
Powerful Political Forces Are Aligning Behind Minimum Income - 99_00
http://nerdinvest.blogspot.com/2016/02/powerful-political-forces-are-aligning.html
======
hackuser
A rarely discussed benefit to minimum income: The higher the social benefits,
then I think the greater the labor market liquidity, for both employers and
workers.

Currently everything else depends on your job: Either you have one, and you
have income, benefits, and all that goes with them in a society where
everything costs money; or you don't and you have nothing (or very little).
But if you don't lose you house, still can afford decent healthcare, and your
kids still eat and go to college, etc., then employees can be more flexible:

Firings and layoffs are less of a crisis; when everything doesn't depend on
having that job then I expect there will be fewer lawsuits. Protections for
jobs in law and regulations can be reduced.

Also, workers, especially those with mortgages and kids, would be less
desparate to keep their jobs. I think that is a healthy thing; they can take
more chances and invest more in training and skill acquisition. Also, they are
not compelled to do odious or unethical things (such as working off the clock,
tolerating abusive environments, particpating in and/or not reporting illegal
activities, etc.) due to a sort of employment extortion. It probably would be
better for managers to get more honest feedback too (though some would have to
learn ways to motivate people besides abusing them!).

Some of that is speculative but I believe a European country, I think Denmark,
worked out a compromise of high and long-term unemployment benefits in return
for making workers easy to terminate.

In part it's also a political solution to the concentration of wealth: If you
are going to accumulate so much of the wealth due to the way the economy is
structured, then in return pay for these social benefits and we all can retain
labor market liquidity and maintain political harmony. U.S. workers have less
to bargain with: They gave away many of their labor market protections and
lost negotiating power by weakening their unions.

~~~
DiffEq
Yet nowhere has this been "field tested" for any length of time. Unless one
makes the case that it has been tested in the form of several countries in the
20th century. Places like the the Soviet Union, China, etc. We see that it
failed in those places and in Soviet countries it failed fantastically. The
fatal flaw in all of this...who is going to pay for it?

~~~
sbuttgereit
That and what economic activity will be suppressed as capital moves away from
prior uses. Nobody is talking about generating new wealth to make this happen:
it's pure consumption and some of that will be at the expense of capital
investment. The seen and the unseen indeed. Unless there's more than hand-wavy
dismissive talk about the negatives such schemes bring, one is foolish to
think that this does anything positive at all.... and that's just the
utilitarian perspective.

Morally, that any one person, by virtue of their relative wealth alone, is
judged a provider, at gunpoint if necessary, to others who, by virtue of their
relative lack of wealth alone, is considered worthy of substance, is such an
inversion of right and wrong as to warrant some serious soul-searching about
what makes one worthy of punishment or reward. Yes, poverty is a problem. Yes,
there are institutional barriers to getting out of poverty. I don't see how
doubling down on those problems does anything than ease the conscious of the
haves.

~~~
shkkmo
> Nobody is talking about generating new wealth to make this happen: it's pure
> consumption and some of that will be at the expense of capital investment.

I've been talking about how minimum income can make the minimum wage obsolete
and thus allow for the existence of a wider variety of jobs (and creation of
wealth) that was previously unviable while also fixing the market
inefficiencies created by putting an artificial price floor on labor.

> Morally, that any one person, by virtue of their relative wealth alone, is
> judged a provider, at gunpoint if necessary, to others who, by virtue of
> their relative lack of wealth alone, is considered worthy of substance, is
> such an inversion of right and wrong as to warrant some serious soul-
> searching about what makes one worthy of punishment or reward.

No, completely wrong.

> by virtue of their relative wealth alone

Wealth exists only within an economy and thus is a social construct that makes
it's owner intrinsically beholden to that society. Wealth thus increases the
moral obligation to the society from which that wealth is derived.

> by virtue of their relative wealth alone, is considered worthy of substance

It is not their lack of wealth, but their mere existence that makes them
'worthy of substance'.

> warrant some serious soul-searching about what makes one worthy of
> punishment or reward

Taxes on wealth are not a punishment, they are the cost of maintaining and
improving the society and allows the wealth to exist.

Minimum income is not reward since it is given to everyone.

~~~
gwright
> Wealth exists only within an economy and thus is a social construct that
> makes it's owner intrinsically beholden to that society. Wealth thus
> increases the moral obligation to the society from which that wealth is
> derived.

This notion pops up quite a bit in HN discussion of basic income. Can anybody
provide some references to any sort of scholarly work on this concept?
Presumably it has been described and discussed in depth and I'd like to be
able to understand it better or even associate a name to the concept.

In any case, I'm not sure I follow the logic in this particular description.
Why does wealth being a 'social construct' make the 'owner intrinsically
beholden' to that society? What does 'intrinsically beholden' mean? These seem
like arbitrary and poorly defined assertions to me.

> Minimum income is ... given to everyone.

Define minimum income. Do you imagine it enough to provide food, shelter,
clothing? If so explain what other mechanisms would prevent the emergence of a
large group of people who simply lived off the efforts of others as a choice.
What mechanism would keep that sort of system in equilibrium rather than the
consuming group growing and the producing group shrinking and the resulting
tensions escalating? And don't we want to construct a system that moves
towards a state that maximizes the number of self-sufficient people rather
maximizing the number of dependent people?

~~~
hackuser
> Why does wealth being a 'social construct' make the 'owner intrinsically
> beholden' to that society?

A stab at it: 1) Money is a social construct, as are many other things
necessary to make wealth valuable and meaningful; 2) Any person's wealth is
due to the 'society' they live in, to a great degree. Consider the roads,
laws, political system, safety, education (of the wealthy person, their
employees, and customers), wealth of customers/vendors/investors, science,
etc. Compare the prospects for wealth and the value of it (i.e., uses for it)
for someone in Syria with someone in the Bay Area, for example.

I agree; I'd like to find something more authoritative bout the topic.

------
twoodfin
Sorry, which "powerful political forces"? A Canadian newspaper?

In keeping with HN guidelines, I don't like to comment on why I flag articles,
but I'm going to continue to flag the nearly content-less Basic Income posts
that seemingly rocket up the front page a few times a week.

I'm sure there are comprehensive, insightful articles on BI out there. If
they're ever posted, I'll probably vote them up.

~~~
AnimalMuppet
The article stated that the party that won Canada's most recent election has
proposed BI. That's "powerful political forces", at least within Canada.

------
xrange
Here's something I like to see some discussion on from Basic Income
proponents. Does BI need to be rolled out everywhere-all-at-once, or is it
possible to do small scale experiments to look at the effects? If you think it
is possible to have meaningful smaller scale tests, how small can it be? 1000
participants? 100,000 participants? 10,000,000 participants? And then the big
question, would there be any outcomes from these smaller scale tests that
would convince you that BI isn't feasible? Can share your list of those
undesirable outcomes that would change your mind about the desirability of BI?
(No sense in running tests if no one will change their mind). Also, what do
people think of the Social Security retirement situation as being a fairly
large example of BI, that has been running for the last 80 years on a subset
of Americans. Does the fact that they are older invalidate it as an example
case in your mind?

~~~
mikeash
I don't think you can do small scale experiments, unless you do it using an
entire small country. The idea is that you raise taxes too, and naturally
you'll have winners and losers. I don't think the losers (wealthier people)
will tolerate being forced into the program while others are left out of it.
If you let people choose, then only the winners (poorer people) will choose to
participate, which will deeply distort the results.

If you can do such an experiment (by, for example, instituting BI in a small
country) then there are certainly outcomes that would indicate BI isn't
feasible. The big questions are whether people in a BI scheme will continue to
work, and whether the higher taxes needed to pay for it will kill the economy.
If everybody quits their jobs and the taxes strangle the economy then that
indicates BI isn't feasible. If everybody keeps working and the economy
proceeds as usual then that indicates it is.

I don't think Social Security is a useful example precisely because it's aimed
at retirees. You don't get much useful information about people's willingness
to continue working when you target it at people who have retired. The tax
rates needed to support it also look artificially low because the SS tax base
is much younger than the SS recipients, and population growth means the former
group is disproportionately large. Finally, it doesn't really look much like a
BI scheme, because what you get out of SS is based on what you paid in, it's
not at all universal.

~~~
xrange
>I don't think you can do small scale experiments

What if you started everyone out at $50/month, and increased it slowly over
the course of say 10 years or 20 years, or 100 years to whatever target you
liked? Or do you think a gradual introduction would invalidate the results, or
that you couldn't extrapolate from people's behavior at $300/mo, what they
might do when the payout is $1000/mo?

Or what if you started walking the social security age backwards gradually,
making people eligible at the age of 60 in the year 2020, and 55 in 2025, and
50 in 2030, etc.?

Can anyone shed insight on Indian reservations and basic income. For some
reason I thought that some reservations with casinos had payments to all the
tribe members?

>You don't get much useful information about people's willingness to continue
working when you target it at people who have retired.

What about the other claims that some people make with BI, like an explosion
of new exciting art/music/novels, etc.. Is that testable with SS recipients
(say looking at how many novels they write the year before, and the year after
they retire, counting the number of hours they watch TV before and after
retirement). Or are they an invalid group because they are old? Or are the
"other" category of BI claims mostly just feel good claims that no one really
believes?

------
jerelunruh
Let's say that currently rent is $1,000 per month, food is $500, and Alice is
earning $2,500.

Now UBI is implemented and Alice and all fellow citizens receive $1,000 per
month. What will keep the market from easing the entry level rent up to $1,500
and food to $1,000 since the money is available? At first glance it seems like
we'd just be choosing a different number representing "broke".

~~~
noonespecial
Draw it out into the absurd to watch it work:

Consider a society with 2 members, Mr Rich (net worth $10M) and Mr. Poor (net
worth $100). Mr. Rich is 100,000 X richer than Mr. Poor right now.

Institute a ridiculous UBI of $1M/year for everyone. At the end of the year,
Mr. Poor has $1,000,100 and Mr Rich has $11M but Mr Rich is now only ~ 11 X
richer than Mr Poor.

Now sure cheeseburgers at Micky-D's are now $700 but the fact has changed that
before, Mr Rich could buy a hundred thousand burgers for every one Mr Poor
could buy. Now he can only buy 11.

UBI works like gravity. Continually pulling the unequal towards a center. The
rich will still stay rich, but unlike today where rich automatically makes
richer, the force will be reversed. It will take "energy" to stay rich.

~~~
bryanlarsen
Mr Rich will have $9M because his taxes would have gone up by $2M/year to pay
for the program.

And the cheeseburgers are still the same price. Mr. Poor was buying
cheeseburgers before he got BI and he's still buying cheeseburgers; neither
supply nor demand has changed. Mr. Rich bought caviar before and after.

If McDonald's gets greedy and raises its prices because it thinks it can,
Burger King is still making money selling at $5.

~~~
psadauskas
Except McDonald's can't find any workers that are willing to work for $8.15/hr
any more. I think prices of most things will go up, not because of inflation,
but because you have to pay more for the people to serve them. On the other
hand, customer service will probably go up, because nobody is there any more
because they _have_ to.

------
jbrun
If you are in Quebec - join us at
[http://revenudebase.quebec](http://revenudebase.quebec) In Canada: join us at
: [http://biencanada.ca](http://biencanada.ca)

~~~
herge
What do you think about Jean-Robert Sansfaçon's critique in Le Devoir
([http://www.ledevoir.com/economie/actualites-
economiques/4624...](http://www.ledevoir.com/economie/actualites-
economiques/462452/revenu-minimum-simple-ou-simpliste)), where he calculates
that to give only 10,000$ per inhabitant in Quebec per year, you would need 68
billion dollars, ~22 times the amount currently spent on social welfare. Also,
that would constitute 70% of the current tax revenue of the Quebec government.

~~~
graeme
Does that take into account that for middle class people it's effectively a
wash?

i.e. Your taxes go up $10,000, but you get a $10,000 payment. I haven't seen a
cost calculation that explicitly factors this in. I imagine it's still
expensive, but perhaps less than it seems?

It's a good article though. A lot of people vastly overestimate current social
payment expenditures. They're much lower than I thought, and I am not in the
camp that thinks basic income will be costless to implement by replacing
social programs.

~~~
JonFish85
"Does that take into account that for middle class people it's effectively a
wash?"

I guarantee that if/when this gets implemented, it won't be a wash for the
middle class. The middle class is where the tax money is, and they'll be the
ones bearing the brunt of the bill, as usual.

~~~
emidln
This is mostly true because we have made forms of non-wage income tax
advantaged while capping out how much income we consider during welfare-tax-
directed calculations (like social security). This doesn't have to be the
case.

------
shkkmo
One big benefit to minimum income that I never heard discussed is the
wonderful ability make the minimum wage obsolete. (Since minimum wage is
merely an alternative route to achieve minimum income without using direct
taxes and that doesn't help those with no job.)

Each time we hit a rough patch we could boost the minimum income to increase
liquidity, and drop the minimum wage to stimulate job creation.

This has the potential to fix some of the inefficiencies of the job market.
There are jobs that people enjoy or find fulfilling that don't provide enough
'value' to exist (or only exist in the black/barter market where minimum wage
is not enforced). There are also jobs that nobody enjoys or find fulfilling,
that should have been automated already, but haven't because we force people
to work to support themselves and thus create a glut of cheap labor with the
minimum wage as the price floor.

As far as to how we pay for minimum income, I love the idea I ran across on HN
of directly and progressively taxing capital/assets rather than income.

------
emartinelli
In Brazil, we have a law[1], from 2004, implementing UBI, but it is not nearly
applied for all population. This law determine a gradual implementation and I
believe that the the full one is far away. There are some benefits for poor
people, unfortunately there are frauds and IMHO some mass manipulation from
government.

[1]
[http://www.planalto.gov.br/ccivil_03/_ato2004-2006/2004/lei/...](http://www.planalto.gov.br/ccivil_03/_ato2004-2006/2004/lei/l10.835.htm)
(Portuguese)

~~~
nmrm2
Are you referring to bolsa familia? Or is this something else? (I don't speak
Portuguese)

~~~
marcosdumay
No, this is about universal income (bolsa família is means tested).

I've never heard about it, I don't think it has gone anywhere.

~~~
emartinelli
Actually, in theory Bolsa Familia should be kind of step to reach UBI. The
referenced law talks about gradual implantation, initially by poor people.

------
locopati
Honest question - how does UBI address hikes in the cost of basic necessities
(food, shelter, clothes) by companies knowing that everyone can afford them?

~~~
manyoso
The UBI can be scaled by the cost of living index which will shelter it from
inflation. We have a sovereign money supply for a reason. Let's use it!

~~~
X86BSD
I keep seeing people say use the cost of living index. Do any of you realize
what a fraud that is? They have taken out the two most expensive categories
people spend money on to _survive_. Food and energy. And it's been like that
for decades. That index is as useless as tits on a tree.

~~~
manyoso
It can be tied directly to inflation or even to GDP. See details here:
[https://medium.com/basic-income/wouldnt-unconditional-
basic-...](https://medium.com/basic-income/wouldnt-unconditional-basic-income-
just-cause-massive-inflation-fe71d69f15e7#.kz2s8ze9d)

------
maxxxxx
My prediction for Basic Income is that even if it gets introduced a few
years/decades later a lot of people will complain (rightfully or not) about
all those parasites not doing anything while "job creators" have to pay for
it. At least in the US it won't work long term looking at the current
discussions about tax rates.

~~~
manyoso
If it is also sold and paired with an elimination of the general income tax I
think it could have wide support on the right and left. And how would we pay
for it without a national income tax? A value added tax and a carbon tax.

~~~
debacle
We need to return to a wealth-oriented tax. Neither income tax nor VAT are
taxes on wealth.

But even as someone without a lot to worry about, I can't think of a fair way
to tax wealth outside of land taxes, which would greatly disrupt the economy.

~~~
tomkinstinch
The estate tax is one mechanism we have now to tax wealth.

~~~
debacle
The estate tax is bullet-hole ridden, unfortunately. Overall the US tax system
is a mess.

------
zanny
While I am a staunch advocate of UBI as a solution to a massive swath of
present and emerging problems around the world, I also do not see the
experiments around it leading to its mass adoption in at least the span of
decades.

Things have to get much worse (and they will) and we will need some active
social unrest (on the scale of Occupy Wall Street or Black Lives Matter,
except informed about UBI and fighting for it in a unified message) before the
wealthy will acknowledge that if they want to stay wealthy, they need a
society to be wealthy within, and we won't have one if people are destitute
and starving by the millions because traditional capitalist expectations of
work and compensation break down in the face of growing automation.

~~~
Florin_Andrei
So that's the question, isn't it. Will it go down smoothly, or will we go
through another round of revolutions and unrest everywhere, complete with
burning down the mansions and whatnot.

------
jedmeyers
Powerful political forces interested in staying in power by bribing electorate
with other people's money?

------
Kenji
Haha, I love how the tech community is so liberal and critical against
government when it comes to privacy and meddling with our private lives, yet
that exact same community is mostly in agreement with UBI which in turn means
being completely dependent on the state. If the state thinks you do something
it does not like (you're a ''terrorist''), your UBI will be striked - you know
that, right?

~~~
manyoso
Liberals understand that we are the state as a government of the people, by
the people and for the people. Probably we remember this from grade school and
also we don't instinctively fear the 'other' like you guys.

~~~
Kenji
I am not the state. And when I look around, a lot of states certainly aren't
'for' or 'by' the people. Maybe you have to start thinking independently,
rather than smugly reciting one-liners from school. The state is a large
entreprise that gives us some things and forces us to do things and pay money
under the threat of violence and incarceration. I argue for voluntaryism, the
notion that people enter into contracts and relationships by their own free
will and without force, which is fundamentally at odds with most of what the
state does.

~~~
manyoso
What you argue has been tried in the early have of the 20th century in the
United States where workplace safety laws and minimum wages were ruled
unconstitutional based on the theory of free contracting parties. It failed
MISERABLY and by miserably I mean it left working people in ... literally ...
misery.

BTW, my 'smug one liner' I learned in school was uttered by President Abraham
Lincoln who is widely regarded as our nations greatest President.

~~~
Voukras
Why do you say it failed miserably? Compared to what? Why do you think the
conditions of that time were a result of legislation being insufficient as
opposed to quality of life simply being lower in that period of time?

By the same logic I can say that not having minimum wage in the 12th century
was the reason why people were suffering. It's entirely true there wasn't a
minimum wage at that time either, but it completely ignores that: \- It would
have been impossible to implement during that period because of the way the
job market worked and because of the technology of that time. \- Their
suffering is attributable to other things than the lack of legislation.

Until advances in technology makes safety regulations and safety equipment
cheap, legislating them means putting people out of a job because the employer
cannot pay for all of that, so they can't operate their business anymore. Have
you ever considered that perhaps that was the case in the early half of the
20th century?

As far as I can tell society and the market does all the heavy lifting and
then the government comes and enacts laws for things that were already
becoming safer and better. Graphs like this are what lead me to the conclusion
I've mentioned:

[https://danieljmitchell.wordpress.com/2012/09/25/assuming-
yo...](https://danieljmitchell.wordpress.com/2012/09/25/assuming-youre-
intellectually-lazy-theres-a-very-strong-argument-for-command-and-control-
regulation/)

------
afarrell
I wonder if there is a way to structure it as a dividend from the profits
gained by unemploying people via automation. That way, fixed-income voters
have a double incentive to advocate for policies of more automation:

\- It goes into their pockets

\- It reduces their cost of living

If they vote in large numbers, as retirees do, that creates a large
constituency to remove red tape.

The problem is making sure there is still enough profit motive to invest.

------
jakeogh
It is inevitable that the threat of withholding 'basic income' will be used to
modify behavior. Didn't pay a fine? Didn't do your taxes? Post "radical"
comments on the internet? On the no-fly list? On the no-drive list? Don't have
a gov-issued InternetID™? No soup for you. How long until China couples it
with it's human scoring system?

~~~
mikerichards
So are you saying that basic income requirements will be very different than
welfare is today?

------
AnimalMuppet
> No, because they would still have Milton Freidman's famous helicopter money
> drop. Previously, this took the form of quantitative easing.

QE was _not_ the same as the "helicopter drop". The helicopter drop (HD) is
much closer to basic income (BI), except that HD might be a one-time thing,
whereas BI is ongoing.

QE is creating money to buy bonds. This raises the price of bonds, and injects
money into the system. But _where_ does it inject the money? To everyone? No,
only to those who currently hold bonds - that is, to the wealthy, and to
financial institutions. HD and BI, by contrast, give the money to everyone.

QE didn't do much to solve the problem of inadequate demand. HD and/or BI may
do better. They may do it at the price of increased inflation, true. But under
the current circumstances, the Fed would welcome a bit more inflation...

------
nugget
Serious question for folks here - do you believe we can successfully institute
a meaningful basic income in the US with the current immigration policies? How
would policies have to change given the increased incentives from UBI?

~~~
AnimalMuppet
Serious answer: I don't think we can institute basic income with the current
immigration policies without rioting in the streets.

------
manyoso
This seems like an idea that is gaining a lot of momentum. When I see
prominent Republican voices speaking about it as "reform" of the welfare
state, then I'll know that the time is ripe in America too.

------
thisislame
The powerful political force behind minimum income is the rentier class who
will ultimately capture it as rent.

Replacing existing programs with "free choice" is a well-worn playbook. See
also: pensions vs. 401k plans.

~~~
civilian
Eer, I don't get it, why wouldn't I want a 401k over a pension?

You can't trust pensions. Companies can go bankrupt, and even governments have
been going bankrupt and have renegotiated pension plans. I'd much rather
slowly tuck away a portion of my own income and have it be labeled as mine,
rather than have it be a future debt on some organization's account book.

------
ef4
Prediction: if universal basic income starts to become an imminent
possibility, the existing public and private sector welfare bureaucracy will
lobby against it. Because it will put them all out of a job.

Not coincidentally, this is also how you can sell the idea to people with
libertarian leanings: _universal_ basic income means much less discretion for
unelected administrators, and more discretion for each individual on how
dollars get spent.

~~~
debacle
You're already right. See: universal healthcare. No one has been lobbying
harder against universal healthcare than insurance companies.

------
mchahn
> A socialists pipe dream, you might say.

A common misunderstanding. BI is not socialism.

    
    
        Socialism: A political theory advocating state ownership of industry.

~~~
dragonwriter
BI is certainly the type of thing many actual.socialists have proposed, and
the definition of socialism you post is, while perhaps what made ght be found
in a particularly compact general dictionaries, not particularly accurate or
complete, even by the standard of general dictionary definitions.

~~~
mchahn
Then post your definition and its source. I just googled six of them and they
all matched mine.

~~~
dragonwriter
Google's is pretty typical of not-unusually-compact general dictionary
definitions, "a political and economic theory of social organization that
advocates that the means of production, distribution, and exchange should be
owned or regulated by the community as a whole."

Unlike yours, it encompasses regulation (which redistributive taxation is
generally recognized as a form of) and the focus is on "the community as a
whole" (for which the state may be the tool used, or may not) and not just the
"the state" as the focus (which is important, since without that it wouldn't
include libertarian socialism.)

------
ck2
Jeez I wish people would quit this.

Minimum income means guaranteed maximum prices for things like rent and food
that you cannot live without.

You think your $500 a month apartment isn't going to become $800 when the
landlord knows everyone is getting at least $1000?

~~~
bryanlarsen
[https://medium.com/basic-income/wouldnt-unconditional-
basic-...](https://medium.com/basic-income/wouldnt-unconditional-basic-income-
just-cause-massive-inflation-fe71d69f15e7#.chjvf9gk6)

------
falsestprophet
A lot of the minimum income people are also for open borders and I rather
doubt you can have both.

------
lintiness
"But more QE may not be politically palatable, as it disproportionately
benefits the wealthy, hurts pension plans, and may lead to banks simply
hording cash."

ok, so the author clearly hasn't got a clue how qe works.

------
anu7df
I am inclined to think all this is posturing. UBI has the potential to reduce
the friction involved in changing jobs. This alone makes it unpalatable to the
corporations. When corporations don't want this, they will lobby and scare
people till UBI becomes contentious. I can already see the ads... Booming
voice narrator " UBI is tax on the small business. Say no to UBI"

------
ars
I support it personally. And I think it should be funded with pollution and
waste taxes (all air+water pollution, no myopia on CO2).

This way money taken from people for taxes is funneled right back to them
instead of having government decide what to do with it.

The main complication I see is handling taxes for import+export, you'll
probably have to refund taxes on exports, and harder, figure out pollution
levels for imports.

