Request For Research: Basic Income

Figuring out basic income is perhaps the most important thing we could do as a society, because it will unlock the energy and creativity we're lacking to solve every other important problem.

Trying to solve global warming, energy, crime or government without basic income is like running a marathon on one leg.

The Valley, through a variety of circumstances, is now home to the highest concentration of technology companies, and is unsurprisingly one of the most expensive places to live in the world.

The are known economic forces [1] that cause clustering of similar firms in small areas, and there's no doubt that this is a net positive for both the city and the individual businesses, at least at first. The incredible concentration both of talent and wealth in San Francisco and Silicon Valley is a clear testament to the power of physical proximity.

However, I urge the technology community and specifically Y Combinator to seriously reconsider the notion that all of technology must happen on a peninsula in central California.

How this decreases the cost of living is obvious. I live in Memphis TN and I pay $500 a month on my mortgage. Further, the city of Memphis and many other cities in the US are in serious need of both talented young people and economic development. The "brain drain" is a real and devastating effect of compressing the technology ecosystem onto the West Coast. Reversing the brain drain would bring leadership, talent, and dollars to areas that need it.

I'd like to specifically call out YC for this section of their FAQ:

> Can we do it without moving to where you are?

> Sorry, no. We tried this once, and by Demo Day that startup was way behind the rest.

In every other aspect of their model, YC is open to all reasonable possibilities. They fund photo sharing apps and nuclear reactors, women and men, young and old, but NOT people who won't move to SF. This reasoning is apparently based on just a few examples. Thus, the idea that constant physical availability is a fundamentally important part funding is just conjecture.

This policy and the attitude behind it are essentially opposed to the ethos of the technologist. How does one change the world by adding incrementally to the wealth of the Bay Area? Also, it's an absurdity that I have to mention that the internet was invented so that we wouldn't have to do stuff like this anymore.

This also addresses the issue of diversity. If you want more diverse people, go to where they live. I find it an amusing contradiction that many of the people who cringe at the idea of moving to the repressive "Deep South" of Tennessee would find themselves working with people who aren't white dudes for the the first time if they ever did move.

So, I urge YC and the tech community at large to spread out from just the bay area. Reconsider the cities you came from. Be bold and try to find the opportunities that are waiting outside Silicon Valley.

[1] https://en.wikipedia.org/wiki/Business_cluster

The phrase "during CPI calculation" should be the key to understanding here. CPI tells you how much prices have gone up or down generally, by just sending a bunch of secret-shoppers around to measure a bunch of prices.

Knowing the treasury's current bond interest rates, the current exchange rate, and Core CPI, you can derive economy-wide aggregate demand—which is the point of the whole exercise. You can then look at any given good's economy-wide demand (i.e. the same formula, where Core CPI is calculated in terms of just that one good) relative to total demand as a time series, take their co-variance, and that's the good's demand-elasticity. (All the numbers are public at every step; there's no real way to fudge them.)

> Would tampons be covered by UBFS? Let's say then we allow for UBFS to cover female menstrual products. Would cups then be covered? Why or why not?

Again: you plug in the demand-elasticity formula and get an answer. No politics, just cold automated logic. Female menstrual products as a category are very likely to be calculated to be inelastic.

Now, how that breaks down to individual items within the category is something I didn't define. As a raw guess, the government could define base inelastic-value for the category, which would apply as a sort of rebate to all the items in that category. Any individual item's price should, after this "rebate", reflect exactly and only its additional elastic demand—making the "premium" products cost some number of nicety-dollars, while the "economy" products in that class cost "nothing" in nicety-dollar terms. (The real key there is the creation of a law preventing companies from increasing their prices in response to this—because, without market manipulation, of course prices would rise to reflect all the same competitive demand as before, plus the extra "free" votes each person got. The law would just need to force companies receiving necessity-dollars to price according to demand in an alternate world where demand was exactly [the amount of inelastic-demand] lower.)

> one word: Arbitrage.

No reason to allow individuals to trade in necessities at all, which would nearly completely prevent arbitraging opportunities. (e.g. it's obvious enough that you shouldn't be able to rent your necessity-dollar-paid apartment out on AirBnB.) Consider anything paid for in necessity-dollars to be tainted and have no legal nicety-dollar value after that.

https://en.wikipedia.org/wiki/Robert_H._Frank

It is overly judgemental of what people living on a basic income are allowed to do, thus making living on only the basic income less viable. Your mother is dying and you need to fly to a different city to visit her? Nope sorry, long distance transit is a nicety. You want to take some time to switch careers? Sorry, books are a nicety. Have back trouble? Sorry a fancy chair is a nicety. You may say that those things could be necessities but a huge fraction of goods typically a 'nicety' can be a 'necessity' in the right circumstances. Better not to tie people's hands.

I think this adds a lot of complexity, cost and bureaucracy for a net loss in how effective the basic income is.