YC should consider writing the occasional blog post about the projects it's working, it would be interesting to follow and the feedback from HN might be useful.
I know we all admire YC here, but let's be practical about it. They're not going to drum up any more bad press for themselves than necessary.
Good idea; I may try something like a "State of YC" update once every 3-6 months.
All media is fully or partially state sponsored, a third of the adult population is on some kind of welfare (incl public pension or student grants), a third of the adult population work for the government, and only a third of the adult population work in private companies, many of which derive all or a big part of their income from the domestic or foreign public sector (pharmaceuticals, clean energy, etc).
Direct and indirect taxes take huge part of income. If you wanna buy a car, taxes are roughly 180 percent plus 25 percent VAT (also VAT on the tax). Those taxes you pay with income that has already been taxed 40-60 percent.
Almost all education, health care, energy, mass transportation is public.
I left the country, but not because of the political or economic system. Quality of life in Denmark is very high and I think most Danes like the socialism of Denmark.
Other Scandinavian countries are similar and also with very high quality of life. Most European countries are to some degree also quite socialist and life there is generally good. So I think it's safe to say that socialism can work.
How is class mobility in scandinavian states? Can you work your way up from the dregs of society to the top levels?
If I want my kids to go to a great school like Stanford or Harvard, can I reasonably expect to be able to find a way to cover tuition as a member of the middle class?
If I'm looking for a job in the $200k US range, what are my potential career options?
What kind of housing can I expect to find if I'm a sole earner as a software engineer with a family of 6?
Social mobility is higher than in the US but the highs are lower.
Almost nobody makes $200k in Denmark, and fewer make it year after year. Even lawyers, dentists, medical doctors usually make less. But you also don't really need it. Public services such as schools, universities and hospitals are great.
You wouldn't be able to live anywhere near Copenhagen if you are on a developer's salary and you need space for 4 kids. Most women in Denmark work. It's not a place designed for one income.
> Speaking at Harvard's Kennedy School of Government, Danish PM Lars Løkke Rasmussen told students that he had “absolutely no wish to interfere the presidential debate in the US” but nonetheless attempted to set the record straight about his country.
> "I know that some people in the US associate the Nordic model with some sort of socialism. Therefore I would like to make one thing clear. Denmark is far from a socialist planned economy. Denmark is a market economy,” Rasmussen said.
> “The Nordic model is an expanded welfare state which provides a high level of security for its citizens, but it is also a successful market economy with much freedom to pursue your dreams and live your life as you wish,” he added.
I just found this quote from the Danish PM. What I find interesting about it is that it indicates the kind of distrust of socialism that I grew up with. I don't feel that social programs are bad, but socialism as a political goal is particularly disturbing. Based on history, governments should not be trusted with that kind of control - even if there are altruistic people involved, the bureaucracy can't meet the changing demands of society. And there are few altruistic people involved in government.
Personally, I think that people in the US shouldn't be thinking about solving problems with more welfare, but in figuring out what's wrong with existing welfare programs which are extensive. That and we need to revise the kind of productivity and consumer friendliness that we expect out of our government. Things like Universal Income wouldn't be considered if someone in trouble could expect to receive help in a timely manner, and if the help was smart and not tied to rules that don't make sense and put additional burdens on struggling people. Most people that are dissatisfied with our current welfare system would be astonished at the resources that are available, and frightened by the hoops that people have to jump through to receive much of it. We've been exposed in a small part by the health care changes recently, but I doubt anyone in my current social circle has experienced waiting in line for 16-24 hours at a social security office, nor have they known anyone who has tried to work for free in order to work their way up the ladder to a job that would both get them off of a welfare program and provide enough income to get by. I've gone off on a tangent, so I'll stop now. :) Your perspective was helpful to me.
Someone has to pay dearly for all these extravagant social programs.
http://www.huffingtonpost.com/2015/01/21/map-expensive-count...
Yes, and in Scandinavia we do. In Greece they didn't, hence the problem.
This is a well-written and heartfelt statement of a point of view on this topic and it deserves respect for that, even if you fundamentally disagree with its thesis ( as I do, on at least two separate counts ).
This is not a capitalism vs socialism or left vs right issue.
Nobody said that this new form of wealth transfer will replace existing forms of wealth transfer. The goal here is that it would run in tandem with existing forms of redistribution. It is a delusion that it will ever be enough. Once UBI is in place, other forms of egalitarianism will soon follow until communism is attained. These initiatives are but like a hammer seeking to equalise all the nails on a given piece of wood.
>America - transfers wealth already in many ways
I'm both well aware and firmly opposed to all forms of wealth transfer (inflation, welfare programs, excessive taxation et al). It is beyond atrocious and I couldn't speak less favourably of it.
Workers should also be compensated according to the quality of work (read: value brought in) that they produce. Workers can and should be wealthy too under this premise.
It isn't compensation for entreprenurial risk that people object to, but compensation for risks taken with Other People's Money (OPM), where the government supplies an implied safety net (Too Big to Fail).
By extension, people object to success (whether though skill or luck) for a risk-taking entrepreneur including entry into the ranks of the capitalists, that group of people who have enough money that participation in OPM schemes is enough to sustain their membership in the exclusive club.
In other words, the prize for winning the game once shouldn't include getting to play risk-free from then on.
> Workers should also be compensated according to the quality of work (read: value brought in) that they produce. Workers can and should be wealthy too under this premise.
OK, so what is the flaw in the current setup that prevents workers from receiving their share of the wealth created? How do you think the system should be changed?
I have no problem with that and I agree with you (but you don't seem to think so). I think it works very well. It's brilliant that many companies have ESOPs. Early employees that take on risk by joining fledgling companies get huge rewards when things pan out. Even workers who come into the business at later stages can get huge gains of they are deemed to bring in proportional value.
>government supplies an implied safety net (Too Big to Fail).
I am very much against this myself. I despise it even. Socialised losses and privatised gains are evil.
This seems to be the crux of our disagreement. I don't think the current setup works very well, at least not for the bottom 3/4 of the US population.
Basically, it was working OK until circa 1975, after which point any gains in improved productivity started accruing to owners of capital almost exclusively. And the more capital you have, the larger your share of those gains, in a superlinear fashion. Meanwhile worker compensation (as measured in constant dollars) has stagnated and even shrunk somewhat recently.
This is the essence of capitalism and why it works well. Gains exponentiate and as well they should. Capitalism favours retention of capital goods as opposed to the consumption of said capital. What has happened is that many folks have engaged in consumerism and the savings rate has gone down immensely. This phenomenon has negatively affected the middle class and working class more than any misconstrued notion of increased productivity without corresponding increase in compensation. If you're to address the culprit, start there.
You cannot invest into a better future if you consume everything and this is exactly what has happened. Nobody cares about savings anymore. Such high time preference, it's horrible!
Here's an excerpt from an Austrian (school) blog:
Low time preference people value present use of their money less than a certain higher future quantity of money. High time preference people, in contrast, are willing to forego higher future quantities of money for sake of enjoying a certain lower present quantity of money. The low time preference people will therefore be inclined to lend to the high time preference people.
That last part is extremely vital. It explains the perpetual cycle we seem to be in. The middle class and working class engaging in excessive consumerism will at some point need to borrow money from the fiscally disciplined to engage in even more consumerism. It has been claimed that the current savings rate is only comparable to that of medieval peasants (more validation needed on this but if it is the case, this is terrible).
If all this is true, why would those gains you mention above fail to grow in a superlinear fashion?
I think it is a case of eroded values more than anything else.
Sure, over time. But what I'm talking about is that the more capital you have the greater your rate of return.
> the savings rate has gone down immensely
Well, no wonder. Have you looked at the interest rate you get on a savings' account? You can't even keep up with inflation that way.
> why would those gains you mention above fail to grow in a superlinear fashion?
You assume that all uses of borrowed capital are consumed with no ROI, when much of it is invested in present or future health (healthcare, better food, safer car), education (particularly through paying higher home costs to get kids into a better school), property improvements, cost savings (more fuel efficient vehicles) and the like.
Sure, a chunk of it is spent on entertainment of various sorts that doesn't have a clear ROI, but this is actually the one area where the consumers' buying power has increased, even accounting for inflation, and the average % of income spent on entertainment has actually gone down considerably.
So, while I certainly agree that compounding interest can account for some of the disparity, it doesn't account for all of it. Rather, we see that the top layers of society are raking in a greater and greater share of the total earned income, entirely aside from the compounding returns from renting out their accumulated capital.
There is no real reason that the CEO of a corporation should receive 300x the salary of a lowly employee, except that the boards that set compensation are comprised solely of people from the same social class.
> I think it is a case of eroded values more than anything else.
Uh huh. So, being poor is a moral failing, is it?
Next you'll be telling me that low incomes give poor people an incentive to work harder, but that we need to pay rich people more so that they have an incentive to work harder.
>Is it from a personal perspective or is it something you have been taught?
I have seen immense poverty and experienced it myself though to a milder degree. So, I'm not putting forward my suggestions out of a sense of being callous, quite the opposite actually. Capitalism is the best way to solve the problem of poverty and supposed inequality. Provision of goods and services of value to others is the best way to earn an income and build a truly sustainable world.
It is indicative that it is indeed dictatorship of the majority since I have received a massive number of downvotes for my sentiments on this matter.
If 5 people come to you and take your car from you, most reasonable humans would call that theft and consider it to be immoral.
The same 5 people come to you and say, we're going to take a vote on whether we should take your car and give you a bicycle, but here's the consolation, you will also be included in the democratic process. I think we all know what the outcome of such an election would be. Would you consider that to be a moral or immoral thing?
Just because I'm included in a democratic process which I didn't sign up for in the first place doesn't make it right to replace my car with a bicycle.
North Korea calls itself Democratic People's Republic of Korea, should I criticize democracy because North Korea calls itself this way?
I'm sorry, but this is idealogical nonsense. The classic 'non-producer' is the rentier. Quite the opposite of what you seem to be implying (i.e. that the needy are the 'non-producers').
Anyone can make it if they apply effort. Anyone. There is no discrimination against hard work, smart work.
A non-producer simply means, someone who is not providing a good or service of value to a willing buyer.
How exactly did Capitalism solve that problem? We still have stark class divisions between people who make the majority of their money from capital ownership and people who have to work to survive.
It is true that there are divisions, but anyone can now participate in the acquisition of wealth and resources. You can save and reinvest until you attain your goals in life but most people are engaged in the consumption of capital goods such that even if they wanted to set up a small business, it gets to be increasingly difficult.
I also don't look at it in the sense that people HAVE to work to earn a living, I see it as people GET to work to earn a living. Your entire outlook on work is flawed and needs to be reevaluated. Work is good. Work allows us to eat, get shelter, clothing and move civilisation forward while at it.
Work may currently be necessary, but it is not "good". For most people it is boring and unpleasant, and a world where they could do something else would be a better world. Telling people who spend the majority of their lives working two jobs and still live in poverty that they "don't HAVE to work, they GET to work" is a hollow joke.
Some people just have bad luck. They can do all the right things, but never get the break they need to succeed. Others are born women in cultures that will simply not allow them to succeed. People can work harder than you their entire lives, and make better choices than you, and still not be economically successful.
This kind of self-righteousness from the lucky is so annoying.
You are the one making a naive assumption here my friend. I've seen and been through worse things than you can imagine. I know scarcity. I've stared it in the face. But I also know that the best way out of a bad fiscal situation is to simply get off your ass and get some work done. Whatever kind of work. Just do it and apply principles of wealth creation such as compounding currently available resources however little and repeat as frequently as possible.
I would much rather provide indigents with tools and methods to do their own fishing as opposed to what you're doing; proposing to them that life is a lottery and your life is not in your hands. Can't you see you're being evil?! Why do you want someone to live off your peanuts as opposed to them applying themselves and living a dignified life based on their own sweat? I'm tired of this mindset and that's why I've decided to voice my concerns regarding this and similar initiatives.
I don't know your background but if I was a betting man I'd say, you're spoilt and you think that money grows on trees so it can be printed out and handed out to people who don't want to work or think. If you truly understood scarcity, you would ask deep questions about money and arrive at a simple conclusion; it is simply a representation of created value within a society and the moment you dilute it, you dilute the need to work, create future value and subsequently move civilization forward.
True. And while I think capitalism is generally a good thing, lifting people out of poverty doesn't make it a good thing necessarily. By that measure communism in China would be a good thing - after all, Mao also lifted millions out of poverty. Many dictators have done the same.
> Anyone can make it if they apply effort.
Not at all. You can be disabled, held back by family obligations or even by a harmful family, be remarkably unintelligent, mentally ill, or otherwise be unlucky in any number of ways.
> A non-producer simply means, someone who is not providing a good or service of value to a willing buyer.
According to you. To me a non-producer is someone whose income is unearned[1].
[1]https://en.wikipedia.org/wiki/Unearned_income Unearned income refers to income received by virtue of owning property (known as property income), inheritance, pensions and payments received from public welfare. The three major forms of unearned income based on property ownership are rent, received from the ownership of natural resources; interest, received by virtue of owning financial assets; and profit, received from the ownership of capital equipment.[1] As such, unearned income is often categorized as "passive income".
Human interactions and behaviours are anything but binary. there are so many reasons why humans behave the way they do that it cannot be wrapped up so neatly as by one theory of economics.
It does seem as though people want to try out variants of the same thing (socialism) while branding it with new terms such as UBI or social democracy. I'm simply calling out the BS and saying, it is socialism. It has been tried over and over again and I promise you that just because you've not lived through it, historical context should make you very wary of it.
This is a mindset and it must be fought against vehemently. You want to help people? Advocate for the following:
- hard work as opposed to indolence
- savings culture as opposed to consumption of capital goods
- innovation/engagement as opposed to being dullards
- celebrating and rewarding achievement based on genuine merit as opposed to cuddling our young ones
- skill acquisition by reading books as opposed to watching TV and partying
You want a utopia but none of the sacrifice required to attain it. That's not going to work.
Those people are already being supported with fantastically expensive bureaucratic benefit systems. Sometimes those systems also act as a disincentive to return to work, trapping people on benefits, by making it impossible for them to get education or work experience or part time work.
Once you have these massive bureaucracies they sustain themselves by land-grabbing more work.
Here's one example from the UK. A man claiming benefits gets temporary work on a zero hour contract. He needs to sign off benefits, so he calls (because that how you do things now) the helpline.
"Is this position going to last longer than 5 weeks?"
He has no idea. But they will only take a yes or no answer.
He is unable to convey that he has no idea whether the job will last for more than 5 weeks or not.
For people who don't know the system it's tempting to just say "it doesn't matter, just take her suggestion and move on to the next question", but sadly the penalty for getting a question wrong (even if you've used their suggested answer) is that you have your benefits suspended or sanctioned.
> celebrating and rewarding achievement based on genuine merit as opposed to cuddling our young ones
You should reward effort, not necessarily achievement. Note that this is different to "cuddling our young ones". This is apparently especially important for smart children.
The DWP's administration costs are 3.6% (FOI request: https://www.whatdotheyknow.com/request/what_percentage_of_th...) and only about 1.5-3% of the population is claiming Job Seekers' Allowance at any one time. The proportion of people voluntarily economically inactive and neither claiming any benefit nor paying income tax is much larger[1]. Eliminating the "job seeker" requirement is obviously going to cost orders of magnitude more even if there's no resulting change in behaviour.
One can criticise the nature of the bureaucracies and weaknesses in the way they handle people getting back into work, but the idea sometimes floated by UBI supporters that they're more expensive than just handing out more cash is flatly and unequivocally wrong.
[1]this is true even after accounting for recipients of sickness benefits. You could save a bit in some areas by eliminating all sickness and housing benefits over the BI payment level, but that's probably hurting quite a few vulnerable people...
It is to a degree a question of semantics seeing as though we're mostly on the same page on most issues. However, I'll still indulge you; sustained effort often leads to achievement. I find achievement to be the best metric to measure effort, otherwise how do you know there's real effort if a given problem is not ultimately solved?
>Here's one example from the UK. A man claiming benefits gets temporary work on a zero hour contract. He needs to sign off benefits, so he calls (because that how you do things now) the helpline.
I personally know of a man in the UK who has an arrangement with his employer to receive payments in cash only. This thereby allows him to still claim unemployment benefits from the government. The employer benefits by not paying PAYE taxes and the employee benefits by earning from two income streams putting him fiscally at par with people who have much higher qualifications than he does.
You can see the sort of rot and inefficiencies that occur when systems such as these are adopted.
HN is full of smart people who through their school life were rewarded for their achievement, not effort, and who got a rude awakening when they went to college and discovered that they were not the smartest in the room, and that the work was hard, and that they were ill-prepared for that hard work.
> I personally know of a man in the UK who has an arrangement with his employer to receive payments in cash only. This thereby allows him to still claim unemployment benefits from the government. The employer benefits by not paying PAYE taxes and the employee benefits by earning from two income streams putting him fiscally at par with people who have much higher qualifications than he does.
But that's the point. HMRC have a bunch of people employed to detect that abuse; DWP people have a bunch of people employed to detect that; local councils have a bunch of people employed to detect that.
We can eliminate fraud, and the expensive fraud detection systems, by telling people it's allowed and expected that they work in addition to their UBI.
https://www.youtube.com/watch?v=_KwQTsO7Kok
He wants to stop claiming benefit; he wants to declare work. His answer doesn't fit into their checkbox, and so a simple question takes 7 minutes.
You are basically saying: We already have bad socialism so lets try good socialism. UBI is as bad if not worst. Distorted market will be least of our worries.
I am in favour of guranteed, no-string-attached food & shalter.
If you want to eliminate Food & Shelter Welfare as well, you would not hear any objection from me.
Acquiring skills is valuable (not just by reading books - there are lots of ways to acquire skills; yes, including watching TV) but relaxing is also valuable. Partying is valuable.
And it's fun, too.
Likewise, rewarding achievement is a good idea, but so is comforting your son if he's upset that he performed badly at something he tried hard at.
And I'm assuming we're all reasonably familiar with the idea that neither 100% hard work (120+ hour weeks, 52 weeks of the year) nor 100% indolence are great ideas?
[0] http://dictionary.cambridge.org/us/dictionary/english/graft
British Slang. work; labor.
Edit:
Tangentially, I happen to speak 3 languages and English is not my native language.
Fixed that for ya
Nonetheless, I agree with you 100%. It doesn't matter what form it takes. Majority of my millennial peers refuse to even accept that socialism leads to the inevitable outcome that is communism and that it is an evil that would deprive all of us of our individual liberties to a point where all human decency will be lost.
Many such have been formed over the years in the US, and they've all collapsed.
The plan is still to run the pilot until we're confident everything is working well (especially with issues like making sure no one loses eligibility for income-based benefits) and then start the full-scale study.