On the other hand it has never been cheaper to start a side hustle.
Would it though? From what I understand EU has way better social safety nets, yet much smaller entrepreneurship rates compared to USA.
Counter-intuitively, limitations drive innovations. When your resources are limited, you are forced to innovate. When you have infinite resources, you tend to waste it. Ever notice that when you have infinite time, you waste it doing nothing, but when your time is extremely constrained, you tend to use it much more effectively? Same thing happens with companies and money. Read: NASA, Texas Instruments developing laser guided bombs, etc.
For example, because TI had such a limited budget for developing laser guided bombs, they couldn't afford a wind tunnel like their defense-contractor competition. So they dropped scale models of bombs into swimming pools and performed mathematical transformations on the measurements. TI's design ended up being far more innovative and outperformed their money-flush competitors[0]
All that said, I think there is some truth to what you say. If healthcare were decoupled from employers, I would be much more likely to leave my current company and start my own since that is one thing holding me back.
2. Innovation and entrepreneurship are not the same thing. Innovation is coming up with something new, entrepreneurship is starting a new business to make money. The former does not always lead to the latter, and the latter does not always require the former (in fact, it rarely does).
3. What the research in this study shows is that limitations of the financial and survival sort do not drive entrepreneurship.
> It's a truism that American culture celebrates entrepreneurs. The opinion polls show exactly what you expect: Americans are incredibly entrepreneurship-minded. A 2005 survey showed that 28 percent of Americans have considered setting up their own businesses, compared to only 15 percent of Europeans. Yet the employment statistics reveal that Americans are far less likely to actually do it — 14.7 percent of the European workforce is self-employed, compared with only 7.3 percent of Americans. American entrepreneurs are clearly being held back from pursuing their dreams. > ... > What explains the paradox? In Europe working for yourself doesn't affect your health-care coverage...In America, the ambitious many are held back.
[1] https://archive.org/details/trapsellingoutto00broo/page/108/...
This is definitely a multiple factor problem, and health care is just one of them. A couple obvious ones - social acceptance/rejection of this as a path, and government/financial friction. If you have only been exposed to the US, it's pretty shocking how hard it is to get a company up and running in many countries. One of the biggies is fairly direct access to capital with the right risk appetite, which itself is complex.
If this was true you'd see people from poor families being more entrepreneurial than those from rich.
Go talk to the owners of the five nearest local small businesses, ask them how they started, and see how it goes.
Speaking from experience, btw.
*: in fact, merely being "humble" is still relatively privileged, a vast sea of humans exists where internet and food and clean water are fleeting dreams
This is not something to argue about, this is something that that we should measure.
> From what I understand EU has way better social safety nets, yet much smaller entrepreneurship rates compared to USA.
> Counter-intuitively, limitations drive innovations.
It seemed like you were claiming that people with fewer resources may counter-intuitively do more innovative businesses, so providing people with UBI or similar resources could reduce innovation in entrepreneurship.
The inventiveness you need to thrive as a poor person is very different from that, and I don't think losing that kind of inventiveness would be a real loss in our world.
Whether or not basic income itself would increase the degree of self-actualization people have is not an easy question. It is in fact a complicated question deeply integrated with culture. I'd guess peoples opinion on this question mostly reflects their political ideology and/or support for basic income.
However, I think it's orthogonal. Limitations are good, but having a basic fallback is also good.
Essentially, Swedes have far greater economic freedom due to greater economic equality. Despite not having UBI.
Germany is pretty close to the United States, despite the United States being a wealthier nation by comparison.
Also, where did you find these numbers indicating such a big difference?
Try firing an employee in France. It's a two year process minimum and in the end a judge might rule you can't do it.
Also the regulatory landscape in the EU imposes such a high burden on entrepreneurs. Coupled with investors being way more conservatives.
With the cost of space in any major city, anything that requires a workshop, working space, or significant storage space is out of the window nowadays for anyone in a major city.
When I was a teenager my side hustle was buying, fixing, and selling used cars. My dad's was the same with small fishing boats.
The story of these billion dollar companies being started in their parent's garage sounds inspirational and all, but I'd imagine less so for the kids whose parents can't afford home with a garage.
You don't need your parents to be millionaires to get that, but in today's terms this is definitely upper middle class.
I have a dream that Healthcare will someday be decoupled from employment. So much waste is tolerated simply due to the fact that the majority of the expense is borne by your employer before the number they put on your paycheck.
I can live on a part time salary without issue, but health insurance, which is already $200/wk for my family with my employer chipping in, would jump to more like $600/wk, which is just completely untenable. There is no sane reason why health insurance should be my single largest expense each month.
- Increase HSA Contribution Limit
- Allow both Traditional & High Deductible insurance premiums to be paid with the HSA
- Ban employers from directly providing/choosing insurance (ex. US Military)
Essentially everyone goes out onto the open market and buys their insurance using pre-tax HSA contributions (similar to tax benefits to employers now). Employers can continue to "help" be providing dollars to HSA/HSA match, rather than picking your insurance for you.
There are more radical and arguably better solutions, but if you want to see a large improvement with minimal changes/the least controversy this is it. Most insurance companies could likely just convert existing employer provided policies into employee direct ones paid via HSA.
I said there are other, arguably better, solutions (e.g. universal coverage) whereas this is an attempt to solve a near-term issue of employer provided health insurance.
If you can get the political support to pass universal reform to health coverage in the US, then absolutely do that instead. In the current political climate this compromise is still a vast improvement.
The current "war" is between complete re-invention and essentially the status quo. This is neither of those, therefore it upsets both sides, and gets squished by "perfect is the enemy of good."
The second, and successful, move was to allow health reimbursement accounts (HRA) to pay for insurance premiums on the individual market. These plans, an ICHRA, would allow a small business to essentially give pre-tax dollars to the employee for buying health insurance as long as the reimbursements were applied consistently across the employee base.
The second was great, but the first would have been even better since it would have lowered group rates. Individual insurance premiums and deductibles (when not subsidized by gov) are often so expensive they are hard to justify. Still ICHRA’s are at least another tool for employers and employees to share the burden.
But we have many start-ups, which usually migrate to the US as soon as they grow big.
The actual powerful network effects are essentially a somewhat benign form of cronyism, not mere inspiration from other entrepreneurs. People do more business with less haggling with friends than with strangers.
This is how humans work. This cannot change with UBI.
But there are also ideas. Even in fields where there's basically no money, half the world's innovation happening within a circle of a few miles is routine. For instance this happens in music, repeatedly.
Sure, on some level he could have done the same work in his garage, in some quiet seaside town full of retired people. But he didn't.
Reducing the friction in long-range interactions obviously has its upsides. But these hairless primates still pick up lots of stuff from being around each other.
Right now, only the wealthy can really risk things.
Ideally we'd just let more people live closer together like they want to, but the elites won't let more people get close to them.
Often because there aren't any good jobs there. With UBI entrepreneurs can self-select and live in places with low rent and weak job markets.
I think we should have robust social housing, as in Vienna or Singapore. But one thing that both places do that we do not is allow for far more housing to be built per person in high-demand areas (i.e. pricy areas). Their defining characteristic for affordability isn't so much the social housing, it's that they build for everyone as if housing were a human right, rather than a financial investment vehicle like we treat it here by enforcing scarcity.
To the extent that there is a "free market" it's only on existing housing once it's built. For existing housing, we let the wealthy do whatever they want, and use their market power to buy whatever they want, including hoarding it. However, it's only because of housing austerity in the building of housing that this real estate becomes such a sought after commodity. It is only through scarcity and austerity of building permits that continued financial climbs are guaranteed.
Most of the political spectrum in the US has housing completely wrong, and thinks that everything is going to be OK if they can just keep the "wrong" people out. Instead, we should adopt radical inclusion and welcome all people, and adopt the true belief that everyone deserves housing, every single person. Not just the cool ones, everyone. That is, unless we want to continue the current meatgrinder of capitalism. Eviction may be the blades at the end of the grinder, but the auger is the housing scarcity and exclusion practiced by nearly every single person in the US.
If you don't need to chase a high income, you can move where there's cheaper rent and try to innovate there. Assuming that you don't need any of the spatial resources of the expensive areas. (A big if... but perhaps you can grow your idea then move to the areas with lots of capital.)
It would provide housing for people on UBI, but because it’s operating on a thin budget, over time it becomes less desirable.
Now, it’s not always the case _if_ you can get the tenants to coöperate and pitch in on basic maintenance and keep anti social behavior at bay ala Singapore, but my feeling is we’re not of the same mindset as Singaporeans.
I live in Soviet-style housing in Poland. The antisocial behavior of some tenants (it seems that there's always at least one) is something you learn to live with. Over the years, you start ignoring the occasional puke in the hallway or automatically put on headphones when someone next to you starts blaring loud music again. All in all, given how much people pay for such flats in Poland, my guess is that it would be totally acceptable for most people to deal with the inconveniences, if the flat was free as a part of the UBI.
Many countries do this by putting legal limits against gentrification.
As does creation of market rate housing[0], even in the short term.
What does that even mean? I'm not aware of any country that restricts the change in the income mix of housing, or the renovation of dilapidated housing by new residents.
Here are few examples among some EU countries: setting a minimum density and number of floors in urban areas to prevent "mcmansions".
Mandated commercial areas (aka shops) on the ground floor on new buildings.
Requirements on walkability applied to new road design to prevent sprawls e.g. limit cul-de-sacs.
Minimum and maximum percentage of buildings for industrial / office / shop / domestic use.
Minimum and maximum apartment size.
Tons of limitations on renovation of historical buildings.
A lot of this stuff makes it very difficult to quickly transform an already urbanized area into a bunch of super-luxury villas or similar.
Well, you know, everyone but the uber-wealthy.
But eliminating zoning restrictions and building more housing actually does work. Then when you move, you have your pick of many apartments to choose from, and nobody has pricing power to charge more.
The effects of rent-restriction you quote are theoretical effects. In the real world, it does work, as long as the rent-restrictions are well-thought-out.
Are you sure? There's lot of research n rent control and it basically all highlights decreased housing mobility, event he pro rent control authors mention it asa downside.
Secondly, landlords are allowed to evict if they do sufficient improvements to the property, which allows a safety valve.
There are so many people that move in the month of July, that over 7% of the entire population - including people who don't rent - moves out on that day. It's pretty much impossible to get a rental truck to move for the entire month of July.
The statistics are that, around July 1st alone, 250 000 out of 900 000 people move. Add in people that don't move in this period, and you get almost half of renters in the entire city moving, despite strict rent control.
You just need to do your rent control carefully. There will be some reduction in mobility, but if you counterbalance them, you can have minimal impacts in mobility and large impact in affordability.
> landlords are allowed to evict if they do sufficient improvements to the property
This is a REALLY unusual provision in rent stabilization laws in the US and as far as I know the EU which normally don't allow evictions like this and severely cap rent increases for improvements.
If you are in Quebec, the RDL is really unique as a form of rent control in that it doesn't set prices or cap increases but rather acts as an arbiter for rent increase disputes. I understand that there are some local criticisms of the system, but I'm not very well versed on the subject.
I think most HN comments about rent control are referring the type that exists in SF where prices are more or less locked in place or otherwise set by the government.
It also does extra controls that many countries don't do, such as capping price increases even if the tenant change (the tenant needs to request the former rent, though).
Allowing rent increases in the case of renovations is unusual, but not that rare either. That said, it's absolutely not "just a dispute resolution board". It 100% is traditional rent control with capped price increases, on top of the rest.
[1]https://www.tal.gouv.qc.ca/en/news/calculation-of-the-2020-r...
It's generally under inflation. A typical price increase cap might be 1.8%.
For cases where the landlord actually asks for a hearing, the average is of around 2.9%.
If no major repairs were necessary, you'll see around 1% or increase, maybe a bit more.
It's important to note that even according to your article, you need to drastically increase supply even for a modest decrease in rent.
No one here is against increasing density. It is however insane to believe that increasing density is enough to fix the problem. Cities at the edge of density still have affordability issues, whereas much less dense cities with appropriate rent restrictions don't.
There is not a single reference to induced demand here. As long as housing stays a profitable investment, and as long as density cannot be increased infinitely without increasing marginal costs, then rent will rise.
The only long term solution is to reduce the profitability of speculation on land prices, so that only productive activities, such as building, are profitable. Rent restrictions are part of this, as rent is a large part of the profitability of land.
And rent restrictions can work. There are many cases where they have been implemented without a significantly negative impact to mobility. So why oppose them?
> enough to fix the problem
I think we need to define the problem before we start arguing solutions. In my view "can't afford the rent" is a poverty problem, not a rent prices problem. So, I want anti-poverty solutions, not rent price adjustment solutions. I view "the rent is too high" as a distinct problem from "can't afford the rent." So in my mind, rent price adjustments via price regulation are inappropriate for both problems.
> so that only productive activities ... are profitable
I understand taxing negative externalities, but this sounds anti-democratic. Who decides what's productive? Let's put an appropriate tax on pollution (broadly defined) and let the market figure out what's most productive. That's what it's good at.
> why oppose them?
I don't know of any instances where rent control didn't affect mobility. Are you considering the effect on immigration and wages in other cities? If they didn't affect mobility, then almost by definition they had no effect whatsoever. They'd have to be covering such a tiny portion of the market that they can essentially be ignored, both cost and benefit. Which makes them a waste of bureaucracy.
It doesn't matter what your threshold for affordability is. Rent is increasing faster than economic growth, on average. It will continue increasing at this rate until a large part of the population literally cannot afford housing. You're never going to be able to solve the issue of people not being able to afford rent once it stops being economical to increase density, because there will be no incentive for landlords not to push up rent until people can't afford it anymore and start to move out (which is what we don't want to happen).
There are no cases where rent control literally did not affect mobility. There are many cases where there is rent control, and high mobility. The city in which I live has around 40% of renters move each year, which is more than enough mobility, and rent control. You do this by using the additional regulatory framework to make it easier for people to move.
Your first paragraph is literally meaningless. No one here said anything about zoning except you. If you want argue against someone else, then argue against someone else. The arguments I put forth and your response were completely orthogonal.
The rest is simply pure ideology. If you want to convince people or build a coalition with people that disagree with you, put your free-market absolutism aside and focus on solutions and problems.
On the contrary, it's providing the valuable service of holding property that I don't want to hold. I'd rather put my capital to some other use. You seem to dislike arguments of "pure ideology" but the assertion that real estate ownership doesn't deserve return on capital seems like it's singling out just one form of capital. Or do you dislike profits drawn from other kinds of property as well?
You say it's settled economics, but you've misstated. Monopolistic excess returns are "rents." Competitive market returns are to be encouraged.
> until people move out
That's actually exactly what I want to happen. 100% occupancy rate is a signal that something is wrong with the market, just as 100% employment would be.
A 100% occupancy rate naturally doesn't happen as people move from neighborhood to neighborhood and from city to city. You don't need to squeeze poor people until they have no choice but to sever their safety nets and move out to have a few percent of slack.
No, that'll just create a lottery system and unemployment or lower wages, because people won't be able to move to the jobs.
> eliminating zoning restrictions that limit housing
Yes, this would be great.
Also, countries with greater welfare programs don't have greater entrepreneurship. The opposite is somewhat true. Probably due to higher taxes and it's very hard to go out of business once you're in business and to fire employees in other countries.
I think there are two reasons why that may be: - Generally larger regulatory barriers. GDPR is an obvious recent one, but also market complexity with EU countries regulations/laws differing more than US states. I think (without knowing). That coupled with "first to market" advantage of US companies. - Money isn't as big as a driver for Europeans. "Rags to riches" is a pretty American thing. "Get educated and live well" is closer to our lookout I think.
In the US, any person has access to consumers all across the US. I think this is a big part of the success of US companies.
So yeah, startups are risky and favor the wealthy, but let's not overstate the case. I'm in favor of basic income and I agree it would be a boon to entrepreneurship, but people with the skills to build a tech startup have already won the lottery. We're not the ones in need.
It's much easier to risk doing a startup when you know that no matter what, you won't have to go hungry or homeless because there's family who will help you. You're a lot less worried about pouring dollars into your 401k at age 22 if you know that you stand to eventually inherit a few million from your parents, so whatever.
If you win the lottery and manage to have significant equity in a startup worth millions, congratulations. If not, you're faced with the prospect of being older and having minimal (or at least far fewer) assets. This is a big problem if you want to raise a family or even if you want to advance your status in life.
The economics of software are simply different. Someone good enough to start a business that brings in $10-20K MRR and barely survive is almost certainly good enough to get hired and paid $200K+ by any number of companies. If you're not going big or going home, it doesn't make sense to do a software startup these days.
Even in other industries, starting and running your own business is a LOT of work. If your goal isn't to (try to) get rich, you can almost always make more money climbing some corporate ladder for a lot fewer hours.
I'm with you on the opportunity cost of money but I don't see how it has anything to do with what we are discussing.
> The economics of software are simply different. Someone good enough to start a business that brings in $10-20K MRR and barely survive is almost certainly good enough to get hired and paid $200K+ by any number of companies. If you're not going big or going home, it doesn't make sense to do a software startup these days.
This is not true at all. There are tons of FAANG engineers plotting their exit to start their own business for the reasons of freedom and impact. It's not just about the money. Also, if you can reach $10-20k MRR—that's a lot more scalable than your salary at a company ever would be.
Don't confound entrepreneurship solely as a vehicle for getting rich.
He is not your friend Bill from across the street that most of people could compare with.
Still this is the whole point of the article, he makes a reasonable example.
Providing entertainment and insight has no value to society?
Instead of perpetual UBI, he’s in favor of a larger single lump sum paid out after a period of time post-civil service. The idea being instead of the slow morphine drip of $1k a month for life, you can get, say, $25k-$50k in a lump sum after serving a year or two in the Peace Corps, AmeriCorps etc.
The advantage being service builds a stronger sense of community and gives you more skin in the game. Additionally, a larger single lump sum is more conducive to helping start a business as well as being cheaper long term. It parallels the GI Bill in a lot of aspects.
1) not everybody will use it because they won’t want to do the civil service part
2) those who do won’t have perpetual payments. Once you use it (unlike Alaska) it’s gone. If you squander it, at least there is an upper limit to your benefit as opposed to a plan that acts as an open-ended annuity. I actually think this may help foster better decisions because for many, this is their one chance at such a windfall. Of course there will be some who squander it regardless
3) As opposed to UBI, the rest of society will get some benefit in the form of service.
To elaborate on the financial wisdom aspect, he advocated for putting the money in a trust fund payable at around 25 years old. Similar to the GI Bill, you could also have strings attached as to what it could be used for (the GI Bill, for example, can be used to open a business, go to university, go to a vocational school, but not just a check for “free” money)
The additional goods and services it buys, come from advances in automation, which are consuming jobs at a geometric rate. Nobody is enslaved to make these things for us (already true for most things).
This attitude is simply the old Protestant Work Ethic writ large - folks that cannot stand to think anybody might not have to slave away at a job.
To draw it clear: is it actually necessary to have an underpaid below-poverty class of workers to make our society function? It cannot exist without them? Was Marx right all along? Is that what is being argued?
To be glib, some people leave millions to their cats but I don't see any entrepreneur kittens.....
That is, the baseline genetic, cultural, and environmental potential for entrepreneurship probably needs to be in place before familial wealth becomes so important.
Given that Saudi Arabia has entirely different ethnic groups, with an extremely different culture, and a very different climate and business environment, I am not surprised at all that the principle factor in north American derived populations entrepreneurship isn't that in the Saudi Arabian population.
It doesn't have to primarily be UBI either. Given where we are technologically, it could be PV/wind/demand management/batteries on every roof, a semi-automated garden in every yard, etc... With a little bit of UBI for whatever people aren't able to do at home (eg TP).
The story goes like this -
When Howard was offered Starbucks for US$3.8 million by original founders, he was working to raise funds for that and his current investors went over his back to buy Starbucks. Howard was introduced to Bill Gates Sr.(Lawyer) by a friend, who took Howard to the building where those investors were straight away and threatened them out of it immediately.
https://www.pcworld.com/article/243311/former_ibm_ceo_john_o...
"it was Opel who met with Bill Gates, CEO of the then-small software firm Microsoft, to discuss the possibility of using Microsoft PC-DOS OS for IBM's about-to-be-released PC. Opel set up the meeting at the request of Gates' mother, Mary Maxwell Gates. The two had both served on the National United Way's executive committee."
Bill Gates was not successful because he started young, but because his mother had the connections to IBM (see some other comment). That cannot be replicated with basic income.
And Alipay would have been killed a million times as it infringes the state monopoly on finance, had him not been shielded by the quagmire of local and central politics.
I'd rather not find it out.
Going to college is not required to become a successful entrepreneur.
Not a requirement, but increases your chances a lot.
Unless we are only talking about Bill Gates.
Look at the extremes and the outcomes of the extremes. If the outcomes are opposite then it's quite likely that a gradient exists in between.
We do. I welcome UBI and I will quit my job.
Just stating plainly I welcome the opportunity to do it full-time.
I don't mean these classes where they get out and write
class Dog(Animal):
def bark(self):
print("a Dog is barking!")
I'm not an educator, nor am I educated ABOUT education, but it's just my hunch. I've seen many a young buck come around with a fancy degree or whatever, and not be able to see a skip-list shaped hole for his skip-list shaped peg. That's hard to deal with at a meta scale. I can't develop a way to quickly train people OTJ how to think algorithmically. They either learned to think about the problems that way, or they learned to rely on some stupid Haskell/Python/Elixir/Kotlin/Blub thing, and can't get any meaningful work done quickly.
Even outside of CS this will give them a huge head start.
Functional decomposition is one of the most valuable skill one can have. Knowing what an interface is and being able to see a system as a series of layers of abstraction is too.
edit: and probably also superfast internet, and a machine with a GPU, and maybe even some way of setting up a server cluster
Less controversial: High level, this comment seems believable. It seems reasonable and possible. Has this be written about? If yes, please kindly provide some links. I would like to read more about it. This high school was really something special!
https://www.gatesnotes.com/About-Bill-Gates/Early-Days-as-a-...
Started my first company at 20, after dropping out from university. (mom wasn't exactly happy)
Sorry, your excuse doesn't apply.
Unless you want to claim that going to a state-funded university is a privilege, in which case I guess everyone in all the countries where universities are free are privileged?!?
For the past 15 years I have worked with wealthy people for a living, hundreds of them. Two things stand out: 1. Most of them came from humble beginnings, typically as immigrants 2. Most of them stress their kids won’t be as successful because of having it too easy
It’s alarming to me how much ignorance there is about real life outside of tech on hackernews, and how insidious academic leftist propaganda is.
The middle class can win this game with a perspective change. Instead of saddling their kids with school loans and pressuring them to "get a job" right out of school, they should give them 5 years where they "angel" them in their own houses for a stake in the company. Get four young sharp kids a couple of years with no bills to pay and I bet they could create something viable.
This is the difference. Entrepreneurs need funding and encouragement. Parents could play this role instead of VCs and they could bank big when funding comes. You don't need $MM to fund a start-up if you approach it will bootstrap principles.
Why didn't I? That was my very first thought. The reason was, I had to work halftime to pay tuition and buy food. I was mired in working to live. Ol Bill had a family to support him as he bought resources (ads in magazines etc), recruited staff, took meetings etc. Always a hot meal on the table when he got home from a big day.
One result of a Basic Income: more folks can be entrepreneurs, if they're willing to live off that few dollars a month. It could make all the difference.