EDIT: pvnick, yes the consensus is measured in decades. Some think fewer, some think more, but yes and thanks.
Your suggestion about automation providing the wealth for basic income is the only argument that makes sense, because wealth redistribution from the nebulous "rich" just would not work on such a massive scale. Personally I don't think we're there yet, but maybe in a couple decades when we have strong AI and automation is more pronounced and self-improving.
Also remember that the average person breaks even, so affordability isn't really an issue.
You probably want the initial value to be high enough that you can actually displace some existing means-tested aid programs, even though you may not initially be able to do all of them.
Slight adjustments in the number of beneficiaries doesn't really get you much benefit in terms of eliminating the inefficiencies of existing programs (in done ways out actually exaggerated them since there is a fixed component of the overhead costs for each program.) The real efficiencies Congress when you are able to eliminate programs altogether.
One benefit of that kind of ramp up is that it naturally phases out existing programs, making them easier to kill when their time comes (and much clearer when their time has come).
It also means (to the risk point above) that if we discover some ruinous dynamic caused by the UBI, we can more easily scrap it and fall back on existing systems.
You are assuming that every one of those people stops working and lives exclusively on the dole.
That's almost certainly not going to be the case.
Now sure... wealthy people will pay more in taxes than they receive in basic income. But it would still be a tax credit.
Yes, but that doesn't mean it needs to be enough for a "living wage." It can still be a universal basic income while being low enough that recipients generally still need to work.
(Of course you'd want to supplement it with welfare programs for those who can't work, which under more generous schemes might be eliminated entirely.)
Edited to add: I wondered how much of this was population growth, and certainly there has been some but real GDP per capita has grown about $5k over that period.
If you want to do away with various kinds of property rights that's a valid argument to make. But you don't get to pretend that it isn't a new, different way.
Ultimately you're going to take some things from some people in order to give it to other people.
Maybe that's smart, maybe it's not. But no matter how you slice it, it's not manna from heaven.
You're already doing that with capitalism with land. Take a private beach as an example, no one created it, the state just added property rights to it and gave it out at some point.
Oftentimes in the US you can trace land ownership all the way back to the original grant of a King or Queen.
60% of all income above $X per year versus the 40% now is a tax, sure.
But the original comment was "The money for basic income will come from automation driven productivity improvements."
So you're going to make a new tax of 500% on sales of automation equipment? Or 50% of the money saved per year by your installation of automation equipment? And then hire several million auditors to go inspect every facility in the country every year to ensure that people aren't installing unregistered automation equipment?
There are already a bunch of tax laws on the books that should make those automation drive increases in profitability get taxed and go into the government's coffers. But companies are very adept at finding loopholes, getting new loopholes, etc. Structuring their business so as to minimize their tax burden. I think it's pretty obvious that just "raising taxes" won't accomplish enough revenue to make basic income work. So that means you've got to do something new, and something that probably won't feel like any previous tax ever levied.
While you might argue that if it's a tax it's a tax (and that's probably technically true) there's a huge difference between increasing existing tax rates and generating substantially new tax law.
I believe offering free food and shelter would be far less expensive and a better investment.
Example: 25% of the homeless suffer from mental illness, what would they do with free money? http://www.studentsagainsthunger.org/
40% of the food supply in the United States is wasted and thus could be possibly reclaimed or reistributed: http://www.worldfooddayusa.org/food_waste_the_facts
The Federal government has plenty of land. Micro houses would be a one time cost and shelter should be built very inexpensively. A Finnish micro house costs under $11,000 http://www.gizmag.com/finnish-micro-house/22580/
See eg http://www.npr.org/sections/money/2013/10/25/240590433/what-...
Basic Income seems like it would inevitably lead to inflation especially since 'fiat money' economics are so prone to emotional speculations. (cryptocoin systems have not yet seemed to develop anything usable for large scale economies).
As a nation, investing in and developing infrastructure is attainable and maintainable where as simply giving cash out is much riskier, especially at the scale for all citizens.
This of course comes with the risk of shady cronyism for the contracts and vendors whom build and maintain these projects.
We give people food stamps, they sell them for less than they're worth for cash. We have public housing. It's called "The Projects" and they're generally known as the rough area of town.
Both of these services cost taxpayers exorbitant amounts in administration. If we eliminated most of that and just gave people cash, we could let them spend on what they need. Because they know better than we do what they need, and their needs are much more varied and specific than one agency could ever cover.
There would be inflation, yes. But inflation in itself is not a bad thing so long as wages keep pace with inflation. They haven't. A minimum income would bring people with almost-no spending power into at least the bottom. And poor people don't save their money -- they spend it, often at local businesses.
This model of BI (replacing existing programs) is nothing but a giveaway to landlords, which I assume accounts for the PR juice behind it.
It's possible to have social housing that's not terrible or stigmatized. Having moved from the US to the Netherlands, the contrast is remarkable. Social housing here is integrated in most neighborhoods, not a "hood" of its own. There are definitely exceptions of course, but even the Schilderswijk or Bijlmermeer are very pleasant places compared to most NYCHA projects.
It's mostly just rent-regulated housing, be it owned by non-profit housing corporations, coupled in case of direst need with a subsidy payment, and with agencies responsible for placement. Not, actually, much different the administrative structures present in most American cities. The main difference appears to be first an explicit goal of avoiding segregation, and second, scale. Most rental housing here is in the social sector, so the benefits extend beyond the very poor, which is critical for avoiding stigma and maintaining political support.
Replacing landlord oversight with cash payments to tenants is not going to do anything to improve the lot of the tenants. I'd rather see the US invest directly in expanding affordable housing integrated with neighborhoods.
Unfortunately, this is a political loser until a majority of voters stand to benefit directly from it. Things are going to have to get a lot worse before that happens.
Rents are a matter of supply versus demand. There is a tremendous supply of housing. What is limited is desirable housing - and a big part of that is housing somewhat near a stable income. A basic income - even a modest one - would seem to radically increase the supply of housing near a stable income.
We're presently seeing low income citizens forced out of city centers and into "undesirable real estate areas" within some stretch of what could be called "commuting distance".
The point is, "undesirable real estate areas" is not static. There are tons of wonderful places that are undesirable simply because they are unaffordable (not expensive - often cheap - but without sufficient income sufficiently available). A basic income will make more of these more desirable to more people. Some of these people will chose to move there rather than SF (or Hayward). This reduces demand for presently-desirable housing, which means fewer low income citizens being forced out of city centers.
Now it's true that centralization allows some efficiencies that decentralization does not. But it has some extra costs - and (especially) some extra risks, as well. I really don't think the ideal outcome is "everyone moves to San Francisco."
It'll be interesting to see which countries are willing to address housing as infrastructure for their economy. I imagine real estate bubbles will continue to happen as long as NIMBYism and tax policy facilitate speculation. There's no sensible reason housing should cost every citizen of each generation 20 entire years of daily income.
I agree very strongly with this. The question is how we best make that happen (more). I think helping more local communities have more places to work/buy/participate is going to be a bigger win than building more housing in the places the jobs already are.
People commute to San Francisco from Tracy. From Sacramento. Moving those people from Tracy to San Francisco cuts their commute. It also means the demands of those people are now more expressed in San Francisco and less in Tracy. That means fewer jobs available in Tracy and more jobs available in San Francisco; that means more demand for housing in San Francisco.
It shouldn't be surprising that bureaucracies are inefficient.
If justice and democracy prevail I predict the participatory budget will approach 100%.
*In markets ones with at least some competition
Also, its important to note that even the machine owners wont make profits in a competitive market.
That is economics 101. But if you had stayed for the later classes you would have had to unlearn that. It is not true.
Maybe that is because "competitive markets do not exist" as the libertarians say, but whatever, in the world in which we live the top automaters are going to make super profits.
What will the world look like when the means of production belong to a small group? In a society (capitalist) where ownership implies control?
http://marketrealist.com/2015/02/intense-competition-leads-l...
Yes ideal competition is just an ideal. But given the right regulatory environment you can very extremely closely mimic that ideal. Maybe even surpass it in terms of encouraging competition.
Implying that I haven't is needlessly rude, and not providing an explanation is unhelpful. Please do better.
"In an econ 101 competitive market you also will not make accounting profits."
The way I learned it, if market participants are making less than they could elsewhere then some will leave. This lowers production and raises the price. This dynamic will raise the profits the remaining producers make until they're making as much (accounting) profit as they could at the next best opportunity, which leaves the economic profit zero. I don't see what drives the accounting profits everywhere to zero.
Zero when accounting for the time value of money. I've read (for instance here http://catalog.flatworldknowledge.com/bookhub/21?e=rittenber...) that firms can make accounting profit in the long run. But they don't go into the requirements for this to happen.... =( But I believe it is due to the time value of money - which, given a long term growing economy with relatively little inflation, will be be long term positive. I'm not for sure though.
It's possible, but - again presuming there is positive opportunity cost - as soon as the economic profit falls below zero it is a better idea for them to leave the industry than to lower their profit further.
I don't undercut your prices because I think I'll be taking home less money. I undercut your prices because I think I'll capture your business and make more money overall. If that leaves you (or some other participant) without the ability to make sufficient profit to stick around, you won't.
More taxes please.
UBI is an excellent libertarian/small-government solution.
Also, UBI is far from libertarianism. Libertarians want to be in control of their own money.
I've come around to the idea that there can't and won't be zero public social support, so UBI seems like the fairest, least-overhead way to take care of it.
The downside is, the argument/power of who to let in the country, or who in the country gets UBI, gets a lot more serious. There really aren't any easy answers here...
That's what insurance is for.
(And the state (or parents) can take out insurance for the kids before they are born---ie before anyone knows whether they are at special risk of any diseases or conditions, thus charging the average is economically fine.)
People are foolish. That's the whole basis of behavioral economics. The point is not that a rational homo economicus would be any more comforted by the fact that the basic income is universal, but that normal people would be. I don't think this universal nature is essential to the basic idea, and would be happy to have the negative income tax.
> Also, UBI is far from libertarianism. Libertarians want to be in control of their own money.
Here's an essay on libertarianism.org that goes through some pros and cons: http://www.libertarianism.org/columns/libertarian-case-basic...
Many libertarians are in favor of UBI. Including this poster.
(I don't like gold as a currency, but it doesn't seem to require even the modicum of central planning that bitcoin does.)
Every kind of redistribution must sum to zero across all people. Basic income is no different in this regard. So to say that basic income is different because the right and poor both receive it is pure sophistry.
Only if it has no impact on monetary velocity. Redistributing money from people who are not going to spend it to people who will (or vice versa) is not zero sum.
Lemma: redistribution is itself a monetary policy, given the velocity differences of different money holders.
Redistributing money from people who are not going to spend it to people who will (or vice versa) is not zero sum.
This is the essence of (neo-)Keynsianism but it only applies during recessions. In the long run, redistributing money to people who are going to spend it has zero effect.
Of course redistribution has a positive effect on welfare as defined by the sum of total utility, but it doesn't increase, for example, GDP.
"Monetary velocity" is not the usual phrasing I've seen, but from the context it was presented in and the description fo the effects attributed to it (and, well, the name -- even though its not exactly the usual term) its fairly obviously the same thing as "velocity of money" [0], a fairly basic economic concept covered in most introductory economics courses.
> Of course redistribution has a positive effect on welfare as defined by the sum of total utility, but it doesn't increase, for example, GDP.
That's debatable. Redistribution to a group more likely to expend money within the domestic economy can increase the velocity of money in the domestic economy even if it has no effect on overall velocity (which it can also have), increasing GDP, in either case.
In any case, measuring economy health by aggregate measures like GDP is not done because those are real fundamental goals, its done because measuring the sum of utility isn't practical. Improving the some of utility without increasing one of the headline proxies isn't "zero effect" in the first place.
I agree with the zero-sum idea; I should have been more clear that the point was only that making basic income universal might help psychologically. Here's my comments to a different post along the same lines above: People are foolish. That's the whole basis of behavioral economics. The point is not that a rational homo economicus would be any more comforted by the fact that the basic income is universal, but that normal people would be. I don't think this universal nature is essential to the basic idea, and would be happy to have a negative income tax.
One of the best-known advocates of UBI/negative income tax was Milton Friedman, and he most definitely was a libertarian.
There's a difference between idealistic versions of political philosophies that don't match human behavior, and practical versions of those philosophies that do.
Let's say we wind up with 50 million people who have no marketable skill. What's your solution? Let them starve? What are you going to do when they take exception to that?
If your answer is to simply kill them, good enough, but you need to face up to the fact that this is what you're advocating.
Jailing them is not an option -- that will likely cost more than the UBI scheme, and you can't even put them to work (it being a given that they can't perform any job that provides a net economic gain).
Second, this doomsday scenario of 50 million people waking up one day to discover there isn't a single thing in the world they can do to feed themselves is such hyperbolic nonsense you might as well be asking how opponents of a UBI plan to deal with a meteor demolishing Texas. Economies change. Sometimes a profession becomes obsolete. The people involved in it go elsewhere and on the whole everyone gets richer. It may sound unpleasant but it's only the same thing mankind has done a thousand times over already with great success. Unless you're mad about the fact that you don't have to milk your own cows anymore. This supposed choice between killing, jailing, or subsidizing millions of people is a false dichotomy that would sound like a joke to me if so many weren't sincerely buying into it. The other and far more reasonable option is to let free human beings navigate a changing world by adapting in the way each of them sees fit. They do it all the time. They don't need some savior swooping in with armloads of other people's money.
Yeah, and? He thought it was the best solution to the problem. See above about the difference between political theory and political reality.
Second, this doomsday scenario of 50 million people waking up one day to discover..
Don't give yourself a hernia setting up those straw men. No one said anything about people "waking up one day" to find themselves unemployable. The discussion is quite clearly about a problem that develops in the long term.
There does happen to be historical precedent for this in the many other technological revolutions modern industry has seen. Can you find one that resulted in one seventh of the country just sitting on their hands strictly because they had nothing to contribute (and not because government "safety nets" paid them to do so)?
Free money to all citizens seems like a bold economic policy with no attainable goal and presumably would draw backlash from wealthy business owners who would simply raise prices on basic goods.
Instead why not just invest in public infrastructure like transportation and public housing, and education?
Why don't greedy people raise prices already today?
This includes everything from manicurists to medical doctors. Repealing these would do two things. First, it would eliminate an unnecessary barrier of entry into a wide variety of occupations, unleashing a great many new job opportunities. Second, it would give consumers -- particularly the poor -- access to low-cost alternatives that today are illegal. Government approval is no guarantee of quality anyway. We don't need it.
I would also suggest eliminating the Federal Reserve System and its monetary policy of gradual inflation. America's period of greatest economic growth was between the end of the Civil War and the start of World War I. Under a regime of moderate deflation the economy grew 4% year-over-year for a sustained period. Living standards rose across the board. Economic mobility was high. I believe this to be directly attributable to the incentives that exist under a monetary policy of slow deflation: saving is rewarded, prices fall over time, yet innovation and wise investment are greatly rewarded. (Gradual inflation, on the other hand, impels people to borrow and borrow a lot, which just on its own reduces one's economic mobility. Excessive borrowing can also be understood as consuming too much in the present at the cost of the future, which is where the boom-bust cycle comes from. Gradual inflation also makes saving extremely difficult. Anyone who doesn't want their savings to erode over time is forced to become a speculator. It subsidizes Wall Street at the expense of every holder of Dollars.)
Education/training can't solve the fundamental problem, which is that a large number of these folks just aren't capable of becoming programmers, or surgeons, or lawyers, or anything else that of that nature.
What should we do with them? The problem isn't going to go away.
And we don't need endless Neurosurgeons; we need folks who can operate our sophisticated society efficiently and pleasantly. There are a million ways to live better, than being sentenced to a life of burger flipping.
You?
I notice that you don't mention any of these "million ways to live better". Do you have any specifics?
Better ways to live: Shopkeeper. Mechanic. Concierge. Furniture repair. Pet groomer. Now you try to add some more.