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Moving Forward on Basic Income

blog.ycombinator.com

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Re: Moving Forward on Basic Income

#581

Post by morgante »

pizza234 wrote: post #565
morgante wrote: post #504

Earlier quoted context omitted.

Why should incentivizing the creation of economically unfeasible and unnecessary jobs be a goal? Such a system would be a huge mess of misaligned incentives.

False dichotomy A job is not either "feasible and necessary" or "unfeasible and unnecessary". Ultimately, the idea is that creating a job at a loss would be preferable to "giving money for free" because it could/would cost less, but not less importantly, it would be a potential for wealth creation. If, stupid example, somebody would be paid for running on a bike to produce electricity, that would create wealth by, sa…

I realize that "feasible" is a messy word.

The problem with such make-work is that you're paying people to do work which shouldn't be done. You're assuming that "staying at home watching TV" doesn't create any value—but it creates entertainment value for the consumer. If it didn't have any value, nobody would buy cable.

Let's say we have some totally trivial job. Say, generating electricity from running on a bike. The market wage for this would be $1.

In the status quo, we might assume that nobody would do that job. If nobody is willing to do that job, it means that their opportunity cost is greater than $1—ie. that even if they are unemployed, their non-market activity is worth more to them than $1/hr. Let's assume their non-market activity is worth $5/hr to them.

Now a government subsidy comes in and pays the employer $5/hr for everyone they employ. So the employer starts advertising bicycle jobs at $6/hr (in practice, they would keep some of the subsidy for themselves). Now the individual is willing to take the job at $6/hr.

Somewhat counterintuitively, this has destroyed value. In the status quo, we were paying nothing (no subsidy) and total value was $5/hr (the value the person gains from their leisure time). With a subsidy, we pay $5/hr and gain only $1/hr in total value (the benefit of the person riding the bike). This is obviously worse.

The only way that your system makes sense is if you treat leisure time as worthless. But that's clearly false: if leisure time was workless, everyone would work every possible hour and unemployed people would all be walking around the streets looking for pennies.

Re: Moving Forward on Basic Income

#582

Post by Kluny »

ryanmarsh wrote: post #91
colinplamondon wrote: post #67

Earlier quoted context omitted.

Personally, I'd hope the system would absolutely tell them "tough shit". There's got to be a line where the safety net gives out, because someone is too expensive to help. That's where family and charity hopefully take over. At the same time, I think your instinct is right, and it's something I've never heard mentioned before. It's almost inevitably that there'll then be the "food security" fund, and the "housing gua…

Or we could teach them financial literacy. Kind of like how countries with socialized healthcare spend more on health education.

Mind you, that would require financially literate teachers. I never had one, in all the years I was in school

Re: Moving Forward on Basic Income

#583

Post by Lawtonfogle »

tn13 wrote: post #353
Lawtonfogle wrote: post #71

Earlier quoted context omitted.

To add to this, what about those unable to take care of themselves. Children, the mentally ill, those who are badly addicted, those who are easily taken advantage of (like in borderline elder abuse cases).

Many of those cases are about law and order and not necessarily welfare. I do not see CPS as a welfare organization.

Law and order responds after the wrong. I'm talking about protection to prevent the wrong.

Re: Moving Forward on Basic Income

#584

Post by twblalock »

I find it very naive to assume that basic income will be implemented as a simple, straightforward, clean replacement of our current welfare systems.

Our current, messy, complicated, unsuccessful welfare systems is the result of many powerful political, social, and moral tendencies and forces, which will reshape basic income in the same way they shaped the welfare system in the first place. There will be many attempts to give some people more income than others -- and some of those attempts will be justified. After several years, we will end up re-creating our current welfare systems, for the same reasons we created them in the first place. Society is not a clean slate upon which any policies can be successfully imposed.

Unless those political, social, and moral forces change or disappear, basic income won't be very basic after the politicians, and the voters, get their hands on it.

Tyler Cowen's thoughts on the matter are very perceptive: http://marginalrevolution.com/marginalrevolution/2013/11/wha...

Re: Moving Forward on Basic Income

#585

Post by pizza234 »

CoffeePower wrote: post #576

This should be interesting. In the not too distant future we will have huge numbers of global population turned redundant by technology, what will they do?

Automation-apocalyptics forget, intentionally I assume, that new types jobs are created in the course of history, not only lost.

While that is no guarantee of how (much) the direction of the jobs market will shape, it makes thing more complex than the "we're sinking!" analysis, since there are more variables which take part than just "robots".

Re: Moving Forward on Basic Income

#586

Post by zanny »

pizza234 wrote: post #565
morgante wrote: post #504

Earlier quoted context omitted.

Why should incentivizing the creation of economically unfeasible and unnecessary jobs be a goal? Such a system would be a huge mess of misaligned incentives.

False dichotomy A job is not either "feasible and necessary" or "unfeasible and unnecessary". Ultimately, the idea is that creating a job at a loss would be preferable to "giving money for free" because it could/would cost less, but not less importantly, it would be a potential for wealth creation. If, stupid example, somebody would be paid for running on a bike to produce electricity, that would create wealth by, sa…

Walmart today is the greatest example of subsidized jobs in practice. Their employees are underpaid and are given social benefit brochures on their first day working. Townships will give Walmart thousands in subsidies to get a store to move in, just to have all the wealth of the town vacuumed up and shipped to the Walton family while all local businesses wither and die because they cannot compete with the economies of scale at hand.

So the state and the taxpayers get to subsidize Walmarts profits, when Walmart could not operate in half the locations it has without corporate welfare to subsidize the costs of their employees.

This already happens today, it happens in many industries (including agricultural harvest and food service) using circumstantial employment rules to underpay employees and have the state subsidize their cost of living so the business can be more profitable.

It is absolutely dystopian and against everything the UBI movement stands for. It is much more reasonable to liberate peoples time to do what they think is valuable, rather than have some bureaucratic state agency colluding with business interests to determine what is valuable enough to force them to spend their time according to that metric (and hint, their measure of value is going to be shareholder value in all its forms).

Re: Moving Forward on Basic Income

#587

Post by rsync »

konschubert wrote: post #485
rsync wrote: post #478

Earlier quoted context omitted.

"Personally, I'd hope the system would absolutely tell them "tough shit". There's got to be a line where the safety net gives out, because someone is too expensive to help." But see, that's why his is a trick question ... If the answer is "tough shit" then it's a concession that implementing BI (or anything like it) is simply adjusting the "tough shit dial" to a relatively different value. There's still a benefits ce…

> It's all of the bullshit in-between that is totally unworkable - both practically and theoretically. No. In most countries of the world, including the United states, limited social benefits exist. It is sometimes messy, it is sometimes unfair. But they are reality.

"No. In most countries of the world, including the United states, limited social benefits exist. It is sometimes messy, it is sometimes unfair. But they are reality."

Yes, that is exactly my point and it is from knowledge of the US systems especially that that point is informed.

It is my contention that they don't work - not just practically, on the ground, but even theoretically.

Re: Moving Forward on Basic Income

#588

Post by jernfrost »

treehau5 wrote: post #479

Why is the underlying assumption always "as technology continues to replace jobs and generate massive wealth" in the world of BI? It seems like BI is an answer to a false dichotomy. What if we fix our society instead? What if instead of massive seeking of profiteering we actually double down on our efforts to improve lives today , right now in this very moment instead of some far distant realization of "when all jobs…

Automation is an absolute necessity to end poverty. Do you really think stone age people could have ended their abject poverty by just "fixing" their society? It is the immense wealth create through increased automation which has allowed the general well being of most people in the western world today.

We can't simply fix the world today by some political decision. There simply isn't enough wealth in the world to create a good life for the whole worlds population. Growing the economy for the whole world to the point there there will be enough for everybody will take significant time. You can't just do it right now, as much as you like.

Then you have countries such as the US, which has at least the same wealth asa e.g. Nordic countries but yet has significant poverty problems largely eradicated in Nordic nations. In a sort of naive and theoretical way these problems should be possible to solve given that enough wealth exists. But in practice such a thing would be difficult to achieve.

If you just installed a nordic style system in the US today, it wouldn't cause an immediate solution to all social problems. The existence of the nordic style welfare system over many years has made sure that there doesn't exist a large poorly educated and dysfunctional class of people.

You can treat an illness much more easily if you tackle it early on. However if you let it fester for years as the US has done, you will need much stronger forms of medication.

E.g the years bad blood between blacks and whites in America can't be changed by merely passing a set of laws.

What you can do is starting with reforms today, but it will be years before one can reap the benefits. People's values, attitudes etc doesn't move that fast. That is why one needs a lot of patience for solving a lot of world problems.

It is likely much faster to develop an advance AI system than getting blacks and white American to trust each other e.g. Likewise it will take decades before Americans are going to think poor people aren't just lazy and caused their own predicament.

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