Guaranteed Minimum What? • Hacker News Board

Re: Guaranteed Minimum What?

#171

Post by mjevans » Fri, May 12, 2017, 9:32 PM UTC

pyoung wrote: post #159

nateberkopec wrote: post #133

Earlier quoted context omitted.

MV = PQ. Money * Velocity = Price level * Quantity of goods and services. Friedman assumes the velocity of money is constant (good assumption), so really the only why you can cause inflation is to increase the supply of money, M. UBI increases the velocity of money by moving money from low-consumption, high-investment rich people to high-consumption, low-investment poor-to-middle-class people. Increase money velocity…

But if we are demand constrained as opposed to supply constrained for most consumer goods, than you will see an increase in 'Q', not 'P'.

Energy, time and space.

Distance is effort, both in energy and time.

Space is already constrained by historical distributional of 'valuable' lands, and restrictions on new ones. There's nowhere left to go out and just settle that someone else doesn't already claim somehow. (Yes, if you go out of the solar system you might claim that... but that's literally how bad the issue is.)

The real solution is increasing supply. Yes, UBI will help individuals, but society must actively balance to ensure that there is enough supply in the markets to maintain liquidity. Otherwise (as we see with housing) flow seizes and prices dramatically rise.

Re: Guaranteed Minimum What?

#172

Post by goatherders » Fri, May 12, 2017, 9:36 PM UTC

zimzam wrote: post #116

mamon wrote: post #94

Earlier quoted context omitted.

The problem with taking money from the rich and giving it to the poor is that you undermine riches' motivation. If you limit the prize, then you also limit amount of effort that one is willing to make to get it. Therefore, after UBI is introduced on mass scale we might see a slow but steady decline in economic activity: fewer new companies started, fewer investments made, riches focusing on tax evasion and moving the…

This assumes that the primary reason to start a company is to become fantastically wealthy, which I would contest. Sure, most founders want to get rich, but I'd assert most would be just as happy to end up in the 8 figure range ($10's of millions) as they would in the 9-10 figure range. (And such a reduction would require taxes on a scale far beyond what UBI would require) Few people are going to consider starting a…

Lol. I'm sure most everyone on the planet would be happy to settle for the 8 figure range. It's humorous that anyone would suggest 8 figures isn't "fantastically wealthy" when only a fraction of a fraction of a fraction of a percent of people ever reach that level.

Re: Guaranteed Minimum What?

#173

Post by Yen » Fri, May 12, 2017, 9:36 PM UTC

URSpider94 wrote: post #134

mamon wrote: post #94

Earlier quoted context omitted.

The problem with taking money from the rich and giving it to the poor is that you undermine riches' motivation. If you limit the prize, then you also limit amount of effort that one is willing to make to get it. Therefore, after UBI is introduced on mass scale we might see a slow but steady decline in economic activity: fewer new companies started, fewer investments made, riches focusing on tax evasion and moving the…

Look, no matter how much you tax the wealthy, you always have a positive derivative -- the more money you make, the more you take home. I really can't see anyone making a rational decision to work less hard because the tax rate is too high, within reason. The other thing that becomes blindingly clear when you live somewhere like Silicon Valley is that wealth is logarithmic. If you take home a million dollars a year h…

I'm generally a fan of redistribution strategies, but, it's worth noting that motivation is not just a binary function of "is the marginal value > 0".

Say I could spend 30 hrs/week running a small business at moderate efficiency, and make $100k/year in profits, or 60 hrs/week running a much larger, more efficient business for $10m/year in profits.

My motivation to put in the extra 30 hrs/week is going to depend greatly on the absolute value of the difference, after taxes. If taxes are such that I take home $90k vs $7million, I'm probably going to work the 60-hour strategy. If taxes are such that I take home $89k vs $500k, I may or may not consider that worth the extra hours.

Re: Guaranteed Minimum What?

#174

Post by clairity » Fri, May 12, 2017, 9:37 PM UTC

chris_va wrote: post #33

I realize that UBI is a very popular position on HN, so I am hoping someone here has given this more thought and can comment. My problem with UBI is that all tests to date look great, but have only been done on a micro level. The fundamental issue I would like addressed is the macro scale inflation you would expect when redistributing trillions of dollars without commensurate economic value being created directly. Mo…

we're so sophisticated now that we abstract the idea of work away from the idea of making a living (as in being able to be alive, as opposed to dead) and come up with concepts like UBI where we can simply not work, without realizing that not working correlates with not living.

work is not some thing apart from ourselves. work is not something apart from play or recreation or relaxation or any such things. we move and create and change and destroy all the same. we value these things as part of our social fabric of keeping a community of us humans alive. money lets us abstract away the need to trade immediate goods for that purpose, but it also lets us abstract out the fairness of it all. those who seem to contribute more to the general welfare might deserve a little more in return, whether it be in goods or esteem or respect. but we're all expected to put in along with taking out.

UBI would tear up that implicit social contract and unmoor us from our democratic underpinnings. while well-intended, UBI suffers from the same idealism as libertarianism by failing to grasp even a basic modicum of the human condition.

despite automation, people will create ways to make a living. lives are literally depending on it. that's not to advocate long-term suffering, but our social responsibility should be focused on using our natural craftiness to help others help themselves (and leveling the playing field), not providing handouts.

Re: Guaranteed Minimum What?

#175

Post by mjevans » Fri, May 12, 2017, 9:37 PM UTC

PeterisP wrote: post #141

haltingthoughts wrote: post #57

Earlier quoted context omitted.

Housing, Education, Healthcare are supply limited and pretty important to the poor and UBI doesn't fix that.

Housing is one of things that can be solved by UBI - currently in many regions housing is scarce in places "where all the jobs are" and plentiful, cheap, and even empty and abandoned in places with few jobs. This imbalance happens in 'competition' between different centers, and also in the process of urbanization. We have people leaving their granparent's houses, and leaving them empty, just to go to the big city whe…

I agree this could help a little, but the "nice" places are still where people will /want/ to live. Where you see a city now is either a nice place, or someplace that has strategic value of some kind. (real cities, not suburb towns)

Markets work best when lightly regulated, when there's corrective action to smooth out the ups and downs of overshoot and collapse tendencies. Something I see lacking is the will to ensure sufficient supply so that demand can have choice, instead of captivity and vulnerability.

Re: Guaranteed Minimum What?

#176

Post by danbruc » Fri, May 12, 2017, 9:38 PM UTC

AnimalMuppet wrote: post #139

danbruc wrote: post #78

Earlier quoted context omitted.

The incentive structure in this example is certainly bad, but that is an issue whenever you are planning to give things away for free, with a universal basic income scheme or otherwise. That my example is exceptionally poor in this regard should not matter too much for the point addressed unless you want to hint at a problem with sustainability. That might or might not be the case depending on the behavior of the peo…

Hint at a problem with sustainability? I'll come right out and say it: Your proposal is not sustainable. The only people who will work in that environment are those who will work for free. Even if that were enough people, you also remove economic feedback about the effectiveness of peoples' actions. That feedback is critical for an economy to efficiently allocate resources.

First let me say that I am not trying to defend universal basic income schemes, I think they are not a great idea. With that out of the way, the point you are mentioning is a fundamental problem of universal basic income schemes. You can not promise to provide goods and services for basic needs to everyone unconditionally unless you have some magic black box providing the required goods and services.

You can try to tweak the incentive structure here and there to make it unlikely that you will end up in the worst case scenario but you can not really get rid of it. Unless you advance technology and automation to the point where you can provide for basic needs without any labor at all, a universal basic income scheme is a promise you can not keep unconditionally.

Re: Guaranteed Minimum What?

#177

Post by redahs » Fri, May 12, 2017, 9:41 PM UTC

PeterisP wrote: post #141

haltingthoughts wrote: post #57

Earlier quoted context omitted.

Housing, Education, Healthcare are supply limited and pretty important to the poor and UBI doesn't fix that.

Housing is one of things that can be solved by UBI - currently in many regions housing is scarce in places "where all the jobs are" and plentiful, cheap, and even empty and abandoned in places with few jobs. This imbalance happens in 'competition' between different centers, and also in the process of urbanization. We have people leaving their granparent's houses, and leaving them empty, just to go to the big city whe…

Housing costs can be solved without massive social transfer payments simply by eliminating all income and consumption taxes and switching to a land value tax in order to pay for public services.

If UBI transfer payments are paid out of a consumption or income tax, then landholders and mortgage companies will simply be able to charge all residents higher rent. If residents experience an increase in housing costs associated with savings which must be put away for purchases, rent, and mortgage payments that is in proportion to the increase income they receive via UBI, then UBI will not have made them better off. UBI will only have redistributed money from workers and entrepreneurs to landholders and banks invested in mortgages.

Under a land value tax, landholders cannot charge higher rent due to an increase in land values brought on by public spending on public services. If they want to increase their profits, they have to invest in real property improvements, such as by expanding the stock of available housing. If UBI is paid out of taxes on labor rather than taxes on land, they will be able to charge higher rent.

Re: Guaranteed Minimum What?

#178

Post by notahacker » Fri, May 12, 2017, 9:42 PM UTC

pg314 wrote: post #164

milesvp wrote: post #156

Earlier quoted context omitted.

There's inflation that the CPI tracks. And then there's inflation in a given sector, or product group. Basically inflation happens any time you shift the money supply around, be it with government regulation, or with economic booms or "gold rushes" (just look at what happened in the shale boom town economies). I can guarantee that there will be inflation in areas of the market that cater to poorer people. There is a…

> Things like basic food stuffs will get more expensive, because there will be more money chasing it. Rents will go up, since disproportionately more poor people rent. Why would demand go up? Do you think these people are currently not eating and living in the streets?

Do you think the fact people are renting property now is going to stop landlords putting the rent up when they know that their target market that's used to spending nearly all their income on rent now has a lot more to spend (and few more housing options than before)?

Re: Guaranteed Minimum What?

#179

Post by hn_throwaway_99 » Fri, May 12, 2017, 9:42 PM UTC

coldtea wrote: post #166

adamsea wrote: post #82

Earlier quoted context omitted.

You kinda missed the whole point of the OP, which was, if people don't add value to a business, how will said valueless people put food on the table and participate in society?

If many of those people don't have money to "put food on the table and participate in society" who will be able to pay any business for anything?

People who can participate (those with the skills necessary to manage more complex systems as he states in his blog post).

The scary part is it looks like wealth will be increasingly concentrated, and more and more people will fall to a level where what we consider basic needs in modern society (food, shelter, education and health care) will no longer be attainable. As the author points out, "it will be messy": Those societies usually don't end well.

Re: Guaranteed Minimum What?

#180

Post by wu-ikkyu » Fri, May 12, 2017, 9:43 PM UTC

coldtea wrote: post #166

adamsea wrote: post #82

Earlier quoted context omitted.

You kinda missed the whole point of the OP, which was, if people don't add value to a business, how will said valueless people put food on the table and participate in society?

If many of those people don't have money to "put food on the table and participate in society" who will be able to pay any business for anything?

Bingo! If humans are continually replaced by robots without being given an income subsidized by the benefits of automation, in the long run, the robots will have to be shut down because the humans can longer pay for the products!