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India floats the idea of a universal basic income

economist.com

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Re: India floats the idea of a universal basic income

#81

Post by neffy »

aminok wrote: post #71

Forcibly redistributing income from low resource generators to high resource generators creates an incentive for people with fewer resources to have more children than they are capable of supporting. This dynamic will in the long run lead to more people that produce fewer resources. Currently government is redistributing income upward by economic prohibitions (regulatory barriers): http://cepr.net/publications/report…

That argument (Malthusian) goes back to the beginning of the industrial revolution. But since pretty much every technologist, scientist and engineer currently working can trace their lineage in less than 4 generations back to the working class, I think I'll go with greater and better distributed wealth and education solving more problems than it creates.

The fundamental issue addressed by positive incomes is simply that money serves two processes in economies that are at complete odds with each other, 1) a store of value and 2) the fluid that drives economic activity. The more money that is held in the fewer hands, the less well it is able to fulfil the second and far more important purpose. In the limit, all the money is held by very few people, and shortly after that, those people find themselves at the hands of a very angry mob.

Which just never ends well.

Re: India floats the idea of a universal basic income

#82

Post by harryh »

taneq wrote: post #80
harryh wrote: post #66

Earlier quoted context omitted.

If a particular company is making outsized profits other firms will enter the market to capture them. Those firms will bid up the cost of the labor necessary to serve the market. The historic share of labor as a % of GDP is pretty constant. It has dipped slightly in the last ~15 years and some people see this as the beginning of a major change but that's highly speculative.

> The historic share of labor as a % of GDP is pretty constant. What time scale are we talking about? I'm pretty sure that 5000 years ago, labour was close to 100% of GDP. I'm equally sure that it's well down below 20% now.

Looking at US data for the past 100 years or so.

And no, it's not at 20%. More like a bit over 50%. If you take out depreciation and gov't because what you really care about is return to capital & labor it's about 30/70.

Re: India floats the idea of a universal basic income

#83

Post by jeffdavis »

whack wrote: post #67
felipeccastro wrote: post #38

I used to think a universal basic income would make sense, especially in developed countries, only for the near future scenario of machines taking ever more jobs. We know that this has always happened in history, and new jobs were always created, but that doesn't mean that the rate of job creation vs destruction will remain the same, forever. What made me change my mind about UBI was to realize that a) human desires…

The reasoning you're using is very flawed. Yes, we'll never get to a state where a small number end up with 100% of the wealth. Yes, there will be an equilibrium reached between the wealthy and the middle class. But this equilibrium point can shift more and more towards the wealthy. In fact, this has already been happening in the past few decades, as illustrated in books such as Capital. And as this equilibrium shift…

I think you are ignoring some bad things that could come out of UBI.

The greatest danger is that people may be comfortable near the BI level until they are about 30, and not really work or educate themselves much (lacking motivation). Then, they want to have a family, and all of a sudden their desires for consumption skyrocket. They can't just join the workforce then, because it will be 10 years before they advance enough to get what they want.

Then you have a bunch of undereducated, inexperienced people who want a lot of stuff.

I'm not saying it will happen, but we have to be careful.

Re: India floats the idea of a universal basic income

#87

Post by aminok »

jjoonathan wrote: post #56
felipeccastro wrote: post #38

I used to think a universal basic income would make sense, especially in developed countries, only for the near future scenario of machines taking ever more jobs. We know that this has always happened in history, and new jobs were always created, but that doesn't mean that the rate of job creation vs destruction will remain the same, forever. What made me change my mind about UBI was to realize that a) human desires…

Human desire may be infinite, but that doesn't mean there is an infinite source of jobs if we just try hard enough. Problem 1: the economic notion of value is weighted by wealth, but the notion of "human desire" you discuss is not. Entertaining a king is valuable, in the economic sense, but feeding and housing a poor is not. It doesn't matter if there are plenty of things that people want to be done, it matters if th…

>See: Enron, where deregulation of the energy markets led to artificial supply shutdown (the infamous rolling blackouts) in order to drive prices higher and profit.

Enron was no such case. California removed price controls on the wholesale power market while leaving them on the retail market. This was a recipe for predation by wholesalers on electric utilities. Besides the problem of inconsistency, price controls always lead to shortages and this is exactly what happened in California (and would have happened whether the partial deregulation had happened or not, because the electricity market prices exceeded the price control levels, at a time when electricity demand was growing due to population growth).

Moreover, new regulations (prohibitions) created in the 1990s prevented utilities from negotiating long-term power contracts with wholesalers, which would have prevented the manipulation that Enron traders engaged in.

Re: India floats the idea of a universal basic income

#88

Post by taneq »

jjoonathan wrote: post #70
tn13 wrote: post #63

Earlier quoted context omitted.

> but that doesn't mean there is an infinite source of jobs if we just try hard enough. Job = Time. As long as human beings can use their muscles and brains in the time to change outcome of some events and as long as people vary in their ability to do so, I think jobs will always exist.

It's not about jobs existing, it's about jobs existing at . We're far from that point now, so how am I supposed to take comfort in a technical argument that it won't get worse than ?

There's also the factor of those jobs being more effectively performed by humans than by machines.

Re: India floats the idea of a universal basic income

#89

Post by xedrac »

jeffdavis wrote: post #83
whack wrote: post #67

Earlier quoted context omitted.

The reasoning you're using is very flawed. Yes, we'll never get to a state where a small number end up with 100% of the wealth. Yes, there will be an equilibrium reached between the wealthy and the middle class. But this equilibrium point can shift more and more towards the wealthy. In fact, this has already been happening in the past few decades, as illustrated in books such as Capital. And as this equilibrium shift…

I think you are ignoring some bad things that could come out of UBI. The greatest danger is that people may be comfortable near the BI level until they are about 30, and not really work or educate themselves much (lacking motivation). Then, they want to have a family, and all of a sudden their desires for consumption skyrocket. They can't just join the workforce then, because it will be 10 years before they advance e…

I think you hit on one of the biggest risks in my opinion. Right now there is a strong motive to educate yourself, because it will likely result in a more comfortable future. Having a highly educated population is hugely beneficial. I suppose if UBI provided just enough to keep you alive, then it might not be so bad.

Re: India floats the idea of a universal basic income

#90

Post by MarkMc »

aminok wrote: post #74

>But as things stand now, the owners of the machines get richer, and the displaced workers get significantly poorer. No they don't. We've had 200 years of massive automation fueled job destruction, and wages and the demand for labour are massively greater now than 200 years ago. The last 20 years in particular have overseen the most rapid wage growth in human history.

In 1995 the real median US household income was $52,664. In 2015 it was $56,516 [1].

US Hourly Wages for nonsupervisory workers has certainly grown over the last 20 years, but not in the past 40 years [2].

[1] https://fred.stlouisfed.org/series/MEHOINUSA672N

[2] https://en.wikipedia.org/wiki/Household_income_in_the_United...

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