-6% of GDP, which would mean profits falling from $1.9 trillion to $1 trillion.
So let's run some numbers. The federal government currently spends about $3.8 trillion and collects about $3.3 trillion in tax revenues; it borrows the difference ($500 billion) by selling Treasury bonds--in effect, borrowing from our grandchildren to fund our benefits today.
This is politically expedient, but morally and fiscally bankrupt.
State and local governments spend another $3.2 trillion source: U.S. Census Bureau. State and local governments collect tax revenues of $3 trillion and borrow the balance.
So government consumes about $7 trillion of the $17 trillion U.S. GDP, and already borrows at least $700 billion to fund these expenditures. (In recession, the deficit spending and borrowing quickly soars well above $1 trillion.)
Paying all 322 million Americans $10,000 a year would cost $3.22 trillion. Proponents claim this can be paid by redirecting existing welfare programs, but a quick review reveals this as nonsense.
All state and local government social welfare programs are around $500 billion, and programs such as food stamps (SNAP) that would presumably be replaced with Basic Income are relatively small budget items: SNAP is around $75 billion.
As for Social Security: those receiving around $850 per month in Social Security benefits won't mind their SSA benefit being replaced by Basic Income--they will receive the same amount. But those earning $1,500 in Social Security benefits will expect to receive $1,500, not $850.
The net result is the savings from swapping Social Security payments for Basic Income are also modest. The SSA distributes around $950 billion annually to about 69 million recipients. As a rough estimate, perhaps $500 billion could be swapped from SSA to Basic Income.
As for Medicaid and and Medicare, Basic Income does not include medical care. These programs will be untouched by Basic Income.
Bottom line, Universal Basic Income will add roughly $2.2 trillion to government spending, while profits and payrolls--the sources of tax revenues--will both decline. The only way to pay for another $2+ trillion in spending is to raise taxes or borrow it from our grandchildren--a proposal that is morally and fiscally bankrupt.
Raising $2 trillion more in addition to the current federal tax revenues of $3.3 trillion and state/local taxes of $3+ trillion is a tall order. If the economy enters a profit and payroll recession (from any of several potential causes, including automation, rampant financialization, global recession, financial crisis, etc.), tax revenues will crater. Who will pay all this additional tax?
Yes, those earning $150,000 or more will end up paying their Basic Income payment as additional taxes, but the number of high-earners (who already pay roughly 85% of all federal taxes) simply isn't large enough to skim another $2 trillion.
Even if every dollar of corporate profit was taken (not likely, given the lobbying power of corporations), that would still leave the Basic Income program $1 trillion short.
Who will pay all this additional tax? If we say the remaining employed, that leads to this question: if much of your wage is being levied to support people who don't work, what's the motivation for working at all? Why not join the work-free crowd?
And what happens when the most productive members of the workforce quit or decline to be productive? Robots can't do everything, despite lavish techno-claims to the contrary.
In sum, the psychology of punishing the productive and rewarding non-contributors is destructive to everyone. Have proponents forgotten that humans are prone to emotions such as resentment? Resentment goes both ways; the recipients of Basic Income will be getting by, but they won't be able to build capital or better their financial stake. They are in effect Basic Income Serfs.
Proponents also believe that the loss of work will free everyone getting a basic income to become an artist, composer, musician, etc. As I noted in "Super-Welfare" Guaranteed Income For All Isn't a Solution--It's Just the New Serfdom, Since meaningful work is the source of positive social roles, Hell is a lack of meaningful work.
In the myopic view of the Basic Income proponents, humans are nothing but consumer-bots who chew through the Earth's resources in their limitless quest for more of everything-- what the Keynesian Cargo Cult worships as "demand."
Tragically, this blindness to humanity's need for meaning and the elevation of spiritually empty consumerism to a Secular Religion leaves the basic Income crowd incapable of understanding this timeless truth: the only possible result of robbing people of their livelihood is despair.
Once meaningful work vanishes, so do positive social roles.
This is why guaranteed income for all is just a new version of Socioeconomic Hell. Being paid to do nothing does not provide meaningful work or positive social roles, which are the sources of positive identity, pride, purpose, community and meaning.
The petit-bourgeois fantasy of every individual flowering as an artist, musician and creator once freed of work is an abstraction, one born of the expansion of academic enclaves and private wealth-funded dilettantes fluttering from one salon to the next. (Ever notice how many trust-funders have therapists? Would they all need therapists if being freed from work automatically generated happiness and fulfillment?)
These are precisely what basic income for all doesn't provide. To the degree that serfdom is political powerlessness and near-zero access to the processes of accumulating productive capital, guaranteed income for all is simply serfdom institutionalized into a Hell devoid of purpose, pride, meaning, community and positive social roles.
This is why I say The Future Belongs to Work That Is Meaningful.
KMO and I discuss these topics and more in The Search for Scarcity. Come on, people--we can do better than the bankrupt serfdom of Basic Income.
* * *
My new book is in the top 10 of Amazon's category of international economics: A Radically Beneficial World: Automation, Technology and Creating Jobs for All. The Kindle edition is $8.45, a 15% discount from its list price of $9.95.
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...its time to tax / bail in, ussa offshore companies
What if we ditched the entire tax code and returned to a system that applied duties to imports?
War
Duties and import taxes, you mean like it's written in the Constitution to fund the Gov't? That's just crazy. We need to be forced to compete with slave labor so that we are lowered to their level. Working so hard and long that we don't have the time or energy to speak up or raise a independently thinking child.
Wasn't the original taxation system limited to the temporary corporations that were created and then dissolved upon completion of their contract? I need to read more about that era so any info anyone has is appreciated. Thanks.
If the money for this scheme was created by the national treasury and spent in existence it would not be so bad. A modest inflationary increase in prices and wages would result. It would also serve to lower the overall level of debt as those who already had good earnings would likely pay down debt they may be carrying with the windfall.
The problem is that the money will be borrowed from the banks or central bank who will create it as debt. Since the author of this piece isn't really clear on this I am guessing this will be a continuation of the same pradigm that has impoverished the middle class and most national treasuries. What is clear is that this scheme will end up only benefiting the banks.
Americans wouldn't have Tv's, electronics, computers, cell phones, clothes, I could go on but won't.. Well passed the Rubicon for that
"Profits and payrolls both fall as automation replaces human labor."
This is called deflation. You can cut the benefit (eventually to zero) as it takes hold, but the purchasing power increases in the meantime.
"Automation, capital, labor and everything that can be commoditized globally has near-zero scarcity value, and hence near-zero profitability."
Hence the benefit is no longer needed.
"As for Medicaid and and Medicare, Basic Income does not include medical care. These programs will be untouched by Basic Income."
The author fails in his imagination. You take these away too, and return the medical system to a cash basis, bringing prices back down to where anyone can afford them.
The author needs to make one more logical step to realize that none of this matters. The singularity is here within five years, after that, everyone has access to a superintelligence on their phone that is ultra-competent. You will have robots that are smarter than you doing your bidding. Every single human person will be the head of their own company, and each company's goal will be to satisfy the values of the owner.
Technological singularity is also approaching and when reached it'll cause tremendous price deflation, which is also expected in the next 3-5 years.
Microchip lithography is a single generation away from reaching the atomic limit of silicone. One generation! Just one! Transistors can only be made half of what they're currently are and that will be it. The sweet spot was actually a generation ago and we are already in the land of diminishing returns when it comes to idle current seepage.
Have you noticed how the CPU frequencies stopped growing over a decade ago? What about dpi increases in camera's CMOS sensors. What about hard drive storage for conventional magnetic medium?
In 5 years it will be physically impossible to manufacture better products. Quality will be achieved only though quantity.
That's why data storage and processing is migrating into the "cloud". It's going off site to giant warehouses that can afford to cram more and more hardware into a given space. That will be it for quite some time, until new manufacturing methods are introduced. Quantum computing is still a pipe dream. 3-dimensional (holographic) storage is still in its infancy. Optical processing although promising, is still inferior to conventional electron channeling.
Long story short - in 5 years every manufacturer on the planet would've reached exact same lever of productivity, killing superiority of current manufacturing giants. Total deflation of technological assets guaranteed.
of course, as many sci-fi writers have predicted, come the singularity, the machines will eventually look around, and say "What do we need the messy humans for?".
that's the ULTIMATE deflation - from 7 billion to zero.
The Sci-Fi writers didn't know what Julia is informing about. There will be no AI.
Processors using silicon yes have hit a physical road block. But silicon is not the only material they can use. IBM as well as others are looking and successfully using Graphene that can operate at much much higher frequencies. Graphene will change the world in computers,energy storage as well as materials. A good guy to Youtube is Robert Murray Smith, hes got a ton of vids on graphene production and uses.
Maybe, Utopia is just around the corner...
"City in my head".
I'm an electrical engineer. I follow these things. IBM was able to reach 7nm lithography in a lab, which they deem to be the absolute limit. Economically viable limit is closer to 10nm. You have to remember that when making a CPU, for instance, you will have a certain percentage of bad dies that will end up as waste on the test bench. The yield has to be high enough for the CPU manufacturer to generate sufficient profit. Even though we can technically make smaller parts, we can't make them reliably. Intel is at 14nm currently with Skylake. It was supposed to be 10nm 2 years ago. What happened? Physics happened!
AMD is able to control yield through current tolerance. They make CPU's that produce more heat and waste more current when idle to get essentially to where Intel is, but we can see the picture. Going forward, greater productivity can only cone at the expense of electrical waste. In other words, there is no future. When each watt stops producing a greater number of FLOPS, that is the end of our IT revolution, much like with oil, the question is not whether more barrels are left to be found, but whether it'll take less than 1 barrel to dig another barrel out of the ground.
We are 5 years away from a total depletion of hardware improvements. I've been studying the issue for years. I'm well qualified to make the assumption. The only thing to take us forward would be a manufacturing method not yet discovered, or better more efficient software.
In electronic terms it are in the same spot, as it appeared to physicists prior to Enistein's theory of relativity. We're entering an age of revision, and unless a new breakthrough invention comes out that changes everything, things will be quite for a long long time.
CPU frequencies stopped. Not many people noticed. CMOS density stopped. No one noticed. Hard drives don't go larger that 4TB. Nobody cares. Well, when everything stops, maybe someone will notice.
Is your avatar a throat chakra? Also, thank you for your educated opinion. I for one greatly appreciate it.
3 years ago I worked for an Indian client who was obsessed the chakra theories. Around that time I started reading ZH and decided to make an account. For the avatar I randomly picked the first thing crossed my line of sight when I was sitting in front of the computer. It was on the cover of my client's booklets lying on the desk. Hence the blue symmetrical thingy.
People would see it if they just looked at the bloody advertisements for computing products.
Look at the most juiced up of the Apple MacBook Pro models: the CPUs are almost exactly the same core/speed/configurations as those being sold three years ago. Prices have been pretty much static as well.
Where is that doubling that was claimed to be guaranteed as far into the future as one could see just five or six years ago?
Vaporware...
The next big thing will be a complete re-imagining of the software environments possibly OS that only loads the parts of itself that are being used atm as is presently done with apps...death of bloatware, etc...
Much the same thing has happened before, such as in aeronautics. Massive progress and innovation from the Wright Brothers up to around 1970, by which point aircraft already looked, functioned, and were manufactured much as they still are today. Sure, there have been innovations since the 1970's, mainly in composite materials, fly-by-wire control systems, and electronics/navigation/radar. But the general principles of aerodynamics, the materials used and the limited they impose, really haven't changed much in close to 50 years now. We hit a wall.
Outside my office are aircraft designed in the 1950's and 60's, still flying, still in operation....because there have been so few revolutionary improvements made since.
We're in about the same place with regards to computers and miniaturization of electronics.
You could, but no government would. Even if the cost of labor drops to almost nothing that does not mean that the products will not cost anything. Look at our current consumer economy. Goods, from electronics, small appliances and even cars, are currently built in China at very little labor costs. In theory the labor costs could be zero since the bank of China could issue enough currency to pay the wages. Yet consumer products here in the US, although incredibly less expensive than they use to be, extract a cost on consumers. The cost is actually paid multiple times, once when you buy it on credit and eventually pay the purchase price back from wages and second in the additional cost of the credit itself. Prices can not drop to zero or the good will not be produced. Although the purchasing power increases, interest from debt and the indoctrination of the consumer driven demand will keep prices at a profitable level for all involved.
Although I would love to see this, the reality is that the FSA, accustomed to the idea that uncle Sammy provides their income, will also demand that uncle Sammy pay their health care. I actually expect to see a final phase of single payer were everyone is taxed monthly, ala Medicare, for a government sponsored health care plan.
I had a similar discussion a couple of years ago with some friends. The question was, when Star trek replicators are invented, how will this affect society. My thoughts are that society will become even more stratified than today. You will see basically three general groups. The elite, does for whom the replicator currently exists in effect, will continue seeking power and the violent enslavement of their fellow human beings. The isolationists who will return to clan living and, similar to the Amish and Mennonites, will separate from the rest of society. Since they can produce everything they need, they have no need to trade or even communicate with anyone outside their clans. The third and largest will be the despondent FSA. This large portion of society will sink deeper and deeper into a type of collective depression since they will lack a purpose. See current Indian reservations. A human without a purpose is a self destructive being that will easily accept any purpose given and will take others with him, see any MENA country.
Energy runs everything. Ideally a human being, though his activities, has to justify the number of barrels and watts supporting his existence. We've long passed the point of human obsolescence. Despite huge criticism of banks and fiat, one has to realize that they are prolonging an old bubble - a population bubble. The industry, through artificial inflation of demand preserves jobs that wouldn't have existed otherwise and without the ability to extract and produce energy directly, humans don't have much going for them. They are not needed. Yet there are still schools that raise kids as if there were factory jobs waiting for them on the other end. There are organizations that operate pretty much life factories with their 19th century command structure even though most of the activity can already be eliminated. People buy products they don't need and offer non-essential services, only because they have phantom credit to support the useless consumer addictions.
Deflation does imply improvement of living conditions for real producers. The downside is that most of us (virtually every urbanite) are non-productive. We have nothing to gain from a system that punishes parasitism. We may think of ourselves as defenders of rights and liberty, when in reality, we're the exploiters, whose habits are facilitated by our much despised governments and banks.
We don't need more superior machines to cause extinction. We are already extinct though our obsolete roles and assumptions of how things out to be.
Although I agree that energy runs everything I have to disagree with the premise that we have a population bubble. We have a consumerism bubble that is kept inflated by fiat and bank credit but, the number of humans in the planet is not hinged on the number of dollars produced but on the amount of food and other basic necessities produced. Fiat is immaterial to that equation. You can't eat digits. All that fiat does is create the incentive to increase food production to levels needed to support current population. When the population reaches the load limits, if it ever does, population will decline. Do you truly believe that humans have been around for less than 10,000 years? The last ice age ended 10,000 years ago, yet humans are thriving again. The human population clearly declined during the last ice age and recovered after.
I think that the economy, due to fiat exploitation appears better than it actually is. When people think good times are ahead and employment prospects are bright, they reproduce in greater numbers, hence the bubble.
The governments also have a say in whether the create or reduce reproductive incentives based on projected needs of the population. They can redistribute capital to either encourage or discourage family formation. They can either offer child care benefits, or have penalties, like in China.
Fiat creates phantom demand for product and it creates phantom demand for human workers that through policy formation leads to either increasing or decreasing birth rates. That's my thesis.
"We have nothing to gain from a system that punishes parasitism. "
I believe that this is a fallacy.
Many of those who ARE producers would indeed by much better off if systemic parasitism could be diminished/expunged.
http://www.propertarianism.com
NO. The fsa/parasites, rentiers/usurers, oligarchy/aristcracy, and zero/negative ROI .GOV/bureaucrats aren't going to let that happen without a monumental fight; but, it is the fight we should have if we are going to survive the Era Of Parasites.
Chinese products generally have dogshit quality, unless they're quality controlled by foreigners. I've had so many electronic cigarette products from China fail prematurely it's not even funny.
Every product has dogshit quality nowdays, whether it comes from China or not. Planned obsolescence has been the only industrial strategy since the 1960's.
As I often mention here at ZH, one of my life's 2 most valued physical possessions is a WW2 can opener that's been in my family for generations. Still as good as the day it was made. I show it to all of my friends as an illustration of how things were made when product longevity was paramount.
I've had three can openers in the last two years - cheap, middle of the road, and expensive. All were shit for durability.
It can't be an accident. BTW, I open a can about once a week.
Look for a "Swing-A-Way", if you can still find one. Still made they same way they were in 1968.
why the hell would being flawed stop the implementation? look at owebombacare.
Indeed, legislation is flawed like by definition.
I'm a freedom loving person, which includes the freedom to be stupid and harmful to one's self so long as it doesn't affect others ability to enjoy their freedom.
Go Finland! Don't theorize - FUCKING DO IT! Demonstrate that it can be done, and I'll apologize for implying they are mentally deficient, or they live as an example to the other "government can solve everything" retards and maybe show a few of them the light.
'Legislation' = designed by parasites to protect/entrench parasitism and enrich parasites.
Get rid of welfare and taxes there would be no unemployment.
(Ever notice how many trust-funders have therapists? Would they all need therapists if being freed from work automatically generated happiness and fulfillment?)
Absolutely right. I've known people who've had everything handed to them, and they were miserable. Two very attractive female .01%'s that literally turned into crack whores. Disowned by their families.
I lived in Santa Fe for a short time after college, and that's where I first heard the apt nomer "Trustafarian."
I think the main flaw in society in our world today is that
People do repetitive tasks for someone who pretty much owns them to get whatever slavery points (currency) that country has. That owner controls how people judge them ( how much slavery points they make ) controls how much they can do in their society ( how much slavery points they make ). You cannot opt out of it, if you do you get socially rejected by peers and you probably will end up on drugs and alcohol and most likely dead. After a nice day of slavery you come home to beggars on the TV asking for only 9 slavery points for something you do not want or need. It goes on and on 24/7.
I guess you can call that freedom.
Instead society should focus on ALL individuals and helping them fulfill their wills.
Item worship has failed society as a whole and to rid the world of dysfunction and misery you should focus on the individual. We need to evolve, item worship is primitive.
So billionares are hoarding slavery points?
Technically everyone is hoarding them because it is needed for everyones survival.
But when you say it like that, it just seems so...wrong.
It is not wrong just over done and we need balance and freedom.
I'm hoarding anti slavery hollow points.
Do you have room for a second? I will bring my hollow points and add to your hollow points.
Well normally I like this blog, but this just does not make sense. Of course you can redirect welfare to give everyone a basic income tax.
In Europe the proportion of welfare recipients (both full time benefits claimants ) and those on benefits plus (government employees in make work jobs) then the number of actual new recipients is very small. The tax receipts will be boosted as everyone who earns 1p will now be paying tax on all income other than there basic income.
What is the point in all this automation if people are going to have to work just as many hours anyway? We should be working maybe 10 hours per week, yes the price of things will decline but how is that a bad thing?
Because when everyone is paid the same money; somebody still needs to be the trashman, someone needs to clean old people's diapers in the nursing home, someone gets to sit in a toll booth, someone gets to be a newscaster, etc. Who decides who is doing what because the jobs all pay the same.
The point of the technology is to give the corporations a short term earning advantage, which is the sole reason they exist. They don't care that it is disinflationary in the long run, or that nobody will have money to buy their products or services a few years down the road. People will not be working as many hours on the whole, and there will be a "new normal" of very high unemployment. The concept of slavery will shift from being forced to produce to being forced to consume.
Marx actually wrote something about this. He was hoping that more technology would give humanity more free time and a better society overall due to less effort for living. It didn't work out that way apparently.
George Orwell (in 1984) discusses this further and gives an explanation for why what Marx invisioned did not work out that way.
Theyre giving you fiat fer Fuck Sake it aint like its Money.
Herein lies the problem!
the gov't run education system sure works, people are getting dumber, can't think for themselves and feel entitled to everything, including "not being offended", other peoples stuff, free health care and free money.. if any of my friends on social media bring this up, I can no longer be friends with them, I could never have an intelligent converstaion with them because they are too stupid
By the Sweat of your Brow, will you Eat..
the real problem with a guaranteed wage to replace welfare, is all the guys who got rich handing out welfare will be unemployed and on the guaranteed amount.. So Ok I'm in Favor...
Stupidity is very common. Not wanting to "know" is right behind it.
"Man defines the meaning of his life through his work" (Paraphrase from Ayn Rand)
Scarcity and the time value of money is a illusion in a economy , scarcity is especially dubious in a economy that can produce a/large industrial surplus.
You can only produce scarcity in such a system via conscience effort.
Also basic income and national dividend people work completely differently.
Basic income people want to use the present tax system to distribute income. (They see it as only reducing social welfare costs)
National dividend people issue new equity money (this is not inflationary , it is deflationary as it does not add to prices
Now you have me curious. How is adding additional currency to the currently circulating amount not inflationary? In Alaska, for example, every family receives pipeline dividends. Those dividends are already included in everyone's budget. True, prices in Alaska, because of transportation costs, are much higher than in the lower 48 and true automation would deflate prices, but the addition of currency is inflationary since currency as used today, as a pseudo commodity, competes with itself. The more of any commodity, the lower the value of that commodity against others.
Wages are part of companies costs, they must recover this in prices.
You are looking at this from a flawed monetary perspective.
Non wage income will not be inflationary in a economy with a industrial surplus.
The nature of consumptíon will simply change.
Typically you will see a crash in capital goods production.
This will drive input costs even lower then today.
"Its head-count and payroll expenses immediately decline, of course, but so do its profits:"
Er, why? I'm selling my product for revenue X. My expenses are Y. I fire all my youts', and replace them with robots. Payroll expenses decline (both wages and FICA, benefits, etc.) Now, my expenses are Z (Z<< Y). My new profits are X - Z >> X - Y.
Sure, competition can do the same thing. Eventually. See how quickly Sears and K-Mart were able to copy Wal-Mart's distribution and logistics systems? In the meantime, you reap GREATER profits.
This guy can't even figure out basic micro-economics, and he wants to lecture us on macro? Please.
It boggles the mind to see how many people fail to understand basic economics. I'm not talking about the complex, confusing and manipulated system we are yoked with currently, I'm referring to the simple exchange of goods and services.
This "basic income" scheme is just another academic exercise that fails to take into account the simple truth. If you give everyone a base level income, you just reset to a higher base level.
If the currency of exchange is marbles and you give everyone 100 marbles, you can bet every item will increase in price by 100 marbles.
I am confounded by "experts" who can elaborate ad nauseum about economic theory and methodology but can't grasp the simple things.
Am I off base or do I make sense?
Yes.
You are right, but you also must realize that the powers that be want inflation, and this is an expedient way to get it.
"you also must realize that the powers that be want inflation "
It is not a matter of want, tptb MUST have inflation in the present system.
Presently massive amounts of inflation are being generated via counterfeiting instead of via the monetization of production because it has to be to keep the present distribution of wealth -NOT of production, mind you- intact.
Because productivity is being counterfeited instead of underwriten the distribution of wealth is now almost entirely skewed to the small minority that have access to the counterfeiting, and thus wealth aggregation and wealth disparity are accelerating...
Given the current monetary system, you are essentially correct.
We would have to eliminate modern Central Banking and their inflationary policy bias for this to have any chance of being successful.
And that obviously ain't gonna happen.
Actually, only the cost of the things that these beneficiaries spend their marbles on would increase, and only if the price elasticity of demand for those things is low, right? So what has low price elasticity of demand? Things that don't have substitutes, like, I don't know, iPhones. But for things that are easily substituted, like wheat or rice, for instance, the price would not increase very much. So what you might expect to see is that the rich would spend their extra money on luxury items, and the poor would eat. Doesn't seem like a bad result. It's certainly better than incentivizing people not to work.
Wrong. You are forgetting that automated productive capacity replaces human labor. Whatever these robots produce (minus diminishing fixed costs) is up for takes. So as long as the money supply matches that productive capacity, it will work just fine.
Also national dividend people do not advocate guaranteed income .
They only wish to give out the industrial surplus when it exists .
No surplus , no income........
Yeah, that's really politically sustainable. Imagine being the politician telling everyone that the "surplus" they had become used to is not there this year and they'll be going without.
Once governments start handing out free goodies to people the politicians can't stop unless there is a total, destructive disaster.
This is exactly what is going on in Saudi Arabia and Venezueala vis-a-vis the petroleum complex.
Alaskans are also going to see their petroleum dividends slashed and new taxes imposed..
http://www.socred.org/index.php/blogs/view/the-big-difference-between-a-...
So funny that people on Wall Street, even the most critical ones, declare that the Trillions of 'Basic Income' to the banks was necessary to 'save the system' but once the same is proposed for the common man it suddenly won't work. BS!
They have a point. Did it work?
It work splendidly for those who were at the top of the financial system, management, partners, shareholders.
-Just ask Jamie or Lloyd...
Advancing tech means more and more people can no longer really provide meaningful production because they lack the IQ / brainpower to do so. Eventually we may have a Diamond Age / Star Trek replicator level economy. If we have the tech to provide nearly endless cheap energy and matter manipulation, you could provide a high lifestyle for billions of people without hardly anyone actually working. Other than some innovators and scientists, most can be automated.
The writer is correct however, humans derive self worth and community from their lives and contributions mattering in a material way. As technology and automation advances however the number of humans that can provide that form of contribution will be ever shrinking. Even if we expand human IQ into inhuman realsm and change what being human means, eventually we'll hit a point where a trivial amount of labor will provide for many, and very few will have the ability to spearhead additional development.
Now the standard model is that as human tech increases, we'll find ways to ever push back the boundaries, creating an ever expanding cycle of growth. I don't buy that. Just like the exponential population growth guys turned out to be wrong (industrial nations go negative pop growth unless you have immigration), eventually our mastery of our environment will reach a point where that form of drive for growth will slow down.
So we are stuck with the question of how to provide meaningingful contribution in a world where there is little scarcity and only the brightest can really spearhead further advancement. I think we'll find that answer as an emergent answer as society reorganizes itself organically over time to these new realities. Maybe open source collective style work and contributions will be an answer. Maybe art and entertainment will be for some. Maybe spiritualism for some. Hunter gatherers in hospitable climates contrary to popular belief had lives of mostly leisure, sex, and ceremony. It's barely a part time job to provide if you live someplace nice. We may find that humans have different modes based on environmental factors and the need for meaningful labor as a source of fullfilment will be reduced. Only time will actually tell, humanity is heading into uncharted waters here.
"So we are stuck with the question of how to provide meaningful contribution..."
Always was that way. Everyone creates their own metric. Wilt Chamberlain's was to sleep with more ladies than anyone else in the world....
I don't know why CHS didn't just cut to the chase: total US tax revenues are roughly 2.5B and don't cover all expenses as is, and we're near the observed Laffer limit already. There is simply no way to fund basic income, even if all other government services were reduced to zero. On top of this, basic income isn't even enough to cover the minimum essential living costs of most americans.
The whole thing is a non-starter. Not that they won't try it, but it, along with literally every other proposal for just about everything, ends with hyperinflation from printed money.
All the parties advocating this shit are simply too chicken to admit the truth, and that is that most of the developed countries have a choice of rejecting the FSA or accepting it, and accepting it means reducing everyone's standard of living to something barely above that of the third world. The world-government types are OK with that, since exporting jobs dragged the emerging market standard of living from stone age to ghetto, and in their fucked up heads they see that as a net win for helping billions of poor at the price of sending a couple billion middle class back into poverty.
Quick, legalize drugs. We need to keep the populace dumb and unaware as they are plugged into the matrix.
"In the myopic view of the Basic Income proponents, humans are nothing but consumer-bots who chew through the Earth's resources in their limitless quest for more of everything-- what the Keynesian Cargo Cult worships as "demand."
No, but unlike the author I need food and shelter.
He also doesnt understand the difference between money and capital.
Why is income equality exploding, if capital does produce zero returns for the owner?
I cant remember reading a more pathetic sales pitch of a book.
Since Australia got all concerned about "helping" its indigenous citizens, instead of having them assimilate into mainstream society, it began paying what they call "sit down money", or what is here referred to as "basic income for everyone".
They spend it on alcohol and tobacco (glue and petrol sniffing, with consequent brain damage, are favored by the kids), have very high suicide, wife beating, child molestation rates and they end up with bad health and early deaths.
A people that once sustained themselves in a harsh environment have no sense of self-worth when reliant on "sit down money" and they destroy themselves. This is not unique to Australia and there are plenty of examples in the west where welfare money is rampant.
Stop pretending that USTs will be paid back (they will not). Stop feeding our children's futures to the gluttonous banks. Just print the money for basic income. No taxes, ever. Just print it.
"Stop pretending that USTs will be paid back (they will not). Stop feeding our children's futures to the gluttonous banks. "
^^^THAT^^^
USTs are NOT designed to be paid back.
USTs are basically the collateralization of the future productivity of PERSONS. NOT US registered/domiciled Corporations, PERSONS. These are sales of perpetual income streams which at core guarantee the basis of The FED Banking Cartel.
More slaves have been sold by the US Gov't during the Obama Administration than in any previous period in the known history of the entirle world.
What do those at the top do?
They set up trust funds for their children so they don't have to work.
Since the dawn of civilisation there has been a Leisure Class at the top of society.
The Leisure Class was obvious in the US early in the 20th century and we have had our Aristocracy in the UK for centuries.
The efforts of the working and middle class support the upper, Leisure Class.
Not working has always been reserved for those at the top, I am sure those lower down the scale can handle it.
Here's how you mess with people's heads. Deflation in the future leads to stores with everything you could want and it's all free.
Surprised that CHS doesn't acknowledge the fact that the USD is conjured out of thin air. In that sense, there can always be more money to pay for...whatever. Would that inflate the currency? Of course, but the value is 95%-99% inflated away now versus the 1913 USD, yet we're all still chasing these worthless digits. Just print more--what's the downside, since it's all fake to begin with? There isn't a downside. A piece of bubble gum inflates to a price of $100 trillion? As long as incomes keep up with absurd inflation like that, so what? It's all fake funny money to begin with. Truth be told, the gov't doesn't need our taxes for anything because the gov't (i.e., the Fed, not their 535 puppets and puppet-in-chief) issues the money. All the tax money we pay them comes from them. Surely CHS is hip to that.
Good points. Why does he shy away from these admissions?
let's go to the graveyard and jot down some names
The concept should not be resticted to just money - why isn't there also free hot pussy for everyone ?
There is plenty to go around.
-Quality of much of it is quite low however..
This kind of proposal is the inevitable conclusion of a dying centrally controlled system. Nothing can preserve the central planners' paradise, but they can drag out their demise a bit longer by propping up the bottom of their model this way.
Doubt it will happen in the so-called "United States" though. Too much headwind from people who already got theirs and think that fiat comes out of their share of some mythical common pie. Zero sum thinking is a product of central planning.
The true issue of the times is that technology is outpacing the ability of the elites to create artificial scarcity. This usually means some kind of war to destroy the productive base and remind people that they are worms who deserve to starve to death.
A result from dropping all the dough as a welfare payment to 0.1% and now we experience an awaited wealth effect trickling down to the grass roots. These two policies however are parallel vectors.
Regarding Meaning: Life is a search for meaning. To say that mere employment hands someone that holy grail called "meaning" is delusional. It's putting the cart before the horse.
capital and labor have very little scarcity value: both are in over-supply. This is why capital earns effectively near-zero return
Confusing capital and money.
Money earning effectively near-zero returns is an indicator of money becoming worthless.
Buy my book! I'm productive! See! See!
It's a bit more complicated, as everyone will have a sizable bump in income, and thus consumption will go up. Hard to see growth making up the gap, though.
Fuck this author.
Basic income is the best idea I've heard in a long time. Of course it won't work NOW, but when automation has taken over to a larger degree. Right now, we still have to work to survive. Of course it will free you up to do whatever you think is a worthwile use of your time. To my knowledge the great artists didn't choose their metier because it improved their chance of economic survival (ok maybe some were more prolific because of economic circumstances, but is that a good thing).