A Dutch city is giving money away to test the basic income theory • Hacker News Board

Re: A Dutch city is giving money away to test the basic income theory

#531

Post by somberi » Fri, Jul 03, 2015, 9:44 AM UTC

Quoting a recent article in The Economist (Edited by me) " The Swiss will soon vote on a proposal for a basic income of 2,500 francs ($2,700) per month, following the success of a national petition....

Turning it into a substitute for all welfare payments would be prohibitively expensive. But it might work as one element of the safety net....

Although the basic income has so far failed to take off, it does have a commonplace cousin: the tax-free allowance....

It is feasible only if it is small, and complemented by more targeted anti-poverty measures.

Basic income: the clue is in the name. "

Full Link: http://www.economist.com/news/finance-and-economics/21651897...

Also of interest (US trying basic income): http://www.economist.com/blogs/democracyinamerica/2013/11/go...

Re: A Dutch city is giving money away to test the basic income theory

#532

Post by ptaipale » Fri, Jul 03, 2015, 10:59 AM UTC

DanBC wrote: post #530

ptaipale wrote: post #414

Earlier quoted context omitted.

Quite. I wouldn't call people "lazy" if they've fallen in a benefit trap. The benefits have been created with good intentions, but they have paved a road.

To be clear: I wasn't calling people claiming benefits lazy; I was saying that wozniacki was calling them lazy. I should have used scare quotes.

Clearly you didn't. Though wozniacki's message was phrased a in bit more nuanced way as well:

certain sections of the society just do not respond positively in measures of improvement of their own station in life -- I think we cannot escape the fact that this is true. Even in the wealthiest welfare states, there is poverty and unhappiness, but mostly it's not because of lack of (monetary) benefits, or access to education etc.

At least in my country (Finland), the development has been from state assistance (for instance, a tired single parent gets someone to help him/her a couple of times per week and do a bit of looking after the whole situation) to monetary payments (they get 123 € per week, which is taken away if they go to work, and they have freedom to decide what to do). And I must admit that when I was younger, I tended to be very liberal/libertarian (in the American sense) and say just giving people money and freedom is what we should do, but now I think it was a mistake. In the short term, people do hate waking up and going to work every day, even if in the long term they will live better lives if they do so.

Re: A Dutch city is giving money away to test the basic income theory

#533

Post by fwn » Fri, Jul 03, 2015, 12:29 PM UTC

s73v3r wrote: post #391

fwn wrote: post #174

Earlier quoted context omitted.

So what makes you think that's not the case? We're not observing a shortage in unskilled work right now.

Because right now, people are forced to work in order to survive. Meaning they have to take the shitty jobs for shitty pay because that's what they can get. If you remove the forced to work part, then they can be more selective.

Being force to work is not the same as the need to work to fulfill personal needs and goals.

That is one key difference between slaves and early farmers.

Re: A Dutch city is giving money away to test the basic income theory

#534

Post by ryanx435 » Fri, Jul 03, 2015, 1:54 PM UTC

reb wrote: post #510

ryanx435 wrote: post #509

Earlier quoted context omitted.

all of the problems you just described can be solved by simply firing a bad employee or not hiring bad ones in the first place. I'm still not following why paying them to do nothing is necessary.

>all of the problems you just described can be solved by simply firing a bad employee or not hiring bad ones in the first place. Hardly. If hiring and firing could effectively eliminate poor employees, there wouldn't be so many. As it is, only the most egregious are weeded out. Firing costly employees can be exceptionally difficult depending on local regulations and may not even be worth the trouble considering the r…

ok, that makes a bit more sense. thanks for explaining.

you also mentioned higher wages for those that are working due to a reduction in available labor supply. wouldn't the higher labor costs for employers off set any productivity gains from getting rid of bad employees?

Re: A Dutch city is giving money away to test the basic income theory

#535

Post by ajuc » Fri, Jul 03, 2015, 3:44 PM UTC

vidarh wrote: post #287

ajuc wrote: post #284

Earlier quoted context omitted.

> Nothing assumes people wanting to share. It assumes once workers won the surpluses won't decrease. This turned out to be false assumption, because people don't like to share, so they don't work as well if they only get part of the fruits of their work, as they would if they got most of the fruits of their work for themselves.

Today they don't generally get a share of the surplus, so by your argument they should be working even worse.

In "the west" they get less than in 50s, but they still do.

The important thing is - salaries depend on their performance and on the demand for given product/service.

Re: A Dutch city is giving money away to test the basic income theory

#536

Post by benkuykendall » Fri, Jul 03, 2015, 8:06 PM UTC

TeMPOraL wrote: post #215

I'm a strong supporter of the concept and motivation behind universal basic income, but I admit I don't understand one part of the calculations - what's the solution for the problem of prices universally rising to the point of cancelling out the UBI? I mean, if everyone suddenly gets additional $500 a month to spend, how do you prevent the market from correcting for that?

It changes the allocation of resources. Let's play with some numbers.

We will say that 5 people have the following monthly incomes [ 0, 500, 500, 2000, 3000, 4000] Our economy only makes one good: bread. There are 1000 loaves of bread produced. Assuming everyone spends all of their money, since there is a total of 10000 dollars, the price of bread will be 10 dollars. Each person can buy = [ 0, 50, 50, 200, 300, 400]

Now, let's say in 2016, everyone gets 500 extra dollars from some outside source, giving incomes [ 500, 1000, 1000, 2500, 3500, 4500] There are now 13000 dollars. The price of bread will be 13 dollars. Each person can buy [ 38, 76, 192, 269, 346]

Some people can buy more bread. Some can buy less.

Re: A Dutch city is giving money away to test the basic income theory

#537

Post by branchless » Fri, Jul 03, 2015, 10:23 PM UTC

roblev wrote: post #525

branchless wrote: post #516

Earlier quoted context omitted.

Base money is 3% of all money. Go ahead pull the lot out. It won't matter. Only parking meters that can't take cards will feel it. Reserves are unconstrained as banks lend to each other after creating credit via deposits from borrowers. If two banks create 400k and then each borrower buys land with this 400k and the seller then deposits the fresh "money" with one another's bank they have 400k credit. Demand is pulled…

Capital is absolutely not unconstrained! It is one of the most difficult things for a bank to increase its capital base. Base money is a low percentage compared to bank money - its true - but all bank money is a claim on base money. Pull out the base money and every bank has a liquidity crisis and would in turn have to recall every loan. More than parking meters would feel it; a bank cannot issue a loan without appro…

See my other link from the BoE - the bank underground one.

They totally disagree with you.

Banks are constrained by demand for capital. This is why we have the present malaise and see banks pushing on a string.

Re: A Dutch city is giving money away to test the basic income theory

#538

Post by roblev » Sat, Jul 04, 2015, 9:28 AM UTC

branchless wrote: post #537

roblev wrote: post #525

Earlier quoted context omitted.

Capital is absolutely not unconstrained! It is one of the most difficult things for a bank to increase its capital base. Base money is a low percentage compared to bank money - its true - but all bank money is a claim on base money. Pull out the base money and every bank has a liquidity crisis and would in turn have to recall every loan. More than parking meters would feel it; a bank cannot issue a loan without appro…

See my other link from the BoE - the bank underground one. They totally disagree with you. Banks are constrained by demand for capital. This is why we have the present malaise and see banks pushing on a string.

I read the bank underground blog post. It is fine and interesting, but it is talking entirely about bank money creation (loans/deposits) and not about base money or capital ratios. That's OK, no reason for an article to talk about everything. But just because one article doesn't talk about capital in the point it is making, doesn't mean that capital is not an important constraint in banking.

https://en.wikipedia.org/wiki/Capital_requirement

There is a reason why bank CEOs have been in recent years judged heavily on their Tier 1 capital ratios, and why they consider it difficult to adjust these ratios. Issuing a new loan makes the bank's capital ratio worse not better.

http://www.forbes.com/sites/greatspeculations/2015/03/06/a-l...

Re: A Dutch city is giving money away to test the basic income theory

#539

Post by koonsolo » Sun, Jul 05, 2015, 9:24 AM UTC

splawn wrote: post #282

koonsolo wrote: post #242

Earlier quoted context omitted.

> Human nature is people wanting to reap rewards for their work (that includes having private property). UBI doesn't take away that. How are you going to pay for UBI? With taxes. If you already receive a tax free UBI, this means the percentage of taxes on your extra income will drastically increase (with factors, not percentages). This means that when you work for someone else (sell your time/products), only a tiny p…

Good point! More stay at home parents is another benefit of BI that I haven't even thought of yet. I get more sold on this idea the more I read about it.

Who is going to pick up the trash, bake bread, repair your car, build your house, build streets, build cars on an assembly line? Less and less people. And less people producing, means less people consuming. Your BI won't be able to support you for very long because prices will increase (less supply). It won't take long before your economy is screwed.

Re: A Dutch city is giving money away to test the basic income theory

#540

Post by logfromblammo » Sun, Jul 05, 2015, 5:01 PM UTC

pekk wrote: post #378

logfromblammo wrote: post #318

Earlier quoted context omitted.

Bear in mind that "administrative expenses" can mean one thing to ordinary people, and something quite different to a government-sponsored accountant. When Medicare/Medicaid pays $150 for the same type of crutch that sells in a local pharmacy for $15, that difference does not go into "administrative expenses". I might prefer the expense of a human employee driving to Walgreens, buying a crutch off the shelf, and deli…

What distinguishes normal accountants from these apparently corrupt "government-sponsored accountants" who "cook the books"? Do they have pointy ears or forked tongues?

Normal accountants don't have 300 pages of federal regulations telling them exactly how they need to lie in their reports.

They have 20 pages of corporate guidelines telling them how they have to lie. Zing!